Strengthening M&A Readiness in a Shifting Market

Crossing the $10B threshold comes with challenges—but preparation brings opportunities

The overall merger and acquisition environment has grown cautious amid tariff uncertainty, yet the outlook for consolidation in the banking industry remains bright. A looser regulatory approach taking shape under the Trump administration is creating an environment where consolidation is not only attractive but strategically advantageous. The recent regulatory approval of the proposed merger between Capital One and Discover may be one sign of a shifting M&A landscape in the banking industry.

As banks look to capitalize on a changing environment, the need for robust M&A readiness becomes increasingly clear, especially for smaller banks looking to grow.

In the banking world, crossing the $10 billion asset threshold is a pivotal moment. When banks reach this level, new regulatory requirements are triggered that include enhanced capital adequacy standards, increased scrutiny of risk management practices, and more rigorous reporting and compliance obligations. Regulators demand comprehensive documentation and improved internal controls.

In practical terms, a bank that has its financial house in order is also more attractive to potential acquirers

Not only does sound financial housekeeping mitigate the risk of penalties and operational disruptions, but it also increases the odds of a successful deal by streamlining due diligence and integration processes and eliminating mid-deal surprises.

Preparing for scrutiny

Banks that have the $10 billion threshold in sight and those positioning themselves for possible M&A activity should prepare for the challenges of greater oversight but also embrace the opportunity to enhance their overall operational and strategic posture.

Proactive assessments in M&A readiness ensure that banks are not caught off guard by additional compliance and operational demands. Taking action to ensure robust AML/BSA frameworks, comprehensive risk management practices, and efficient financial reporting can be the difference between a deal that falters and one that succeeds.

Foundational readiness assessments

A foundational readiness assessment is critical to banks considering M&A activity or otherwise preparing to cross the $10B threshold. This assessment provides a detailed evaluation of a bank’s current practices, identifies gaps and prioritizes risks across several key areas:

	Regulatory Compliance & Examinations Evaluate governance, control frameworks and preparedness for evidential compliance with critical regs like Dodd-Frank, AML and Fair Lending to ensure that the bank’s compliance posture meets the heightened standards.		Enterprise & Credit Risk Management Review existing risk management frameworks, including risk indicators, monitoring, model validation, and vendor management, to ensure the bank can effectively handle increased scrutiny.
	Technology & Operational Adjustments Assess and upgrade infrastructure, cybersecurity measures and data governance protocols to support a more rigorous operational landscape.		Financial Considerations Ensure accounting, reporting and profitability metrics are transparent and robust enough to satisfy both regulators and potential acquirers.
	HR, Training & Culture Address gaps in internal communication, employee retention and training to build a culture of compliance and operational excellence.		Strategic Planning Develop a clear roadmap that aligns the bank’s operating model, product strategy and pricing with the demands of post-$10 billion growth.
	Customer & Community Focus Enhance brand reputation and mitigate reputational risks through better customer engagement and escalation protocols.

A successful rise above the $10 billion threshold hinges on this type of comprehensive readiness assessment, which not only guides internal improvements but also signals to regulators and potential merger partners that the bank is positioned to operate at the next level.

Explore your readiness

While uncertainty around broader economic policies—particularly trade and tariff measures—may translate into M&A caution in other sectors—the banking industry is being considerate of timing, but still poised for consolidation. For banks and credit unions of all sizes, preparing now is key to seizing opportunities when market signals strengthen.

By proactively addressing regulatory and operational gaps through a readiness assessment, banks eyeing growth can enhance their M&A attractiveness and position themselves to explore various opportunities with greater assurance of success.

If you’d like to explore your readiness for growth through a merger or acquisition, let’s talk.

Learn more about our M&A expertise in the banking industry and how we helped our client ensure the success of a complex integration on a fast timeline.

Ensuring a Seamless FDIC-Assisted Bank Acquisition & Integration

About the Author

Carissa is a Partner in our Banking & Financial Services practice. She brings deep industry expertise in digital solutions, software development, third-party risk management, bank operations, M&A, compliance and regulatory initiatives. Carissa is an expert in policy development and process optimization and digitization. She has spent her career successfully leading efforts to implement operational efficiencies and improvements in the highly regulated financial services industry. She has experience supporting these initiatives across global, national and community banks, credit unions, automotive and niche lenders, as well as fintech.