M&T Bank (MTB) & People's United (PBCT) Announce Merger Date
M&T Bank Corporation MTB and People's United Financial, Inc. PBCT have jointly announced that their merger is expected to close on or about Apr 1, 2022, following the regulatory nod from the Fed. The merger was originally expected to close in the fourth quarter of 2021.
The merger is subject to satisfaction or waiver of the remaining customary closing conditions. M&T Bank received the approval of the Federal Reserve System for acquiring People’s United on Mar 4. Prior to this, both companies received an approval from the New York State Department of Financial Services and the Connecticut Department of Banking.
Systems conversion following the acquisition is expected to be complete in the third quarter of 2022. Until then, customers of both banks will continue to be served through their respective bank branches, mobile applications and websites.
The $7.6-billion deal is anticipated to expand M&T Bank’s footprint in the Northeast. When the deal was announced last year, MTB had expected the combined entity to have $200 billion worth of assets, 1,100 branches and 2,000 Automated Teller Machines spread across 12 states.
In mid-February, the companies extended their merger agreement deadline to Jun 1, 2022, from the initial timeline of Feb 21, 2022, as the Federal Reserve nod was pending. The delay in the closure of the deal will push back the expected annual cost synergies of $330 million, 85% of which was expected to be achieved in 2022.
The merger will create a complementary top-tier deposit share in core markets. Moreover, the footprint spread across an economically diverse region is expected to bode well for the combined company’s long-term prospects.
Over the past year, shares of MTB have gained 7.1% compared with the 0.8% rise of the industry it belongs to.
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M&T Bank currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Inorganic Growth Efforts by Other Firms
While rampant political and regulatory scrutiny of large bank mergers and acquisitions might aggravate the execution risk for future deals, it is not discouraging banks from consolidation activities.
Last week, First Horizon Corporation FHN and TD Bank Group TD signed a definitive agreement whereby the latter will acquire the former in an all-cash deal valued at $13.4 billion or $25 for each FHN common share.
TD anticipates the FHN acquisition to close by Nov 1, 2022. The buyout is subject to customary closing conditions, including approvals from First Horizon's shareholders, and the U.S. and Canada regulatory authorities.
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