By: Max Crampton-Thomas 
2 min read Jan 2021 — “M&T Bank prides itself on having a solid, carefully selected portfolio of clients, and is ready to support them in opportunities for expansion that might result from the pandemic,” Regional President for Philadelphia and South Jersey Bernie Shields said in an interview with Invest. He also delves into the challenges that the events of 2020 have created for the real estate banking sector as well as how the bank is using fintech to strengthen its overall offerings.
How did M&T Bank move to help the business community in Philadelphia and South Jersey during the pandemic?
We quickly determined that we had to triage our most challenged clients, those who were being impacted the most severely, to identify solutions specific to their needs. While awaiting guidelines from banking regulators, the government and internal constituencies on what we were allowed to do, we worked to understand the dimension of each client’s problem, on a case-by-case basis. From the end of March until the Paycheck Protection Program (PPP) was launched, we identified the challenges our clients were facing to better determine what kind of relief we could provide. At the same time, there were some clients that, because of the business they were in, were seeing their volumes actually increase. These organizations required a different kind of support.
When the PPP was approved, we were well-positioned to execute efficiently since we are consistently ranked among the top SBA lenders in the country. We established an online portal and protocol given the anticipated volume and requirements around due diligence. We recognized that if we allowed PPP applications to expand beyond existing clients, we could open ourselves up to too much risk related to fraud and increase the difficulty in executing funding for existing clients in a timely manner. We were also very strict about not prioritizing our biggest clients – our process focused on the order in which a completed application was received. We did this in a very egalitarian way: We gave clients information on how to access the online portal and detailed what they needed to have ready. By June, we had processed more than 35,000 PPP applications throughout the bank and we had a nearly 100% rate of approval.
What challenges has the current situation brought to the real estate banking sector?
M&T is heavily concentrated in commercial real estate. Relative to our peers, we have a greater proportion of our loan book focused on commercial real estate, largely concentrated within our footprint, which is the mid-Atlantic region to the Northeast – from Virginia up the coast to New York City and Boston. We have every kind of asset in the class, including hotels and retail where there is significant stress. Other segments, like industrial and residential, are super strong. For-sale real estate is off the charts and multifamily rentals continue to be good.
In all of these asset classes, the majority of our clients can survive challenging economic circumstances. For the most part, we are picking pretty strong sponsors who have the ability to weather the storm through significant liquidity or stability of cash flow. In our view, the situation will probably create some opportunities for our clients as time moves forward. We expect to be there to support them.
What steps has the bank taken to bolster its strategy through technology and fintech?
We have a great focus on it and part of that is our branch footprint. Every year, we look at our delivery and execution to see if we have the right properties or outlets for what our clients want and need. The reinvestment at this point is aimed more at electronic delivery and execution, although we remain committed to our branch network and to being user friendly for our communities.
We believe integrating fintech into what we are doing is a way to do that. There’s something like 4,500 banks left in the country, and that number is likely to continue to shrink. There are around 7,000 fintech companies. But just being in fintech does not guarantee survival. M&T Bank has an advantage in its history of delivering quality products and serving our communities in a regulated industry. While there will be fewer banks in the future, those that are well-run and layer in the appropriate levels of financial technology are the ones that are going to survive and thrive.
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