M&T Bank 1Q Falls On Write-Downs, Credit Woes

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; [e-mail]