Blog: Bank merger awaits feds’ approval | Business | journalinquirer.com – Journal Inquirer

The $7.6 billion merger of M&T Bank Corp. and People’s United Bank was expected to close in the fourth quarter of 2021 but is still awaiting approval from the Federal Reserve, M&T spokesman David Samberg said Wednesday.

M&T, which is based in Buffalo, New York, announced in October that it had received approval from the New York State Department of Financial Services and the Connecticut Department of Banking to complete its purchase of Bridgeport-based People’s United Bank.

The takeover was expected to close by the end of the year, with the banks combining their operating systems in February 2022, bank officials have said.

Speaking at the Boston BancAnalysts Association’s annual bank conference on Nov. 4, M&T Chairman and CEO Rene Jones said the merger seemed to be “in a temporary space,” regarding federal approval.

“There just seems to be a pause in deals being approved through the system,” Jones said.

In that conversation and in a talk at the Barclay’s Global Financial Services Conference on Sept. 15 Jones said he expects the integration of the two banks’ systems to move quickly once the deal gets its final stamp of approval.

Jones said the goal was to close in the fourth quarter of 2021 and integrate the banks in the first quarter of 2022. Preparatory work for that has shown that the banks’ cultures are very similar, he said, meaning the integration should move smoothly.

Meanwhile, Bloomberg News reported this week that Democrats in Congress and the Biden administration are pushing for greater scrutiny of large regional-bank takeovers, according to Cowen Inc.

Deals that create lenders with more than $500 billion in assets are at greatest risk, but even smaller ones may in jeopardy due to increased scrutiny by the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, Cowen analyst Jaret Seiberg wrote in a note to clients Tuesday, quoted by Bloomberg.

“We are in a period of transition to a new standard for merger approvals, where there is a greater focus on how deals affect the convenience and needs of the community and whether they increase systemic risk,” Seiberg wrote. “Deals that historically would have secured regulatory approval are now at risk. How much risk will depend upon how the Federal Reserve, FDIC and OCC revise their approach to merger reviews.”

Seiberg pointed to a number of recent steps by Democrats to reassess rules for bank deals. Those include House Financial Services Chair Maxine Waters calling for a moratorium on deal approvals until regulators finish a merger-policy review, and the resignation of Federal Deposit Insurance Corp. Chairman Jelena McWilliams following a dispute with Biden appointees over launching a public-comment period on overhauling bank-merger guidelines, Bloomberg reported.

The moves toward increased financial regulation follow the busiest year for bank mergers and acquisitions since 2007, with more than $61 billion in deals announced through Dec. 9, according to S&P Global.

Deals awaiting approval include U.S. Bancorp’s planned $8 billion acquisition of MUFG Union Bank, which is scheduled to be completed in the first half of the year.

Agencies were slow to approve a number of deals last year, with three mergers that had awaited action for months not receiving sign-off until Dec. 17, Seiberg wrote.

Those included the application by Waterbury-based Webster Financial Corp. to acquire Sterling Bancorp, and indirectly acquire Sterling National Bank, both of Pearl River, New York. The $10.3 billion merger agreement was announced April 13.

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