The Federal Reserve has approved M&T Bank’s request to acquire Bridgeport, Connecticut-based People’s United, the central bank announced late Friday afternoon.
Last month, the two banks extended until June 1 the deadline to complete the $7.6 billion deal, which would expand M&T’s footprint in New England and bring its total assets to around $216 billion.
M&T, which is on a two-year stress test cycle, will receive a new stress capital buffer this year, the Fed said. However, a recalculation will be required for 2023 as this year’s test will not include the effects of the acquisition.
The timing of the Fed’s approval raised eyebrows at Better Markets.
“It becomes a disturbing pattern that undermines the credibility of the Federal Reserve. It opens the question – what is it trying to hide by releasing such important information at a time when it will receive the least attention, media coverage and scrutiny?” Phillip Basil, director of banking policy for the association, said in a press release, noting that when the Fed gave the green light to three more bank transactions in December, the notice also came late on a Friday afternoon. “Such weekend and end-of-day announcements do a disservice to the public and fall short of the Fed’s role.”
Basil added that the merger approval “underscores the need for the Fed to follow the lead of the [Federal Deposit Insurance Corp.] and the Department of Justice asking for the public’s input on sensible reforms to the review process, which simply needs to be much more transparent.”
Banking sector consolidation, Basil said, is reducing financial products and services to families, including low-income people, small businesses and communities of color.
President Joe Biden issued an executive order in July requiring the Justice Department, the Fed, the FDIC and the Office of the Comptroller of the Currency (OCC) to “provide further review” of the deals.
The Fed is one of two regulators – along with the OCC – to convene a virtual public hearing, scheduled for Tuesday, to discuss the U.S. bank’s proposed $8 billion acquisition. MUFG Union Bank.
The central bank’s nod signals the final approval the M&T deal needed. New York and Connecticut state regulators approved the acquisition in October. The shareholders of both banks approved the transaction last May, M&T said.
M&T’s deal caught fire when M&T announced last July that it would cut 747 jobs at People’s United, including 661 at the bank’s headquarters in Bridgeport. M&T then pledged to retain at least 80% of the Connecticut bank’s workforce and employ at least 1,000 people in Bridgeport within a year of completing the systems conversion, according to American banker.