M&T Bank Corp. has chopped $24 million off its 2013 profits, as it settles a lawsuit its Wilmington Trust unit faced over investment losses.
Buffalo-based M&T said a settlement was reached Monday, one day before the trial was to begin in Delaware. The amount of the settlement was not disclosed.
The lawsuit centered on management of a trust that was established in 1970 by a Mennen family member. Heirs to Mennen Co., the maker of Speed Stick deodorant, last year sued Wimington Trust and a Mennen family member, who were the co-trustees. The plaintiffs sought more than $100 million in damages, alleging breaches of fiduciary duty.
M&T said it increased its reserve for litigation as of Dec. 31, 2013, by $40 million, which led to the reduction in its net income. As a result, M&T’s net income for 2013 was $1.14 billion, instead of $1.16 billion. That means its 2013 net income increased 11 percent from 2012, instead of 13 percent as originally reported.
The revision also lowered M&T’s diluted earnings per share for 2013 by 18 cents, to $8.20. The revised figure was up 9 percent from 2012, instead of 11 percent as initially reported.
M&T has faced other difficulties linked to Wilmington Trust since acquiring the institution in a $351 million stock purchase in 2011.
In August 2013, the Securities and Exchange Commission notified Wilmington Trust of possible enforcement action, centering on financial reporting and securities filings by the Delaware-based firm before the M&T deal. The U.S. Justice Department is also investigating Wilmington Trust for actions that occurred prior to the M&T acquisition.