On paper, M&T Bank's acquisition of People's United Bank wrapped up more than a year ago. In practice, integrating M&T into the former People's footprint across New England is just getting started, according to CEO René Jones.
"That's really important, to get everyone on the same platforms, on the same systems and under the same philosophy, but the real work is building trust," Jones said. "We're kind of at the beginning of that process."
Jones spoke with Buffalo Business First on Thursday about the bank's plans for its entire footprint — from its new frontier in New England to its headquarters in downtown Buffalo.
M&T has spent the last year opening branches in underserved areas in New England and implementing programs like its multicultural small business labs there.
While the acquisition boosted M&T's balance sheet right away, it's these community-driven efforts that will drive meaningful results, Jones said.
"That alone is what really produces lots of growth," he said.
M&T has grown rapidly over the last several decades due largely to acquisitions, acquiring 25 other banks between 1987 and today. That pace has slowed recently, with only two acquisitions since 2011.
The People's acquisition added five states to M&T's footprint, bringing the total to 12 (in addition to Washington, D.C.).
Jones said the bank will stick with with its longtime philosophy of making sure it's as strong as it can be before taking on new acquisitions.
Its four main goals for 2024 are the same as last year:
"We feel that we have a lot of good work to do today, and we're not really thinking about whether there's a next acquisition on the horizon," he said.
The bank's leadership reevaluates M&T's core priorities each year.
"What we want to do is try to give our teams themes, but not actually dictate exactly what they're doing, because each community is different," Jones said.
- Growing in New England and Long Island
- Improve the resiliency of the bank and its ability to absorb stress
- Ensure risk management systems that can scale to meet the bank's needs
- Streamline and optimize M&T's processes.
To these ends, the bank's technology budget for 2024 is nearly $1 billion.
"All of those things drive technology spending. Because everything is focused on technology," Jones said.
'Super bullish on Buffalo'
M&T has doubled down on downtown Buffalo, opening two tech hubs here over the last several years and moving some of its suburban offices into the city.
"I'm super bullish on Buffalo," he said.
He said people used to ask him why he'd ever choose to live here.
"That has shifted to 'What's going on in Buffalo?'" and now we hear people say, 'You've got to see what's going on in Buffalo,'" he said.
He said he regularly meets with business leaders interested in relocating here.
The Covid-19 pandemic and its aftermath threw downtown Buffalo's resurgence off-cadence. Fewer people are spending time downtown. But Jones is confident this is a temporary problem.
"We haven't really found our new rhythm yet, we as Buffalonians," he said.
Seneca One is teeming with people. M&T and others are working to find ways to "activate" busy spaces to get people engaging downtown in ways beyond work, he said.
"People are using the space in a different way then they used it before, and that process of change and adaptation is going to have to continue for a while," he said.
M&T shifts its CRE strategy
At the end of 2018, commercial real estate accounted for nearly 39% of M&T's loan portfolio. Today it's less than 25%, although the total portfolio has grown by more than $45 billion since then.
That's the result of an ongoing effort, started in 2019, to gradually scale back CRE's prominence on the bank's balance sheet, according to Jones.
M&T has long been a major player in the commercial real estate space, and it intends to stay that way, Jones said. "We've been able to continue to do business with our clients, it's a really strong segment for us, but the size of our balance sheet has come down a little bit," he said.
The 2008 financial crisis led to major shifts in commercial real estate lending works. Banks used to account for about 60% of CRE loans, now they're about 40%.
M&T is steering more customers to borrowers to solutions that exist outside the bank's balance sheet, such as M&T Realty Capital Corporation and M&T Investment Banking.
"What we're really doing is just adapting ourselves to that new environment so that we can give our customers all of the services that we need without using our balance sheet alone," Jones said.
