M&T Bank Corp has announced its largest deal, solidifying its base; Robert Wilmers, Chief Executive Officer has added about $40billion to both its deposit and loan since 2008 via few acquisitions. With Hudson City, the bank rank in the top 11 by deposits and 14 by assets among US commercial banks.
Robert has converted M&M from a takeover target to an acquirer, following the financial crisis. After merger talks with Santander SA broke down in 2010, M&T Bank pursued stressed lenders and did not compromise its balance sheet for getting profit.
The bank has given the liberty to distressed organizations at bargain based prices; Cassidy, who works in Maine, said a number of banks were expanding for development’s sake, but M&T is an outperform and didn’t follow what other banks were doing in order to see itself in the bigger position.
M&T’s latest deal is largest among those with released values, assets, according to the data compiled by Bloomberg. The biggest banks in United States, Wells Fargo & Co, JP Morgan Chase & Co, Citigroup Inc, and Bank of America Corp have had to stop from purchasing lenders in the wake of crisis as the company rules and regulations prohibits them, from holding 10% of the country’s deposits.
In the early 2008, M&T bank has been the 4th best performer in KBW Index, returning 10% to shareholders and since then, its share is increasing and operating double than tangible book value that computes what shareholders are willing to pay for after removing insubstantial assets, such as brand name and goodwill that have little value in insolvency.
The lender’s price to substantial book value is 3rd highest in KBW Index and lenders find few banks, US Bancorp and New York Mellon Corp and making loans and taking deposits ‘boring’. Robert Wilmers said that bank is looking for good value for their shareholders and more often the bank looks at distressed lenders.
One of the largest shareholders of M&T is Warren Buffett that holds share of about 5.4million as of 2012 (June), which is equal to 4.3% of total stake. It may even cause hesitation to investors to buy M&T’s share.
The bank purchased Wilmington Trust Corp in 2011, taking ownership of Delaware Bank which was established by Du Pont family for about $400 millions. In 2009, it acquired Proident Bankshares Corp at $270million. These deals helped M&T to expand its business, including corporate services and wealth management.
