M&T Profit on the Rise

BUFFALO, N.Y. (TheStreet) -- M&T Bank (MTB Quote) surged nearly 4% in early trading Tuesday after posting profit that widely exceeded analysts' expectations.

M&T said that net income rose 40% to $127.6 million, or 97 cents a share, vs. $91.2 million, or 83 cents a share in the year-earlier quarter.

The $69 billion-asset company recorded a host of special items in the quarter, which together reduced net income by $9 million, or 8 cents a share, it said.

Shares were rising 3.6% to $68.68 in recent trading after the market opened.

In late August, M&T acquired the deposits and certain assets of Bradford Bank of Baltimore, with assistance from the Federal Deposit Insurance Corp. M&T recorded an after-tax gain of $18 million for the third quarter as a result of the acquisition. The company is still working through merger-related expenses from its second-quarter acquisition of Provident Bankshares. For the three months ended Sept. 30, it recorded merger-related expenses of $9 million, it said.

M&T also recorded a $29 million impairment charge in the quarter related to available-for-sale securities, the company said. However, because those investment securities were previously "reflected at fair value" on its balance sheet, the impairment charges did not reduce stockholders' equity, M&T said. The company also benefited from a $10 million reversal of taxes previously accrued for uncertain tax positions in various jurisdictions.

"M&T posted solid results," CFO Rene Jones said in a statement. "Our approach of providing basic banking services to customers we know in the communities where we live and work continues to prove quite successful. Credit costs remain below current industry experience and our net interest margin improved by 18 basis points during the quarter."