Tag Archives: M&T Bank

Sheriff Howard Underpaid, Like Schoolteachers

15 Jul

Sheriff Tim Howard beclowned himself again by taking a job working security for M&T Bank.  On top of that, he even did the sort of thing that’s supposed to really piss off the WBEN right in western New York: he used his county take-home vehicle to get to and from work at the bank. 

But Howard is shameless, and whines that the work was, like, really fulfilling and totally cool. It was also paying him $50/hour. 

If this was merely the first time Howard did something embarrassing, corrupt, or stupid, it’d be bad enough. But as the News points out

It’s hard not to conclude that this is simply another episode of the sheriff’s pattern of poor judgment. That deficiency was on display when the jail was plagued with prisoner suicides; it was on display in the aftermath of jail escapes, including that of Ralph “Bucky” Phillips; and it was on display last fall when he pitched for votes by promising not to enforce the state’s new gun law known as the SAFE Act. This is a law enforcement officer who has shown he is without any sense of the propriety his high office demands.

It is true that Erie County’s sheriff is woefully underpaid. Howard’s salary is just $79,000, a ridiculously low figure given the importance of the job to county residents. Incredibly, Howard is paid $32,000 a year less than his undersheriff, Mark N. Wipperman, though it’s fair to say that Wipperman does a better job running the department than his boss.

But if money was a motivating factor for Howard, the answer wasn’t for him to cheat taxpayers of a full-time sheriff by moonlighting as a bank detective. It was to petition the County Legislature and county executive for an increase in pay, and then to rally support for the point. Most sheriffs, though perhaps not this one, could have made a strong case for a higher salary.

Better yet, if the Sheriff’s salary is so “low” at $79,000 (I really need to remember that line the next time some half-baked asshole attacks public school teacher salaries), Mr. Howard can simply resign and go to work for M&T full time.

Banking Built in Buffalo

7 Oct

When Buffalo was the eighth largest city in the country, full of captains of manufacturing and industry, it occupied a position of attention for the world. Do you wish you knew what that felt like, current resident of the echo? Well, you do, today, as the spotlight is now on Buffalo’s banks. And if you are anxious and confused, I don’t blame you.

For different reasons and with different motivations, HSBC, M&T and First Niagara are all currently in the national and international headlines (of the financial industry publications, at least). All three are on the cusp of growth and the revival of Buffalo . . . or a spectacular crash and hollowing out of one of our city’s few thriving business sectors. Let’s take them one at a time.

M&T Bank’s murmurs of acquisition and take over have been the most cryptic, but also now the least threatening. Most reporting of the on-again, off-again talks between M&T and Spanish banking giant Banco Santander involved M&T’s acquisition of Sovereign Bank, creating the 15th largest bank in the US, or a Top 10 bank, depending on how you count. The talks broke down because Santander, while dumping its under-performing subsidiary Sovereign, was really interested in acquiring M&T. How could this happen? Because for M&T, the talks were never about Sovereign or expansion, but how to best find a home for 22.5% of the company’s stock currently owned by Allied Irish Bank.

Confused? When M&T acquired Allfirst Bank and moved into the mid-Atlantic in 2002, it did so by purchasing the bank with M&T stock. The major stake holder in Allfirst at that time was Allied Irish Bank, and during Ireland’s Celtic Tiger phase, Allied Irish probably seemed like a safe place for one fourth of the company’s stock. M&T and Allied Irish took seats on each other’s boards, and M&T’s international profile grew. Unfortunately Ireland’s economy has fallen hard, and Allied Irish has been mandated by the Irish government, as a condition of its bailout which will give the government near total ownership and control of the bank, to dispose of its entire stake in M&T by the end of 2010.  

This causes problems for M&T. Fortunately, Wilmers and crew have control issues, and have built in agreements as to the disposition of their shares. They could arrange a sale to one single entity, but not everyone has a couple billion lying around they don’t know what to do with. They could let Allied Irish do a fire sale, but flooding the market with M&T stock would severely depress the price. Or, they could mix the purchase into another deal – i.e. the Sovereign acquisition. M&T would buy Sovereign with M&T stock, while simultaneously, Santander would buy the 22.5% stake. This would give Santander over a 51% stake in M&T, and thus control. Buffalo can be thankful Wilmers has the chutzpah to demand continued control of a company that he and his crew would no longer own – on that issue, talks broke down.

M&T fears of a diluted stock price were well founded. Allied Irish has just announced they are selling off their stake in several big chunks to investors hand picked by M&T. Still, M&T’s stock is down 10% since the news of Allied Irish’s stock disposal plan was announced, and nearly 20% since merger talks ceased. In the end, however, M&T will be left the same as it was, and well capitalized enough to continue to make small acquisitions in the future, if it desires.

Moving on to HSBC, Chris Smith does an excellent analysis of the internal pressures and politics there, involving power centers in Chicago and New York. Buffalo is so far out of its league in this competition, it is merely the pawn in a larger game. Any local tradition or loyalty to Marine Midland is nearly extinct, and few even call the hockey arena by the wrong name (a la Pilot Field). When HSBC moves 4000 jobs to suburban Chicago, it will be a surprise ambush on the front page of the paper, with no foresight of the bomb possible. Buffalo is at HSBC’s mercy to either consolidate Upstate New York functions in downtown Buffalo (big win for WNY and the New York HSBC office) or move the functions to the data center in Chicago. All of the sound and fury of the Mayor and Common Council, Erie Canal Development and the Webster Block, may in the end signify nothing. Buffalo’s white knight and champion in this proceeding: Chuck Schumer – watch for the press releases of his frequent calls to Niall Booker, HSBC-North America CEO.

First Niagara’s position may look strong to the casual observer, but it is actually the most tenuous. If M&T’s position is driven by the Irish and EU banking collapse, and HSBC is subject to internal politics, First Niagara is susceptible to the most common and old-fashioned of publicly traded company ailments: low stock price. Initially expanding as good opportunities arose (it was only 3 years ago little First Niagara bought smaller Great Lakes), First Niagara is now in a vicious buy-or-be-bought cycle.

CEO John Koelmel is under tremendous pressure to get the stock price up from the $11-$14 range, where it has been languishing for years. As he told the Buffalo News in August: “If we can’t get the stock price to $16, $18, $20, I won’t be in this job much longer.”

Profits are rising at First Niagara, but so are the number of company shares as they use proceeds from stock issuances to buy into Upstate New York, Pennsylvania, and now, New England. Despite endorsements from Kramer on CNBC based upon the size of First Niagara’s dividend, Wall Street is skeptical, and the share price has continued to slide since the announced NewAlliance deal. No matter how fast First Niagara buys smaller banks, it can’t seem to grow into increased per capita profitability. Can First Niagara get ahead of the curve, and finally drive up profits internally, and thus its share price, to stay viable? Or will TD ( a potential Top 10 bank suitor with new manned kiosks in the Buffalo Airport and a swath of branches up and down the East Coast, but none inland in New York and Pennsylvania) step in and offer $17 a share? Once that happens, First Niagara will finally “maximize shareholder value” and achieve its price goals by being bought itself.

Of the three, M&T’s position is the most solid and definitive. Buffalonians can thank Wilmer’s for his stubborn streak; it is currently the deciding factor in M&T’s continued local presence and independence. HSBC’s actions will be decided by the Fates, and beyond any local control. For me, the most worrying of the three is First Niagara: the precedent (Empire, Gold Dome) exists locally (not to mention nationally) for a quick flame out, and its roots are least deep. When Wall Street stock price pressures are finally too much, there is little to anchor First Niagara to its new Larkin digs, or the city it has called home for less than two years.