But that expansion will come at the expense of regional and community banks, which Bain forecasts will shrink substantially in number, with large regional institutions (those holding $50 billion to $1 trillion in assets) declining from 49 to as few as 30, and community banks contracting from roughly 4,200 to between 3,600 and 3,800.
Fewer but larger banking institutions typically means shifts in lending relationships, custodial offerings, and the competitive dynamics between bank-affiliated and independent advisory channels.
What’s driving the deal surge
Three forces are converging to accelerate deal activity over the next two to three years, according to Bain.
First, a significant capital overhang has accumulated across the banking sector: as of June 30, 2026, 17 US banks each held more than $10 billion in excess capital, with seven individually sitting on more than $20 billion beyond regulatory requirements, based on S&P Capital IQ data cited in the report.
Second, the regulatory environment has turned markedly more permissive. Under the current administration, deal approvals have accelerated, antitrust scrutiny has eased for transactions below $250 billion in assets, and capital requirements have moderated, conditions Bain expects to persist for the next two to three years.