To get a top-flight trust operation, the Buffalo, N.Y., bank had to accept with it a damaged brick-and-mortar lender in Delaware.
M&T — among the speediest integrators in bank M&A — has been slow to integrate both units. The $78 billion-asset company is scheduled to finish converting Wilmington Trust's wealth and corporate systems in June, 13 months after closing the $351 million deal.
It is a far different story than its purchase in 2009 of Provident Bankshares Corp. It closed the deal for the Baltimore bank on a Friday and wrapped up the conversion of Provident's 135 branches in three days. That was M&T's biggest deal ever. Wilmington Trust is its second biggest.
Why has M&T been so slow bringing it into the fold?
The same reason a blue-collar guy waits to dig in to the first course at a black-tie dinner: he wants to make sure he uses the right fork.
"The Wilmington Trust customer base and the bank itself were set up differently than the other banks we have come across. It was more customized, more specialized," says Mark J. Czarnecki, M&T's president.
"We have a model down on traditional bank acquisitions — that model would have us go faster," he says. "Here, we're taking it a little slow."
Wilmington Trust is M&T's first foray into upper-crust banking. It sets up tax shelters for millionaires. M&T banks the other 99%. M&T has bought 23 banks since the early 1970s, most of them simple operations. It knows that rushing into an unfamiliar business leads to trouble. M&T booked a $79 million charge last quarter tied to a stake in a Miami commercial mortgage firm it acquired just before the crash.
M&T wants to avoid a clumsy, brand-diluting takeover of an elite bank, which Wilmington Trust was despite its loan troubles, executives say.
There are a lot of moving parts. Wilmington Trust had two U.S.-chartered banks and more than a half-dozen investment businesses that handle corporate and personal trust work in 90 countries.
Wilmington Trust was forced to sell itself when bad loans to homebuilders sent customers fleeing from its marquee trust division. M&T did not want to further rattle Wilmington Trust's customers and advisors, so it kept the Wilmington Trust name — something it had not done in previous acquisitions.
"Their whole natural advantage, their business strategy, was around being from Delaware, that was the centerpiece of who they were," Czarnecki says. "To rename them M&T would be to take away their identity in a way that would not be helpful — we thought about that a lot."
M&T Chief Executive Robert Wilmers has met with many important clients of Wilmington Trust to reassure them, and to get a sense of their needs. He also put a 35-year Wilmington Trust veteran, William Farrell, in charge of M&T's wealth and institutional services. Part of Farrell's job is to bridge the cultural divide between Delaware and New York.
Going slow helped end the customer and employee attrition, Czarnecki says. The post-merger growth in checking accounts in Delaware is the best M&T has ever seen. But being patient has translated to higher costs.
