Robert Wilmers has led M&T Bank Corp. for more than three decades.
In that time, he oversaw two dozen acquisitions that took the regional bank holding company beyond its Buffalo roots into seven states and the District of Columbia.
Branches now number close to 800 and deposits top $95 billion.
In our metro, M&T ranked No. 6 by deposits as of last summer, with 6.5 percent of the market, according to federal banking data. Elsewhere upstate, in Buffalo, Rochester and Syracuse, it was No. 1 with a quarter to half of all deposits.
For years, Wilmers has penned an annual letter to shareholders, as many company chairmen and CEOs will do. But his missives usually go beyond highlighting past-year accomplishments to talk about big-picture issues. In the late 1990s, for instance, he warned about the “brain drain” of young adults and high-wage earners leaving New York; a decade later, as the Great Recession raged, he worried what the “shadow banking system” of hedge funds and investment banks might have wrought.
This year, the 82-year-old’s concerns are focused on two of M&T’s pillars – middle class depositors and small businesses – and how post-recession monetary policy and regulation have affected them and their communities. While reducing interest rates may be part of the “standard playbook” of responses to a recession, the Great Recession was unique and keeping interest rates so low for so long proved detrimental to the average U.S. household, Wilmers says.
At first, the low rates offered relief on monthly mortgage bills, but over time ate into household interest income (retirement savings, bank deposits, investments). For families making under $100,000 annually, interest income declined 68 percent between 2005 and 2014, he writes. Meantime, total median household income, including wages, remained stagnant.
“No wage growth. No investment earnings growth. No wonder families are stretched and stressed,” Wilmers says. So, too, are small businesses that once were “the engine of new job creation.”
Regulations meant to backstop the recession “have ultimately proved a drag on growth,” according to the banker. “Businesses were no longer willing or able to take the prudent risks that even moderate growth expectations demand.” That has implications for communities when those small businesses become vulnerable to takeover by outsiders who are less concerned about local projects or charities.
“This is how communities with great histories, a willing workforce and affordable housing are passed by and hallowed out,” Wilmers says. While his 2009 letter reluctantly urged new regulations to curb exotic products and “a virtual casino” of lending, Wilmers says the crisis has passed and now it’s time to “reform the reforms.”
“Regulation meant to protect Americans has unwittingly inflicted unintended consequences across the country – the profound impacts of which are only now coming to be fully appreciated by the public and understood by the legislators themselves,” he writes.
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected]