M&T Bank in Buffalo, N.Y., reported double-digit growth in first-quarter profit thanks to a change in its tax treatment of compensation and improved profit margins.
The $123 billion-asset company’s net income rose 19% from the same period last year, to $329 million. Earnings per share rose 23% to $2.12, beating by 18 cents the average estimate of analysts polled by FactSet Research Systems.
M&T changed its accounting policies during the quarter to recognize excess tax benefits and deficiencies associated with share-based compensation as income tax expense or benefit. The change reduced M&T’s income tax expense by $18 million, generating additional earnings of 12 cents per share.
Net interest income after the loan-loss provision rose 4% to $859 million. Net loans and leases rose 2% to $88 billion. Commercial real estate loans increased 11% to $33 billion.
The net interest margin improved 16 basis points to 3.34%. The yield on average earning assets rose 13 basis points to 3.67%, while the cost of interest-bearing liabilities improved by 1 basis point to 0.52%.
Noninterest income rose 6% to $447 million on higher trust income and credit-related fees.
Noninterest expense rose 2% to $788 million. Higher salaries offset a decline in advertising and marketing expenses.