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M&T Bank (MTB) Q3 Earnings Beat Estimates, Expenses Decline
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M&T Bank Corporation (MTB - Free Report) reported net operating earnings of $3.56 per share in third-quarter 2018, surpassing the Zacks Consensus Estimate of $3.35. Also, the bottom line improved 59% year over year.
The company recorded rise in revenues with support from margin expansion. Moreover, improved credit quality and lower expenses were other positive factors. However, decrease in loan and deposit balances was a headwind.
Net operating income came in at $531 million, up around 60% from $361 million recorded in year-ago quarter.
On a GAAP basis, M&T Bank’s earnings per share of $3.53 jumped 39% year over year. Net income soared 48% to $526 million.
Revenues Increase, Expenses Decline, Loans & Deposits Fall
M&T Bank’s revenues came in at $1.49 billion comparing favorably with the year-ago figure of $1.43 billion. However, it lagged the Zacks Consensus Estimate of $1.50 billion.
Taxable-equivalent net interest income increased 7% year over year to $1.04 billion in the quarter, driven by higher net interest margin, partly offset by lower average earning assets. Furthermore, net interest margin expanded 35 basis points (bps) to 3.88%.
The company’s non-interest income remained stable year over year at $459 million. Higher trust and other income were offset by lower brokerage services income and mortgage banking revenues.
Non-interest expenses were $776 million, down 4% from the prior-year quarter. Excluding certain non-operating items, non-interest operating expenses came in at $770 million, declining 3.5% from the year-ago quarter. The fall reflected lower amortization costs and other expenses, partially offset by increased advertising and marketing expenses along with outside data processing and software.
Efficiency ratio came in at 51.4%, down from 56% in the prior-year quarter. Lower ratio indicates rise in profitability.
Loans and leases, net of unearned discount, fell 1.4% year over year to $86.7 billion at the end of the reported quarter. Additionally, total deposits declined 5% to $89.1 billion.
M&T Bank's net operating income highlighted an annualized rate of return on average tangible assets and average tangible common shareholder equity of 1.89% and 21%, respectively, compared with 1.25% and 13.03% recorded in the prior-year quarter.
Credit Quality Improves
M&T Bank reflected an improved credit quality in the reported quarter. Provision for credit losses shrunk 47% year over year to $16 million. Also, net charge-offs of loans came in at $16 million, down 36%.
The ratio of non-accrual loans to total net loans was 1%, up 1 bps from a year ago. Non-performing assets decreased 2% year over year to $958 million.
Capital Position
M&T Bank’s estimated Common Equity Tier 1 to risk-weighted assets under regulatory capital rules were around 10.44%. Tangible equity per share came in at $67.64, down 2% year over year from $69.02.
Share Repurchase
During the September-end quarter, M&T Bank repurchased a total of 2.84 million shares of its common stock for a total cost of $498 million.
Our Viewpoint
M&T Bank’s results display an impressive performance in the quarter. We believe the company, with its sturdy business model and strategic acquisitions, is well poised for growth. Further, easing margin pressure and relaxed regulations will be favorable. Moreover, decline in expenses came as a tailwind.
However, despite improving economic conditions, M&T Bank’s declining loans and deposits balance remain a concern.
M&T Bank Corporation Price, Consensus and EPS Surprise
Comerica’s (CMA - Free Report) third-quarter 2018 adjusted earnings per share of $1.86 surpassed the Zacks Consensus Estimate of $1.76. Also, the results compared favorably with year-ago adjusted figure of $1.27.
Driven by stellar revenues, PNC Financial (PNC - Free Report) delivered a positive earnings surprise of 3.3% in third-quarter 2018. Earnings per share of $2.82 beat the Zacks Consensus Estimate of $2.73. Moreover, the bottom line reflected a 30.6% jump from the prior-year quarter.
Impacted by lower mortgage banking revenues, Wells Fargo (WFC - Free Report) recorded a negative earnings surprise of 3.4% in third-quarter 2018. Earnings of $1.13 per share missed the Zacks Consensus Estimate of $1.17. However, the bottom-line compared favorably with 83 cents recorded in the prior-year quarter.
