Fourth Quarter Profits Surge for M&T Bank

Andrew Klips |

As one of the few banks that came through the financial collapse without ever cutting its dividend, M&T Bank Corp. (MTB) continues to show strength in its earnings.  The Buffalo, New York-based regional bank said on Wednesday that fourth-quarter profits more than doubled compared to the year prior in spite of charges that reduced earnings.

The Company reported GAAP-measured diluted earnings per common share for the fourth quarter of $2.16 from $1.04 in the year-earlier quarter, an increase of 108 percent.  GAAP-basis net income in the recent quarter totaled $296 million, up from $148 million in the fourth quarter of 2011.  Excluding one-time charges and write-downs, net operating income rose to $304.7 million, or $2.23 per share, from $168.4 million, or $1.20 per share in Q4 2011.  Wall Street was expecting earnings of $2.18 per share.  Analyst expectations generally do not include one-time expenses.

Revenue during the latest quarter increased 10 percent to $1.12 billion, in line with analyst expectations.

Revenue from mortgage banking surged by nearly 200 percent to $116.5 million.  Net interest income grew 8 percent to $667.42 million while total other income increased 14 percent to $453.16 million.

For the year ended December 31, 2012, diluted earnings per common share were $7.54, up 19% from $6.35 in 2011. Net income rose to $1.03 billion in 2012 from $859 million in the previous year. Expressed as a rate of return on average assets and average common shareholders' equity, net income in 2012 was 1.29% and 10.96%, respectively, compared with 1.16% and 9.67%, respectively, in 2011.

"This was a year of tremendous accomplishment, in which M&T recorded record levels of net income and earnings per share. Revenues were up in most major categories, led by exceptional growth in mortgage banking,” said Rene F. Jones, Executive Vice President and Chief Financial Officer at M&T Bank.

M&T Bank has capitalized and grown through a series of acquisitions, including snagging Wilmington Trust in 2011 and agreeing to buy Hudson City Bancorp (HCBK) in August for $3.7 billion.  Once centered around Buffalo, M&T Bank’s footprint now stretches from the Great Lakes to Virginia and up to Connecticut.

Shares initially gapped ahead at the opening bell to challenge all-time highs at $104.58 set in October, but have slinked backwards 30 minutes into Wednesday trading to be down by less than one percent at $103 each.  Shares of MTB have appreciated about 35 percent in the past six months.

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