The biggest bank M&A deals in 2021 — so far

ByAllissa Kline, Jon Prior, Laura Alix, Polo Rocha

September 28, 2021 4:00 AM

Banks in search of the scale that will enable them to compete against larger rivals have been pairing up at a steady clip throughout 2021.

So far this year, deals worth more than $48 billion have been announced, an American Banker analysis found. That total easily outpaces all of both 2018, when combined deal values hit $29.6 billion, and 2020, when they reached $27.8 billion, according to data from S&P Global.

With three months remaining in 2021, deal values could still surpass the total of $54.8 billion in 2019, which included the mega-merger between BB&T and SunTrust Banks.

What follows is a look at the seven biggest bank M&A deals so far this year. Each of them would create a larger regional bank in one part of the country — the Northeast, the Midwest, the South or the West Coast.

The deals are listed by sale price in descending order. The acquiring bank is listed first, followed by the selling bank.

GEORGE FREY/BLOOMBERG

U.S. Bancorp/MUFG Union Bank

Sale price: $8 billion (cash and stock)

Combined asset size: $664 billion

Date announced: Sept. 21

Status: Expected to close in the first half of 2022

U.S. Bancorp’s planned acquisition of MUFG Union Bank

will be the first major test

of the Biden administration’s pledge to scrutinize major bank mergers more carefully.

A regulatory run-in for Union Bank revealed just before the deal was announced and some reshuffling coming atop the Federal Reserve Board has led experts to believe the approval may not be swift.

Still, should the deal for Union Bank in San Francisco go through, Minneapolis-based U.S. Bancorp would receive a boost in the California market, where executives think it can compete with bigger rivals.

Another wrinkle to the sale by Tokyo-based Mitsubishi UFJ Financial Group is that it’s

the latest move

by a foreign company seeking to unload its U.S. retail banking operations. Foreign-owned banks have traditionally lagged industry averages on key profitability metrics, and several of them have recently headed for the exits.

M&T Bank/People’s United Financial

Sale price: $7.6 billion (all stock)

Combined asset size: $200 billion

Date announced: Feb. 22

Status: Expected to close in the fourth quarter

M&T’s pending purchase of People’s United in Bridgeport, Connecticut, marks the company’s

first bank acquisition in six years

and the first under Chairman and CEO René Jones. The deal would not only expand the Buffalo, New York-based company’s footprint in New England, but also add business lines such as equipment finance to M&T’s portfolio.

Shareholders of both companies approved the acquisition in May. In July, M&T made public its post-acquisition layoff plans, including 747 job cuts in Bridgeport, Connecticut, and subsequently faced

a wave of backlash

from community members and government officials who said they were caught off guard by the number of layoffs.

M&T moved quickly to make assurances about its commitment to the region, pledging to retain approximately 80% of People’s United workforce, including all 1,068 customer-facing employees. It also promised to employ at least 1,000 people in Bridgeport within a year after the systems conversion that’s scheduled to take place in February 2022. M&T said it would turn People’s United’s Bridgeport headquarters into M&T’s New England regional headquarters.

Webster Financial/Sterling Bancorp

Sale price: $5.1 billion (all stock)

Combined asset size: $63 billion

Date announced: Apr. 19

Status: Expected to close in the fourth quarter

Webster Financial in Waterbury, Connecticut, is looking to scale up in the Northeast by acquiring Sterling Bancorp in Pearl River, New York.

Even before the deal was announced

, both banks had been looking for

ways to expand beyond their current markets

in the slow-growing Northeast.

Webster is the largest bank operating in the health savings account market, which generates lots of low-cost deposits, while Sterling has historically focused on national businesses such as asset-based lending and equipment finance.

Executives expect the combined company to keep the Webster name and establish a new corporate headquarters in Stamford, Connecticut, while also maintaining offices in Waterbury and the greater New York City market. John Ciulla plans to remain president and CEO of Webster following the merger.

Citizens Financial Group/Investors Bancorp

Sale price: $3.5 billion (cash and stock)

Combined asset size: $214 billion

Date announced: July 28

Status: expected to close in the first half of 2022

Citizens hopes to build a stronger market presence in the New York metro area with its first whole bank acquisition since going public.

If it's approved,

the deal

will give Providence, Rhode Island-based Citizens a top-10 market share by deposits in metro New York. It would also add $27 billion of assets, $20 billion of deposits and 154 branches across New York City, Philadelphia and New Jersey.

Since it spun off from the Royal Bank of Scotland in 2015, Citizens has acquired small, nonbank firms at a steady clip, focusing largely on fee-generating businesses. Investors has a strong base of small business clients who could benefit from some of the capital markets capabilities Citizens has built over the years, Citizens CEO Bruce Van Saun said in July.

BancorpSouth/Cadence Bancorp

Sale price: $2.9 billion (all stock)

Combined asset size: $44 billion

Date announced: April 12

Status: Expected to close in the fourth quarter

The merger between BancorpSouth in Tupelo, Mississippi, and Cadence in Houston would be a major one in the Southeast. But

the biggest deal

struck in the nearly nine years that Dan Rollins has been BancorpSouth’s CEO hasn’t been without some drama.

It had looked as if Cadence would escape a major regulatory crackdown when an investigation into potential fair housing violations was dropped under the Trump administration. But that issue was revisited after President Biden took office.

In a settlement with the Justice Department announced in August, Cadence

was required to pay $8.5 million

in connection with the redlining allegations. The settlement also requires investments in the Houston market where the problems were found.

Still, there are no indications so far that the merger will be delayed. BancorpSouth has recently been selling branches to other banks in anticipation of the deal’s approval.

New York Community Bancorp/Flagstar Bancorp

Sale price: $2.6 billion (all stock)

Combined asset size: $87 billion

Date announced: Apr. 26

Status: Expected to close in the fourth quarter

Four months after an

abrupt CEO shakeup

, New York Community Bancorp in Hicksville, New York, jumped into the M&A ring with

an agreement to buy

Flagstar Bancorp in Troy, Michigan.

The deal — which, if approved by regulators, will be New York Community’s first in more than a decade — offers two key advantages: it diversifies the bank’s loan book, which historically has leaned heavily on multifamily lending, and it adds lower-cost deposits to help offset the higher cost certificates of deposits that have historically funded the company’s loans.

Assuming the deal closes, New York Community will have nearly 400 branches, 87 loan production offices and the entirety of Flagstar’s mortgage warehouse business, which is the second largest in the country. It’s part of New York Community’s plan to shift from being a niche lender into a full-fledged commercial bank.

“This, in my opinion, is not a traditional merger,” CEO Thomas Cangemi

told analysts

in July. “It is an alliance where we are taking the best of both companies and forming a much stronger, better positioned organization and creating significant value for everyone.”

Old National Bancorp/First Midwest Bancorp

Sale price: $2.5 billion (all stock)

Combined asset size: $45 billion

Date announced: June 1

Status: Expected to close in the fourth quarter

Old National hopes to fill a major hole in its Midwestern footprint with

its pending acquisition of Chicago-based First Midwest

.

The deal for First Midwest and its more than 100 branches, most of them in the Chicago area, would make Old National the sixth largest bank headquartered in the Midwest.

The two banks billed the deal as a merger of equals, but Old National would be the surviving entity. Chicago is scheduled to be home to the combined bank’s commercial lending and community banking operations.

Evansville, Indiana-based Old National has roughly $23.7 billion in assets, a bit more than First Midwest’s roughly $21.6 billion in assets.

Though the Office of the Comptroller of the Currency has already greenlighted the transaction, it still needs approval from the Federal Reserve.