M&T Bank gets fresh start with People’s deal
For the seven banks that have maintained branches in Bethel over the years, the town’s residents and businesses have boosted the deposit base by impressive margins, triggering loans that generate income for those banks.
The one outlier? A branch in the heart of downtown, where M&T Bank has seen its Bethel deposits plummet more than $50 million since adding the branch five years ago.
As it turns out, M&T’s experience in Bethel is no outlier for its half-decade run in Connecticut, which began when after it acquired Hudson City Savings Bank in 2015. M&T is now pursuing the $7.6 billion buy of People’s United Financial, which has the largest branch office network in Connecticut and trails only Bank of America for deposits.
In Federal Deposit Insurance Corp. data posted last summer, M&T reported a precipitous drop off in own customer deposits across its nine Connecticut branches, from $888 million as of June 2015 to just under $300 million last year.
By comparison, Connecticut’s nearly 1,100 remaining bank branches statewide generated a 36 percent increase in deposits over that same five-year stretch. And since assimilating the Hudson City branches, M&T’s own deposits are up 21 percent across more than 750 locations from Virginia to Massachusetts.
What’s up with M&T in Connecticut? Banks often make the decision to close branches, whether to phase out of a market or avoid geographic overlap — Bank of America closed several in Connecticut over the years, including a branch in Bethel that had $50 million in deposits in 2017 on the eve of being shuttered.
But M&T has kept the full slate it picked up in Fairfield County from Hudson City. In announcing the Hudson City acquisition, M&T’s CEO at the time emphasized the branch network as a major factor in the appeal of the deal.
“One thing we’ve never focused on is filling out our franchise from a geographical perspective — adding pins on the map solely to fulfill someone’s idea of completeness,” said former M&T CEO Bob Wilmers, speaking in 2012 while leading the company through the Hudson City acquisition which took three years to complete amid regulatory scrutiny. “However, in this case, in addition [to] making full financial and strategic sense, the geographic fit also works quite well . ... We’ve always believed that a strong branch presence is a key component of commercial banking.”
Deposit data can move significantly depending on how banks assign major commercial and municipal accounts to any single office. And customers otherwise have a say after an acquisition, whether seeking better service and rates or using it as an excuse to shop for a branch closer to home.
With the People’s United deal, M&T picks up 175 offices in Connecticut and close to 250 more in nearby states. While People’s United plans to close dozens of bank counters in Stop & Shop supermarkets in the coming years, its branches remain familiar sights otherwise in Connecticut’s retail corridors.
During a Monday conference call, the chief financial officer of M&T highlighted People’s United’s branches — but in the context of their proximity to Stop & Shop supermarkets where limited-service branches will close, presumably on the assumption that M&T will be able to hang onto customer relationships through other nearby offices in those communities.
In a separate web conference with his M&T workers, CEO Rene Jones emphasized the community relationships he hopes M&T will preserve and expand upon in People’s United territories.
“There’s no way we would have the capability to keep all the customers that do business with People’s today, unless we keep the majority if not all of the customer-facing employees,” Jones said. “Getting through that together is going to be a lot of work, but it actually also is a lot of fun because we get to introduce ourselves to new people and new communities and new customers.”
In a Monday interview, Jones’ counterpart at People’s United expressed confidence the combined company will offer a stronger set of services for customers.
“One of the primary reasons that we agreed to pursue this with them was the similarities in culture and the commitment to communities,” said People’s United CEO Jack Barnes. “It’s one of the strong pieces of this [merger] that gives me a great deal of confidence . ... In many ways, I think because of their strength, they’ll do more; they’ll make a strong commitment to products, services, low-income housing — they really have a great track record there.”