M&T profit falls 54 percent in third quarter

CNY Business Journal (1996+), Nov 7, 2008 by Tampone, Kevin

A charge related to Fannie Mae and Freddie Mac stock helped push profit lower in the third quarter at M&T Bank Corp. (NYSE: MTB), holding company for M&T Bank.

M&T's net income fell 54 percent in the period to $9I.2 million, or 82 cents per diluted share, from $199.2 million, or $1.83 per diluted share, in the third quarter of 2007. The charge on Fannie and Freddie stock lowered profit by $97 million, or 88 cents per diluted share, according to M&T.

The federal government in September took over Fannie Mae and Freddie Mac - massive players in the secondary-mortgage market.

Buffalo-based M&T is the leading bank in the Syracuse and Binghamton areas, according to June statistics from the Federal Deposit Insurance Corp.

M&T holds more than half the deposit market in Binghamton and nearly 22 percent in Syracuse. The bank also holds the number two position in the Utica-Rome region with nearly 19 percent of the de-posit market.

Although profit fell at M&T in the third quarter, many banks throughout the country have been posting large losses and some have even collapsed from the ongoing upheaval in the financial markets and broader economy.

M&T is looking toward the future, said Rene Jones, executive vice president and CFO, during an Oct. 21 conference call discussing the bank's earnings. The bank is continuing to invest in core initiatives, such as adding branches in its Mid-Atlantic region.

"We're not using the environment as an excuse to reduce spending in areas crucial to our future growth," Jones said.

He also said things will probably get worse before they get better.

"We have likely not reached the peak of the credit cycle," he said. "We expect continued increases in delinquencies and nonperformers, although at manageable levels, particularly in the consumer portfolio."

Still, he added the bank's upstate New York and Pennsylvania markets were likely to be more resilient, even as the country moves into a recession.

M&T's provision for credit losses was $101 million in the third quarter, up from $100 million in the second quarter and $34 million a year ago. Net charge-offs in the period totaled $94 million, compared to $99 million in the second quarter and $22 million in the third quarter of 2007.

Net interest income at M&T totaled $493 million in the third quarter, four percent higher than a year ago. Noninterest income fell 55 percent to $114 million.

Noninterest expense in the third quarter totaled $435 million, compared with $391 million a year ago.

M&T had $48.7 billion in loans and leases at the end of the third quarter, up from $44.8 billion a year earlier. The bank had $42.5 billion in deposits at the end of the period, compared with $38.5 billion a year earlier.

M&T has $65 billion in total assets and 700 branches in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Jersey, and Washington, D.C.