The Office of the Comptroller of the Currency has approved Santander's (SAN) proposed merger of Webster Bank (WBS), a critical regulatory milestone on a $12.2 billion transaction first announced earlier. Webster reported strong FY2025 revenue of $2.9B (+11.9% YoY) with a 34.6% net margin and $5.90 diluted EPS, underscoring the franchise value Santander is acquiring. With OCC approval in hand, remaining hurdles are likely limited to Federal Reserve sign-off and any state-level approvals before the anticipated 2026 close.

The key trade setup is the merger-arb spread on WBS: the stock should converge toward deal value as remaining regulatory risk is reduced. The spread's width at current prices reflects residual close-timing risk and any tail risk of Fed non-approval. Watchers should track whether WBS is trading materially below the deal-implied price and how wide that arb remains post-OCC news, as well as any Fed Reserve commentary on bank consolidation.