M&T Bank (NYSE:MTB) has benefitted from the spate of rate hikes of the past year, which supported a doubling in the interest it earns on outstanding loans.
M&T, which provides banking products across the eastern United States, reported net interest income of $1.83 billion for the three months to March 31, 2023, up from $907 million in the same quarter of 2022. It attributed some of the growth to its April 1, 2022, acquisition of People’s United Bank, as well as a 139 basis point widening in its net interest margin due to the Federal Reserve’s rate hikes.
However, its provision for credit losses increased to $120 million, from $10 million a year earlier, as a result of weaker forecasted economic conditions on many loan categories and higher outstanding loan balances.
Total deposits declined by 3% to $159 million from $164 million in December, which the bank partly attributed to the impact of seasonal decreases.
Net income quarter almost doubled to $702 million, from $362 million in 1Q 2022, while diluted earnings per share jumped 53% to $4.01, ahead of the $3.99 expected by analysts.
"The strength of M&T's diversified community banking model and prudent management have positioned M&T to continue to deliver for our customers,” the bank’s chief financial officer Darren King said in a statement. “These results reflect loan growth, steady credit quality, a strong liquidity position and, as in past years, seasonally higher salaries and employee benefits expense.”
M&T’s shares were up 0.3% at $116 in early New York trade.
Contact the author at stephen.gunnion@proactiveinvestors.com