Seeking Alpha
Profile| Send Message| ()  

M&T Bank (MTB) has seen its share of setbacks, but Barron's Jack Willoughby says investors should look to the long-run as the stock could see at least 30% upside.

M&T is a well-run regional lender that has focused on providing community-banking services and making savvy acquisitions. The difficult economic times have contributed to a rise in non-performing loans, but its non-performance rate of 2.11% is still below its peers' average of 3.25%. The bank also made an ill-timed entry into mortgage securitization right before the market collapsed. These setbacks will continue to pressure M&T in the near-term. CEO Robert Wilmers admitted "we've made our mistakes, but we feel we have them well under control, and are working through them."
Allied Irish Banks owns a 22% stake in M&T, and there's speculation that the cash-strapped bank will have to sell its stake because of an emergency bailout it received from Ireland. M&T says it has received no indication that Allied Irish Banks plans to sell.
Analysts expect earnings per share of $2.29 in 2009, a hefty drop from $5.01 in 2008. However, earnings are expected to rise 40% to $3.22 per share in 2010.
M&T could also benefit as the country pulls out of its economic slump. M&T president Mark Czarnecki said "we're seeing opportunities to do business with clients we wouldn't have had a chance with 20 years ago - they were long-term customers of someone else."
Sara E. Hasan, of boutique investment bank McAdams Wright Ragen, has a price target of $112 for the stock vs. a recent $58.46. Short-term uncertainty is creating an "opportunity to own a conservatively managed, consistently profitable institution at a significant discount to its historic valuation."

:::::::::::::::::::::::::::::::::::::::::::::::::::::::

Here is some more interesting commentary about M&T Bank:

Followers of the Oracle of Omaha will be interested to read Warren Buffett's Stock Portfolio, parts I, II and III. MTB is a top-30 holding for Buffett.

Meanwhile, Reggie Middleton concedes MTB is one of the few banks that escaped his Doo Doo 32. The others: BB&T Corp (BBT), Glacier Bancorp (GBCI), Sandy Spring Bancorp (SASR), TriCo Bancshares (TCBK), and Zions Bancorp (ZION).

Source: Investors Can Bank on M&T - Barron's