M&T Bank Corp.’s first-quarter profits rose 6 percent from a year ago, to $242 million, the Buffalo-based bank said Monday.
A surge in mortgage banking revenues in the past quarter fueled the increase, said René F. Jones, vice chairman and chief financial officer. “With rates sort of at historic lows, there’s been a nice resurgence in people (refinancing) and trying to capitalize on that low-rate environment.”
M&T’s Buffalo operations benefit in another way from that trend: “At the end of the day, when we choose to service those mortgages, that servicing is done in Western New York.”
The bank’s diluted earnings per share increased 2 percent from a year ago, to $1.65 from $1.63.
M&T and New Jersey-based Hudson City Bancorp recently announced another extension of the deadline to complete M&T’s purchase of that bank until Oct. 31. The two banks announced the deal in August 2012, but have been awaiting federal approval ever since. M&T has invested heavily in its anti-money laundering and Bank Secrecy Act systems, to correct deficiencies identified by regulators. The Federal Reserve has indicated it will act on its review of the merger application by Sept. 30.
Jones said M&T expects its spending on professional services to continue to decline. But some of that spending reduction will be offset by the bank’s continued spending on its technology systems, both internally and for the benefit of M&T customers, he said.
M&T’s net interest income was $659.6 million, essentially unchanged from a year ago. Its non-interest income, including mortgage banking revenues, rose 5 percent, to $440.2 million.
During a Monday conference call, an analyst asked Jones if the prolonged merger process had changed M&T’s attitude about pursuing future acquisitions. Jones said he didn’t see why, with the infrastructure M&T is building, that it “shouldn’t be able to do deals in the future.”
“This might be the largest transaction since Dodd-Frank,” Jones said of the Hudson City deal, referring to the Wall Street Reform and Consumer Protection Act. “There’s a lot of uncertainty out there, but clearly the standards are high. And I feel good about the fact, while it may seem counterintuitive, that we’re in there finding out firsthand what those standards are. And I think that as we get to a place, our investments should be leveragable. And I’ve never heard anything to suggest that the regulatory environment doesn’t want deals to happen ever again.”
M&T is scheduled to host its annual meeting on Tuesday in downtown Buffalo.