The bank M&A landscape may be warming up as pricing expectations between buyers and sellers move closer together, according to Bank Director’s 2026 Bank M&A Survey, sponsored by Crowe.

Bank leaders report more deal conversations over the past year, with 37% saying another institution has expressed interest in acquiring their bank in 2024 or 2025 — a notable jump from 27% a year earlier. That increased interest coincides with a willingness among buyers to pay more. Forty-four percent of respondents say they would pay up to 1.5x tangible book value for the right target, and 20% would go as high as 1.75x, both higher than last year’s responses.

Those shifting expectations appear to align with stronger pricing in deals already completed. S&P Global Market Intelligence data shows acquirers paid a median 150% of tangible common equity through Sept. 2, 2025, up from 131% in 2024 and 124% in 2023.

Buyers’ motivations are also evolving. Among respondents open to acquisitions, 41% now cite low-cost deposits as a primary driver — up sharply from 29% last year — tied with geographic expansion at 41%. Another 38% point to gaining scale for technology and broader investment needs.

Branch deals are gaining attention as well. One in four respondents say their bank is likely to buy branches in 2026, compared with 18% last year. Crowe partner Patrick Vernon notes that recent branch purchases have been driven more by deposit acquisition than geographic reach.

Even with rising M&A activity, profitability pressures remain. Funding costs continue to be the top concern for 61% of bank leaders, outpacing worries over slow loan growth or regulatory burdens. Technology expenses (48%) and compensation and benefits costs (45%) also rank as major challenges — both higher than in last year’s survey.

Overall, with pricing expectations converging and the appetite for low-cost funding intensifying, 2026 could see dealmaking regain momentum across the banking sector.

“Something common that we’re hearing in the industry is, ‘How do we attract and retain depositors?’ and ‘What’s the value in a strong deposit book?’” Vernon says. “There aren’t really effective ways to go out and get a large number of deposits in the market right now if you’re not considering M&A.”

Key Findings

Boardroom Discussions
Forty percent of survey respondents say their board discusses M&A on a quarterly basis, while 28% discuss it yearly. In those discussions in 2025, boards focused on M&A in the context of overall strategy (73%), potential targets (65%) and M&A trends (58%). 

Angling For a Better Price
Forty-four percent say they could grow fee-generating businesses in order to get a better price in a sale. Twenty-nine percent see a need to reduce their concentration of non-core, higher cost deposits, and 19% could renegotiate key vendor contracts. Twenty-two percent believe that no changes are needed. 

Mixed Plans on Subordinated Debt
Twenty-one percent report their bank has subordinated debt that’s set to mature or reset in 2025 or 2026. Of those, 31% have not yet decided how they want to address it. Others plan to raise new debt to replace it (23%), let the interest rest float as the debt amortizes (23%) or use existing capital to call the debt (23%). 

Organic Growth Drivers
Respondents largely expect commercial real estate (67%) and commercial and industrial lending (65%) will fuel organic growth in 2026. Additionally, 38% expect growth from fee-driven businesses, such as wealth management and treasury management.  

Limited Interest in Crypto
In July 2025, federal banking regulators released guidance for banks looking to provide crypto or digital asset custody services, but few banks seem interested in exploring it. Just 21% say their institution is looking into providing these services, while 44% have not even discussed it. 

Optimistic on the Economy
Fifty-seven percent anticipate that the U.S. economy will grow at a moderate pace through the end of 2026, while 15% anticipate a downturn or recession.