M&T Chairman: Megabanks running an unsafe business model


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EDITOR’S COMMENT: Nocera has run across a banker who speaks the plain truth, doesn’t fiddle with trading profits and builds a sound business model. He found it refreshing. I like that. Imagine the degree of refreshment when he realizes that there are about 7,000 community banks and credit unions that are also operating on sound business models and could easily pick up the pieces after the megabanks collapse, which they most surely will.


The Good Banker


Not long ago, as I was leaving a business lunch, my luncheon companion handed me a thin manila envelope. He didn’t tell me what was in it or why he had given it to me, but as soon as I opened it up, I immediately understood.

It contained a copy of the 2010 annual report to shareholders by a bank executive I’d never met: Robert G. Wilmers. For nearly 30 years, Wilmers has run the M&T Bank, based in Buffalo. When he took it over, M&T had $2 billion in assets; today, its assets exceed $68 billion, and it’s one of the most highly regarded regional bank holding companies. It has also been one of the best performing stocks in the Standard & Poor’s 500-stock index; indeed, M&T was one of only two banks in the S.& P. 500 that didn’t cut its dividend during the financial crisis.

Wilmers’s report, however, was less about the company’s numbers than about the dismal state of his beloved profession. Wilmers, it turns out, is that rarest of birds: a banker willing to tell harsh truths about banking. That, for instance, much of the money the big banks earn comes from trading profits “rather than the prudent extension of credit that furthers commerce.” That derivatives had helped bring about the crisis and needed to be regulated. That bank executives were wildly overpaid. That the biggest banks — the Too Big to Fail Banks — were operating, as he put it, an “unsafe business model.”

My first thought upon finishing the report was: I need to meet this guy. So, a few weeks ago, I did.

In person, Wilmers does not immediately strike one as a rabble-rouser. At 77, he is soft-spoken, a bit reticent, and almost excessively polite. “I personally believe that there isn’t a more honorable profession than the banking industry,” he began. “Most bankers are very involved in their communities, and they can stand up and be counted. I saw a poll recently,” he continued, “that showed we are now considered the third worst profession. That bothers me.”

On the other hand, it didn’t exactly surprise him. In the run-up to the financial crisis, the giant national banks — which he viewed as a distinct species from the typical American bank — had done things that deserved condemnation. And, he added, “They are still doing things that I don’t think are very good.”

Such as? “It has become a virtual casino,” he replied. “To me, banks exist for people to keep their liquid income, and also to finance trade and commerce.” Yet the six largest holding companies, which made a combined $75 billion last year, had $56 billion in trading revenues. “If you assume, as I do, that trading revenues go straight to the bottom line, that means that trading, not lending, is how they make most of their money,” he said.

This was a problem for several reasons. First, it meant that banks were taking excessive risks that were never really envisioned when the government began insuring deposits — and became, in effect, the backstop for the banking industry. Second, bank C.E.O.’s were being compensated in no small part on their trading profits — which gave them every incentive to keep taking those excessive risks. Indeed, in 2007, the chief executives of the Too Big to Fail Banks made, on average, $26 million, according to Wilmers — more than double the compensation of the top nonbank Fortune 500 executives. (Wilmers made around $2 million last year.)

Finally — and this is what particularly galled him — trading derivatives and other securities really had nothing to do with the underlying purpose of banking. He told me that he thought the Glass-Steagall Act — the Depression-era law that separated commercial and investment banks — should never have been abolished and that derivates need to be brought under government control. “It doesn’t need to be studied for two years,” he said. “I would put derivative trading in a subsidiary and tax it at a higher rate. If they fail, they fail.”

As Wilmers continued on in this vein, I found myself nodding in agreement. I also couldn’t help thinking back on remarks I’d heard Jamie Dimon give at a recent Chamber of Commerce event. Dimon, who made more than $20 million last year at JPMorgan Chase, is widely viewed as the best of the big bank chief executives. But he’s also become the most vocal defender of the status quo. “To people who say the system would be safer with smaller banks doing traditional banking, well, the system would be safer if we also went back to horse and buggies,” he told the Chamber audience. “That is a quaint notion that won’t work in the real world.”

