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M&T Bank's Mortgage Revenue Jumps 24%

  • M&T Bank reports first-quarter earnings per share of $1.50.
  • Analysts were expecting EPS of $1.48.
  • Mortgage banking revenue increased 24% year-over-year, to $56.2 million.

NEW YORK ( TheStreet) - M&T Bank (MTB - Get Report) on Monday reported a 24% year-over-year increase in mortgage banking revenue and a four-fold increase in trust revenue, as it continued to integrate its Wilmington Trust acquisition.

The Buffalo, N.Y. lender reported net income available to common shareholders of $188.2 million during the first quarter, or $1.50 a share, compared to fourth-quarter earnings to common shareholders of $129.8 million, or $1.04 a share, and earnings to common shareholders of $190.1 million, or $1.59 a share, during the first quarter of 2011.

M&T's fourth-quarter results were boosted by a $55 million litigation settlement, it its results during the first quarter of 2011 included $39 million in pretax gains from the sale of securities, primarily guaranteed by Fannie Mae (FNMA).

M&T Bank Corp. CEO Robert Wilmers

The first-quarter earnings came in slightly ahead of the $1.48 estimate among analysts polled by Thomson Reuters.

M&T reported first-quarter mortgage banking revenue of $56.2 million, increasing from $40.6 million the previous quarter, and $45.2 million a year earlier. The company said that its new strategy of holding more mortgage loans on its balance sheet reduced "mortgage banking revenues by approximately $21 million that would have been recognized had the loans been held for sale."

First-quarter trust income totaled $117.0 million, increasing from $113.8 million the previous quarter and $29.3 million a year earlier, reflecting "continued progress with the integration of Wilmington Trust," according to CFO Rene Jones.

Jones added that "average loans grew an impressive 10% on an annualized basis as compared with the fourth quarter of 2011." Average loans totaled $60.5 billion in the first quarter, growing 16% year-over-year, reflecting in part the Wilmington acquisition.

M&T's net interest margin -- the difference between a bank's average yield on loans and investments and its average cost for deposits and wholesale borrowings -- was 3.69%, improving from 3.60% during the fourth quarter, reflecting "the impact of a $1.41 billion increase in average loans outstanding in 2012's initial quarter, which largely offset a decline in lower yielding balances held at the Federal Reserve Bank of New York." In keeping with the industry trend in the prolonged low-rate environment, the net interest margin declined from 3.92% in the first quarter of 2011.

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