M&T Bank, People’s United extend merger agreement while awaiting federal approval

Photo | Grant Welker People's United Bank's offices at Mercantile Center in downtown Worcester

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By Zachary Vasile

New York lender M&T Bank and Bridgeport-based People’s United Bank have extended the window to complete their $7.6 billion merger while they still await federal approval of the deal, the banks announced.

People's United Bank has eight Central Massachusetts locations and $1 billion in local deposits as of June 30.

In a statement, M&T and People’s United officials said they have extended their merger deal agreement — which was first announced a year ago — to June 1.

The banks are still waiting on final approval from the Federal Reserve, which has yet to rule on the deal. Delays from the Fed’s board of governors caused the would-be partners to miss their first prospective deadline, set for the fourth quarter of 2021, and have now apparently scrapped their back-up date, which was supposed to be Feb. 21.

The deal could close sooner than June 1, depending on if and when the Federal Reserve approves the deal.

“M&T and People’s United both remain committed to the merger and seeking [the Federal Reserve’s] approval,” the banks said in a joint message.

While neither M&T nor People’s United have officially addressed possible reasons for the holdup, M&T Chairman and CEO Rene Jones told an industry conference in November that other, similar mergers and acquisitions were running into the same delays.

Some analysts have speculated that the Federal Reserve could be responding to signals from the Biden administration, which has spoken in favor of reining in bank mergers that could threaten competition and consumer choice.

Still, other deals have gone through in recent months, including the merger of Webster Bank and Sterling Bancorp, which completed their linkup on Feb. 1. The Federal Reserve signed off on that deal on Dec. 17.