M&T Bank 1Q Profit Falls 68 Percent, Shares Slide
The Associated Press
04/21/09 - 11:35 AM EDT
BUFFALO, N.Y. (AP) M&T Bank Corp. on Tuesday said its first-quarter profit fell 68 percent as the regional bank's results were hurt by an investment loss and a larger set-aside to cover credit losses.
Shares of M&T fell nearly 9 percent in morning trading.
M&T reported net income for the three months ended March 31 of $64.2 million, or 49 cents per share, down from a profit of $202.2 million, or $1.82 per share, in last year's first quarter.
The latest quarter's profit was reduced by a loss on investment securities of $20 million, or 18 cents per share.
The bank also more than doubled its provision for credit losses to $158 million from $60 million in last year's first quarter.
The increase is more modest compared with M&T's $151 million credit loss provision in last year's fourth quarter. And the latest quarter's set-aside is $58 million greater than the $100 million in net-charge-offs from loans written off as unpaid.
Analysts surveyed by Thomson Reuters, whose earnings estimates typically exclude one-time items, had forecast a profit of 71 cents per share in the latest quarter, on average.
Shares of M&T fell $4.54, or 8.7 percent, to $47.97 in morning trading.
The quarter's $100 million chargeoffs represent an annualized 0.83 percent of average loans outstanding, up from 0.38 percent in last year's first quarter, but down from 1.17 percent in the fourth quarter.
Rene Jones, executive vice president and chief financial officer, said the chargeoff decline compared with the fourth quarter "will likely stand out favorably when compared to the top U.S. regional banks. Despite that improvement, we considered it prudent to build the allowance for credit losses given the state of the economy."
M&T said the higher chargeoff rate for the past two quarters were driven by the recession, and declines in residential real estate values.
Net interest income, or the difference between how much it costs a bank to borrow money and how much it receives from lending money to customers, was $452.7 million, down 7 percent from $484.6 million in the year-ago quarter.
M&T is a holding company whose subsidiaries operate bank branches in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Jersey and Washington D.C.
In December, the bank announced plans to buy Baltimore-based Provident Bankshares Corp. in a stock-for-stock deal. The transaction, which will boost the bank's presence in Maryland and Virginia, is expected to close sometime this quarter.
