Sometimes too much good news can be a bad thing for a banking company, at least according to Robert S. Patten of UBS Warburg, who initiated coverage for M&T Bank Corp. Friday with a “hold” rating.

The Buffalo company’s stock did not rise with other bank stocks after the Federal Reserve’s surprise rate cut on Jan. 3., but M&T has been spared from the recent carnage in the sector. Analysts say the company boasts good management, solid earnings, and a convincing acquisition strategy that helps put it an exclusive club. The problem is the stock’s high multiple, Mr. Patten wrote in a research note on Friday. He would like to see M&T trading in the low $60s, rather than at Friday’s $67.33 — 19.64 times earnings as tallied under generally accepted accounting principles.

But the company’s ability to consistently outperform its peers in earnings growth and credit quality could make it a likely survivor of the credit woes afflicting the bank sector, he wrote.

M&T’s stock did not entirely evade last week’s troubled market. It lost a moderate 24 cents Friday, or 0.36%, on another bad day for bank stocks. The American Banker index of 225 banks shed 0.54%, and the index of top 50 banks lost 0.08%, while the Standard & Poor’s 500 index was down 0.59%.

“We believe the company’s conservative operating history, strong reserve levels, and its track record of above-average credit quality should enhance its ability to maintain relative earnings power through more difficult economic cycles,” Mr. Patten wrote.

Other analysts, who had difficulty comparing the bank’s story with other stocks out there, said they share Mr. Patten’s view of M&T.

Marni Pont O’Doherty and analyst with Keefe, Bruyette & Woods Inc., said that because the company tends to pay for acquisitions in cash rather than stock, multiples calculated from GAAP earnings are misleading in this case. She thinks the stock is reasonably priced.

M&T’s fourth-quarter per-share earnings rose 18% from a year earlier, to $1.14, and its full-year earnings climbed 12%, to $4.31.

Mr. Patten wrote that the stock deserves to trade for more than its current cash/earnings ratio of around 14.

Beth A. Messmore of Merrill Lynch Global Securities said she favored M&T’s conservative underwriting standards. “They don’t do fashionable things.”

Michael Piermonte, vice president of corporate finance, said that M&T neither loosened its credit standards during the late 1990s nor tightened them recently. Its percentage of nonperforming loans increased 8 basis points last year, to 0.49% of total loans.

Ms. Pont O’Doherty, who gives the stock a “near-term neutral” but “long-term accumulate,” said M&T has proven adept in acquisitions. “They paid the right price and generally run the companies better than they would have done on their own.”

Most recently, M&T bought Premier National Bancorp. of Lagrangeville, N.Y., on Feb. 12 and Keystone Financial Inc. of Harrisburg, Pa., last year.

“They have built their franchise through logical extensions and know their market extremely well,” she said.

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