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M&T's shares were down 8% in early trading to $71.25.The third-quarter results included $16 million, or an after-tax 13 cents, in expenses tied to the acquisition in May of Wilmington Trust. Net operating earnings -- excluding "the impact of amortization of core deposit and other intangible assets and merger-related gains and expenses" -- were $1.53 a shareIn comparison to M&T's third-quarter GAAP net income available to common shareholders of $164.7 million, or $1.32 a share, second-quarter earnings to common shareholders were $297.2 million, or $2.42 a share, when the company booked a $110.7 million gain on investment securities. In the third quarter of 2010, GAAP net income available to common shareholders was $176.8 million, or $1.48 a share.M&T said that its third-quarter performance "reflected higher net interest income, a lower provision for credit losses and significantly higher trust income," which were "muted by higher noninterest expenses and lower residential mortgage banking revenues."Third-quarter net interest income was $616.7 million, increasing from $569.9 million a year earlier. Trust income increased nearly four-fold year over year to $113.6 million in the third quarter. Both increases primarily reflected the Wilmington acquisition. The third-quarter net interest margin -- the difference between a bank's yield on loans and investments and its average cost for deposits and borrowings -- declined to 3.68% during the third quarter, from 3.75% the previous quarter and 3.92% a year earlier.Mortgage banking revenue declined to $38.1 million in the third quarter from $42.2 million the previous quarter and $61.1 million a year earlier, which the company said "reflected M&T's decision to retain the majority of residential mortgage loan originations in the recent quarter rather than selling them."Third-quarter noninterest expense totaled $662 million, increasing from $577 million the previous quarter and $480 million a year earlier, with "the most significant factor for the higher levels of operating expenses [being] the impact of the operations obtained in the Wilmington Trust acquisition."
1 2 Next › Last »M&T Bank CFO Rene Jones said that "now that the conversions [related to the Wilmington acquisition] are behind us, we are well positioned to turn our attention towards achieving the economic benefits from combining the organizations."
M&T's credit costs continued to decline, with a $58 million third-quarter provision for credit losses, compared to $63 million in the second quarter and $93 million in the third quarter of 2010.
The bank still owes $230 million in federal bailout funds received in 2008 through the Troubled Assets Relief Program, or TARP, along with an additional $151.5 million in TARP money originally received by Provident Bancshares, acquired by M&T in May 2009. M&T's shares were down 9% year-to-date, through Tuesday's close at $77.07. Based on a 70-cent quarterly payout, the shares had a dividend yield of 3.63%.RELATED STORIES: Morgan Stanley Beats on Accounting Gain (Update 1) >U.S. Bancorp Beats with Record Earnings >PNC Profit Boosted by Commercial Loans >Bank of New York Hits Estimates, Revenue Drops >New York Community Bancorp Reports Strong Lending Volume >Comerica Tanks After Earnings Miss >-- To contact the writer, click here: Philip van Doorn.To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.
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