Profit squeaked higher at M&T Bank ( MTB) last quarter, mostly due to a slight improvement in interest income.

As the first bank out of the gate to reveal fourth-quarter earnings, the Buffalo, N.Y.-based company said Thursday that profit rose 4.1% to $213 million. M&T's per-share earnings met the analysts' consensus estimate of $1.88.

Revenue of $723.1 million in the quarter fell short of analysts' expectations, mostly due to a 16% decline in mortgage revenue from a year earlier. Analysts were predicting the $57.1 billion-asset bank to make $729.1 million of revenue in the quarter.

M&T's operating profit for the quarter rose 5.6%, to $224.7 million, it said. For the year M&T made $7.37 a share on profit of $839 million, up 7% from a year ago.

Net interest income in the quarter, the profit a bank makes on its lending and deposit operations, rose 4% to $467 million. M&T's net interest margin rose 4 basis points from a year earlier, to 3.73%.

Expenses rose 4% to $389 million in the quarter.

Average loans and leases rose 5%, to $41.4 billion. M&T has previously said it has chosen not to pay up for consumer loans, such as automobile loans and leases, as other competitors have.

Deposits rose 8%, $39.9 billion.

Credit quality inched southward. M&T's net charge-offs rose 41% from the third quarter, to $24 million. Loans classified as nonperforming rose 24%, to $224 million. The company attributed the rise in nonperforming loans to the addition of four relationships with automobile dealers that totaled $41 million in loans and one large commercial loan of $10 million added to the category during the quarter.

"Continued slowing of domestic automobile sales has resulted in a difficult operating environment for certain automobile dealers, leading to deteriorating financial results," the company said.

Shares were falling $1.18 to $121.50.

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