At the M&T annual meeting earlier this year, Wilmers told the company’s shareholders that the bank’s mission was to “find ways to continue to attract deposits, make sound loans and grow in accordance with our historic credit quality standards.”

How quaint, indeed. And how refreshing.

16 Responses

  1. “Congress socializes the losses after privatizing the gains.” Mark Toma 9/17/2008.

    United States Government Owned Asset Management Company run by Lewis WIlliam Seidman per Resolution Trust Corporation Act of 1991.

    The Resolution Trust Corp (agency charged with taking over 100,000 units of rental housing thrift failure resolution) created in the wake of S&L crisis of the 1980’s.

    A government agency established in 1989 and disbanded in 1996 that administered federal savings and loan institutions that were insolvent .

    ‘Precedents — such as the Resolution Trust Corporation of the late 1980s and early 1990s, as well as the Home Owners Loan Corporation of the 1930s.”

    Is MERS the new electronic governmental body whose MEMBES are able to buy up the troubled paper while kicking people out of their homes and no longer need to keep USA businesses operating.

    MERS not created to have a limited life created to span the 21st Century. What nonpartisan professional management entity with oversight? Federal Reserve System and OCC.

    “pathology of this crisis is that unless you get ahead of it and deal with it from strength, it devours the weakest link in the chain and then moves on to devour the next weakest link”

    Question who is the next weakest link? the USA?

    Sure SOUNDS like ‘MERS’ is ‘Home Owners Loan…’ as suggested and already being run city by city, state by state by state, federal administrative government agency by refiling foreclosures as ordered today in Minneapolis by HUD.


  3. Regarding FNF (First National Financial) and … DOCX (Subsidiary) of which Lenders Processing Services was division thereof executes the transactions (issues the checks for example) of the electronic registrations that MERS claims to be Nominee and beneficiary. The transactions themselves are executed through Lenders Processing Services and DOCX (subsidiary) who controlled over 50% of the industry per their own admission in 2006 to investors in SEC 10K’s.

    I cut/pasted year Certegy and FNF merged and their own description to investors of how the business works. I was hoping Neil would turn into a cohesive article.

    Reasonable people do not know that ‘bank’s are a National Brand Consumer Retial Lable and back office is outsourced (of which they are owners and benefit) albeit the title and settlement agencies, settlement agents, etc.

    Posted as individual comments so not as overwhelming ‘important’ information consumers must read and understand to become empowered to move the courts!


  4. Dear Shelley A. Erickson,
    I’m very interested wmcochrane1@msn.com. Thank you.

  5. Dear Sherry Erickson and Members:
    I’d like to turnaround website saveamericaone.com for doing this kind of good. There is no limit (so far) on the # of pages. Would be info only in public domain. Need others to help figure out best way. 973-347-3475

  6. Shelley A. Erickson. I am very interested. Burmese8@yahoo.com

    Thank you

  7. Anyone who wants to reply to me and wants that list sent to their e-mail I will send you the copies of all the ROBOs I have scanned.

  8. Forgot! If you are able to financially have livinglies do a forensic audit on your mortgage title, and deed of trust, and securities. Mine is in the making. It cost me $2,000.00 for an attorney to just do a debt dispute letter for me and send it in 2009. It is free on living lies. That was before I started surfing the internet to find out what had happened to me, after being betrayed on my mod loan. I want to start my sons forensic audit, but could not get a second one going because there order site saw I had already ordered one. So if Neil Garfield will let me know how to get mine paid in full I want to pay mine up and not do the 200.00 a month plan and begin my sons. G. Hernandez and Leticia Quintana are on my sons and he is obviously MERS.

