Banking Sector ‘Remains Poised for M&A’ Later This Year, Says KPMG’s Torrente

Reporting: Armie Margaret Lee
The banking industry could see a pickup in M&A later in the year, according to Peter Torrente, U.S. sector leader for the banking and capital markets practice at KPMG LLP.

Given the level of market volatility and macroeconomic uncertainty, “optimism [for M&A] has been muted the last couple of months,” said Torrente. “Looking further out into 2025, we believe the industry remains poised for M&A.”

Drivers of deal activity include the need to gain scale, diversify product offerings and expand geographically, he said.

M&A transactions this year include FB Financial Corp.’s purchase of Southern States Bank parent company Southern States Bancshares Inc. in a $381 million transaction announced in March and expected to close late in the third quarter or early in the fourth quarter. Other deals include Seacoast Banking Corp. of Florida’s acquisition of Heartland National Bank parent Heartland Bancshares Inc. for about $110 million in a transaction announced in February and expected to be completed in the third quarter.

Among the deals announced last year was Capital One Financial Corp.’s acquisition of Discover Financial Services in an all-stock transaction valued at $35.3 billion and anticipated to be completed this year.

Banks are taking steps that could result in deal activity later this year.

“Banks continue to scenario plan transactions that would be the best strategic fit for their business, which is a good precursor to deals happening later in the year,” Torrente said.

In addition, banks are “refreshing their due diligence strategy,” he said.