M&T: 1Q cash earnings per share up 18 percent

CNY Business Journal (1996+), May 17, 2002

BUFFALO - M&T Bank Corporation (NYSE: MTB) reported diluted cash earnings per share for the first quarter of 2002 of $1.34, an increase of 18 percent from $1.14 in the first quarter of 2001. Cash net income for the recent quarter was $129 million, 15 percent higher than $112 million in the comparable, 2001 quarter. Cash net income in the initial quarter of 2002 represented an annualized rate of return on average tangible assets of 1.75 percent, up from 1.59 percent in the year-earlier quarter. Cash return on average tangible common equity rose to an annualized 30.38 percent in the recent quarter, from 27.93 percent in the first quarter of 2001. Cash earnings exclude the aftertax effect of expenses associated with merging acquired operations into M&T and the amortization of intangible assets.

Taxable-equivalent net interest income rose 10 percent to $305 million in the recently completed quarter, from $276 million in 2001's first quarter. The improvement, said the company, reflects higher average loans outstanding and a widening of M&T's net interest margin, or taxable-equivalent net interest income expressed as an annualized percentage of average earning assets. Average loans and leases outstanding during the initial 2002 quarter were $25.1 billion, up 7 percent from $23.4 billion in the corresponding 2001 quarter. Net interest margin improved 21 basis points (hundredths of one percent), to 4.37 percent in the first quarter of 2002, from 4.16 percent in the year earlier quarter.

The provision for credit losses was $24 million in the recent quarter, up from $19 million in the initial 2001 quarter. Net charge-offs of loans totaled $16 million during both the first quarter of 2002 and 2001. Expressed as an annualized percentage of average loans outstanding, net charge-offs were 0.26 percent in the recent quarter, compared with 0.28 percent in the corresponding quarter of 2001. Nonperforming loans totaled $182 million, or 0.73 percent of total loans at March 31, compared with $161 million, or 0.67 percent, a year earlier. Loans past due 90 days or more and accruing interest were $148 million at the recent quarter end, compared with $141 million a year earlier. Included in these loans at March 31, 2002 and 2001, were $109 million and $105 million, respectively, of one- to four-family residential mortgage loans serviced by M&T and repurchased from the Government National Mortgage Association. The outstanding principal balances of these loans, which were repurchased to reduce servicing costs, are fully guaranteed by government agencies. In general, the remaining portion of accruing loans past-due 90 days or more are either also guaranteed by government agencies or well-secured by collateral.

Noninterest income in the recent quarter totaled $124 million, up 11 percent from $112 million in the first quarter of 2001. Higher revenues from deposit-account and mortgage-banking services, said the company, contributed to the yearover-year increase. Noninterest operating expenses, which exclude amortization of intangible assets and nonrecurring expenses associated with merging acquired operations into M&T, were $210 million in the first quarter of 2002, compared with $197 million in the corresponding 2001 period. Contributing to the rise in operating expenses, according to M&T, were higher costs for salaries, including commissions and incentive compensation, and employee benefits. The efficiency ratio, or noninterest operating expenses divided by the sum of taxableequivalent net interest income and noninterest income, measures the relationship of operating expenses to revenues.

Michael P. Pinto, executive vice president and chief financial officer of M&T, noted, "We are pleased with the 18-percent growth in cash earnings per share achieved in the first quarter of 2002, particularly considering the challenging economic environment in which we are operating."

At March 31, M&T had total assets of $31.3 billion, compared with $30.9 billion a year earlier. Loans and leases, net of unearned discount, rose 4 percent to $25.1 billion, from $24.2 billion at March 31, 2001. Deposits were $21.6 billion at the recent quarter-end, compared with $21.0 billion a year earlier. Total stockholders' equity was $2.9 billion at March 31, representing 9.42 percent of total assets, compared with $3.0 billion, or 9.68 percent, at March 31, 2001. Common stockholders' equity per share was $31.67 at the recent quarter-end, up from $30.84 at March 31, 200. Tangible equity per common share was $18.68 and $17.33 at March 31, 2002 and 2001, respectively.

In November 2001, M&T's board of directors authorized the company's repurchase of up to five million shares of its common stock. Through March 31, M&T had repurchased 1,931,013 shares of common stock pursuant to the repurchase program, at an average cost of $74.62 per share.