M&T Bank Corporation (NYSE: MTB) stock fell over 2.7% on 20th April, 2021 (as of 12:44:35 UTC-4 · USD; Source: Google finance) after the company posted the first quarter of FY 21. Mortgage banking revenues were $139 million in the recent quarter, down $1 million from $140 million in the linked quarter. Furthermore, looking at the loans by category on an average basis compared to the linked quarter, commercial and industrial loans were essentially flat, with increased dealer floor plan balances and other C&I loans, partially offset by lower average PPP loans. Due to timing of originations and the receipt of payments, average PPP loans have fallen by $453 million from the prior quarter. Commercial real estate loans declined less than 0.5% compared to the fourth quarter, which indicates very low levels of customer activity. Residential real estate loans grew by 4%.
The company has delivered the net income for the first quarter of $447 million compared with $471 million in the linked quarter and $269 million in the year ago quarter. On a GAAP basis, M&T’s first quarter results produced an annualized rate of return on average assets of 1.22% and an annualized return on average common equity of 11.57%. This is compared with rates of 1.30% and 12.07% respectively in the previous quarter. Also included in the first quarter’s results were merger related charges of $10 million related to M&T’s proposed acquisition of People’s United Financial. Net operating income for the first quarter, which excludes intangible amortization and the merger-related expenses, was $457 million compared to $473 million in the linked quarter and $272 million in last year’s first quarter.
Moreover, the net operating income yielded annualized rates of return on average tangible asset and average tangible common shareholders’ equity of 1.29% and 17.05% for the recent quarter. The comparable returns were 1.35% and 17.53% in the fourth quarter of 2020.
On an end-of-period basis, PPP loans were of total $6.2 billion, up from $5.4 billion at the end of the fourth quarter. Average core customer deposits, which exclude deposits received at M&T’s Cayman Island office and CDs over $250,000 rose 4% or $5 billion compared to the fourth quarter.