M&T continues growth in Maryland

Posted: 7:10 pm Tue, November 9, 2010
By Ben Mook
Daily Record Business Writer

By taking over the assets and deposits of the failed K Bank and making an offer to buy Wilmington Trust Corp. that includes that bank’s assets and locations in Maryland, M&T Bank is continuing a decade’s worth of growth in the state.

The Buffalo, N.Y.-based bank has gone from having no presence in the Maryland market in 2000 to having more than a 12.5 percent share of the market as of the end of June. The bank has done this by buying large regional rivals and taking advantage of opportunities created by current economic conditions that have increased the number of failed banks the past few years.

“They have built a very strong market position in Maryland over the years,” said Bert Ely, a Virginia banking consultant. “They have been very opportunistic in the strategy of growing their presence.”

The latest acquisition occurred Friday when the Maryland Office of Financial Regulation closed Owings Mills-based K Bank and appointed the Federal Deposit Insurance Corp. as the receiver. The FDIC in turn cut a deal with M&T to assume all of K Bank’s deposits and $410.8 million of the bank’s $538.3 million in assets.

The K Bank deal marked the third FDIC-assisted transaction for M&T. In July, M&T agreed to accept the deposits of another failed bank, Ideal Federal Savings Bank in Baltimore. A buyer was not found for the deposits at Ideal, so they were transferred to M&T as a convenience to Ideal’s former customers. In 2009, M&T purchased the assets and deposits of Bradford Bank after it failed and was closed by the FDIC.

“In each case, it just made sense for us to do it. Maryland is an important market for us,” said Atwood “Woody” Collins III, president and COO of M&T Bank’s Mid-Atlantic division.

The same week the bank made the K Bank deal, it announced a $351 million deal to purchase Delaware-based Wilmington Trust Corp. Collins said the Wilmington deal was the priority for M&T, but the K Bank situation was too good to pass up. The deals could add as much as 1 percent more to the bank’s market share in Maryland.

“It was a coincidence, it usually doesn’t happen that way,” Collins said. “Any time we have a chance to grow market show in Maryland, we’ll consider it, and that’s exactly what we did with the K Bank situation.”

Ten years ago, according to the FDIC’s annual market share report, M&T does not even appear. In 2001, the report showed the bank with 25 offices and $510 million in deposits in Maryland. That gave it a 0.76 percent share of the market, equal to Baltimore-based First Mariner Bank, which had $506 million in deposits at the time.

The bank’s presence in Maryland took off after its 2003 acquisition of Maryland-based Allfirst Financial Inc. for $886 million in cash and 26.7 million shares of stock. By 2005, M&T had moved ahead of Chevy Chase Bank, SunTrust Bank and BB&T Bank to grab 8.6 percent of the market, second only to Bank of America, which had 19.6 percent of the market.

M&T took another big step forward last year when it purchased Provident Bank of Maryland, which was then the largest bank headquartered in the state. This year, as of June, M&T trails only Bank of America in market share and had $14.1 billion in deposits and 215 offices in Maryland.

Kathleen Murphy, CEO of the Maryland Bankers Association, said M&T’s growth over the years has shown that Maryland is a crucial market for them.

“M&T has identified Maryland as a market of choice for them,” Murphy said. “They have really made quite an impact in terms of representing the industry here in Maryland.”