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Buffalo-based M&T Bank expects to see loan growth in 2023 and plans to build its small business banking services in the newly acquired New England market.

Darren King, M&T’s chief financial officer, said during the bank’s fourth quarter earnings call on Thursday that the financial benefits of the People’s United Bank acquisition had been consistent with or slightly better than M&T’s expectations when it first announced the deal in February 2021.

M&T saw its full-year net income increase year-over-year by 7 percent after acquiring Connecticut-based People’s United Bank in April 2022. M&T’s full-year 2022 net income was $1.99 billion compared to $1.86 billion in 2021. The bank’s 2022 return on average assets was 1.05 percent compared to 1.22 percent in 2021.

King noted that merger-related expenses associated with the People’s United deal totaled $580 million in 2022 compared to $44 million in 2021. Of the 2022 merger expenses, $45 million were in the fourth quarter, King said.

M&T Bank had fourth quarter net income of $765 million, or diluted earnings per common share of $4.29, compared to $647 million, or diluted earnings per share of $3.53, in the third quarter of 2022. In the fourth quarter of 2021, before the bank had completed the acquisition, net income was $458 million, or diluted earnings per share of $3.37.

In response to an analyst’s question, King said the bank through the fourth quarter had achieved almost all of the cost savings that M&T had expected from the People’s United acquisition, $330 million, or 30 percent. Inflation has made the dollar amount higher than expected, King said, and some one-time expenses and severance costs were lower than anticipated.

“Overall, we’re very positive about where things sit early on, and as I mentioned before, excited to go to work in New England and bring M&T’s brand of banking into that new market,” King said.

The bank did maintain higher staffing levels in the branches and call center, King said, noting that the levels would normalize in 2023. The bank’s September system conversion saw customers facing challenges, including with account access.

M&T does expect loan growth in 2023, particularly with commercial and industrial loans, and King said the People’s United franchise would be part of that loan growth.

The bank also plans to focus on building out its small business and business banking segment, King said.

“That’s one of the places where we see a great opportunity in the New England franchise and to deploy our methods of banking,” King said.

M&T had $200.7 billion in total assets as of Dec. 31, up from $198 billion on Sept. 30 and $155.1 billion on Dec. 31, 2021, before the acquisition. Loans and leases totaled $131.6 billion at the end of 2022, an increase from the end of the third quarter, when loans were $128.2 billion, and from the end of 2021, when loans totaled $92.9 billion. Total deposits were $163.5 billion at the end of the fourth quarter compared to $163.8 billion on Sept. 30 and $131.5 billion on Dec. 31, 2021.

The fourth quarter saw M&T realize a $136 million gain from the sale of M&T Insurance Agency, while the bank made a $135 million contribution to M&T’s charitable foundation. Reflected in the bank’s costs of operations, these items together did not materially affect net income, King said.