BUFFALO, N.Y. (
M&T Bank Corp.
Monday reported first-quarter net income available to common shareholders of $138 million or $1.15 per share, exceeding the average estimate of analysts' polled by
for a profit of 99 cents a share.
The latest performance was ahead of both profits of $123 million or $1.04 per share, in the fourth quarter, and $55 million or 49 cents a share, in the year-ago period.
The company's annualized return on average assets for the first quarter was 0.89% and its return on average common equity was 7.86%.
The main factor in the earnings improvement was a reduced quarterly provision for loan losses, which was $105 million for the first quarter, down from $145 million the previous quarter and $158 million a year earlier.
There were signs the bank's asset quality was turning a corner. While nonperforming assets, including nonaccrual loans -- less government-guaranteed balances -- and repossessed real estate increased slightly during the quarter, to $1.4 billion or 2.04% of total assets, loan losses declined.
Net charge-offs during the quarter totaled $95 million, down from $135 in the fourth quarter and $100 million during the first quarter of 2009. The annualized ratio of net charge-offs to average loans was 0.74%, down from 1.03% the previous quarter and 0.83% a year earlier.
While industry aggregate figures are not yet available for comparison, the annualized fourth quarter net charge-off ratio for all U.S. banks and thrifts was 2.89%.
M&T's ratio of loan loss reserves to total loans was 1.73% as of March 31, keeping the company well ahead of its annualized charge-off pace. This means that if charge-offs stay at the same level or continue to decline over coming quarters, earnings should be boosted by further declines in provisions for loan loss reserves.
Another bright spot for earnings is the company's net interest margin - the difference between the average yield on loans and investments and the average cost of funds - which continued increasing during the first quarter, to 3.78%, from 3.19% a year earlier.
Total assets were $68.4 billion, up from $64.9 billion a year earlier, with the bank acquiring Provident Bankshares of Baltimore, Md. in May, and the failed Bradford Bank, also of Baltimore, in August.
The company still owes the government $600 million in bailout money received via the Troubled Assets Relief Program, or TARP.
M&T's shares closed at $84.25 Friday, returning 27% year-to-date, according to SNL Financial.
Allied Irish Banks plc
is M&T's largest shareholder, holding roughly 22.6% of the company's common shares as of Dec. 31.
Written by Philip van Doorn in Jupiter Fla.
Philip W. van Doorn joined TheStreet.com Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a Bachelor of Science in business administration from Long Island University.