Buffalo, New York-based M&T Bank and Bridgeport, Connecticut-based People’s United Financial are extending the deadline to complete their merger until June 1, the banks announced Friday.
The $7.6 billion deal, announced in February 2021, carried an initial cutoff date of Feb. 21, 2022 — one day shy of a year.
"Approval by the Board of Governors of the Federal Reserve System is the outstanding regulatory approval required to complete the merger," the banks said in a statement, noting that New York and Connecticut regulators had given the deal a green light in October. "M&T and People's United both remain committed to the merger and seeking such approval."
That refrain is familiar.
"Action by the Federal Reserve Board is the remaining regulatory approval required to complete the merger, and both parties are committed to continuing to seek such approval," First Citizens BancShares and CIT Group said in a Sept. 30 release announcing the companies were delaying the timeline of their own tie-up from Oct. 15, 2021, to March 1, 2022.
The Fed signed off on the First Citizens-CIT deal in late December, on the same day it approved two others — Webster Bank’s $5.1 billion all-stock acquisition of Sterling Bancorp, and WSFS Financial’s $976.4 million purchase of Bryn Mawr Trust — just in time for the latter two deals to close in line with fourth-quarter expectations announced in April and March 2021, respectively.
The central bank last month approved a $2.5 billion merger between Evansville, Indiana-based Old National Bank and Chicago-based First Midwest Bank — another combination that, early on, appeared destined for a delay.
An Indianapolis-based fair-housing advocacy group sued Old National in October, alleging the bank discriminated against Black borrowers trying to obtain mortgages.
"We are calling on the Federal Reserve to do what it is required to do," the Fair Housing Center of Central Indiana's executive director, Amy Nelson, told The Indianapolis Star, "and conduct a thorough analysis and to address any disparities ... to make sure that Old National’s lending practices are fair to everybody."
That lawsuit was dropped in December when the sides reached an agreement, according to American Banker.
The Fed's approval came five months after the OCC's, though the timeline still met the expectations of Old National and First Midwest, which said when they announced the deal in June 2021 that they expected it to close, at the latest, in the first quarter of 2022.
Although the pace of bank merger approvals by the Fed has lagged for months, the drumbeat for a more critical look at the tie-ups has grown stronger. President Joe Biden in July issued an executive order requiring the Justice Department, Fed, Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corp. (FDIC) to update their guidelines "to provide more robust scrutiny" of the deals.
FDIC Acting Chair Martin Gruenberg this month listed a "careful interagency review of the bank merger process" among his top five priorities.
A review of FDIC bank merger policies — published in December by Gruenberg and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra without the prior approval of now-former Chair Jelena McWilliams — set off a fierce, partisan power struggle within the agency that abated when McWilliams resigned.
Citizens plugs along
Among other transactions at least six months in the making, Citizens Bank’s proposed $3.5 billion acquisition of Short Hills, New Jersey-based Investors Bancorp, announced in July, is still waiting for Fed approval, Citizens CFO John Woods told American Banker on Friday.
"There are some banks that are overdue for their approval," he said. "We are not."
Citizens Bank still expects the deal to close early in the second quarter.
"With this acquisition now complete, we look forward to bringing our new customers the full range of Citizens capabilities," Citizens CEO Bruce Van Saun said in a press release Tuesday. "Combined with our pending acquisition of Investors Bancorp, these new branches will fill an important gap in our retail footprint while giving us a top-10 deposit ranking in the key New York City Metro market." Sixty-six of the 80 branches are in the nation’s largest banking market.
The bank is also looking to bolster hiring in wealth, mortgage lending and business, along with adding 500 former HSBC employees, Van Saun said.
Not every regulator-delayed deal has gone to plan. Unable to get the Fed's "approval of or non-objection," Green Dot pulled out of a planned $165 million acquisition of Kentucky-based Republic Bank's tax refund-processing unit in October. Republic sued to force the transaction, but a Delaware court ruled against it in December.
Virginia-based Blue Ridge Bank and FVCB agreed last month to terminate their planned merger. While the banks did not mention a regulatory component in the termination announcement, they had delayed the deal's expected completion in November, after the OCC found "certain regulatory concerns with Blue Ridge Bank."