  9. This mans track record shows no compassion or responsible concern for ethics and good business. If something goes wrong in a business you run, the top dog is responsible for what has happened and knows it happened and how it happened. He is just a good con artist that has been caught and is only sorry because he has been caught. Don’t leave it up these con artist to investigate themselves, or the government. Go into county records in multiple counties in any state and pull up the records by typing in MERS. All of us need to do some investigating ourselves. Make a list of all the notaries in alphabetical order, and all the assistant secretaries and vice presidents of MERS, then all the employees signing for the banks and foreclosure companies. Cross reference your list with the ones already on the internet under Robo signers and under mortgage serving fraud (look at the article that has forum and how they steel your house click on to this article and go to the list of fraudsters & co -conspirators and scroll all the way down. They are all fraud docs. I was able to come up with a new one G. Hernandez signs as asst. sec of MERS in Pierce county , again on another doc in KIng County as asst. sec of RECONTRUST, AGAIN IN ANOTHER DOC in Crook county, Oregon as the notary witnessing Leticia Quintana signing as asst sec of MERS transferring assignment to RECONTRUST, WHOM THEY BOTH WORK FOR! A LITTLE CONFLICT OF INTEREST THERE? I found a stack of Linda Green doc’s and Chrystal Moore docs and more on the already ROBO list. I have turned them into the internet bloggs and to the attorney general in Wa and am turning it into the Orgegon attorney general today, and I have sent it to the recorders office in all the counties I have found them. I just got a letter from King County telling me this was not a concern of theirs, I need to contact another department , she put on the e-mail for me and I will next, but I e-mailed her back and told her that was not my only point to complain of mortgage fraud, she also told me they just record anything that is sent into record. I told her these ROBO signers owe them millions of dollars for the assignments they did not record and this info was for them to investigate this to make them pay for the fees they did not pay. We can all spend hours searching the internet to cross reference and put the pieces of the puzzle together to prove fraud. Lynn Syzmonaik did this and was on 60 minutes exposing the fraud, and we need to continue exposing the fraud. This exposure of fraud can not be ignored and has already caused the banks a lot of grief. Make them whine some more! Expose these robo signers on the web. I scanned them and put them on my e-mail to send to everyone I can think of. And sent them on paper to gov reps. Fraud vitiates all contracts.

  10. Don’t think M & T Bank are clean in this whole mess. Read their PSA and see who they’re in bed with. BOA, Wells fargo and the same ole crew.

  11. I just defaulted on my Chase Heloc—shove it, J.Dimon!!

  12. An unsafe business model? My goodness, we are just realizing this now. Securitization and derivatives need to go, too.

  13. Would appreciate a followup for M&T Bank Corp the good American Bank Parent of Wilmington Trust.

    How is M&T Bank Corp fka First Empire State Corp
    (aka Wilmington Trust Corp) different from
    JP Morgan Chase Inc? And how is M&T Bank Corp a good American bank?

    I was excited to read about M&T Bank Corp and considered moving my checking account from JP Morgan.

    Went on-line. Found website, history and services that could work, with a location in Port Jervis, NJ.
    But I had an itch over ‘M&T as familiar globally.
    Possible son works for an independent similar sounding named bank?

    I wanted to review an American Bank’s organization, ffiec.gov, secinfo.com and more to see how they do sound banking business right.

    Hmmmm… M&T was familair to me and as a global entity … Faith and Begoura as Irish/American as O’Bama and more

    Can the Good American Banker separate himself ethically when he is Chairman CEO of Parent Finanical Holding Company of a Global Conglomerate?

    John Stump tells the same familiar tale of the 150 year old American Bank on his website too. I did a term paper on trademarks of Wells Fargo stagecoache and how they kept all of our property safe.

    Sins by Omissions? or Associations? Appears this story is folklore. He may take only $2M in paycheck but… as Chairman of Board and CEO

    On secinfo.com only one
    Robert G. Wilmers of M&T Bank Corp with his own CUSIP 55261F 10 4,

    I selected one ad-hoc SC 13 D/A 1/22/04and most recent disclsoures Equity Comp Plan & equity incentive plan for which e paid no price for restricted stocks held in 10 groupings.

    Shares he held by means of a gift.
    No consideration was paid for such shares.

