Magazine article American Banker

1Q RESULTS: Credit Quality Turns Up at M&T; Profit Rises 10%

Magazine article American Banker

1Q RESULTS: Credit Quality Turns Up at M&T; Profit Rises 10%

Article excerpt

Byline: Matthew Monks

M&T Bank Corp.'s credit problems eased dramatically in the first quarter as more overdue commercial borrowers started making payments again.

For the first time in several quarters, new overdue loans were matched equally by those that were "cured," or taken off nonperforming status, according to Rene Jones, the Buffalo lender's chief financial officer.

Though declining to give specific numbers, Jones said the improvements occurred across all commercial loan categories.

"It gives you some sense that we're in a different stage of the cycle," Jones said. "You're probably seeing this in all institutions - as the economy gets better, companies that were having some difficulties, some of them are actually starting to get better."

Lower credit costs and higher net margins tied to two recent acquisitions drove M&T to its most profitable quarter in nearly two years. First-quarter profits were $151 million, up 10.3% from the fourth quarter.

The results reaffirmed M&T's status as one of the country's strongest banking companies.

M&T, which counts Warren Buffett as a shareholder, has stayed profitable through the financial crisis due to its conservative underwriting. The company, which has more than 750 branches along the east coast from New York to Virginia, began backing away early from problem loan categories like auto loans and less-than-prime mortgages.

It has experienced its fair share of pain through the downturn, booking nearly $1 billion of loan losses in the last nine quarters on credits to homebuyers and home builders. …

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