If a bank does a non-assisted transaction "and the FDIC comes in and swoops up a bank in a similar market with better franchise value , shareholders will be upset," says Ken Thomas, a Miami-based banking consultant and economist. Lawrence Kaplan, a former senior lawyer at the Office of Thrift Supervision and currently part of law firm Paul, Hastings, Janofsky & Walker's banking and financial institutions group, says it's possible that one of the parties has balance sheet issues that come out during the regulatory review process, such as a worsening credit picture. An acquiror's capital levels are a key concern for any deal and "if the regulators get spooked or have concerns, they could slow down the process" or impose conditions in order to approve the deal, which may not be suitable or appealing to the involved parties, Kaplan says. Regulators are also paying more attention to the structure of the combined companies and/or controlling parties of these deals and digging into whether a buyer has the capacity and appropriate risk profile to purchase a target, Kaplan says. This is particularly important as private equity investors mull deals in the sector. Two weeks ago, Royal Bancshares of Pennsylvania ( RBPAA) canceled an agreement to sell its bank subsidiary to a private investor group because it could not secure sufficient capital to satisfy regulators. In October, Frontier Financial ( FTBK), which was being acquired by a SP Acquisition Holdings, a so-called blank check company, could not obtain regulatory approvals within its desired timeline, and the purchase was canceled.