M&T Falls Shy of Street
October 19 2015 - 8:20AM
Dow Jones News
M&T Bank Corp. said profit edged up in its latest quarter,
as cost reductions helped offset the effect of a slowdown in
mortgage loan originations and a sharp increase in the lender's
loss provision.
Results fell short of Wall Street projections.
The bank earned $280.4 million in the third quarter, up from
$275.3 million a year earlier. Per-share earnings rose to $1.93
from $1.91. Revenue edged 1.2% higher to $1.14 billion. Analysts
had predicted $2.01 in earnings per share and $1.15 billion in
revenue, according to Thomson Reuters.
M&T, like many other lenders trying to cope with low
interest rates, has turned to cost-cutting to lift profit. The
Buffalo, N.Y.-based lender, which won approval earlier this month
for its long-stalled acquisition of Hudson City Bancorp Inc., on
Monday said it managed to bring noninterest expenses down by 1.7%
from the year-ago quarter and by 6.2% from the second quarter.
M&T's efficiency ratio, a measure of costs against revenue,
fell to 57.1% from 58.4% a year earlier and 58.2% in the prior
quarter. That is as the bank's net interest margin—a key gauge of
lending profitability—fell to 3.14% from 3.23% a year earlier and
from 3.17% in the second quarter.
Meanwhile, fee-based revenue declined. Noninterest income fell
2.4% from a year earlier and 11% from the second quarter, thanks to
a 10% drop in mortgage banking revenue, a 12% decline in trust
income and because of a one-time gain from a sale that helped lift
the previous quarter's result.
A higher provision for credit losses also bit into the bottom
line. The bank set aside $44 million for potential loan losses, up
about 50% from a year earlier.
Shares in the company, down about 6% this year, were inactive
premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 19, 2015 08:05 ET (12:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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