    Mr. Wilmers is a Citizen of US
    and sole voting power M&T Bank Corp
    5,499,526 (4.6%)

    R.I.REM INVESTMENTS S.A. Sole Member; Wilmers Co. LLC, Roche Foundation Trustee, West Ferry Foundation ‘Elisabeth Roche Wilmers, St. Simon Charitable Foundatino, Interlaken Foundation, Grantor Retained Annunity Trust No 5 Trustee Ira H Jolles, Grantor Retained Annuity Trust No 6. Trustee Robert G. Wilmers & Ira H Jolles Trustee

    Robert G. Wilmers, age 76, is chief executive officer (2007), chairman of the board (2000) and a director (1982) of the Registrant. From April 1998 until July 2000, he served as president and chief executive officer of the Registrant and from July 2000 until June 2005 he served as chairman, president (1988) and chief executive officer (1983) of the Registrant. He is chief executive officer (2007), chairman of the board (2005) and a director (1982) of M&T Bank, and previously served as chairman of the board of M&T Bank from March 1983 until July 2003 and as president of M&T Bank from March 1984 until June 1996.

    Restated Certificate of Incorporation

    RE: 2010 Annual Report of The Good Banker when
    Robert G. Wilmers took over 30 years ago was he with First Empire Bank.
    c/o Corporate Recording
    One M&T Plaza 5th Flor
    Buffalo NY 14204

    “The well-being of the bank is dependent upon the well-being of the communities we serve.”

    Established in 1856 as Manufacturers and Traders Bank. M&T Bank Corporation, one of the 20 largest US headquartered commercial bank holding companies throughout New York, Maryland, Pennsylvania, Washington, D.C., Virginia, West Virginia, New Jersey, Delaware and Toronto, Canada. Info from website.

    Free ATM access is available to M&T cardholders at Sheetz, NOCO, Rutter’s, many Wawa stores throughout Maryland, Thurgood Marshall BWI Airport, several General Growth Malls in Maryland, Virginia and Delaware, and participating HESS locations in Pennsylvania.

    Institution Type: Financial Holding Company – Domestic (2011)

    Primary Federal Regulator: FEDERAL RESERVE
    RSSD ID: 1037003

    First Empire State Corp 12/31/1969 established as a Bank Holding Company renamed 5/29/1998 to M& T Bank Corp who changed 3/1/2011 to a Financial Holding Company-Domestic.

    Parent: First Empire State Corp:

    First Empire State Corp (1037003) renamed M&T Bank Corp 5/29/1998 and changed from Bank Holding to Financial Holding Co – Domestic 3/1/2011.

