Last year, 188 banks agreed to sell and four new ones opened, forty-seven exits for every entrance. Read separately, those are a consolidation story and a formation story. Read together, they are one cycle — sellers are exiting at the best prices since 2022, and a provision almost nobody has noticed in the 21st Century ROAD to Housing Act gives that departing capital and talent a dated window to come back in as new banks. The window closes, practically, in the middle of next year.

With this piece I am starting a series I have wanted to write all year. Over the next two weeks we will look at what I believe is the largest restructuring of American banking since the 1990s, who is leaving, who is arriving, which charters they are choosing, and what it means for the institutions in the middle. I call the series The Re-Banking of America, because that is what the research data describes. Not a decline, a reconstruction. And underneath every installment runs a single contest I will return to again and again — the fight for the franchise, the struggle over who gathers, holds, and profits from the stable deposits that make banking a business. I start here, with the numbers that first convinced me something structural was underway.

Every week I read the same two headlines from different publications. One says community banking is consolidating away, another merger, another sub-billion-dollar franchise absorbed, another market down to two branches and a coffee shop. The other says bank chartering is booming, the OCC took twenty-two de novo applications by early August against an average of five a year for the previous decade. The industry treats these as opposing stories, an obituary on one page, a gold rush on the other.

They are the same story. One feeds the other, and the mechanism is worth a bank's attention because it has a deadline attached.

Sellers Are Finally Getting Paid

Start with the deal data, because I have spent the last month inside it, and it changed character this year in a way the raw count hides. Per S&P Global Market Intelligence data through mid-August, bank M&A is running at roughly 160 announced deals annualized — below last year's post-crisis peak of 188, still above every other year since 2021. The count has plateaued. The prices have not.

Average price to tangible book for bank targets fell from 156 percent in 2022 to 129 percent in 2024, it was a buyer's market, where boards sold under duress, in the shadow of the 2023 liquidity events. This year it is back to 159 percent, above 2022. Median earnings multiples sit near fifteen times. And the median core deposit premium, the purest read on what acquirers want, has gone from 2.5 percent in 2023 to 8.3 percent — more than tripled in three years.

Two things follow. First, banks selling now are selling by choice, into strength, which is the healthiest version of consolidation with actual failure remains rare, with five banks failing so far in 2026, each absorbed by another institution in an FDIC-assisted sale. What the data describes is voluntary exits at premium prices, not distress. Second — and this is the part that connects the two headlines — capital exiting at 1.59 times book is capital that got rewarded, and rewarded capital comes back.

Seedbed Nobody Counts

Consolidation produces exactly two byproducts, management teams without a chair, and markets without a local lender. Last year's 188 deals came with 2,542 branches sold; add this year and 2024, and nearly 4,850 branches have changed hands in thirty-two months. That is a lot of displaced bankers and a lot of orphaned Main Streets.

Now look at who is filing the new charter applications, because it is not who the coverage suggests. Strip out the crypto trust banks and the Utah industrial banks and the largest single category in the 2025–2026 formation pipeline is ordinary community banks — twenty-six of them. Pittsburgh's first de novo in roughly twenty years, organized by former BNY executives. A Houston group led by a banker who built and sold before. An Oklahoma team that withdrew an application in 2025 and refiled this June. Florida alone has four proposed banks in the queue, Texas two, and San Juan has Puerto Rico's first new bank application in years.

One honest caveat belongs here, because the recycling thesis has a geography problem. Consolidation produces de novo banks only where a market is worth re-entering. Where it is not, the rural county whose bank sold because no successor wanted it, the small town whose acquirer prunes the branch within two years, the same cycle produces a banking desert instead, and the Federal Reserve already counts over twelve million Americans living in one. In attractive markets, a bank exit seeds openings. In unattractive ones, exits are just exits, which may be why the new banking law I will come to in a moment pairs its formation incentive with a mandated study of rural depositories. Congress, quietly acknowledging exactly this problem. Refiles are the tell. Organizers who gave up under the old process are coming back, and they are disproportionately people the consolidation wave set loose. This is how community banks have always been born, the acquired bank's president, the market the acquirer deprioritized, the local capital that just got cashed out at a premium and wants back in. The merger data is not context for the formation story. It is the supply chain.

