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M&T CEO details importance of small business to the economy

By Journal Staff


Small businesses remain a key piece of the U.S. economy, but they are struggling to create as many jobs as they have in the past, M&T Bank Corp (NYSE: MTB) Chairman and CEO Robert Wilmers said.

Wilmers focused his April 17 annual message to M&T shareholders on the importance of small businesses and some of the challenges they face.

He noted that in the 1980s, companies with fewer than 100 employees created 57 percent of the total net new private-sector jobs in the nation. During the last decade, the total has fallen to 33 percent, he said.

“It is no surprise to us that small business-related job creation has slowed in established, mature small businesses, as well as in startups,” Wilmers said, according to a transcript of his remarks. “Indeed, the sad reality is the small business growth engine has been slowing for some time. The recent recession and lethargic recovery has only magnified a problem that has been brewing for decades.”

While the nation’s leaders frequently speak of support for small business, the performance of federal programs has been lacking, Wilmers added.

Loans backed by the government through the Small Business Administration (SBA) are so complex, he said, that only one-third of banks are active SBA lenders. Just 725 banks nationwide made 10 or more SBA loans, Wilmers said.

“Consequently, SBA lending represents a trivial share of total small business lending in the U.S., approximately 3 to 5 percent,” he said. “But, despite the minor role it plays, the SBA is the embodiment of public commitment to small businesses.”

For its part, M&T made nearly 7,500 small-business loans in 2011 and its portfolio of small-business loans outstanding totals $5.2 billion. The bank is ranked as the 11th largest small-business lender in the nation, Wilmers said.

He also said the government should consider an overhaul of SBA lending programs with an eye toward streamlining and simplifying the process.

Wilmers also pushed for schools to do a better job educating students in basic skills. He noted that all firms, including small businesses, often have difficulty recruiting qualified employees, especially those with technical skills.

“A sustained economic recovery, in other words, is neither automatic nor inevitable,” Wilmers said. “Growth will require a qualified work force.”


M&T reports flat first-quarter net income



Buffalo–based M&T Bank Corp. earned $206.5 million in the first quarter, up slightly from $206.3 million a year earlier. The company earned $1.50 per share in the period, down from $1.59 per share in the first quarter of 2011.

M&T’s deposit growth has benefited from some of the upheaval caused by HSBC Bank’s exit from the upstate New York market, M&T CFO Rene Jones said during an April 16 conference call on the first-quarter results. First Niagara Bank of Buffalo plans to close an acquisition of HSBC’s branches in upstate New York next month.

Total deposits at M&T rose to $60.9 billion at the end of the first quarter, up from $59.4 billion in the previous quarter and $50.5 billion a year earlier. Total loans rose to $60.9 billion from $52.1 billion a year earlier.

Net interest income for the period totaled $627.1 million, up from $575.1 million in the first quarter of 2011. Noninterest income was $377 million, up from $314 million a year earlier.

M&T’s provision for credit losses was $49 million in the first quarter, down from $75 million a year earlier. Net charge-offs totaled $48 million, down from $74 million.

Nonaccruing loans totaled $1.07 billion as of March 31, down from $1.08 billion a year earlier.

Noninterest expense in the first quarter totaled $640 million, compared with $500 million in the first quarter of 2011.

M&T Bank has more than $79 billion in assets and branches in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, and Washington, D.C.

M&T is the leading bank in the Syracuse–area deposit market with 30 branch offices, more than $2.2 billion in deposits, and a market share of more than 21.2 percent. It is number two in the Utica–Rome market with 13 branches, more than $615 million in deposits, and a market share of about 16.8 percent.

The bank also leads the Binghamton–area market with a deposit market share of 48.7 percent, 16 branches, and more than $1.2 billion in deposits, according to the latest statistics from the Federal Deposit Insurance Corp.—K.T.

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