M&T Bank Q1 net interest income misses analyst expectations

Overview

• U.S. regional bank's Q1 net income and adjusted EPS rose yr/yr

• Q1 net interest income missed analyst expectations despite wider net interest margin

• Company repurchased $1.25 bln of common stock during the quarter

Outlook

• Company did not provide specific guidance for future quarters or the full year in its press release

Result Drivers

• NET INTEREST MARGIN - Margin widened 2 bps from prior qtr as funding costs declined more than yields on earning assets

• LOAN MIX - Higher average balances of commercial and industrial loans drove loan growth, offset by declines in commercial real estate and consumer loans

• NONINTEREST INCOME FACTORS - Noninterest income reflected a new accounting election for mortgage servicing rights, lower gains on commercial mortgage loans originated for sale, and a $33 mln distribution from investment in Bayview Lending Group

Company press release: ID:nPnRVq40a

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 8 "strong buy" or "buy", 12 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for M&T Bank Corp is $230.00, about 4.3% above its April 14 closing price of $220.51

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 11 three months ago

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