Shareholders of Wilmington Trust Corp. in Delaware have approved the troubled bank's discount sale to M&T Bank Corp., surmounting a potential obstacle in the deal's path.
More than 93 percent of shares that voted at the meeting Tuesday morning in Wilmington -- representing 75 percent of outstanding shares -- were voted in favor of the $351 million deal, the banks said. More than 100 people attended the meeting at the bank's headquarters.
Closing of the deal, expected by midyear, is still subject to approval by state and federal regulators. The Delaware banking commissioner is holding a public hearing on Thursday.
M&T agreed in November to buy the beleaguered Delaware bank for $3.84 per share in an all-stock deal that valued Wilmington Trust at a 46 percent discount to its previous stock price.
The purchase will give M&T the No. 1 market share in Delaware, with 48 branches, 225 ATMs, $10.4 billion in assets and $8.3 billion in deposits. That equates to 23 percent of the state's deposits and complements M&T's strong market presence in the Mid-Atlantic, including Baltimore and Washington, D.C.
M&T also gains one of the premier money management and corporate services providers, with $58.4 billion in assets under management for clients in 33 countries and 16 trust offices.
That's much larger than M&T's own wealth business and will make M&T a much bigger player in those highly profitable, fee-based arenas, doubling trust revenues. M&T will rebrand the branches and lending businesses under its own name but will keep the Wilmington Trust brand for the wealth management and corporate businesses.
In all, M&T will operate a total of 790 branches and 2,080 ATMs in eight states and the District of Columbia.
With the deal, M&T also gains another $330 million in preferred stock from the government's Troubled Assets Relief Program, bringing its total TARP investment to $1.08 billion. Unlike most of the biggest banks, M&T has not indicated a timetable for repaying TARP.
The merger has been under fire by some critics and shareholders, who felt the price was too low. Several lawsuits were filed in an effort to block the deal. But no other bidder has emerged since the deal was announced, and executives have argued that the sale to M&T is the Delaware bank's only choice. The lawsuits were settled this month.
The smaller bank has been hammered during the financial crisis and economic recession by massive losses on commercial real estate loans to home builders and developers, primarily for retirement communities in southern Delaware. Losses also spread to other loan categories, and its capital was severely depleted, prompting a regulatory crackdown and forcing the fire-sale deal to M&T.
M&T plans to cut 700 jobs in Delaware as part of its effort to revamp Wilmington Trust's operations and reduce expenses by $80 million a year. But CEO Robert G. Wilmers also announced earlier this month that M&T will add 40 jobs at its existing call center in southern Delaware and invest $7 million to $10 million to build a backup data center in the state.