National Financial Services M&A Transaction Perspective
Transaction activity in 2024 has increased from the prior year with a total of 124 transactions announced. This is an increase from the 92 transactions announced in 2023. However, past challenges around unrealized losses, economic uncertainty, and election-year politics likely played an outsized role in keeping bank mergers and acquisitions (M&A) activity below historic levels. The outcome of the U.S. presidential and congressional elections will likely drive a more favorable regulatory and tax environment and provide some lift to bank M&A activity in 2025, assuming the economy continues to grow at a consistent pace.
Pricing for whole bank and thrift transactions remained relatively stable in 2024, with an average price to tangible book value (P/TBV) of 126% compared to 128% in 2023. However, that continues to be below average P/TBV levels seen over the past 10 years.
Stock prices for banks continued to stay strong in the fourth quarter of 2024 after facing significant downward pressure over the past couple of years. At year-end 2024, the Dow Jones U.S. Banks Index (DJUSBK) was up 32.05% at $650.29 year-over-year, while the KBW Nasdaq Bank Index (BKX) was up 32.75% at $127.47 in the same period.
West Region
In the West Region, there were 15 announced transactions in 2024, which is more than the 11 transactions announced in 2023. Based on transactions with pricing data available, P/TBV averaged 108% in the West Region in 2023. Based on the seven transactions with pricing data available, P/TBV averaged 89% in the West Region in 2024.
Mid-Atlantic Region
In the Mid-Atlantic Region, there were 15 announced transactions in 2024, which is greater than the six transactions announced in 2023. Based on transactions with pricing data available, P/TBV averaged 121% in the Mid-Atlantic Region in 2023. Based on the 10 transactions with pricing data available, P/TBV averaged 102% in the Mid-Atlantic Region in 2024.
Midwest Region
In the Midwest Region, there were 46 announced transactions in 2024, which is greater than the 39 transactions announced in 2023. Based on transactions with pricing data available, P/TBV averaged 130% in the Midwest Region in 2023. Based on the 12 transactions with pricing data available, P/TBV averaged 142% in the Midwest Region in 2024.
Northeast Region
In the Northeast Region, there were seven announced transactions in 2024, which is greater than the four transactions announced in 2023. Based on transactions with pricing data available, P/TBV averaged 116% in the Northeast Region in 2023. Based on the three transactions with pricing data available, P/TBV averaged 137% in the Northeast Region in 2024.
Southeast Region
In the Southeast Region, there were 23 announced transactions in 2024, which is greater than the 21 transactions announced in 2023. Based on transactions with pricing data available, P/TBV averaged 137% in the Southeast Region in 2023. Based on the 12 transactions with pricing data available, P/TBV averaged 143% in the Southeast Region in 2024.
Southwest Region
In the Southwest Region, there were 18 announced transactions in 2024, which is greater than the 14 transactions announced in 2023. Based on transactions with pricing data available, P/TBV averaged 145% in the Southwest Region in 2023. Based on the three transactions with pricing data available, P/TBV averaged 142% in the Southwest Region in 2024.
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