Commercial real estate loan growth and the Hudson City acquisition fueled fourth-quarter profit growth at M&T Bank in Buffalo, N.Y.
Net income at the $123 billion-asset M&T rose 24% to $308 million from the same period in 2015. The comparisons were affected by M&T's November 2015 acquisition of Hudson City Bancorp in Paramus, N.J.
M&T sold its holdings of collateralized debt obligations during the fourth quarter as required by the Volcker Rule; M&T recorded a $2 million pretax gain as a result of the sale. M&T also donated $30 million to its charitable foundation in the quarter, reducing net income by $18 million, or 12 cents per share.
Net interest income rose 9% to $814 million on growth in earning assets. Net loans rose 4% to $89.9 billion as increases in commercial real estate and business loans offset a decline in residential mortgages. CRE lending, the biggest loan category at M&T, rose 15% to $33.5 billion. M&T's investment-securities portfolio rose 4% to $16.3 billion.
Noninterest income rose 4% to $465 million. Higher trust income and mortgage banking offset a decline in trading account and foreign exchange gains.
Noninterest expense fell 2% to $769 million on lower personnel costs; additionally, M&T benefited from a favorable comparison as it incurred no merger-related expenses in 2016, compared to a significant amount of those costs in 2015 due to the Hudson City deal.