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David Robinson: M&T's long-term future still likely to center around Buffalo

David Robinson

In an industry where banks gobble each other up like Pac-Man, M&T Bank seems to be in a secure place — even after the death of CEO Bob Wilmers.

End of an era: M&T's Robert Wilmers, force in community, dies at 83

The bank is on solid financial footing after investing heavily in recent years to shore up its systems to detect money laundering and riding out a ban by federal regulators that kept it from making acquisitions until its reforms were in place.

And the leadership transition to a triumvirate of M&T's three vice chairmen — Richard S. Gold, René F. Jones and Kevin J. Pearson — implies stability in the bank's day-to-day operations.

M&T's next CEO could come from within

That type of stay-the-course strategy also makes it less likely that the leadership change will result in any drastic measures, like moving the bank or putting it up for sale.

"This isn't a time of weakness for M&T," said Edward Hutton, a Niagara University professor and former Buffalo banker.

Wall Street's reaction Monday to the news of Wilmers' death also was a reassuring sign that investors have confidence in the Buffalo bank's succession plan and the likelihood that its new leaders will stick to its tried-and-true strategy of being a regional bank with a strong community focus.

M&T's stock rose by 1.7 percent on the first day of trading after the 83-year-old Wilmers died unexpectedly Saturday night.

"Wilmers had often expressed that he felt very strongly his successor should be an insider to carry on the culture of M&T, which he felt had made the bank so successful," Frank Schiraldi, an analyst at Sandler O'Neill Partners, said in a note to investors. "If it is an insider to take up the helm, we believe it will be one of these three."

Schiraldi isn't expecting big changes, either.

"Until the board names a successor, these three individuals will run day-to-day operations, which, as is our understanding, has already largely been true, with Wilmers largely involved at top level strategy," Schiraldi said. "All three have been long time lieutenants of Wilmers and we would not anticipate any meaningful change to the bank's strategy regardless of which becomes CEO."

That's sure to be reassuring, not only to M&T's nearly 17,000 employees but to everyone in the Buffalo Niagara region -- where M&T is one of the biggest private employers and community benefactors.

While the bank has moved into faster-growing markets in the mid-Atlantic region through a series of acquisitions since 2003, it still is a big player in the upstate banking market. That upstate presence likely limits the appeal of M&T to big banks looking to expand their footprints.

After all, big banks tend to shun slow-growth markets. They usually prefer places that are growing faster than the rest of the country.

It's why Citibank sold off its local branches, including some to M&T. It's why HSBC dumped its local branch network as part of an poorly-timed strategy shift that included a push into risky, high-rate consumer lending through Household Finance. It's why, when First Niagara Bank put itself up for sale after overpaying for some of HSBC's upstate branches, it wound up in the arms of Key Bank, another bank that already was here and wanted to bolster its upstate market share.

But M&T has never looked down its nose at upstate. To Wilmers, there was nothing wrong with slow-growth markets where people and businesses borrow money and do a pretty good job of paying it back.

M&T's new triumvirate likely feels the same way, especially since M&T has a commanding market share of nearly 30 percent or more in Syracuse and Rochester. Its Buffalo market share is even higher, although that figure is inflated by a quirk in the way federal banking regulators count corporate deposits.

M&T has other things going for it. Its restrictions on acquisitions have been lifted, freeing it to seek out deals to build out its regional footprint. UBS analyst Saul Martinez expects the new tax law to help M&T more than most banks. And Hutton thinks M&T's focus on commercial lending will help it do better as interest rates rise, since many business loans carry variable rates that will rise as overall rates increase.

"At this point, they're probably seeing some daylight, and I think they're probably looking at some acquisitions," said Anthony J. Ogorek, who runs Ogorek Wealth Management in Amherst.

In other words, business as usual. And for the Buffalo Niagara region, that's the best thing that could happen

David Robinson: To WNY, Bob Wilmers was much more than a banker

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