M&T Bank appears to be just another boring regional lender but that doesn’t account for its CEO
By: Christina Rexrode
April 21, 2017 5:30 a.m. ET
M&T Bank CEO Bob Wilmers rides to work on a decrepit bicycle with mismatched tires.PHOTO: MICHAEL BUCHER/THE WALL STREET JOURNAL
Bob Wilmers has been doing things his way since 1983. He doesn’t intend to stop.
Mr. Wilmers is chief executive and chairman of M&T Bank Corp., a Buffalo, N.Y.-based lender that from the outside appears to be just another boring regional bank. That doesn’t account for Mr. Wilmers, an 83-year-old cheapskate with an air of grandeur.
He stuffs his office with accouterments from his award-winning vineyard in France’s Bordeaux region; rides to work on a decrepit bicycle with mismatched tires; and lambastes whomever he believes is threatening his bank or small-business customers, be it the government for overreach or private-equity firms for greed.
“What can I say?” says Mr. Wilmers, who became CEO in 1983, after waging an activist campaign to get on the board. Today he directly or indirectly controls almost 6% of M&T, whose market value is around $23 billion. “I can’t spend all my time worrying what other people think.”
And he doesn’t. “He’s a contrarian,” said Martin Heckscher, who graduated from Harvard with Mr. Wilmers. “He does everything opposite.”
By the time Mr. Wilmers got involved with M&T in the early 1980s, he already had had a few careers: a job in the finance administration of New York City Mayor John Lindsay was followed by a posting as head of Belgium for Morgan Guaranty, a predecessor of J.P. Morgan Chase& Co.
At M&T, he grew the bank steadily even though it is concentrated in slow-growth markets throughout upstate New York and the Rust Belt. The plan was simple: Quality loans to worthy borrowers.
In 1990, M&T had revenue of $286 million on a deposit base of $6.2 billion. By 2008, the bank’s deposits had grown to $42.6 billion and revenue to $2.9 billion. This year, the bank’s deposits could top $100 billion.
Mr. Wilmers has bought 24 competitors, but never had an acquisition plan. It is better, Mr. Wilmers says, to examine opportunities when they present themselves than commit to growing by a certain amount or into particular locations. He has expanded only in areas where M&T already is or borders, adamant the bank do business only where it knows the local economy.
“To the extent you consider me unusual, there’s nothing unusual about the bank,” says Mr. Wilmers. “We just try to be good at what we do.”
Angela Bontempo, a longtime board member, remembered Mr. Wilmers recruiting her when she was a nun trying to turn around a struggling hospital in Buffalo. “He was a real person who came to talk to another person,” Ms. Bontempo said.
When he stumbled—for instance, in 2007 buying into collateralized debt obligations made of subprime loans—he acknowledged the fumbles, saying M&T “was not immune” to the temptation of easy growth. He also regretted expanding the bank into non-prime mortgages, including in unfamiliar regions.
But he digs his heels in when he feels it is warranted. For example, a wealth management firm M&T owns, Wilmington Trust, was indicted by the Justice Department, which alleged it misled regulators about the quality of some of its loans before it was bought by M&T.
M&T, which hasn’t been charged, has said the lawsuit is unfounded and is fighting the criminal charges. Mr. Wilmers believes the legal action will discourage healthy banks from rescuing troubled companies in future crises. A trial is scheduled for October.
Throughout the financial crisis and since, M&T never cut its dividend and never posted a quarterly loss. In the nearly 34 years since Mr. Wilmers took over M&T, including a period in the mid-2000s when he stepped back from the role, the bank has generated an average annual total return, which includes reinvested dividends, of 16.7%. That puts him near, but not quite in, the same league as Warren Buffett, whose Berkshire Hathaway Inc. is also a major shareholder.
Mr. Wilmers’ low-key manner can cause people to underestimate him. He was known to show up to client meetings driving his 1990 Toyota Corolla station wagon, affixed with a bumper sticker proclaiming his love for his grandchildren, until the car finally died about a year ago. During meetings, it can seem like he is not paying attention—until he pipes up with a sharp observation, according to people who know him.
“Sometimes people think he’s sleepy,” said David Walentas, a Brooklyn real-estate developer. “He’s the smartest guy in the room.” His firm tapped M&T to lead financing for a number of projects throughout New York City. “They’re not just bureaucrats. If it’s not a perfect deal, you go to them and they’ll explain things and have confidence in us,” Mr. Walentas said.
Last year, M&T posted a 22% increase in earnings, but the board cut Mr. Wilmers’ pay to $3.5 million from $3.7 million. Their reason: Shareholder returns could have been better.
It is hard to overestimate Mr. Wilmers’ impact on Buffalo, where M&T has been based since 1856. His bank is the region’s third-biggest private employer, and from the zoo to the orchestra, there is hardly an institution he hasn’t helped rescue, even sending his bankers to city hall to help untangle budget problems. In 2015, he warned city leaders not to think that construction cranes on the Buffalo skyline meant all was well, saying the local school system was still “a dismal failure.”
For someone so outspoken, Mr. Wilmers avoids the spotlight. He rarely speaks at banking conferences or even on his company’s quarterly earnings call, figuring his lieutenants know the numbers just as well.
His voice is strongest in his annual letter, which he works on throughout the year. In this year’s 34-page missive, he fretted over the fortunes of the middle class. Recent stock market gains, Mr. Wilmers says, are lulling decision makers into believing that the economy is adequate, but most families aren’t invested in the stock market and are suffering because low interest rates have battered returns on their savings.
Mr. Wilmers also gives voice to the resentment felt by regional banks that detest being lumped together with too-big-to-fail institutions. “Trading brings out the worst in humanity,” he says.
Mr. Wilmers doesn’t know how long he plans to stay in the job, but isn’t in any rush to leave. “What is it they say in country music?” Mr. Wilmers muses from his office chair. “The older the fiddle, the better the tune.”