- M&T Bank was one of the rare banks to post an earnings beat driven primarily by core pre-provision profit drivers and not credit costs.
- The bank's hotel portfolio drove a big increase in non-performing loans, and charge-offs are likely to be elevated for a couple of years.
- M&T plays the long game where credit is concerned, and I believe actual losses will be lower than current numbers may suggest, as well as lower than most peers.
- With limited prospects for loan growth, ongoing spread pressures, likely headwinds in mortgage banking, and limited cost leverage, pre-provision profits could be weak for a couple of years.
- M&T Bank isn't overvalued today, but the returns don't appear to merit the risk that weak relative PPOP growth will limit share price performance compared to peers.
For further details see:
M&T Bank's Quality And Growth Challenges Both Fairly Represented Today