Wells Fargo and Citigroup have room to buy a big bank. These 5 regionals fit the bill

Walk the halls of any major banking conference or listen in on a quarterly earnings call, and one topic keeps coming up: With the window for mergers wide open under the Trump administration, who will take a swing?

After years on the sidelines because of regulatory restrictions, large banks can once again contemplate buying other lenders, even a $100 billion-plus-asset regional bank.

While JPMorgan Chase and Bank of America are barred from such a deal because they already have more than 10% of national deposits, there are two megabanks that could pursue a large acquisition: Citigroup and Wells Fargo . The nation's third- and fourth-largest banks have enough room under the national deposits cap to pursue a hefty regional bank, according to investment bankers, consultants and investors.

"Two years ago, it was impossible for a bank of that size to get approval to acquire almost anything," said Brian Graham , co-founder of advisory firm Klaros . "Now, it's possible they can get a deal done. I'd be shocked if they aren't exploring it."

After spending much of the last decade in a penalty box — Citigroup via consent orders and Wells Fargo capped by growth restrictions — both institutions have cleared key regulatory hurdles and are in growth mode.

A large acquisition — like the ones that rival JPMorgan pulled off during the crises of 2023 and 2008 — would give Wells Fargo or Citigroup thousands of branches and billions of dollars in deposits.

For Citigroup, which has only about 650 U.S. branches, it would offer a much-needed source of cheaper funding. For Wells Fargo, which already has a large branch network, such a transaction would add more scale and cost-cutting opportunities.

"There's a massive race for scale, and the shot clock is running," KBW analyst Chris McGratty said about the broad need for industry consolidation. "If you want to do something, this is the time to do it."