March 25, 2026 — 2026 is shaping up to be a big year for mergers and acquisitions in the banking industry and, based on commercial loan data, certain geographic markets may present more attractive expansion opportunities for acquisitive banks than others.
In 2024 and 2025, falling interest rates unleashed pent-up demand for bank M&A, which had bottomed out in the high-interest-rate environment of 2023. The consolidation momentum continues into 2026.
“With bank executives seeing growing appetite for M&A and a more supportive environment, deal flow seems poised to accelerate through the rest of this year,” says Gregory Schneider, Director, Commercial Loan Analytics (CLA) at Crisil Coalition Greenwich.
Where might deals emerge?
To gain additional insight into where new M&A deals might materialize, the CLA team at Crisil Coalition Greenwich tapped into its proprietary loan-level dataset, which includes data on loan size, loan pricing, risk level, geography, and other attributes for both new originations and portfolio data. The results suggest why certain geographic regions might be particularly attractive markets for acquiring banks.
“Although bank transaction decisions are highly complex, ultimately driven by regulatory, capital and strategic considerations, the underlying economics of regional lending markets play a role,” says Gregory Schneider.
To better understand those regional dynamics, the team evaluated each major U.S. region on growth in commercial loan sales, pricing opportunities (differences in average spreads on C&I loans), loan portfolio credit quality, and portfolio industry diversification.
Synthesizing the results of this analysis, the team constructed a composite regional attractiveness measure that balances earnings opportunities with portfolio risk. The Southwest region ranks at the top of that scale, scoring highly across multiple dimensions. It ranks as the region with the highest loan growth rate, the highest average SOFR spreads, and the second-most conservative portfolio average when it comes to credit risk.
Rounding out the top three are the Rocky Mountain region, which has some of the widest average spreads but riskier portfolios, and the Southeast, which has the second-fastest loan growth (as defined by 2-year CAGR) and the most diverse portfolio average in terms of industry composition.
“Bank industry M&A activity is being propelled by strong tailwinds, at least some of which are expected to persist through year-end. As the year plays out, variations in market dynamics and loan portfolios across regions can provide clues about which banks are most likely to fall into the sights of potential acquirers,” says Gregory Schneider.