M&T seeks Northeast growth, optimistic on Trump-era mergers

M&T Bank Corp. is open to a merger in its quest for a Northeast expansion, which comes as the new Trump administration seems poised to grease the wheels for bank deals.

The bank is "very optimistic" that President-elect Donald Trump will appoint financial regulators who are "more balanced" than current agency heads, said Daryl Bible, chief financial officer of the Buffalo, New York-based bank.

"We'll see what happens when people get into the seats," Bible said.

Trump, who will be inaugurated Monday, has yet to name key leaders to regulatory agencies. Some see signs that deals involving large regional banks — such as Capital One Financial's proposed purchase of Discover Financial — will not be as easy to accomplish as some hope. But generally, analysts expect the Trump administration to be more receptive to mergers, giving smaller regionals like the $212 billion-asset M&T more wiggle room to get a deal approved.

Among M&T's top priorities is growing in New England, where the bank wants to become a "dominant player," Bible said. The goal is to be as big there as it is in Baltimore, where it expanded in 2003 through a merger and is now a major presence — with naming rights to the Baltimore Ravens stadium.

"Whether it takes 20 years or whether it's something shorter, that really depends on if we have inorganic growth in those periods," Bible said Thursday after the company reported its earnings for the fourth quarter of 2024.

The bank's net income rose to $681 million in the fourth quarter, up 41% from a year earlier. The 2023 figure included a $197 million payment to the Federal Deposit Insurance Corp., which asked bigger institutions to pay for the bank failures in 2023.

In his opening comments, Bible reminded analysts that the bank is a "disciplined acquirer."

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Truist Securities analyst Brian Foran wrote in a note to clients that a deal is unlikely this year as the bank is making a series of tech upgrades and may not want to "acquire amidst such large internal overhauls."

2026 is more likely for an M&T deal, Foran wrote. Some investors have expressed "angst" over M&T opting for mergers rather than more buybacks, but the bank does have a "better-than-average track record historically" in executing successfully on deals, he wrote.

The bank already has a presence in New England. It has a relatively small set of branches there but has been ramping up its hiring of commercial bankers and wealth managers.

"We're having an impact, but I think our impact will continue to increase and grow as we continue to put more investments there," Bible said. "And then if we have opportunities at some point to do inorganic, that will just speed up the process here as well."

As the bank grows its client base, customers will start asking M&T to expand its footprint even further, Bible predicted.

"We'll have basically people pushing us or pulling us into those markets, and there will be a demand for an M&T Bank," he said.

The bank last struck a deal at the start of the Biden administration, buying People's United Financial in Bridgeport, Connecticut, to boost its presence in the market. The deal took a bit longer to get done than executives expected, previewing some of the difficulty the industry would have as regulators took a longer time approving deals.

In recent months, bank regulators and the Department of Justice have formalized new policies that lawyers say make deals harder.

As Trump starts making more nominations, Bible said he's hopeful the president's picks focus on understanding the true risks facing the industry.

He credited a recent speech from Fed Gov. Michelle Bowman, a Trump appointee and former community banker, where she called on regulators to take a more "pragmatic" approach. That includes tailoring regulations so they're applied depending on the risks a bank poses, plus increasing transparency on how key regulatory decisions are made.

M&T beat Wall Street's forecasts with net income of $681 million, or $3.86 a share, in the fourth quarter, up from $482 million, or $2.74 a share, in the year-ago period. Analysts polled by S&P had expected earnings of $3.69 a share.

Provisions for credit losses shrank to $140 million from $225 million in the year-ago quarter.

For its guidance this year, M&T told investors to expect upward of $7.1 billion in net interest income, up from the 2024 figure of about $6.9 billion. It's also eyeing some modest growth in commercial, consumer and residential mortgage loans, along with declines in commercial real estate — where M&T has been actively scaling back its footprint.

The company expects loans of about $137 billion to $139 billion, an increase from its average of about $135 billion in loans last year.

Its stock price fell about 3% after the earnings report.