M&T Bank in Buffalo, N.Y., for the first time was able to report a full-quarter impact from its acquisition of Hudson City Bancorp, which took about three and a half years to complete because of regulatory challenges.
And the report generally was a good one as profits increased by double digits and the residential mortgage loans grew substantially.
The $125 billion-asset company's net income rose 26% compared with the year-ago period to $275.7 million.
M&T completed its acquisition of Hudson City Bancorp in October.
Net loans rose 31% to $86.9 billion. Residential mortgages rose 197% to $25.3 billion, to become M&T's second-largest loan category. About 98% of Hudson City's loan book was residential mortgages.
Nonperforming assets rose 25% to $1.1 billion. In the fourth quarter of last year, after the Hudson City deal closed, M&T recorded a $21 million provision for credit losses on loans acquired from Hudson City.
Net interest income after the provision for credit losses rose 32% to $823 million. The net interest margin improved to 3.18% from 3.17%.
Noninterest income fell 4% to $421 million. Trust income fell 10% to $111 million, reflecting the April 2015 sale of M&T's trade-processing business within its retirement services division. Mortgage banking, a segment of noninterest income, fell 19% to $82 million.
Noninterest expense rose 13% to $776 million. Salaries rose 11% to $432 million. Equipment and occupancy costs rose 12% to $74 million. Federal deposit insurance assessments rose 137% to $25 million. The efficiency ratio improved 446 basis points to 57%