M&T Bank profit falls; analysts lower estimates

By THOMAS ADAMS • January 18, 2012

‎Analysts lowered quarterly earnings estimates for M&T Bank Corp. by 4 cents Wednesday, to a consensus of $1.51, a day after the bank announced a 32 percent decline in fourth-quarter profits and missed Wall Street estimates by 43 cents.

The Buffalo-based bank on Tuesday reported net income of $129.8 million, or $1.04 a share in the fourth quarter. That compares with $189.7 million, or $1.59 a share, in the fourth quarter of 2010.

Analysts had predicted earnings of $1.47 a share.

The results were impacted by a $79 million other-than-temporary impairment charge related to M&T’s 20 percent investment in Bayview Lending Group LLC, the bank reported.

M&T received $55 million from a December settlement of a 2008 lawsuit against Deutsche Bank Securities Inc. and others, and subsequently contributed $30 million to the M&T Charitable Foundation. It also recorded a $25 million other-than-temporary charge related to a package of mortgage-backed investment securities.

The impact of those four items reduced profits by $48 million, or 38 cents a share, the bank said.

“We remain cautious with our outlook for credit,” said Rene Jones, executive vice president and chief financial officer Rene Jones said in an earnings call Tuesday. “After all, we're bankers.

“The economy is growing, albeit slowly, but unemployment still remains high and the housing sector is unsettled. We expect continued slow, steady improvement in criticized and non-accrual loans, with credit costs improving over a long-time horizon.”

M&T ranks second in the Rochester market with local deposits of more than $3 billion.