    M&T Bank Corp (1037003) Buffalo NY
    M&T Life Insurance Co (1074754) Phoenix AZ
    M&T Capital Trust III (20704731)
    AllFirst Preferred Capital Trust (2861607)
    AllFirst Preferred Asset Trust (2861625)
    BSB Capital Trust III (3162936
    Southern Financial Statutory Trust I (3195279)
    Southern Financial Capital Trust III (3195288)
    Provident Statutory Trust III (3237889)
    Bayview Lending Group LLC (3551585) Coral Gables FL
    BSB Capital Trust 1 (3683824)
    M&T Capital Trust IV (3715864)
    Wilmington Trust Corp – Financial Holding Co (1888193)
    Wilmington Trust Co (272218) State Member Bank
    100 West Tenth St Corp (1979055)
    Brandywine Insurance Agency Inc. (1970964)
    Compton Realty Corp (1979215)
    Wilmington Trust SP Services Inc. (1979381)
    Wilmington Trust SP Services (DE) Inc (2787743)
    Wilmington Trust SP Services (Nevada) (2898676) Las Vegas NV
    Special Services (DELAWARE) Inc. (3029141)
    Wilmington Trsut SP Services (South Carolina) Inc (3372137) Charleston SC
    Wilmington Trust SP Services (Vermont) Inc (3384224) Burlington VT
    Rodney Square Investors LP (1979420) Philadelphia PA
    Wilmington Brokerage Services Co (1979484)
    Wilmington Trust SP Services (New York) Inc. (2086183)
    Siobain VI, LLC (2215143)
    WTC Camden, Inc (3329805)
    WT Community Investments, Inc. (3587593)
    Manufacturers & Traders Trust Co (501105)
    M&T Financial Corp (1037012)
    First Manufactured Housing Credit Corp (1074718)
    Glen Burnie MD
    M&T Realty Capital Corp (1074736) Baltimore MD
    M&T Securities Inc. (1381519)
    First Maryland Commercial Holdings Corp (2346917)
    MTB Investment Advisors, Inc. (2453226) MD
    MTB Asset Management Inc. (2482833) MD
    WMATA 1998-1STM-B4 TRUST (2833855) Millsboro DE
    M&T Real Estate Trust (2868802) NY
    M&T Mortgage Reinsurance Co, Inc. (2875350) VT
    M&T Insurance Agency, Inc. (2897455) NY
    RCS Consulting Group LLC (3445750) Chevy Chase MD
    M&T Pennsylvania Service Corp (2984739)
    Premier National Investmenet Co, Inc. (3008360)
    M&T Conduit Corp (3155778)
    Lafayette Settlement Services In c(3195251)
    M&T Trust Co of DE (3201826) Wilmington DE
    PB Investment Holdings LLC (3237955)
    M&T Lease, LLC (3299524)
    233 Genesee St Corp (3683815)
    Rodney Square Mgmt Corp (1979402) DE
    WT Investments Inc (1979532) DE
    Roxbury Capital Mgmt LLC (3624667) Santa Monica CA
    Cramer Rosenthal McGlynn LLC (3682108)
    Camden Partners Holdings, LLC (3682117)
    Wilmington Trust FSB (2214052) Wilmington DE
    Wilmington Trust Fiduciary Service Co (79006) Weehawken NJ
    WTFSB Properties (4157993) Wilmington DE
    Wilmington Trust (Cayman) LTD (2945507) Georgetown Cayman Islands
    Wilmington Trust Investment Management, LLC (3099872) Atlanta GA
    Wilmington Trust (UK) Limited (3116797) London England
    SPV Advisors LTD (3116818) London England
    Wilmington Trust SP Services (LONDON) Limited (3116863) London England
    Wilmington Trust SP Services (DUBLIN) Ltd (3116872) Dublin Ireland
    Wilmington Trust SP Services (Cayman) LTD (3116920) Grand Cayman, Cayman Islands
    SPV Managemetn LTD (3116939) London England
    Bedell SPV Management, Jersey, Channel Islands
    Wilmington Trust (London) Ltd (3404533) London United Kingdom
    Wilmington Trust SP Services (Frankfurt) GMBH (3441396) Frankfurt Germany
    GTBA Holdings Inc (3383393) Wilmington DE
    GTani Barash & Altman, LLC (3383414) Wilmington DE
    Wilminton Family Office, Inc. (3451564) Wilminton DE
    Wilmington Trust CI Holdings Ltde (3463183) Georgetown Cayman Islands
    Wilmington Trust Corporate Services (Cayman) Ltd (3463192) Georgetown Cayman Islands
    Florence Limited (3463204) Georgetown Cayman Islands
    Kendall Corp Ltd (3463213) Georgetown Cayman Islands
    Sentinel Corp (3463222) Georgetown Cayman Ilands
    Woodridge Corp LTD (3463231) Georgetown Cayman Islands
    Redmond Limited (3463240) Georgetown Cayman Islands
    WT Luxembourg, Sarl (3613027) Luxembourg
    Wilmington Trust SP Services (Luxembourg) SA (3614686)
    Wilmington Trust SP Services (Amsterdam) BV (4166959) Luxembourg Netherlands
    Rodney Square Insurance Co Inc. (4170321) Wilmington DE
    M&T Bank, National Association (2265456) Oakfield NY
    First Maryland Capital I (2534545) NY
    M&T Capital Trust I (2552307) NY
    First Maryland Capital II (2567169) NY
    M&T Capital Trust II (2589189)
    Keystone Financial Mid-Atlantic Funding Corp (2606853) NY
    Provident Trust I (2694083) NY

    M&T Bank, NA feeds directly to Parent M&T Bank Corp in Buffalo NY a Financial Holding Co.

