M&T Bank and Wilmington Trust to merge
M&T Bank Corp. (MTB) and Wilmington Trust Corp. (WL) announced plans to merge Monday, after rumors spun last week about a potential Wilmington buyout. M&T, which is based in New York, expects to gain $8.3 billion in deposits and $8.1 billion in loans from Wilmington before acquisition accounting adjustments. Shareholders in Wilmington Trust will receive 0.05 shares of M&T stock per share held in the Delaware-based bank. M&T, which also serves the Northeast, will acquire Wilmington's 48 branch locations in Delaware as well as 225 ATMs, bringing M&T's network to approximately 800 branches and 2,000 ATMs in eight states and Canada. Chairman and CEO of Wilmington Trust, Donald Foley, said the merger will help his company continue to provide services to its niche market in the Northeast. It will also assist the company in facing a large amount of financial instability encountered over 2010. "Our merger will allow us to build on our many strengths and preserve our commitment to clients and the Delaware community," Foley said. "Wilmington Trust today has two very strong fee-based businesses that continue to perform well. However, as our third-quarter earnings announcement shows, we continue to face difficult financial realities associated with the credit quality of the loan portfolio in our banking business." For the third quarter, Wilmington Trust reported a net loss of $365.3 million. This follows a 2Q loss of $116.4 million. Wilmington's stock fluctuated uncharacteristically this year because of concern for the firm's stability. In January, Wilmington's stock broke $15 per common share and then spiked in April, trading at $20 a share. The deal has been approved by the board of directors for both firms and is expected to close in mid-2011. Write to Christine Ricciardi. Disclosure: The author holds no relevant investments.