America has lost its regional-bank champion. Robert Wilmers built M&T Bank into a $120 billion in assets lender with 24 acquisitions over almost 35 years and used that platform to attack post-crisis rules that lumped mid-tier players with mega-banks. His death on Saturday at 83 robs the industry of one of its staunchest defenders.
Most bank bosses ran for cover after last decade’s financial meltdown, choosing to let lobby groups do their bidding in arguing against the Dodd-Frank Act and other regulations. JPMorgan’s Jamie Dimon was a notably outspoken exception. Mr. Wilmers was another.
He was no dyed-in-the-wool regional banker, having worked at both Bankers Trust and JPMorgan. He came to Buffalo-based M&T — now valued at almost $26 billion — as an activist investor pushing for better results. Instead, he was hired in 1982 and became chief executive officer a year later.
Like Mr. Dimon, Mr. Wilmers would lay out his thesis in annual shareholder letters that could run to 30 pages or more. The big five banks were a particular bugbear. In his letter covering 2011, he accused them of “a pattern of investing in areas where they possessed little knowledge,” appearing to “seek dominance at the expense of leadership,” and stating that they “continue to distort our economy.” In this year’s missive, he pointed out these five had paid $158 billion in legal settlements over a decade.
He also amassed evidence of what his bank’s small and midsize businesses were most concerned about: health care costs and new regulations, not competition or materials costs, he wrote last year.
Most important, though, he did not hold back on the perils of new banking rules he regarded as over the top. This year he outlined how M&T underwent 27 examinations from six agencies during 50 of the 52 weeks in 2016. The bank’s compliance costs shot up to $440 million that year, or almost 15 percent of operating expenses from $210 million in 2010.
That is, in part, the result of regulators finding shortfalls in M&T’s anti-money-laundering procedures and other areas after it bid for Hudson City Bancorp. The deal, struck in 2012, took more than three years to get the nod from watchdogs. As problematic as that was for M&T, which counts Warren Buffett’s Berkshire Hathaway as a top-10 shareholder, it also bolstered for many Mr. Wilmers’ argument about regulatory overreach.
His death comes just as Congress is considering a bipartisan move to ditch one of the biggest constraints he fought: the designation of any bank with $50 billion or more of assets as a systemically important financial institution, which Mr. Wilmers dubbed a decision made “abruptly and arbitrarily.” It’s a victory he’ll now be unable to savor.
Continue reading the main story