Why M&T Bank Shares Are Trading Higher Today

Zinger Key Points
  • M&T Bank reports Q1 FY24 revenue slightly below consensus, with net interest income down 8% Y/Y.
  • Net income decreases to $531 million, with provision for credit losses up to $200 million, reflecting elevated loan levels.

M&T Bank Corporation MTB shares are trading higher after it reported first-quarter FY24 results.

Revenue of $2.260 billion, slightly missing the consensus of $2.263 billion. Net interest income expressed on a taxable-equivalent basis was $1.69 billion, down 8% Y/Y.

Noninterest income totaled $580 million, slightly lower than $587 million in the year-earlier quarter, with the net interest margin contracting to 3.52% vs 4.04% a year ago.

Net income of $531 million came below $702 million a year ago. EPS was $3.09, which came in line with the consensus.

M&T’s efficiency ratio was 60.8% compared to 55.5% in the year-earlier quarter. M&T recorded a provision for credit losses of $200 million, higher than $120 million in the year-earlier quarter, reflecting elevated levels of criticized commercial and industrial loans and loan growth.

The allowance for credit losses totaled $2.19 billion or 1.62% of loans outstanding as of March 31, 2024, compared with $1.975 billion or 1.49% of loans outstanding in Q1 FY23.

M&T held total assets of $211.5 billion as of March 31, 2024. Loans and leases, net of unearned discount, were $133.8 billion. The CET1 capital ratio was estimated at 11.07% as of March 31, 2024. 

Daryl N. Bible, M&T’s Chief Financial Officer, said, “We are off to a solid start in 2024 as we were able to grow certain sectors of our commercial and consumer loan portfolios, while continuing to shrink our commercial real estate exposure. Expenses were prudently managed in the recent quarter and our selective approach to allocating resources to our strategic priorities with utmost care has not wavered.” 

“M&T’s liquidity and capital position strengthened, reflecting a stable deposit base, higher levels of borrowings and solid earnings after considering seasonal employee compensation expenses and an incremental FDIC special assessment.”

Investors can gain exposure to the stock via IShares U.S. Regional Banks ETF IAT and SPDR S&P Regional Banking ETF KRE.

Also Read: M&T Bank Earnings Are Imminent; These Most Accurate Analysts Revise Forecasts Ahead Of Earnings Call

Price Action: MTB shares are up 2.94% at $138.51 premarket on the last check Monday.

Photo via Wikimedia Commons

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