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M&T Bank of Buffalo will make its fourth major bank acquisition in two years, buying banks in Rochester and Binghamton, it said this morning.

It has agreed to pay $111.1 million for Central Trust Co. of Rochester and Endicott Trust Co., which operates in a suburb of Binghamton. They are owned by Midlantic Corp. of New Jersey.

This will be the third time M&T and its parent, First Empire State Corp., have cooperated with another bank to make an acquisition. First Empire joined with Key Bank in 1990 to buy much of Empire of America and in 1991 to buy Goldome.

This time, it made a joint bid with ONBANCorp., Inc., which owns OnBank in Syracuse.

OnBank will buy Midlantic's other two upstate banks, Merchants National Bank & Trust Co. in Syracuse, and Union National Bank in Albany.

M&T was interested in buying Central Trust back in 1989 when it and its sister banks were put up for sale by the Bank of New York.

At that time, the bidding got too rich for conservative M&T, and Midlantic walked off with the banks for $305 million.

"We were interested then but we knew that what we would be willing to pay was much lower than what the bank would sell for," said Gary S. Paul, a senior vice president at M&T.

M&T and OnBank will pay a combined price of $201 million for the four banks.

M&T became interested in Central Trust last summer when it learned Midlantic, which is struggling to regain its financial stability, had put it up for sale.

It was not interested in buying all four banks, but thought one bid for the four banks would be more attractive to Midlantic, Paul said.

"We touched base with OnBank as being the most likely one to be interested in Syracuse, and we found they were also interested in the Albany bank," he said.

The banks have been negotiating with Midlantic since late December, and signed sales agreements at about 2:30 a.m. Saturday, Paul said.

The Central Trust acquisition is a natural expansion of M&T's Rochester operations. The bank entered the market early in 1990 with the acquisition of Monroe Savings Bank, and continued its expansion there later that year when it bought branches that were operated by Empire of America.

Central Trust is a significant purchase because it is a profitable commercial bank with a full range of lending services, compared to Monroe and Empire, which were money-losing savings institutions with only consumer businesses, Paul said.

Central Trust has $1.1 billion in assets and $1 billion in deposits, and 30 branches in a 10-county area. It has 568 employees.

The bank was profitable during 1991, despite the recession that severely affected commercial banks, and its business continues to grow, Paul said.

Its book value at Sept. 30 was $96.2 million, which makes M&T's purchase price a modest 15 percent premium over book value, he said.

The Endicott Trust purchase puts M&T in an entirely new market, although Central Trust's market extends south to Binghamton, making the two banking networks almost adjacent to one another, Paul said.

M&T finds Binghamton attractive because Endicott Trust's market area is home to several major IBM plants, he said.

Although M&T gets only eight branches in the market with $300 million in assets, it will have a 9 percent market share and be the fourth-largest bank in the area, after Binghamton Savings Bank, Chase-Lincoln First Bank, and Marine Midland Bank, he said.

By contrast, it has taken three acquisitions to build an 11 percent market share in Rochester, he said.

Endicott Trust also was profitable in 1991, he said. It has 153 employees.

The acquisitions are expected to be completed by mid-year. Both banks will be merged into M&T Bank.

Once they are done, M&T will have $8.5 billion in assets and $6.9 billion in deposits. Its parent, which is also based in Buffalo, will have $10.6 billion in assets.

The additional assets are held by its other banking subsidiary, East New York Savings Bank in New York City.

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