M&T Bank Nears Deal to Buy People’s United for More Than $7 Billion – The Wall Street Journal

M&T Bank Corp.

MTB 2.20%

is nearing a deal to buy

People’s United Financial Inc.

PBCT 2.28%

for more than $7 billion, according to people familiar with the matter, in the latest in a string of regional-bank tie-ups.

The companies are discussing an all-stock deal that could be announced as soon as this week, the people said, assuming talks don’t fall apart. Based in Bridgeport, Conn.,based People’s United has a market value of roughly $6.6 billion, while Buffalo, N.Y.-based M&T’s is more than $19 billion.

Combined, the banks would have more than $200 billion in assets, with a network of branches concentrated in the Northeast and mid-Atlantic regions. The deal would facilitate M&T’s expansion into the Boston market and strengthen its position in New York and Connecticut.

For M&T, a serial acquirer, it would be its first major takeover since its acquisition of Hudson City Bancorp Inc. in 2015. That deal was delayed for three years after regulators found “significant weaknesses” in M&T’s anti-money-laundering and consumer-compliance programs.

M&T is among the largest regional lenders in the Northeast, with $142.6 billion in assets at the end of 2020. Commercial real-estate loans comprise almost 40% of its portfolio, including some to New York City’s battered hospitality sector. But loan performance at the bank, as well as that of many of its regional peers, has been better-than-expected over the past year.

People’s United operates about 450 branches in Connecticut, southeastern New York, Massachusetts, Vermont, New Hampshire and Maine. The bank said last month it wouldn’t renew contracts at the 140 branches located inside the grocery chain Stop & Shop when they expire in 2022.

The combined company is expected to be led by M&T Chief Executive René Jones and maintain a significant corporate presence in Bridgeport, the people said. Mr. Jones, who has led the company since 2017, is one of very few Black chief executives in the banking industry and corporate America in general.

There has been a steady stream of regional-bank deals recently as industry players seek scale to better compete with larger competitors whose big budgets allow for flashier technology.

Last year,

Huntington Bancshares Inc.

agreed to merge with

TCF Financial Corp.


First Citizens Bancshares Inc.

said it would buy

CIT Group Inc.


PNC Financial Services Group Inc.

reached a deal to buy the U.S. arm of Spain’s


for $11.6 billion. The year before, two larger regional banks,


and SunTrust, merged to become Truist Financial Corp. in what was the largest bank deal since the financial crisis ushered in stricter regulations.

Ultralow interest rates and meager loan growth have made it difficult for banks to profit from lending. The effect is most pronounced on regional banks, which rely more on lending profits than their national counterparts. Net interest margin, or the difference between what a bank pays its depositors and what it earns from lending, hit a record low for commercial banks in the fourth quarter of 2020.

Write to Orla McCaffrey at orla.mccaffrey@wsj.com and Cara Lombardo at cara.lombardo@wsj.com

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Appeared in the February 22, 2021, print edition as ‘M&T Bank Nears Deal Valued at $7 Billion.’