M&T Bank hires 15 Ferris bond specialists

Move allows firm to grow into municipal securities

August 12, 2008|By Eileen Ambrose | Eileen Ambrose,SUN REPORTER

M&T Bank yesterday announced it has hired 15 specialists who had made up the core of the municipal bond department of regional brokerage Ferris, Baker Watts Inc.

The hires, which occurred during the past month, allow Buffalo-based M&T to expand into the fixed-rate municipal bond business. All but one of the bond specialists will work in Maryland. "It's a terrific fit," said Atwood "Woody" Collins III, president of M&T Bank's Mid-Atlantic Division. "This gives us the full spectrum of municipal bond underwriting, sales and trading."

The Royal Bank of Canada acquired privately held Ferris in June in a stock deal worth $230 million. At the close of the deal, 10 percent of Ferris' 840 workers lost their jobs. RBC had said that a second round of cuts might occur after the two companies merged.

M&T began expanding in this region after its purchase of Allfirst Financial Inc. in 2003. Ferris, Baker Watts' roots in Baltimore go back 108 years. Though the small brokerage weathered the Great Depression and bear markets, the stresses of being a small player against much larger competitors took its toll in recent years. Compliance costs grew while commissions for trading and research declined. Ferris also suffered from the subprime mortgage mess.

And a stock manipulation scheme by one of Ferris' former clients and his broker at the firm also contributed to decision to sell the firm. Both men are serving federal prison terms.

M&T offers variable-rate municipal bonds, which is a small spectrum of the market. The bank wanted to expand into fixed-rate municipal bonds that make up the largest piece of the market, Collins says.

It's questionable whether M&T would have done so just yet if it hadn't been able to hire the Ferris specialists, Collins says. "That falls under the heading of being opportunistic," Collins says.

Some of the hires had lost their job at Ferris. M&T hired a credit analyst, senior investment banker, underwriters, sales people and traders.

"Their track record of success is top notch," says Jerome Collier, managing director of M&T Investment Banking.

RBC's Dain Rauscher Inc. money management subsidiary in Minneapolis said in a statement that it didn't have a place in the combined organization for jobs that overlapped and it was pleased that M&T hired the workers.


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