Stock Earnings Analysis: M&T Bank (MTB)

M&T Bank Corporation (NYSE:MTB) reported earnings for the three months ended Mar2016 on April 18, 2016. The company earned $1.82 per share on revenue of $1.29B. Analysts had been modeling earning per share of $1.84 with $1.3B in revenue.

M&T Bank Corporation (MTB) on April 18, 2016 reported its results of operations for the quarter ended March 31, 2016.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the initial quarter of 2016 were $1.73, up 5% from $1.65 in each of the first and fourth quarters of 2015.  GAAP-basis net income in the recent quarter was $299 million, 24% higher than the $242 million earned in the year-earlier quarter and 10% above the $271 million recorded in the final 2015 quarter.  Net income for the initial 2016 quarter expressed as an annualized rate of return on average assets and average common shareholders’ equity was .97% and 7.44%, respectively, compared with 1.02% and 7.99%, respectively, in the corresponding 2015 period and .93% and 7.22% in the fourth quarter of 2015.  M&T’s first quarter 2016 results reflect a full-quarter impact of its November 1, 2015 acquisition of Hudson City Bancorp, Inc. (“Hudson City”).

Commenting on M&T’s recent quarter performance, René F. Jones, Vice Chairman and Chief Financial Officer, noted, “Results in 2016’s initial quarter reflected strong growth in net interest income, solid loan growth, stable credit performance and well-controlled expenses, leading to an 11% rise in diluted net operating earnings per share, to $1.87, over the year-earlier period.  The quarter was highlighted by the full integration of Hudson City’s operations through the successful conversion of the deposit system and branch network.  Our entire banking franchise is now operating under the M&T flag, enabling us to extend to our new customers our unwavering commitment to outstanding service.”

Supplemental Reporting of Non-GAAP Results of Operations.  M&T consistently provides supplemental reporting of its results on a “net operating” or “tangible” basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T, since such items are considered by management to be “nonoperating” in nature.  The amounts of such “nonoperating” expense are presented in the tables that accompany this release.  Although “net operating income” as defined by M&T is not a GAAP measure, M&T’s management believes that this information helps investors understand the effect of acquisition activity in reported results.

M&T Bank Corporation earnings per share showed a decreasing trend of -3.2% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 906%.Analysts project EPS growth over the next 5 years at 9.31%. It has EPS annual growth over the past 5 fiscal years of 4.8% when sales grew 3. It reported 31.8% sales growth, and 5.7% EPS growth in the last quarter.

The stock is trading at $119.5, up 20.92% from 52-week low of $100.08. The stock trades down -8.64% from its peak of $134 and 2.3% above the consensus price target of $122.25. Its volume clocked up at 0.98 million shares which is higher than the average volume of 0.83 million shares. Its market capitalization currently stands at $18.98B.