Articles · Lenders and fintech
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How Much Did M&T Bank Make From Pandemic Relief?
The SBA's loan file credits M&T Bank with 90,029 PPP loans and, on our fee model, $475.2 million in processing fees. A third of those loans, and $137.3 million of the fees, were made by People's United Bank, which M&T bought in 2022. M&T's own loans come to $337.9 million. M&T never said what its fees were. People's United did.
I. Two banks under one name
The SBA paid a processing fee to the lender that made each PPP loan. Most lenders never said what those fees came to, so the answer has to be modeled, as it was for Womply's fees. For M&T, the file first has to be sorted by the bank that made each loan.
The SBA's loan-level file lists M&T's PPP loans at two lender locations. One is in Buffalo, where M&T has its headquarters. The other is in Bridgeport, Connecticut, where People's United Bank had its headquarters until M&T bought it in April 2022. The FDIC's records show People's United Bank, National Association merging into Manufacturers and Traders Trust Company, effective April 2, 2022; M&T closed the purchase of its parent on April 1. No loan in the file carries the People's United name. Every one of the Bridgeport loans was approved in 2020 or 2021, before M&T owned the bank.
Each bank's own count matches its location in the file:
| Question | Figure | Source | Kind |
|---|---|---|---|
| What does the SBA file credit to M&T? | 90,029 loans, $13.3 billion; $475.2 million in fees | SBA loan-level data, priced loan by loan | modeled |
| What does it credit to the Buffalo location? | 59,094 loans, $9.63 billion; $337.9 million in fees | same | modeled |
| What M&T said it made | "more than 58,000" approvals, "about $9.8 billion" | M&T press release, May 24, 2021 | company claim |
| What does it credit to the Bridgeport location? | 30,935 loans, $3.68 billion; $137.3 million in fees | same | modeled |
| What People's United said it made | "approximately $3.8 billion" funded | People's United Form 10-K for 2021 | company filing |
| People's United's PPP fees, net of costs, booked 2020–2021 | $120.8 million, with $14.8 million still deferred at the end of 2021 | People's United Forms 10-K for 2020 and 2021 | company filing |
| M&T's PPP interest income, fees included, mid-2020 through 2021 | $374 million | M&T quarterly earnings releases | company filing |
Counted by the bank that made the loan, M&T's fees are $337.9 million and People's United's are $137.3 million. Our ranking of PPP lenders, which takes the file as it stands, puts M&T 16th of 4,688 lenders (PPP lenders by estimated fees). The series ranking of fee collectors adds agents and contractors, ranks each on its fees after documented payments to agents, and counts each loan to the bank that made it. There M&T's own $337.9 million is 19th, in a ranking led by Womply, which arranged loans for other lenders, billed them $1.8 billion to $2.6 billion and is covered in its own piece. The next name is Highlight Technologies, an SBA contractor, $32,344 behind. JPMorgan Chase's own loans, the largest lender total, came to $1.70 billion on the same model. All of these are fees before the cost of the staff and systems that processed the loans.
II. Who paid M&T, and for what
The SBA paid the lender of record a processing fee on every PPP loan and guaranteed the loan in full. For 2020 loans the fee was 5 percent of loans up to $350,000, 3 percent up to $2 million and 1 percent above that (85 FR 20811). For 2021 loans of $50,000 or less, the fee became the lesser of 50 percent of the loan or $2,500 (86 FR 3692; 86 FR 3712).
Say an engineering firm in Baltimore borrowed $500,000 from M&T in April 2020. The SBA paid M&T 3 percent, $15,000. A florist down the street who borrowed $20,000 earned the bank $1,000.
M&T lent to the engineering firm more often than most. Its own PPP loans averaged $162,984, against about $69,100 for the program and about $94,700 for JPMorgan Chase's own loans (PPP per-lender totals). A book of larger loans draws the lower rates, and M&T's came to 3.5 cents in modeled fees per dollar lent. JPMorgan's came to 4.1 cents and Wells Fargo's, a book of small loans, to 5.0.
| M&T's own loans by size | Loans | Share of loans | Modeled fees | Share of fees |
|---|---|---|---|---|
| $50,000 or less | 32,558 | 55.1% | $53.6M | 15.9% |
| $50,000 to $350,000 | 20,629 | 34.9% | $138.2M | 40.9% |
| $350,000 to $2 million | 5,277 | 8.9% | $120.4M | 35.6% |
| $2 million and up | 630 | 1.1% | $25.7M | 7.6% |
More than half the loans were for $50,000 or less and brought in 15.9 percent of the fees. Loans between $350,000 and $2 million were 8.9 percent of the count and 35.6 percent of the money.
The 2021 rule paid more per dollar. M&T's 24,448 loans that year came to 4.6 cents per dollar, against 3.1 cents on its 34,646 loans in 2020. People's United's book was smaller per loan, at an average of $118,924, and came to 3.7 cents.
