Robert Wilmers: The Buffett of Banking

Robert Wilmers may not be a household name, but the chairman and CEO of M&T Bank (MTB 0.81%) is one of this country's finest bankers. Since assuming control of the Buffalo, New York-based lender in 1983, Wilmers has produced among the highest total shareholder returns not only in the bank industry, but in the entire stock market.

In this segment from Industry Focus: Financials, analyst Gaby Lapera and Fool contributor John Maxfield discuss what makes Wilmers one of the best bankers of the modern era.

A full transcript follows the video.

This video was recorded on Aug. 7, 2017.

Gaby Lapera: Let's turn to the Buffett of banking, Robert Wilmers of M&T Bank. Warren Buffett has this really great quote, it goes, "Be fearful when others are greedy and be greedy when others are fearful." That basically means that there's cycles. I think everyone knows this, there's cycles to the stock market. But when the stock market is really high and everyone is buying everything in sight, that's the time to be conservative, to think, "Do I really need to buy this? Is this really a great idea right this second?" And let everyone else drive the price up of everything. And when the cycle inevitably comes back down, that's when you should jump in and be like, "I already know this is a great company and I'm going to buy it and add to my portfolio now." And Robert Wilmers exemplifies this, except with banking. It's really interesting.

John Maxfield: That's exactly right. Be fearful when others are greedy. Warren Buffett has a lot of amazing sayings. I want to make one other point about Warren Buffett before I go on that line of thought. There are few people in this country who truly understand the fundamental mechanics of banking better than Warren Buffett. He understands it, you get that sense. He understands it from his experience in the insurance business, because if you look at what Berkshire Hathaway is, it's fundamentally predicated on an insurance company, and using the float for that, to then take that float, invest it profitably. And the way he invests profitably is to be fearful when others are greedy and greedy when others are fearful. So, that's really why Buffett and banking, where those two come together. Also, he owns probably the best portfolio of banks that's ever been accumulated ever, certainly in the United States.

But there's another component of this that makes Robert Wilmers, in my mind, the Buffett of banking. And that is, Robert Wilmers, since he took over M&T Bank in 1983, this guy has just produced phenomenal returns. Buffett-like returns. Let me give you some specific numbers to hang your hats on. No. 1, if you go back to 1983, when Wilmers took over M&T Bank, of the 100 largest banks that were operating in the country at the time, only 23 remain today. That was a result of the consolidation wave that we talked about, in the context of Hugh McColl. M&T Bank is the top-performing bank in terms of total shareholder return over that time period. And you can even expand that out to see how incredible the returns Robert Wilmers has produced at M&T. Go back to the 1980, that was three years before Wilmers took over, but if you look back there, it's a good, clean number. And you take all the companies in the United States, all the publicly traded companies in the United States that were there then and are still here today, M&T Bank is the 16th highest performing stock over that time period. So, you're talking about a guy who has really used these same principles and understands cycles and when to be aggressive, when to pull back from the market in the same ways that Warren Buffett does. And, not coincidentally, one of M&T Bancorp's biggest shareholders is Warren Buffett himself. So, it's this beautiful narrative arc that really comes together.

Lapera: I'm going to insert myself really quickly. For M&T Bank to be the 16th highest returning company, that's crazy. Banks don't really do that. Banks are slow and steady wins the race tortoises, not superstars. It's crazy.

Maxfield: And the way he's done it, to your point when you set this all up about M&T, is that every time the United States financial industry has gone through a crisis, Robert Wilmers has gone in -- it's such a well-run bank that they didn't get into trouble in these crises, they just come in and basically rescued other banks and bought them for pennies on the dollar when they ran into trouble. And you do that time and time again. He did it through the LDC crisis, the less-developed loan crisis, the savings-and-loan crisis, they did it in the early 2000s when we had issues in the markets following September 11th and the whole Enron scandal, and then he bought a whole bunch of banks in the wake of the financial crisis. He just, over and over and over again, he's just done this and it's produced these phenomenal returns.