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New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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M&T Bank (MTB) Q3 Earnings Beat Estimates, Expenses Decline
M&T Bank Corporation (MTB - Free Report) reported net operating earnings of $3.56 per share in third-quarter 2018, surpassing the Zacks Consensus Estimate of $3.35. Also, the bottom line improved 59% year over year.
The company recorded rise in revenues with support from margin expansion. Moreover, improved credit quality and lower expenses were other positive factors. However, decrease in loan and deposit balances was a headwind.
Net operating income came in at $531 million, up around 60% from $361 million recorded in year-ago quarter.
On a GAAP basis, M&T Bank’s earnings per share of $3.53 jumped 39% year over year. Net income soared 48% to $526 million.
Revenues Increase, Expenses Decline, Loans & Deposits Fall
M&T Bank’s revenues came in at $1.49 billion comparing favorably with the year-ago figure of $1.43 billion. However, it lagged the Zacks Consensus Estimate of $1.50 billion.
Taxable-equivalent net interest income increased 7% year over year to $1.04 billion in the quarter, driven by higher net interest margin, partly offset by lower average earning assets. Furthermore, net interest margin expanded 35 basis points (bps) to 3.88%.
The company’s non-interest income remained stable year over year at $459 million. Higher trust and other income were offset by lower brokerage services income and mortgage banking revenues.
Non-interest expenses were $776 million, down 4% from the prior-year quarter. Excluding certain non-operating items, non-interest operating expenses came in at $770 million, declining 3.5% from the year-ago quarter. The fall reflected lower amortization costs and other expenses, partially offset by increased advertising and marketing expenses along with outside data processing and software.
Efficiency ratio came in at 51.4%, down from 56% in the prior-year quarter. Lower ratio indicates rise in profitability.
Loans and leases, net of unearned discount, fell 1.4% year over year to $86.7 billion at the end of the reported quarter. Additionally, total deposits declined 5% to $89.1 billion.
M&T Bank's net operating income highlighted an annualized rate of return on average tangible assets and average tangible common shareholder equity of 1.89% and 21%, respectively, compared with 1.25% and 13.03% recorded in the prior-year quarter.
Credit Quality Improves
M&T Bank reflected an improved credit quality in the reported quarter. Provision for credit losses shrunk 47% year over year to $16 million. Also, net charge-offs of loans came in at $16 million, down 36%.
The ratio of non-accrual loans to total net loans was 1%, up 1 bps from a year ago. Non-performing assets decreased 2% year over year to $958 million.
Capital Position
M&T Bank’s estimated Common Equity Tier 1 to risk-weighted assets under regulatory capital rules were around 10.44%. Tangible equity per share came in at $67.64, down 2% year over year from $69.02.
Share Repurchase
During the September-end quarter, M&T Bank repurchased a total of 2.84 million shares of its common stock for a total cost of $498 million.
Our Viewpoint
M&T Bank’s results display an impressive performance in the quarter. We believe the company, with its sturdy business model and strategic acquisitions, is well poised for growth. Further, easing margin pressure and relaxed regulations will be favorable. Moreover, decline in expenses came as a tailwind.
However, despite improving economic conditions, M&T Bank’s declining loans and deposits balance remain a concern.
M&T Bank Corporation Price, Consensus and EPS Surprise
M&T Bank Corporation Price, Consensus and EPS Surprise | M&T Bank Corporation Quote
Currently, M&T Bank carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Comerica’s (CMA - Free Report) third-quarter 2018 adjusted earnings per share of $1.86 surpassed the Zacks Consensus Estimate of $1.76. Also, the results compared favorably with year-ago adjusted figure of $1.27.
Driven by stellar revenues, PNC Financial (PNC - Free Report) delivered a positive earnings surprise of 3.3% in third-quarter 2018. Earnings per share of $2.82 beat the Zacks Consensus Estimate of $2.73. Moreover, the bottom line reflected a 30.6% jump from the prior-year quarter.
Impacted by lower mortgage banking revenues, Wells Fargo (WFC - Free Report) recorded a negative earnings surprise of 3.4% in third-quarter 2018. Earnings of $1.13 per share missed the Zacks Consensus Estimate of $1.17. However, the bottom-line compared favorably with 83 cents recorded in the prior-year quarter.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>