Regional bank M&T Bank Corp. ( Part of Warren Buffett's Holdings) fourth-quarter profit jumped 57 percent as interest and fee-based revenue grew, but shares tumbled on signs of rapidly deteriorating credit.
For the final three months of 2008, the bank earned $102.2 million, or 92 cents per share, compared with $64.9 million, or 60 cents per share, in the year-earlier period.
On an adjusted basis, excluding certain one-time charges and expenses, the bank earned $111.8 million, or $1 per share, compared with $83.7 million, or 77 cents per share.
Shares tumbled, hitting a 12-year low of $33.60 in early trading.
Analysts are worried about the bank's deteriorating credit trends.
During the quarter, the bank set aside $151 million to cover potential loan losses. This compares with $101 million in the corresponding 2007 period. Meanwhile, net chargeoffs, or loans written off as unpaid, more than doubled to $144 million. The chargeoffs represent an annualized 1.17 percent of average loans outstanding, up from 0.46 percent in the fourth quarter of 2007. M&T said chargeoffs were primarily concentrated in loans to residential real estate builders and developers, commercial loans, residential real estate loans, and consumer loans.
Net interest income, or the difference between how much it costs a bank to borrow money and how much it receives from lending money to customers, was $486.1 million, up 3 percent from $470.2 million in the fourth quarter of 2007. Results were boosted by a drop in interest expense.
Noninterest income, or income earned from fees and other charges, increased 50 percent to $241.4 million from $160.5 million, driven by increases in mortgage banking revenue and brokerage services fees. Additionally, the bank reported a loss on investment securities of $23.5 million, down sharply from a loss of $127.3 million in the prior-year period.
In December, the bank announced plans to buy Baltimore-based Provident Bankshares Corp. in a stock-for-stock deal. The transaction, which will boost the bank's presence in Maryland and Virginia, is expected to close in the second quarter.
For the year, M&T earned $556 million, or $5.01 per share, compared with $654 million, or $5.95 per share, in 2007.
As per Sep 08 shareholding pattern, Warren Buffet's Berkshire Hathaway is holding 6,715,060 shares of M&T Bank.
For the final three months of 2008, the bank earned $102.2 million, or 92 cents per share, compared with $64.9 million, or 60 cents per share, in the year-earlier period.
On an adjusted basis, excluding certain one-time charges and expenses, the bank earned $111.8 million, or $1 per share, compared with $83.7 million, or 77 cents per share.
Shares tumbled, hitting a 12-year low of $33.60 in early trading.
Analysts are worried about the bank's deteriorating credit trends.
During the quarter, the bank set aside $151 million to cover potential loan losses. This compares with $101 million in the corresponding 2007 period. Meanwhile, net chargeoffs, or loans written off as unpaid, more than doubled to $144 million. The chargeoffs represent an annualized 1.17 percent of average loans outstanding, up from 0.46 percent in the fourth quarter of 2007. M&T said chargeoffs were primarily concentrated in loans to residential real estate builders and developers, commercial loans, residential real estate loans, and consumer loans.
Net interest income, or the difference between how much it costs a bank to borrow money and how much it receives from lending money to customers, was $486.1 million, up 3 percent from $470.2 million in the fourth quarter of 2007. Results were boosted by a drop in interest expense.
Noninterest income, or income earned from fees and other charges, increased 50 percent to $241.4 million from $160.5 million, driven by increases in mortgage banking revenue and brokerage services fees. Additionally, the bank reported a loss on investment securities of $23.5 million, down sharply from a loss of $127.3 million in the prior-year period.
In December, the bank announced plans to buy Baltimore-based Provident Bankshares Corp. in a stock-for-stock deal. The transaction, which will boost the bank's presence in Maryland and Virginia, is expected to close in the second quarter.
For the year, M&T earned $556 million, or $5.01 per share, compared with $654 million, or $5.95 per share, in 2007.
As per Sep 08 shareholding pattern, Warren Buffet's Berkshire Hathaway is holding 6,715,060 shares of M&T Bank.
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