Regional Banks Are Ripe for Mergers as DC Warms to Consolidation

For years, US regional banks have operated under a paradox. Like all companies, they need growth to survive and want to do so predictably. Every billion dollars in new assets directly pads the bottom line. But the post-2008 regulatory crackdown designed to make banking safer has also made the slow-growth strategy trickier.

The moment a bank tiptoes across a key threshold like $100 billion or $250 billion in assets, more compliance costs kick in, potentially weighing on new revenue growth for years. Alternatively, banks can catapult past each regulatory asset threshold, typically through a merger or acquisition. A $90 billion ...