BUFFALO, N.Y. (
M&T Bank Corp.
on Monday announced the completion of its acquisition of Wilmington Trust.
The deal ends Wilmington's over 100 year history as a independent bank that was cut short by economic slump in its native Delaware.
M&T said that the merger added $10.7 billion in total assets, leaving the company with $78 billion in assets, with offices in New York, Pennsylvania, Maryland, Virginia, West Virginia, New Jersey, Delaware, Florida, Washington, D.C. and in Ontario, Canada. The company acquired 55 branches as part of the Wilmington deal.
M&T Bank Corp. CEO Robert Wilmers
Wilmington Trust's shareholders received 0.051372 share of M&T stock for each share of Wilmington they owned, in a deal valued by M&T at $351 million. M&T also agreed to simultaneously repay the government $330 million in bailout funds that Wilmington Trust had received through the Troubled Assets Relief Program, or TARP, in December, 2008.
This leaves M&T still owing $600 million in TARP money that the company received in December 2008, and another $151.5 million the government originally provided to Provident Bancshares, which was acquired by M&T in May, 2009. In its first-quarter 10-Q filing with the
Securities and Exchange Commission
, M&T said it intended to repay another $370 million in TARP money by the end of the second quarter.
M&T on May 11 said it had entered into an agreement to sell $500 million in preferred stock, with a 6.875% coupon.
CEO Robert Wilmers said that "M&T now offers one of the nation's premier wealth management services with approximately $81 billion of assets under management."
Wilmington's decision to sell in November of last year wasn't a surprise. Following the holding company's 38.1 million third-quarter net loss to common shareholders, main subsidiary Wilmington Trust, FSB was left with a total risk-based capital ratio of 14.21% as of September 30, just above the 14% required under an order from the Office of Thrift Supervision
On May 9, Marty Mosby of Guggenheim Securities upgraded M&T Bank Corp. to a "buy" rating from a neutral rating, with a $114 price target, saying the Wilmington acquisition would be "more accretive than the market appreciates and that as it pays off TARP post the close of the deal, we believe the stock will react favorably.
Written by Philip van Doorn in Jupiter, Fla.
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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.