    Rodney Square feeds to Wilmington Trust Corp to Parent

    1995 Parent: First Empire State Corp Buffalo NY
    Bank Holding Co (1037003)
    Manufacturers & Traders Trust Co (501105) – State Bank
    M&T Mortgage Corp (1966578)
    Highland Realty & Properteis (2012128)
    M&T Credit Corp (2238348)
    Citizens Financial Services Inc (2262156)
    Nova American
    M&T Bank International (1171729)
    M&T Securities (1381519)
    Cornerstone Ventures (1966550) CA
    NEJore Corp (1647532)
    MSB Associates Inc (1451261)
    Esquire Communications LTD (2051378)
    Taber Acquisition Corp (1984518)
    Chem PUB, LP Greenwhich CT (1966747)

    12/31/1973 First Empire Bank International NV located at CURCAO, Willemstad, 0, CAO, Bonaire, SABA, St. Martin & St. was established as an International Nonbank Sub of Domestic Entities.
    12/31/1976 First Empire Bank International NV was renamed to M&T Bank International N.V.
    7/30/1995 Institution closed.

    Premier National Bancorp, Inc. fka Community Bancorp, Inc. renamed to fka Fishkill National Corp acquired by Hudson Chartered Bancorp Inc. renamed to Premier National Bancorp, Inc. Parent George Gale Foster Corp acquired 2001 by Olympia Financial Corp whose Parent is M&T Bank Corp 2003

    Parent Allied Irish Banks PLC, First Maryland Bancorp Parents of First Maryland Holding Corp acquired by First Maryland Bancorp 12/16/1994 renamed AllFirst Financial Inc. 9/15/1999, 4/1/2003 acquired by M&T Bank Corp.

    To research:
    M & T Mortgage Co Parents Mellon related to National Realty Association

  14. Pamela Edwards, nothing quaint about that jerk Dimon:

    Jamie Dimon, CEO of JPMorgan Chase and avowed supporter of the American economy (what a load of crap!), said today that he thinks investigations into an enormously lazy and gummed-up foreclosure-paperwork system (lazy and gummed up?….millions are out on the street due to these acts, I would use another term, maybe ****ed up is even too nice?) may hamper the housing recovery.

    “It may slow it down,” Dimon said. He told Reuters he hopes that the current joint investigation by all 50 state attorneys general will only temporarily hold up the housing market. In any case, the problem appears to be getting bigger. Dimon said Wednesday during JPMorgan’s third-quarter earnings conference call that his employees were going over 115,000 foreclosure files in hopes of finding errant affidavits and rectifying the problem.

    By contrast, the end of September, JPMorgan said it was reviewing 50,000 documents to make sure they were filed properly. (Was anyone ever aware of a simple filing problem? I thought it was outright fraud that “gummed up” the process.)

    It’s unclear whether the move will be enough to remedy the situation in light of reports that JPMorgan Chase hired staggeringly underqualified people, dubbed them “mortgage experts,” and had them dutifully (and fraudulently) sign off on untold thousands of foreclosure documents. Nevertheless, Dimon said additional costs to his company related to legal trouble in the foreclosure business will be minor.

    It will be a great day for humanity when JPMC is shuttered and this clown is led off in matching bracelets. And given his knowledge of the aforementioned crimes, that’s exactly where he ought to be, heading for an extended stay at a different type of club than he’s used to. A FPMIA prison.


  15. I’ll just bet that Dimon’s take on people losing thier homes is quaint too.An unsafe business model run by the banks…..really imagine that.Its only been being done for how long now?15 or 20 years that we are aware of.Come on now if this gentleman feels this way surely he’s been around the block a time or two and if he’s involved inbanking and has been for sometime this id not just come up.Where was he with his info back in 98?What were any of them doing to prevent this from happening and all of a sudden he has a bad feeling about this.Well an good he wants to step forward now my take day late dollar short.Thanks for the info 20 years too late.Thanks but no thanks.

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