Following the settlement of the lawsuit of its Wilmington
M&T Bank Corporation
) announced revised GAAP earnings for fourth-quarter 2013 and
full-year 2013. For the resolution of the case which was filed in
Delaware Chancery Court in Wilmington, the company increased
litigation reserves by $40 million as of Dec 31, 2013.
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The litigation involved the trust's management, established by a
Mennen family member. Last year, heirs of Mennen Co., maker of
Speed Stick deodorant sued Wilmington Trust and a Mennen family
member and demanded more than $100 million in damages over
investment losses. However, the settlement amount is undisclosed.
Revised Q4 and 2013 GAAP Results
M&T Bank restated fourth-quarter 2013 net income of 221.4
million or $1.56 per share, down from the previously reported net
income of 245.7 million or $1.74 per share. For full-year 2013,
revised net income came in at $1.14 billion or $8.20 per share
compared with the previously reported net income of $1.16 billion
or $8.38 per share.
Further, as of Dec 31, 2013, the revised estimated Tier 1 common
capital ratio was 9.22%, down from the previously reported ratio
of 9.25%, while the estimated Basel III Tier 1 common equity
ratio was 8.98%, down from the previously reported ratio of
9.01%. Further, revised tangible common equity to tangible assets
ratio was 8.39% versus previously reported ratio of 8.42%.
Other costs of operations, which were reported at $261.4 million,
have been increased to $301.4 million in the quarter, including
litigation-related charges of $40 million. Moreover, other costs
of operations for the full-year 2013 came in at $860.3 million
after revision, up from $820.3 million previously reported.
Following the financial crisis, the market witnessed a rise in
the number of distressed banks ready to be taken over by their
stronger counterparts. M&T Bank capitalized on such
opportunities. In fact, strategic acquisitions have been a part
of M&T Bank's business expansion policy.
The proposed acquisition of
Hudson City Bancorp Inc.
) in a cash and stock deal worth $3.7 billion is expected to
provide upside to M&T Bank's top line by leveraging the
former's retail network as well as product and balance sheet
The company, with its solid business model and strategic
acquisitions, is well poised for growth. While the sluggish
economic recovery, regulatory issues and low interest rate
environment remain headwinds for M&T Bank, we believe that
its sound capital position, improving credit quality and growing
core deposit bode well in the long run.
M&T Bank currently carries a Zacks Rank #3 (Hold).
Some better-ranked major regional banks worth considering include
SunTrust Banks, Inc.
), both with a Zacks Rank #2 (Buy).