III. What M&T reported, and what it folded in
M&T never published a PPP fee total. It reported something close to one. From mid-2021 its quarterly earnings releases gave "interest income from PPP loans, including recognition of fees associated with repaid loans," for the current quarter and two earlier ones:
| Quarter | PPP interest income, fees included | Release |
|---|---|---|
| Q2 2020 | $29 million | July 21, 2021 |
| Q3 2020 | $39 million | Oct. 20, 2021 |
| Q4 2020 | $73 million | Jan. 20, 2022 |
| Q1 2021 | $70 million | July 21, 2021 |
| Q2 2021 | $51 million | July 21, 2021 |
| Q3 2021 | $71 million | Oct. 20, 2021 |
| Q4 2021 | $41 million | Jan. 20, 2022 |
The seven quarters add to $374 million. That figure includes the loans' 1 percent interest. M&T's PPP loans averaged $4.4 billion in 2020 and $4.1 billion in 2021 (Form 10-K for 2022), so the coupon accounts for about $85 million. The remainder, about $289 million, is our estimate of the fees M&T recognized by the end of 2021. M&T deferred the fees and booked them as the SBA repaid the loans, a process its Form 10-Q for the third quarter of 2021 calls "the related recognition of previously deferred fees." In the fourth quarter of 2020, "$29 million of interest income was recognized from the accelerated amortization of deferred fees related to payments received" on PPP loans.
More came in 2022. M&T had $1.2 billion of PPP loans outstanding at the end of 2021. Its Form 10-K for 2022 says only that the Business Banking segment's loan margin narrowed on "a lower level of PPP fee income resulting from repayment of loans by the SBA." The model's $337.9 million for M&T's own loans is gross and covers every year; the $289 million covers fees booked through 2021 only. The filings give neither the 2022 fees nor M&T's cost of making the loans.
We found no pledge by M&T to give its PPP fees away, in its filings or its releases. Wells Fargo gave away its 2020 fees, about $420 million (Wells Fargo 2021 Annual Report).
IV. The People's United book
People's United reported the number M&T did not. From mid-2020 each of its quarterly and annual reports stated the PPP fees it had recognized. From the third quarter of 2020 on, the reports call them "net of related costs":
| Quarter | Fees recognized, net of costs | Deferred fees left at quarter end |
|---|---|---|
| Q2 2020 | $9.4 million | $68.8 million |
| Q3 2020 | $9.9 million | $61.3 million |
| Q4 2020 | $15.3 million | $45.9 million |
| Q1 2021 | $24.8 million | $62.5 million |
| Q2 2021 | $20.1 million | $56.0 million |
| Q3 2021 | $20.3 million | $35.8 million |
| Q4 2021 | $21.0 million | $14.8 million |
The fourth-quarter 2021 figure is the full-year $86.2 million less the three quarters reported before it. Recognized fees add to $120.8 million; with the $14.8 million still deferred, $135.6 million. The model gives $137.3 million for the Bridgeport loans, before costs. The two differ by about 1 percent.
M&T and People's United signed their merger agreement on February 22, 2021, while the 2021 PPP round was open. People's United made 5,698 more PPP loans after that date, for $394.0 million. The deal closed on April 1, 2022. People's United shareholders received 0.118 of an M&T share for each of theirs, and M&T put the total consideration at $8.39 billion (Form 10-Q, June 30, 2022). By then, $120.8 million of the People's United fees had already passed through People's United's income statement. On February 18, 2022, about $310 million of its PPP loans were still outstanding (People's United Form 10-K for 2021). M&T's filings after the closing report its PPP balances, which averaged $545 million in the second quarter of 2022, without separating the loans that came from People's United.
V. The queue: 20,669 approvals in a day
M&T opened its application portal on April 6, 2020, three days after the program began ("M&T provided an online application solution for small business customers and began accepting loan applications under the PPP," M&T earnings release, April 20, 2020). The first round of money ran out on April 16. By then the SBA had approved 27,244 of M&T's own loans that are still in its file, for $6.09 billion: 90 percent of the dollars M&T lent in 2020. Of those approvals, 20,669 are dated April 15. Frank Micalizzi, M&T's regional president for Westchester, Rockland and Connecticut, put the first-round total at $6.4 billion for 27,711 businesses. He told the Business Journal (Westfair Communications) who came first:
"You need a checking account or depository account to just credit the SBA proceeds. So we made a determination that many banks did early on to try to service your clients first and foremost because they were the easier ones to get through the pipeline. They already had depository accounts with the bank" (Peter Katz, Business Journal, April 27, 2020).
Customers of every size got through. Of M&T's 2020 loans of $50,000 or less, 70.2 percent were approved in the first round; program-wide the figure was 21.4 percent. For loans between $350,000 and $2 million the shares were 91.2 percent and 69.4 percent. People's United's gap was wider: 86.1 percent of its loans in that band were approved in the first round, against 34.8 percent of its loans of $50,000 or less (SBA loan-level data, our count).
