M&T Bank Corp.'s (MTB) first-quarter net income fell 68% on
write-downs and increased loan-loss provisions.
The company, which got $600 million from the Treasury
Department's Troubled Asset Relief Program, posted net income of
$64.2 million, or 49 cents a share, down from $202.2 million, or
$1.82 a share, a year earlier. The latest results included 18 cents
in write-downs on investment securities.
Analysts polled by Thomson Reuters expected earnings, excluding
items, of 71 cents.
The provision for credit losses rose 9.3% from a year earlier to
$846 million, in part because of a commercial loan that was
transferred to nonperforming status during the quarter. Net
charge-offs, loans the company doesn't think are collectible, rose
to 0.83% of total loans from 0.38%, while nonperforming loans -
those near default - rose to 2.05% from the fourth quarter's 1.54%
and the prior year's 0.97%.
Total deposits increased 2% from a year earlier. Return on
common shareholders' equity, a key metric for measuring banks'
profitability, fell to 3.6% from 12.5%.
Regional banks such as M&T had been considered more
insulated from credit-market woes because they often hold their
loans in portfolios and generally use more conservative
underwriting standards. But many companies' results have been hurt
by the credit crisis and mortgage meltdown as delinquencies and bad
loans pile up.
Analysts have said Allied Irish Banks PLC (AIB), which owns a
24% stake in M&T, is likely to sell that stake as it looks to
raise cash beyond what the government promised to inject earlier
this year. The bank said it would raise the funds through asset
sales, but declined to say which assets it might divest.
M&T shares closed Monday at $52.51 and haven't traded
premarket.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com
