M&T Bank Q4 earnings increased as loans grow, interest rates rise
M&T Bank (NYSE:MTB) stock rose 1.2% in Thursday premarket trading after Q4 earnings beat as net interest income benefited from the Federal Reserve's interest rate-hiking campaign and the company continued to integrate People's United into its operations.
Q4 net operating EPS of $4.57, vs. $4.44 consensus, jumped from $3.83 in Q3 and from $3.50 in Q4 2021.
"Diluted net operating earnings per share increased in each quarter following our acquisition of People's United, including 19% in the fourth quarter," said Chief Financial Officer Darren J. King. "The integration of the acquired franchise, expansion of the net interest margin and solid growth in commercial loan balances position M&T (MTB) to continue its strong performance into 2023."
M&T (MTB) completed its acquisition of People's United in April 2022.
Q4 annualized return on average common equity of 12.59% vs. 10.43% in Q3 and 10.91% in the year-ago quarter.
Taxable-equivalent net interest income of $1.84B, matching the Visible Alpha consensus, increased from $1.69B in the prior quarter and from $937M in the year-ago quarter. Net interest margin rose to 4.06% from 3.68% in Q3 and from 2.58% in Q4 2021.
Provision for credit losses was $90M compared with $115M in Q3 and a benefit of $15M in Q4 2021.
Q4 noninterest expense of $1.41B rose from $1.28B in the prior quarter and from $928m in the year-ago period. Excluding expenses considered to be non-operating, Q4 noninterest expenses were $1.35B, up from $1.21B in Q3 and from $904M in Q4 2021.
Compared with Q3, M&T Bank (MTB) increased spending on equipment and net occupancy, outside data processing and software and a seasonal increase in advertising and promotional spending. That was partly offset by a declined in salaries and employee benefits expenses, reflecting lower employee staffing levels after converting People's United operating systems with those of M&T and one less pay day in Q4.
Average loans outstanding were $129.4B in Q4 vs. $127.5B in Q3; total deposits of $163.5B at Dec. 31, 2022 slipped from $163.8B at Sept. 30.
Mortgage banking revenue of $82M vs. $83M in Q2 and $139M in Q4 2021.
Service charges on deposit accounts were $106M vs. $115M in the prior quarter and $105M in the year-ago period.
Trust income of $195M vs. $187M in the previous quarter and $169M a year earlier.
Brokerage services income was $22M vs. $21M in Q3 and $19M in Q4 202.
Other revenue from operations rose to $267M from $153M in Q3 and from $139M in the year-ago quarter.
Conference call at 11:00 AM ET.
Earlier, M&T Bank (MTB) non-GAAP EPS of $4.57 beats by $0.13, revenue of $2.51B beats by $140M