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M&T Bank Acquires Mortgage Banking Firm, Adds $2.7B Loans

Zacks Equity Research

M&T Bank Corporation MTB recently acquired certain assets of a Philadelphia-based commercial mortgage banking firm through its subsidiary, M&T Realty Capital Corporation. Terms of the deal remained undisclosed.

Carey, Kramer, Pettit, Panichelli & Associates, Inc., founded in 1987, offers services in the Greater Philadelphia region. According to the company’s website, it has originated and closed more than $13 billion in loans via life insurance, agency, and CMBS relationships, since its inception.

M&T Bank’s mortgage banking unit stated in a release that the purchase went effective on Jan 4, 2017 and that it has also hired the firm’s staff.  M&T Realty will run the business activities of Carey, Kramer, Pettit, Panichelli & Associates under a division as ‘CKPP’.

This acquisition adds about $2.7 billion in loans to M&T Realty’s servicing portfolio as well as substantial annual life insurance company origination volumes. Notably, M&T Realty originated over $3.3 billion in loans during 2016 and services a portfolio of more than $13.3 billion.

Tari Flannery, President of M&T Realty noted, “We are extremely pleased to announce this transaction. CKPP’s life insurance origination platform and servicing philosophy will mesh well with M&T Realty Capital Corporation’s full-service commercial mortgage banking model.”

The latest move seems to be in line with M&T Bank’s expansion strategy. Driven by a strong financial position, the company has accomplished several major acquisitions in the last several years. Notably, the merger with Hudson City in Nov 2015 significantly expanded the company’s retail branch network in the eastern U.S.

Stock performance

Shares of M&T Bank surged 43.6% in a year’s time, outpacing the 31.5% gain for the Zacks categorized Major Regional Banks industry.  The Buffalo, NY-based banking giant reflects strength in several areas, including growing loans and deposits, improving credit quality and a solid capital position. The Dec 2016 rate hike is likely to improve its margins, while the company is also expected to benefit from potential tax cuts and lesser regulations under Donald Trump’s administration. However, litigation issues and mounting expenses remain some of the key concerns.

Currently, M&T Bank carries a Zacks Rank #3 (Hold).

Stocks to Consider

Comerica Incorporated CMA: Comerica has been witnessing upward estimate revisions ahead of its fourth-quarter 2016 results. Over the past 30 days, the Zacks Consensus Estimate for the quarter advanced 1.1% to 96 cents. Also, for 2016, it moved up slightly to $2.98. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Citigroup Inc. C: Over the past 30 days, the Zacks Consensus Estimate for fourth-quarter 2016 inched up 1% to $1.11 and 1.1% to $4.75 for 2016. The company has a Zacks Rank #2 (Buy).
The PNC Financial Services Group, Inc. PNC: The Zacks Consensus Estimate for fourth-quarter 2016 climbed 1.6% to $1.86, over the past 30 days. In addition, it moved up slightly to $7.18 for 2016. The company also carries a Zacks Rank #2.

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