M&T Bank Corporation (NYSE:MTB) Q1 2019 Earnings Conference Call Transcript

Apr 15, 2019 • 11:00 am ET


M&T Bank Corporation (NYSE:MTB) Q1 2019 Earnings Conference Call Transcript


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Welcome to the M&T Bank First Quarter 2019 Earnings Conference Call.

It is now my pleasure to turn the floor over to Don MacLeod, Director of Investor Relations. Please go ahead, sir.

Donald J. MacLeod

Thank you, Laurie, and good morning. I'd like to thank everyone for participating in M&T's first quarter 2019 earnings conference call, both by telephone and through the webcast. If you've not read the earnings release we issued this morning, you may access it along with the financial tables and schedules from our website, www.mtb.com, and by clicking on the Investor Relations link and then on the Investor -- Events and Presentations link.

Also, before we start, I'd like to mention that comments made during this call might contain forward-looking statements relating to the banking industry and to M&T Bank Corporation. M&T encourages participants to refer to our SEC filings, including those found on forms 8-K, 10-K and 10-Q, for a complete discussion of forward-looking statements.

Now, I'd like to introduce our Chief Financial Officer, Darren King.

Darren J. King

Thanks, Don, and good morning, everyone. M&T's results for the first quarter largely reflected another quarter of solid financial performance. As noted in this morning's press release, some highlights include commercial loans both real estate and middle market, which showed a second consecutive quarter of solid growth on the back of strong originations and subdued payoff activity compared to last year.

The net interest margin remained strong, thanks to the December rate action by the Fed as well as some seasonal factors. The mortgage business was buoyed by the late quarter move in the 30-year rate, which combined with the impact of our purchase of mortgage servicing rates during the first quarter, position the business for a better year in 2019.

Trust revenues slowed slightly in the past quarter, mainly due to market volatility, impacting balances and keeping some customers on the sidelines. Expenses remained generally well controlled despite our investments in technology, both in talent and hardware, which are being somewhat front-loaded in 2019.

Now, let's look at some of the specific numbers. Diluted GAAP earnings per common share were $3.35 for the first quarter of 2019 compared with $3.76 in the fourth quarter of 2018 and $2.23 in the first quarter of 2018. Net income for the quarter was $483 million, compared with $546 million in the linked quarter and $353 million in the year-ago quarter.

On a GAAP basis, M&T's first quarter results produced annualized rate of return on average assets of 1.68% and an annualized return on average common equity of 13.14%. This compares with rates of 1.84% and 14.80%, respectively, in the previous quarter. Included in GAAP results in the recent quarter were after-tax expenses from the amortization of intangible assets amounting to $4 million or $0.03 per common share, little change from the prior quarter.

Consistent with our long-term practice, M&T provides supplemental reporting of its results on a net operating or tangible basis from which we have only ever excluded the after-tax effect of amortization of