M&T Bank's profit in 1Q misses analyst forecasts by 1 cent

Expenses for acquiring Allfirst are blamed

April 11, 2003|By William Patalon III | William Patalon III,SUN STAFF

M&T Bank Corp. reported yesterday a first-quarter profit increase of 3 percent that was slightly below expectations as expenses for acquiring Baltimore's Allfirst Financial Inc. cut into its bottom line.

For the three months that ended March 31, M&T said it had net income of $117 million, up from the $114 million it earned in the first quarter of 2002. Earnings per diluted share were $1.23, a 4 percent increase from the $1.18 reported in the first quarter of last year.

Earnings per share came in a penny below analysts' forecasts, according to surveys conducted by Thomson First Call and Zacks Investment Research, two financial-information services.

In view of the lackluster backdrop, however, M&T said its first quarter was solid.

"Overall, this was a decent quarter [despite] difficult economic conditions," said C. Michael Zabel, M&T's vice president of corporate communications.

M&T assumed majority ownership of Allfirst from Allied Irish Banks PLC in a $3.1 billion deal April 1, the first day of the second quarter.

Allfirst did not contribute to M&T's first-quarter earnings, but merger-related expenses did slash profits by $4 million, or 4 cents per share, for the quarter, the bank said. Allfirst is expected to be moderately accretive to earnings this year.

M&T, based in Buffalo, N.Y., said business was strong in both mortgage lending and consumer lending, though its commercial-loan business was weak.

Michael P. Pinto, executive vice president and chief financial officer, said that despite the nation's economic malaise, M&T is "encouraged by the operating results of our mortgage banking business and continued strong growth in our consumer loan portfolio, although these positive factors were offset by generally lackluster revenue growth in other business lines."

"Excluding the effects of Allfirst and assuming that the economy begins to rebound later this quarter, we remain comfortable with our previously stated belief that M&T's full-year results will be within the range of $5.25 to $5.35 of diluted earnings per share," Pinto said.

M&T had total assets of $33.4 billion, up 7 percent from $31.3 billion reported at the end of last year's first quarter. Deposits were $21.9 billion as of March 31, up 1 percent from $21.6 billion last year.

M&T shares rose 63 cents to close at $81.20 yesterday.

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