After recent failures of Silicon Valley Bank, Signature Bank, and the failed purchase of First Horizon by Toronto-Dominion, analysts express skepticism about future banking deals being profitable for investors.

Analysts suggest that even if investors choose the right bank before a merger, they are likely to be paid in stock instead of cash, with only a small premium. This is based on previous all-stock deals in the shale oil industry as a model for the current banking landscape.

Furthermore, Yellen’s indication of a likely decline in earnings for banks when second-quarter earnings are reported next month adds to the pessimistic outlook. Many well-known banks are currently trading with low forward earnings per share multiples, as they are forced to pay more for deposits.

Bank of America analysts point out several hurdles standing in the way of bank deals. Regulators are taking too long to approve deals, as seen in the cases of Toronto-Dominion and First Horizon.

Additionally, the Department of Justice and the Federal Trade Commission are not supportive of industry consolidation. Furthermore, mark-to-market accounting is negatively impacting bank assets while the Federal Reserve is committed to keeping interest rates high, making it difficult for potential buyers to pursue deals due to the immediate hit to capital ratios.