M&T Bank (NYSE:MTB) has reported a sharp decline in fourth-quarter earnings as net interest income dipped and it increased provisions for credit losses.
The Buffalo, New York-based bank reported a 6% year-over-year decline in net interest income to $1.72 billion for the three months to December 31, 2023. It raised provisions for credit losses by 150% to $225 million, citing continued pressure on investor-owned commercial real estate borrowers and a $1.7 billion increase in loan balances from the prior quarter.
Diluted net operating earnings fell 31% to $2.81 per share, below the $3.67 consensus of analysts polled by Zacks Investment Research.
“With commercial real estate values and higher interest rates impacting our commercial clientele, our relationship-based approach gives us confidence in our ability to work through those challenges with our customers and appropriately assess the associated credit risk and loss reserves,” M&T chief financial officer Daryl Bible commented in a statement.
Ahead of the opening bell, the lender’s shares were up 1.6% at $130.96.