On April 19, 2020, borrowers filed class actions against JPMorgan Chase, Wells Fargo, Bank of America and U.S. Bank, alleging that each was "prioritizing the applications that would make the bank the most money" (the complaints, as Banking Dive reported them on April 21, 2020). Courts sent the JPMorgan claims to arbitration and held that the CARES Act gave borrowers no right to make Bank of America process applications in a different order (The Banks Served Their Own Customers First, and Courts Shrugged). We found no such suit against M&T or People's United in the federal court records on CourtListener, and no suit by an agent seeking a share of either bank's fees. Agent-fee suits against other banks failed (The Agents Got Nothing).
The 2021 round started the same way. In its first week open to lenders of all sizes, M&T led all lenders in net dollars approved, with $718 million on 5,261 loans; Fifth Third was second, at $540 million (the Buffalo News, January 27, 2021, citing the SBA).
VI. What M&T said
"One of the top ten SBA lenders in the country" (April 20, 2020). A year later it was "the nation's fifth largest Small Business Administration (SBA) lender in fiscal year 2020" (May 24, 2021). Micalizzi put the bank's pre-pandemic SBA business at "a little less than about 2,000 SBA loans a year." Its own PPP book was 59,094 loans in 15 months.
"M&T grew its SBA loan team of 20 to more than 2,000" (May 13, 2020). The Business Journal reported that M&T normally had about 200 people handling SBA loans, and quoted Micalizzi: "going from 200 to 2,000 employees." The two accounts differ on the starting size and agree on 2,000.
"More than 70 percent of the approvals were for loans less than $100,000; 86 percent were for less than $250,000" (May 24, 2021). The SBA file agrees: 70.7 percent and 86.2 percent of M&T's own loans. The same release gave an average loan of $164,410; the file gives $162,984.
"The Paycheck Protection Program provided us with an unprecedented opportunity to help our communities navigate one of the most challenging periods any of us have ever experienced" (Richard Gold, M&T's president and chief operating officer, May 24, 2021). M&T's own releases put its PPP interest income, fees included, at $374 million by the end of 2021.
Method, and what would change the numbers
Modeled fees. Each loan in the SBA's PPP loan-level file (release of September 30, 2024) is priced under the fee rule for its approval date and draw; loans are counted by approval year. The model assumes the SBA paid a fee on every loan in the file. Fees on loans later cancelled or reduced may not have been paid in full, so the modeled figures are fees owed, not received, and before any costs.
Whose loans. Loans are assigned to the lender that made them. The file lists 90,029 loans under Manufacturers and Traders Trust Company at two originating-lender locations: Buffalo, New York (59,094) and Bridgeport, Connecticut (30,935). The Bridgeport location is counted as People's United Bank: People's United was based in Bridgeport, its own reported total ($3.8 billion) matches the location's ($3.68 billion), the FDIC records its merger into M&T's bank in April 2022, and no loan in the file carries the People's United name. M&T's reported totals (58,000 approvals, $9.8 billion) match the Buffalo location.
Round-one counts. Loans approved from April 3 through April 16, 2020, by the SBA's approval date, among loans still in the September 2024 file. Loans cancelled before then are not in the file, so these counts are a floor.
Documented figures. M&T's PPP income figures are quoted from its earnings releases (Form 8-K exhibits) of January 2021 through January 2022, and its balances and deal terms from its Forms 10-Q and 10-K for 2021 and 2022. People's United's fee figures are quoted from its Forms 10-Q and 10-K for 2020 and 2021. The split of M&T's $374 million into interest and fees is our arithmetic: 1 percent of M&T's reported average PPP balances.
What is not public. M&T's PPP fees apart from interest, its costs of processing the loans, and how it accounted for the People's United PPP loans and their deferred fees after April 1, 2022.
Sources: SBA PPP loan-level data (Sept. 30, 2024), priced under 85 FR 20811, 86 FR 3692 and 86 FR 3712 (M&T lender page; PPP lenders by estimated fees; PPP per-lender totals; fee schedules by vintage); M&T Bank Corporation earnings releases of April 20, 2020, Jan. 21, 2021, July 21, 2021, Oct. 20, 2021, Jan. 20, 2022 and April 20, 2022 (Exhibit 99.1 to Form 8-K); M&T Forms 10-Q for the quarters ended Sept. 30, 2021 and June 30, 2022, and Form 10-K for 2022; M&T press releases of May 13, 2020 and May 24, 2021 (PR Newswire); People's United Financial, Inc. Forms 10-Q for the quarters ended June 30 and Sept. 30, 2020 and March 31, June 30 and Sept. 30, 2021, and Forms 10-K for 2020 and 2021; FDIC BankFind, institution history for People's United Bank, National Association (FDIC certificate 27334); Peter Katz, "M&T Bank gets ready for the next SBA round," Business Journal, Westfair Communications (April 27, 2020); Dan Ennis, "JPMorgan, Wells Fargo, Bank of America, U.S. Bank chased larger PPP loans' fees, lawsuit says," Banking Dive (April 21, 2020); Wells Fargo 2021 Annual Report (Exhibit 13 to Form 10-K); Matt Glynn, "M&T Bank leads nation in Paycheck Protection Program," Buffalo News (Jan. 27, 2021). Related: How Much Did Womply Make From Pandemic Relief?; The Banks Served Their Own Customers First, and Courts Shrugged; The Agents Got Nothing.