M&T Bank Corp (NYSE:MTB)

CAPS Rating: 4 out of 5

A Bank holding Company which provide individuals, corporations and other businesses, and institutions with commercial & retail banking services, including loans and deposits, trust, mortgage banking, asset management, insurance & other financial services.


Player Avatar NetscribeBanking (89.38) Submitted: 2/27/2007 7:57:52 AM : Underperform Start Price: $94.64 MTB Score: +21.15

MTB is New York based holding company primarily operating though its subsidiaries in New York, Pennsylvania, Virginia, West Virginia, Maryland and Delaware.

Recent acquisition of Citibank’s 21 upstate New York branches has not only expanded the market share but also provided low cost deposits to the tune of $1 billion, which have been used to retire wholesale borrowings and marginally improve the deteriorating net interest margin. Cheap sources of funding has been difficult to come by with more than 60% of its deposits are in the Western and Central New York, where the manufacturing hub is in a state of recession and no signs of comeback

Around 35% of the total revenue is generated through fee income making it less dependent on spread income. The loan portfolio is diversified with a balanced mix of asset class and approximately 50% of its loan portfolio is in real estate. Home equity lines of credit and consumer loan categories remain slow and are vulnerable to the current yield environment.

Huge potential is seen in the branches of Mid Atlantic region where only 2% and 22% of the customer use its mortgage and merchant services compared to 10% and 37% for other region. Historically the attitude of the bank has been to shun of risky loans thereby forgoing growth for better credit standards. But of late there has been a dent in the same with non-performing loans creeping to 0.52% from 0.39%. However the metrics are satisfactory when compared to its peers and has adequate loss reserves to support it.

The management feels the year 2007 to have modest revenue growth, as signs of excess liquidity remain visible that would pressurize loan pricing. The fundamentals look good and its superior operating performance has helped it find a place even in Warrant Buffet’s Berkshire Hathaway’s portfolio. However there is a general feeling in the market that the stocks current price already reflects the future growth prospects. Unfavorable interest rate scenario with the stock trading at a premium makes the future of the bank uncertain and chances of beating the market looks dim.

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Member Avatar NetscribeBanking (89.38) Submitted: 4/16/2007 6:46:47 AM
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Despite unfavorable interest rate environment the banks diluted earnings per share in 2006 rose 10% to $7.37 posting its 13th year of consecutive double-digit income growth. Efficiency ratio has improved to 51.51%, still remaining one of its key priorities whereby it expects to put a lid on its expenses, trying to curtail its infrastructure cost and salary bills. The bank has recently taken a 20% stake in Bayview lending group, which it considers a prudent investment owing to the high stock prices of banks that makes mergers and acquisitions unattractive. Its loan portfolio looks well diversified and balanced, and still has a relatively high proportion of low cost deposit. Historically it has maintained good credit quality and its conservativeness have resulted in above average loan loss reserves. Total non-interest income rose 10% last year to $1.05 billion and its profitability ratio fares well. Endorsing the same its return on average assets and return on equity stood at 1.5% and 13.89% respectively dwarfing majority of its peers. It has opened six new banking centers in the mid Atlantic area and also has taken the option of moving the branches to new areas with higher population density.The bank in its recent press releases had stated that it had problems with Alt-A loans that typically include some form of limited documentation requirements as compared with more traditional residential mortgage loans. Unfavorable market conditions and lack of liquidity continue to haunt the mortgage industry in 2007 as a result of which it was not able to auction off $833 million of mortgage loans at an acceptable price. Fed still seems to have a problem with inflation being beyond the comfortable level and has not reduced rates as expected is a real cause of concern. Summarizing the above mentioned facts it is better to avoid the stock for 2007.

Member Avatar DeeDame (< 20) Submitted: 6/23/2010 12:42:12 PM
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The WORST bank on the face of the Earth - the disgusting way they treat employees, they should be sued on a daily basis. In conclusion, BITE ME!

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