M&T Bank Corporation Posts Lower Q4 Earnings; Misses Estimates (MTB)

M&T Bank (MTB) announced its fourth quarter and full year earnings before the bell on Friday, with quarterly GAAP earnings falling from last year’s Q4 while full year earnings rose 11%.

MTB Earnings in Brief

M&T Bank reported quarterly net income of $245.72 million, which was down from last year’s Q4 net income of $296.19 million. The company’s diluted EPS came in at $1.79 for the quarter, down from the $2.23 per diluted common share reported in last year’s Q4 results. MTB missed analysts’ estimates of $1.92 EPS. For the full year, MTB reported EPS of $8.38, marking an 11% increase from last year’s EPS of $7.54

CFO Commentary

Rene F. Jones, CFO and executive VP, had the following comments about the company’s earnings: “While expenses were elevated by investments in our infrastructure during 2013, M&T achieved a net operating return on average tangible common shareholders’ equity of 18.17% for the full year.  Our core capital position strengthened, as the Tier 1 common ratio grew to 9.25% at the 2013 year-end, up 17 basis points from September 30 and 168 basis points higher than at December 31, 2012.  We are also pleased with the continued improvement in credit quality.  M&T’s liquidity and risk profile was enhanced during the year through several actions, including replacing less liquid investment securities with Ginnie Mae securities and the securitization of loans held in the loan portfolio.  During the final two quarters of 2013 we invested heavily in several key areas, including risk management, capital planning and stress testing, regulatory compliance, and other operational and technology initiatives.  Those investments will better position M&T for the future.”

No Dividend Change

MTB did not announce a change to its quarterly dividend, and has not raised its dividend since 2007. It should be noted that MTB did not cut its dividend during the recession, as many of its peers did. The company’s most recent dividend was paid on December 31. Investors should look for MTB to declare its next dividend in the coming months.

Stock Performance

MTB stock was inactive in pre-market trading, but was down 35 cents, or 0.3%, at yesterday’s close. YTD, the company’s stock is down 0.34%.