M&T Bank Corp.’s second-quarter profits rose 49 percent from a year ago, a strong showing bolstered by selling its holdings of Visa and MasterCard shares.
The bank reported net income of $348.5 million, compared with $233.4 million a year earlier, for the quarter ending June 30. Its diluted earnings per share were $2.55, compared with $1.71 a year ago.
“Our earnings quality remained strong in the recent quarter, including higher net interest income, comparatively strong mortgage banking revenues and above-average credit quality,” said Rene F. Jones, executive vice president and chief operating officer, in a Wednesday conference call.
M&T sold its holdings of Visa and MasterCard shares for an after-tax gain of $62 million. It had received the shares during the restructuring of those companies prior to the financial crisis. The bank’s non-interest income, which is generated from sources including fees, was $509 million, up 30 percent from $392 million a year ago. M&T’s net operating income was $361 million, or $2.65 per share, easily topping analysts’ estimates of $2.10 per share. The bank’s net interest income from taking deposits and making loans was $684 million, a 4 percent increase from the second quarter of 2012.
Loans grew at an 8 percent annualized rate in its Western New York and upstate region during the quarter, and at a 7 percent annualized rate in its Pennsylvania region, exceeding the modest growth pace of many markets.
Jones said M&T continues to benefit from the effect of HSBC’s divestiture of its upstate retail network, as some customers affected by the change in affiliation of those branches are still choosing a “new home” for their banking.
M&T, at the Federal Reserve’s direction, is working on submitting a revised Bank Secrecy Act/anti-money laundering compliance program to resolve deficiencies identified in M&T’s procedures, Jones said.
“We’re really focused on submitting that plan, and then we’ll have our head down for some time trying to make sure that we have everything in place to execute it.”
Once those issues are addressed, M&T can turn its attention to other matters, like its planned acquisition of Hudson City Bancorp, Jones said.
Jones said the bank has hired about 500 people who had worked at Bank of America’s mortgage servicing center in Getzville; a second phase of hiring is under way, and he said since the last quarter, M&T has hired 53 professionals for Bank Secrecy Act/anti-money laundering compliance work.