Wells Fargo and Citigroup stand out among U.S. megabanks as the only two with remaining capacity under the 10% national deposit limit to acquire large regional banks. This renewed opportunity comes after years of regulatory constraints that limited their growth through mergers and acquisitions. While Wells Fargo CEO Charlie Scharf has expressed openness to transformative deals to boost franchise value, Citigroup CEO Jane Fraser has prioritized organic growth, and the firm remains cautious about the complexities and distractions a major acquisition might bring.

Despite the easing of regulatory barriers following changes in policy under the recent administration, the pace of bank mergers in North America has slowed significantly, with deal value halving in the first half of 2026 compared to the previous year. Market conditions have led many banks to prefer capital returns to shareholders over deals, and the incentive to sell is low amid strong profit margins and stock valuations. Nonetheless, banking experts see this period as one of the most favorable environments for mergers since the financial crisis due to clearer regulatory guidelines and expedited approval processes.

Analysts identify five regional banks that fit the strategic criteria for acquisition by either Wells Fargo or Citigroup. These include Fifth Third, Huntington, Citizens, KeyCorp, and Regions, each offering complementary geographic footprints and deposit bases that align with the megabanks’ expansion goals. For example, Fifth Third provides strong Midwestern and Southeastern U.S. presence useful to Wells Fargo's scale ambitions, while Citigroup could benefit from Citizens’ hold in the Northeast to expand its consumer banking footprint. Additional targets such as Zions for Wells Fargo and First Horizon for Citigroup align well with regional growth strategies.

Looking ahead, industry forecasts from Bain suggest that by 2030 the number of regional banks could shrink considerably, potentially creating one to three new megabanks with over $1 trillion in assets through consolidation. Should Wells Fargo or Citigroup opt out, there remains the possibility of mergers among the top regional banks themselves to remain competitive. While the window for large acquisitions appears open, decisions will depend on strategic priorities, risk tolerance, and the evolving dynamics of the U.S. banking sector.