M&T Bank 4Q Net Up 57% On Deposit Growth, Fewer Losses

M&T Bank Corp. (MTB) posted a 57% jump in fourth-quarter net income as deposits continued to climb and investment losses fell sharply.

Chief Financial Officer Rene F. Jones said the results harken to the company's ability to loan without being subject to big credit losses, while at the same time being seen as a flight to quality for depositors. M&T has been long known as one of the steadiest performers in the banking industry.

The Northeast and mid-Atlantic company posted net income of $102.2 million, or 92 cents a share, up from $64.9 million, or 60 cents a share, a year earlier. Analysts polled by Thomson Reuters were looking for $1.10. Losses on investment securities tumbled to $23.5 million from $127.3 million.

Regional banks such as M&T had been considered more insulated from credit-market woes because they often hold their loans in portfolios and use more conservative underwriting standards. But many companies' results have been affected by the credit crisis and mortgage meltdown.

The provision for credit losses - a reserve to cover customer defaults or other bad credit - jumped 50% from a year earlier to $151 million. Net charge-offs, those the company doesn't think are collectible, rose to 1.17% of total loans from 0.46%, while nonperforming loans - those near default - rose to 1.5% from the third quarter's 0.90%

Average deposits rose 18% on an annual basis, with customers moving money to banks seen as more stable amid the credit crisis and recession. Commercial-loan growth was 5% on an annual basis during the quarter.

M&T is also using the current climate to expand its footprint, agreeing last month to acquire Provident Bankshares Corp. (PBKS). The deal will bolster M&T's presence in Maryland and Virginia.

M&T shares closed Wednesday at $37.90 and were inactive premarket. The stock has fallen by one-third in January amid another downdraft for financial shares.

-By Mike Barris and Kevin Kingsbury, Dow Jones Newswires; 201-938-5658; [e-mail]

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