M&T Bank sees earnings rise by 34%

M&T Bank saw its fourth-quarter earnings rise by 34%, beating analysts’s estimates, as the company’s bad debts fell.

AIB holds a 22% stake in the US bank which it is thought it is likely to sell this year to boost its depleted capital base.

M&T operates throughout the northeast and mid-Atlantic and has been relatively stable throughout the financial crisis as it focused on its community- banking model and made acquisitions.

Warren Buffett has regarded the bank as a good investment play for some time.

Analysts said the bank has a stronger balance sheet than some of its regional-bank rivals, Dow Jones reported.

Despite that it took $600 million (€423m) from the US Treasury’s Troubled Asset Relief Program during the banking crisis.

The bank reported profits for the period reached €136.8m or $1.04 a share, up from $102.2m, or 92 cents, a year earlier.

Earnings would have been about 21 cents a share higher but for the fact that it was hit by $21m of charges related to investment securities and merger-related costs of $4m over the period.

Loan losses of $145m fell from $151m a year earlier.

Bad debt provisions were down with the amount of loans the bank thinks it will fail to collect on outstanding debt down from 1.17% a year earlier, but were up by 0.83% on the third quarter.

Total deposits rose 11% during the three month period from a year earlier and 1.3% over the previous quarter.

René F Jones, executive vice president and chief financial officer commenting on the results said that by sticking to the provision of lending and banking services in its local markets, M&T produced solid earnings again in the fourth quarter of the year.

“We were pleased to see a continued widening of our net interest margin, which improved 10 basis points to 3.71% in the quarter.

“That key measure has increased for three consecutive quarters. Credit costs in the fourth quarter were down slightly and continue to be below current industry experience,” she said.

She added that the 2009 acquisitions of Provident and Bradford in the mid-Atlantic region improve overall earnings of the group over the period.

AIB has had a 22% stake in M&T since it merged Allfirst with the bank in 2003.

AIB made its first acquisition in the US in 1983 when it bought into First Maryland Bancorp which later became Allfirst as the bank expanded in the region.