Window With a Date on It

Here is what makes this cycle different from every previous one, and it is sitting in a housing bill.

The 21st Century ROAD to Housing Act, signed July 11 after passing the Senate 85–5, carries a Title IX that amounts to the first statutory de novo formation policy in decades. Section 908, "Promoting New Bank Formation" defines a qualifying community bank as one with under $10 billion in assets that becomes an insured depository institution between January 1, 2026 and December 31, 2028, and gives those banks two things organizers have wanted for twenty years: authority for a two-year phase-in of capital requirements, and a two-year right to ask to deviate from the approved business plan, with the agency required to answer in 180 days and to explain, if it says no, what would make the answer yes.

Do the arithmetic on that window. The FDIC's new two-phase process, announced August 10, promises a contingent decision within 120 days but the median time from final order to opening still runs about 200 days, and the full journey from filing to ribbon-cutting runs twelve to eighteen months when everything goes right. To be open and insured by December 31, 2028, an organizing group realistically needs to file by the middle of 2027. The window is open now, it is retroactive to January, and it is not open long.

The same Act quietly fixes the funding problem that killed many a de novo business plan: custodial deposits excluded from brokered treatment up to 20 percent of liabilities, and reciprocal deposit capacity widened to any CAMELS 1, 2, or 3 institutions. Congress did not just invite new banks. It made the deposit math work.

What This Is Not

Honesty requires the scale check. This is a recovery to normal, not a gold rush. In 1998 the OCC received 138 charter applications in a single year; the mid-2000s produced 185 new insured banks annually. Eleven insured banks have been opened since the start of 2025. Three of the last fifteen years produced zero applications at all — zero — so today's numbers look explosive mainly because the baseline was extinction. Comptroller Gould calls the current volume "a return to the norm", and the data says he is right.

Nor did the standards drop. This summer the OCC denied one applicant on AML history, denied another on capital and management, and returned a third as materially deficient. The FDIC's failure-to-launch record is real, nearly a quarter of banks approved between 2015 and 2019 never opened, almost always because the capital raise fell short. The window rewards prepared organizers. It does nothing for hopeful ones.

Question for Your Board

If you are running a community bank, this cycle asks a different question at each end of the table.

If you are weighing a sale: you are selling into the best pricing since 2022, and that is a legitimate answer, but understand that your buyers are paying 8 points over book for your deposits, which tells you precisely what you are giving up and what it is worth. If you are staying independent, the 47-to-1 arithmetic means your acquirer-consolidated markets are producing displaced customers and talent at a rate this industry has not seen in a generation, and the banks that will harvest that dislocation are being organized right now, on a statutory schedule.

And if you are one of the sellers, the president who just handed over the keys, the investor group that just cashed out at 1.59 times book, the side door back into the industry is open, marked with a date, and better lit than it has been since the 1990s. In 2025, forty-seven banks sold for every one bank that opened. If even a tenth of those teams walk back through by 2028, the formation wave stops being a footnote to consolidation and becomes its answer.

The capital is in the data. The window is in the statute. The clock runs out in about eighteen months.

CCG Catalyst advises community and regional banks, credit unions, and fintech companies on charter strategy, M&A, and de novo formation. If your institution is weighing a sale, an acquisition, or a return to the market — or you are an organizing group testing whether the numbers pencil — reach out to our team at www.ccgcatalyst.com, or see the full library at CCG Insights.

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By: Paul Schaus | Founder & Managing Partner, CCG Catalyst Consulting

Disclaimer: The views expressed in this article represent the perspective of CCG Catalyst Consulting based on our direct experience advising financial institutions. This commentary is intended to stimulate industry discussion and does not constitute legal, accounting, or regulatory advice.