M&T Bank Acquires Another Struggling Bank

For the second time this week, Manufacturers and Traders Bank (M&T) of Buffalo, NY has acquired a struggling bank. After being closed today by regulators, nearly all of the deposits of K Bank of Randallstown, MD were assumed by M&T. Just a few days ago M&T Bank offered to acquire Wilmington Trust Bank in nearby Delaware. K Bank was the 58th ranked bank on the list and had approximately $538.3 million in total assets and $500.1 million in total deposits when closed.

64th ranked Pierce Commercial Bank, of Tacoma, WA closed with approximately $221.1 million in total assets and $193.5 million in total deposits. Heritage Bank (4070th) of Olympia, WA has agreed to assume all deposits.

88th ranked First Vietnamese American Bank of Westminster, CA closed with approximately $48.0 million in total assets and $47.0 million in total deposits. Grandpoint Bank of Los Angeles, CA has agreed to assume all deposits excluding certain brokered deposits. Grandpoint Bank is owned by Grandpoint Capital which began in June 2010 through the acquisition of Santa Ana Business Bank (7015th). It has since been the buyer of a number of small banks.

106th ranked Western Commercial Bank of Woodland Hills, CA has also closed this week. It had approximately $98.6 million in total assets and $101.1 million in total deposits. First California Bank (5750th) of Westlake Village, CA has agreed to assume all deposits.

M&T Acquires Struggling Wilmington Trust

The Wall Street Journal reported today that M&T Bank acquired Wilmington Trust at a 46% discount over (or perhaps under is more accurate) its stock price. While over 90% of all bank failures seem to come from the weakest 1.5% of banks, this does not mean that banks further down the list are not also constrained in terms of their ability to operate. This has been the rationale behind presenting the rank of acquiring banks when possible each week. M&T is an incredibly healthy 6408th on the current list. Wilmington Trust? They are 383rd. If you factor in the roughly 3-5% probability of failure, their cost structure may simply be too great to continue as a going concern.