Fourth-quarter earnings at M&T Bank in Buffalo, N.Y., took a slight, short-term hit as the company made a sizable charitable donation to honor its recently deceased former Chairman and CEO and dealt with the immediate impact of tax reform legislation.
Net income for the $118.6 billion-asset M&T totaled $322 million, down 2% from the same quarter in 2016. Earnings per share were $2.01, missing analysts’ median estimates of $2.41, according to FactSet Research Systems.
“Fourth-quarter results were negatively impacted by the newly enacted tax legislation, but a lower corporate tax rate in the future should provide many benefits to M&T,” Chief Financial Officer Darren King said in a press release. “We are proud to carry on the legacy of our long-time Chairman and Chief Executive Officer, Bob Wilmers, through investing in the communities we serve by contributing $50 million during 2017 to The M&T Charitable Foundation, the highest annual amount in our history."
Wilmers, who was widely admired and known as a staunch advocate for his industry, ran M&T for over three decades and passed away in December.
M&T estimated that the impact of recent tax reform legislation to be $85 million, as the company reduced the value of tax deferred assets. The donation to its charitable foundation reduced its net income by about $27 million, M&T said.
Net interest income totaled $971.5 million in the fourth quarter, up 11% from the year ago period. The net interest margin expanded 48 basis points to 3.56%.
Total loans and leases declined 3% to $87.9 billion in the fourth quarter, led by declines in commercial lending and consumer real estate.
Noninterest income increased 4% to $484.1 million in the fourth quarter. This was boosted by increases in fee income, trust income and trading income.
Total deposits declined 3% to $92.4 billion.
Nonaccrual loans accounted for 1% of total loans in the fourth quarter, a slight decline from 1.01% a year ago. M&T charged off $27 million loans during the fourth quarter, compared with $25 million in the year-ago period, and its provision for credit losses totaled $31 million, compared with $62 million a year ago.
Noninterest expenses increased 3% to $795.8 million.