Wilmington Trust to merge with M&T Bank

Wilmington Trust Corp. and M&T Bank Corp. have announced an agreement to merge, ending the existence of Wilmington Trust’s long-standing Delaware brand. The union will form one of the largest banks in the eastern United States, M&T Bank officials said.

News of the merger was released Monday, Nov. 1.

Under the terms of the agreement, Wilmington Trust common shareholders will receive shares of M&T common stock in exchange for each share of Wilmington Trust common stock they own in a stock-for-stock transaction valued at $351 million, plus assumption of $330 million in Troubled Asset Relief Program preferred stock.

Headquartered in Buffalo, N.Y., M&T has $68.2 billion in assets and extensive operations in the Mid-Atlantic region. Wilmington Trust, based in Wilmington, has $10.4 billion in assets.

“This strategic partnership brings together two institutions that share many common values and that operate several distinct but complementary lines of business,” said Robert G. Wilmers, M&T chairman and CEO, in a press release.

Wilmers said by leveraging the strengths of both organizations, M&T would build a more powerful franchise with strength and stability, scale and density, and top-class products and services.

Donald E. Foley, chairman and CEO of Wilmington Trust, said the bank’s third-quarter earnings show it faced difficult financial realities associated with the poor credit quality of its loan portfolio.

“Wilmington Trust today has two very strong fee-based businesses that continue to perform well,” Foley said about the bank’s financial planning and corporate banking units.

He said the bank had little assurance its loan portfolio would strengthen significantly in the near term and that its capital position would not further decline.

Foley said after careful study, the bank’s board, advised by its lead financial adviser Lazard Freres & Co. LLC, concluded that a merger with M&T was the best available option for stockholders, clients and nearly 3,000 employees. M&T will acquire 48 branch locations in Delaware and 225 automatic teller machines (ATMs).

Following completion of the merger, M&T will operate about 800 branches and 2,000 ATMs in eight states, the District of Columbia and Ontario, Canada.

M&T expects to gain approximately $8.3 billion in deposits and $8.1 billion in loans from the merger.

Wilmington Trust’s individual and commercial customers can continue to bank in the same locations. Bill Benintende, Wilmington Trust vice president of public relations, said the biggest change customers will notice is rebranding of bank branches.

“The signage will change, but the people will not. M&T has been very vocal in its commitment to maintain all of the staff in our branches,” Benintende said.

Following her Election Day victory, Rep. Ruth Briggs King, R-Georgetown, said she wants to investigate ways to create more jobs. She said the Wilmington Trust and M&T Bank merger might do that.

“M&T already has a large operation in Millsboro. There could be something to be realized in Sussex County in terms of jobs from that potential merger acquisition,” she said.

But Sen. George Bunting said he thinks just the opposite might result – a loss of jobs. Bunting asked, in an Oct. 14 letter sent to the Federal Reserve, for an investigation into Wilmington Trust’s commercial loans to Delaware-based limited-liability corporations. He asked that if the Fed found any indications of criminal wrongdoing that it notify the Federal Bureau of Investigation.

“I’m not sure there’s anything criminal; it just seems like a lot of mismanagement has gone on. M&T is not going to keep people who were losers in making these loans,” Bunting said.

He said many loans Wilmington Trust made went to the same individuals doing business under various limited-liability corporations for commercial real estate ventures, many in Sussex County.

“The names of the people who made these commercial loans should be publicized so the public knows.

“The public then can make its own judgment,” he said.

Bunting said although M&T will help protect many jobs held by Wilmington Trust employees, it’s unlikely all employees will keep their jobs.

“M&T is going to want their own management. There’ll be a lot of changes made, and somebody’s going to get hurt,” he said.