In February 2026, Huntington Bank completed a merger with Cadence Bank, creating a top-10 U.S. commercial bank with approximately $284 billion in assets. The partnership established Huntington as one of the top-10 banks in Alabama by deposits and expanded the company’s footprint across 21 states, says David Turner, Huntington’s Alabama regional president.
“The transaction provided immediate scale across high-growth Southern markets and builds on the strong foundation with continued investment in Alabama and throughout the region,” Turner says.
Due to its size, the Huntington-Cadence merger touched many areas of the state.
But banking mergers and acquisitions are common. The state of Alabama experiences a handful of such deals annually, ranging from massive acquisitions by multi-state entities to smaller, local transactions signaling the consolidation of community banks.
Every bank that goes through a merger or acquisition must comply with a stringent set of regulations intended to protect consumers and their money.
“Bank mergers and acquisitions are among the most heavily regulated transactions in the financial services industry,” says Mike Vincent, president and CEO of United Bank in Atmore, which acquired Town-Country National Bank in 2021. “Institutions must obtain approval from both federal and state banking regulators. We must demonstrate that the transaction is financially sound and show that it will continue to meet the needs of customers and communities of both institutions.”
Federal Regulations Governing Bank M&A
Federal regulations governing mergers and acquisitions in banking are consistent around the country, and some states have additional regulations.
At the federal level, any deal must obtain Bank Merger Act approval from the acquirer’s primary regulator, says Scott Latham, president and CEO of the Alabama Bankers Association. The primary regulator for national banks is the Office of the Comptroller of the Currency, while state banks’ primary regulator is the Federal Deposit Insurance Corp. (FDIC) for nonmember banks and the Federal Reserve Bank for member banks.
If the merger is structured at the holding company level, as most are, it must also be approved by the Federal Reserve under the Bank Holding Company Act, Latham says.
The Department of Justice must conduct its own antitrust review of the deal to understand any competitive effects of the proposed merger. Regulators also must survey the bank’s financial and managerial resources and understand how the proposed merger will affect the convenience and needs of the community, including its financial stability, Latham says. This review includes a Community Reinvestment Act (CRA) rating, which gauges a bank’s ability to serve the financial needs of its local community, including low- and moderate-income neighborhoods, as well as investigation of any Bank Secrecy Act (BSA) issues, which are required anti-money laundering efforts to help prevent financial crimes.
“The most common deal-killers generally stem from regulatory issues such as a less-than-satisfactory CRA rating, an open enforcement action, or unresolved BSA issues at either institution,” Latham says. “Those can effectively freeze an application.”
State Regulations Governing Bank M&A
In Alabama, banks undertaking mergers or acquisitions must meet some additional requirements. For example, “if the target or resulting bank is state-chartered, the State Banking Department must approve under Title 5, and the Superintendent’s approval runs on its own track with its own timeline,” Latham says.
The state of Alabama also prohibits an interstate merger or branch acquisition if it would result in the out-of-state bank and its affiliates gaining control of 30% or more of total deposits held by all insured depository institutions in the state, Latham explains. However, the Superintendent of the Alabama State Banking Department, with Banking Board approval, may adopt a waiver procedure for good cause.
In addition, Alabama does not allow an out-of-state bank to acquire an Alabama state bank, or substantially all its branches, unless that bank has been in continuous operation for a minimum of five years. Known as the “seasoning requirement,” five years is the strictest end of the range allowed by Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, which removed geographic limits on U.S. banks and allowed them to buy and operate branches across state lines.
“Several states require less or none, so [banks] elsewhere can be sold quickly in ways an Alabama startup bank can’t,” Latham says.
Overcoming Hurdles
As might be expected, complying with all the regulations and getting a bank merger approved and completed can take a significant amount of time. “Regulatory review typically includes an assessment of capital strength, management resources, risk management practices, compliance programs and Community Reinvestment Act performance,” says United Bank’s Vincent. “The process can be lengthy and requires extensive due diligence and documentation.”
When Troy Bank & Trust, based in Troy, completed its most recent acquisition in 2020, the process involved overcoming some hurdles. “In our case, the problem was with the HHI calculation,” says Jeff Kervin, president and CEO, referring to a common measure of market concentration used to determine competition in the market. “That led to issues with the Justice Department concerned about potential anti-competitive aspects of the transaction.”
With time and attention to detail, Troy Bank’s acquisition was approved and completed in July 2020.
“Generally, the executives of Alabama banks are able to lean on the Alabama Banking Department regulators in a way that helps them determine what needs to be done when considering strategic changes such as a potential merger,” Latham says. “Together with their consultants and attorneys, banks are often able to obtain answers to important questions in a very timely way.”
Why Strict Regulations Are Needed
Despite the hurdles they may sometimes represent, the regulations governing bank mergers and acquisitions are designed to protect consumers and their money.
“Clearly, all regulatory agencies and bodies are concerned with negative impacts on the customer, and I think this is proper and understandable,” Kervin says. “The goal is for the customer to be protected and after a merger for the customer to be in a better position, having more products, services and overall benefits.”
The regulatory process may be extensive, but it serves an important purpose, Vincent adds. “The review helps ensure that acquiring institutions are financially stable, that customers maintain access to banking services and that the combined organization can operate safely and soundly,” he says. “These requirements support public confidence in the banking system and help protect consumers, communities and the broader financial system.”
Unlike mergers and acquisitions in some other industries, “bank mergers affect far more than the two parties to the deal,” Latham says. It’s important for regulators to make sure that the transaction won’t create excessive market concentration that would raise prices or cut credit access, which is a real risk in Alabama’s many rural, single-county markets. Regulatory review also can protect the interests of the local community, which might include branch closures, lending to underserved areas and continuity of service.
“Because banks are highly leveraged institutions backed by a federal safety net, a poorly executed merger can transmit losses to the public rather than just shareholders,” Latham says. “So, the burden is on the merging banks to demonstrate the deal serves the public interest, not just their own.”
Nancy Mann Jackson is a freelance contributor to Business Alabama. Jackson is based in Madison.
This article appears in the October 2026 issue of Business Alabama.
