M&T, People’s United postpone merger deadline till June

M&T Bank and People’s United Financial are delaying the deadline for their merger until June, as the two companies await approval from the Federal Reserve.

The $7.6 billion deal, which would expand M&T’s presence in the Northeast, had an initial deadline of Feb. 21 — exactly one year after the merger announcement. M&T, in Buffalo, New York, and People's United, in Bridgeport, Connecticut, had aimed to close the transaction by the fourth quarter of last year and complete their systems conversion this month.

But the Fed has yet to give its OK, so on Friday the companies said they are extending their deadline to June 1.

“M&T and People’s United both remain committed to the merger and seeking” approval from the Fed, the last of the necessary regulatory sign-offs, the companies said.

Bank regulators in New York and Connecticut, where M&T and People’s United are headquartered, gave green lights in October.

Much was made last year of the deliberate pace at which the Fed seemed to be approving larger bank mergers. But in December the central bank announced it was signing off on First Citizens BancShares’ acquisition of CIT Group, Webster Financial’s deal with Sterling Bancorp and WSFS Financial’s merger with Bryn Mawr Bank Corp.

Last month, the Fed approved Evansville, Indiana-based Old National Bancorp’s merger with First Midwest Bancorp.

That said, several large bank deals are still pending. U.S. Bancorp in Minneapolis is awaiting the OK on its proposed $8 billion purchase of MUFG Union Bank in San Francisco, which was announced in September. In January, U.S. Bancorp executives expressed confidence that the deal will be completed during the first half of this year, which would be in line with the deal’s original timeline. The Fed announced this month it would hold a public hearing on the U.S. Bancorp-MUFG application.

At the same time, Citizens Financial Group in Providence, Rhode Island, is waiting for approval to buy Investors Bancorp in Short Hills, New Jersey. On Thursday, Citizens Chief Financial Officer John Woods said the $3.5 billion acquisition, which was announced in May, is still expected to close early in the second quarter.

Separately, New York Community Bancorp, which announced its intention to buy Michigan-based Flagstar Bancorp in April, is also on standby for Fed approval. In January, New York Community Chairman and CEO Thomas Cangemi said he expects the $2.6 billion deal to close sometime in 2022.

Regulators are under pressure to toughen their merger-approval processes.

President Biden issued an executive order last year that directed regulators to review their criteria for vetting deals, and the Department of Justice is reviewing comments from the public on the issue. Members of the Federal Deposit Insurance Corp. board clashed over merger policy in December.

M&T has pledged to provide $43 billion of loans and other financial support in the communities it will operate in as part of a five-year reinvestment plan negotiated with National Community Reinvestment Coalition.