M&T Bank's fourth-quarter 2014 operating earnings came ahead of
the Zacks Consensus Estimate and the prior-year quarter figure as
well. Impressive results came on the back of top line growth, lower
expenses and decline in provision for loan losses. Further,
increased loans and deposits, continued improvement in credit
metrics and a strong capital position were the tailwinds. After
analyzing the company's results, we are maintaining our long-term
Neutral recommendation on the stock.
Headquartered in Buffalo, N.Y. and founded in 1969, M&T Bank
Corporation (MTB) is the holding company for M&T Bank and
Wilmington Trust, National Association. M&T Bank operates
branch offices in New York, Maryland, Pennsylvania, Delaware, New
Jersey, Virginia, West Virginia and the D.C. M&T holds a 20%
interest in Bayview Lending Group LLC ("BLG"), a privately-held
commercial mortgage company. M&T recognizes income or loss from
BLG using the equity method of accounting. The carrying value of
that investment was $51 million as of Sep 30, 2014.
In Aug 2012, the U.S. Treasury announced a public offering of
preferred stock worth $381.5 million, which it held in M&T
Bank. This allowed M&T Bank Corp. to exit the Troubled Assets
Relief Program (TARP).
Back in 2008, M&T participated in TARP and took $600 million
as the bailout money. In return, preferred stocks were issued to
the Treasury. In the meantime, the acquisitions of two TARP
recipients Provident Bankshares Corp. (acquired in 2009) and
Wilmington Trust Corp. (2011) burdened the company with more TARP
funds to be returned. M&T Bank already paid a part of its TARP
dues ($700 million) in May 2011 and was left with the remaining
$381.5 million in the TARP preferred stock.
The reportable segments are Business Banking, Commercial
Banking, Commercial Real Estate, Discretionary Portfolio,
Residential Mortgage Banking and Retail Banking. Details are as
The Business Banking segment provides a wide range of services
to small businesses and professionals through the company's branch
network, business banking centers and other delivery channels such
as telephone banking, Internet banking and automated teller
machines. Services and products offered by this segment include
various business loans and leases, business credit cards, deposit
products and financial services such as cash management, payroll
and direct deposit, merchant credit card and letters of credit.
The Commercial Banking segment provides a wide range of credit
products and banking services for middle-market and large
commercial customers. Services provided by this segment include
commercial lending and leasing, letters of credit, deposit
products, and cash management services.
The Commercial Real Estate segment provides credit and deposit
services to its customers. Real estate securing loans in this
segment is generally located in the New York City metropolitan
area, upstate New York, Pennsylvania, Maryland, D.C., Delaware,
Virginia, West Virginia, and the northwestern portion of the United
States. Commercial real estate loans may be secured by
apartment/multifamily buildings office, retail and industrial space
or other types of collateral. Activities of this segment also
include the origination, sales and servicing of commercial real
estate loans through the Fannie Mae DUS program and other
The Discretionary Portfolio segment includes investment and
trading securities, residential mortgage loans and other assets
short-term and long-term borrowed funds brokered certificates of
deposit and interest rate swap agreements related thereto and
Cayman Islands office deposits. This segment also provides foreign
exchange services to customers.
The Residential Mortgage Banking segment originates and services
residential mortgage loans and sells substantially all of those
loans in the secondary market to investors or to the Discretionary
The Retail Banking segment offers a variety of services to
consumers through several delivery channels, which include branch
offices, automated teller machines, telephone banking and Internet
banking. The segment also offers certain deposit products on a
nationwide basis through the delivery channels of Wilmington Trust,
N.A. Credit services offered by this segment include consumer
installment loans, automobile loans, home equity loans and lines of
credit and credit cards.
The All Other' category reflects other activities of the company
that are not directly attributable to the reported segments.
As of Sep 30, 2014, the company had consolidated assets of $97.2
billion, net loans and leases of $64.7 billion and deposits of
M&T Bank Corporation (MTB): Read the Full
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