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With regulation issues cleared, M&T Bank interested in M&A again

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With regulation issues cleared, M&T Bank interested in M&A again

Buffalo, N.Y.-based M&T Bank Corp. management said Oct. 18 that the bank is once again interested in M&A and would generally focus on an in-market deal or something close to its existing footprint.

Speaking during the bank's third-quarter earnings call, CFO Darren King said the bank would be interested in everything ranging from a whole-bank merger to acquiring a mortgage servicing business or fee-heavy businesses in wealth management or institutional custody. An analyst asked management about its interest in deal activity considering the bank recently resolved a regulatory consent order over its Bank Secrecy Act and anti-money laundering practices.

"Our ability to engage in those kinds of dialogues and talks has improved. And we're certainly open to having those conversations. It takes both a willing buyer, which we are, and a willing seller, so I'm not sure where the world stands from that perspective," King said.

On deal terms, King said the bank would prioritize the internal rate of return on a deal and ensure it is higher than the company's long-term cost of capital. The bank would also look at other metrics, such as any possible dilution to earnings per share or tangible book value per share as well as the payback period. King said the bank would shoot for a lack of dilution and quicker payback, but would not highlight any single metric.

Geographically, King said management would focus on areas either in-market or contiguous to M&T's existing footprint. He said the bank would want to leverage its brand recognition as well as its ability to have employees instill the bank's culture as part of any acquisition.

On size, King said M&T would want an acquisition large enough to make a difference on earnings but not so large that integration would be difficult. He said the bank has historically focused on companies that were 20% to 40% of the bank's size.

M&T had $120.40 billion in assets at Sept. 30. The bank reported net income available to common shareholders of $336.0 million, or $2.21 per share, up from net income of $327.0 million, or $2.10 per share, a year ago.