In several articles over the years I have mentioned M&T Bank (MTB) and People’s United Financial (PBCT) together, as although M&T is a much larger bank, they are geographic neighbors, they share a similar credit and operational culture, and they have both served their shareholders relatively well over the years with what I’d call an “opportunistically conservative” model.
On Monday those ties became much closer, as M&T Bank and People’s United announced a merger wherein M&T will acquire People’s United in an all-stock deal. While I’d run the numbers on a possible merger here before, I had thought that People’s United would likely prefer to remain independent and pursue its own value-added M&A strategy over time. But in a difficult environment for organic bank earnings growth, I think the M&T opportunity was too much to pass up.
On a pro forma basis, I like this deal. People’s United shareholders are getting more than I think the bank was currently worth on a standalone basis, and they get to participate in the upside of the merged entity if they wish. M&T finds a good use of capital, eases some of the growth worries I had, and improves its franchise by essentially replicating it in New England with an excellent cultural fit.
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M&T Bank Acquires People's United In An Attractive Win-Win Deal
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