trending Market Intelligence /marketintelligence/en/news-insights/trending/BK3lL4rN607dLOvcTXgzCA2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

M&T Bank reports drop in C&I loans, lower customer deposits

Street Talk Episode 68 - As many investors zig away from bank stocks, 2 vets in the space zag toward them

Street Talk Episode 66 - Community banks tap the debt markets while the getting is good

Street Talk Episode 67 - Veteran investor tabs Mick Mulvaney to help with latest financial stock-focused fund

Street Talk Episode 65 - Deferral practices trap US bank portfolios in purgatory


M&T Bank reports drop in C&I loans, lower customer deposits

M&T Bank Corp. management faced numerous questions during its third-quarter earnings call about the bank's weak loan growth figures in the third quarter.

On Oct. 18, the bank reported a decline in its commercial and industrial loan portfolio, partially driven by a drop in loans to auto dealers to finance inventories, also known as floor plan loans. Combined with planned runoff in the bank's residential mortgage portfolio but offset by some growth in consumer loans, the bank's total loans were down roughly 1% from the second quarter. The bank's lack of loan growth was referenced several times during the analyst question-and-answer portion of the call.

Excluding the impact of the auto dealer loans, the bank still reported a $388 million quarter-over-quarter decline in C&I loans. CFO Darren King said the bank saw a high level of paydowns of its C&I loan book across the board without any concentration by industry or by geography.

"Paydowns were probably the biggest driver of decreases in the quarter. When you look at originations, they were down a little bit, but not the biggest driver. The biggest driver was the rate of paydowns," King said.

King also cautioned analysts that they should expect an increase in the bank's criticized loans in the third quarter when the bank files its regulatory disclosure. He said the increase was not dramatic, with the absolute level higher than the second quarter but still below the level at year-end 2016.

He added that strong asset prices have allowed some borrowers to sell parts of their businesses, enabling the loan payoffs. And the bank has seen elevated payoffs in commercial real estate, too, where King said the bank has seen a significant number of borrowers pay off construction debt and then use a nonbank lender for the asset's permanent financing.

Looking forward, King said the bank is optimistic about its fourth-quarter numbers based on the company's existing loan pipeline. He said the bank's pipeline heading into the fourth quarter is 15% to 20% higher than previous quarters this year but cautioned that elevated paydown activity remains a "wildcard."

On the deposit side, King said average core customer deposits were $1.1 billion lower than the second quarter, attributing the drop to intended runoff of certain deposits from the Hudson City Bancorp Inc. deal. But an analyst noted that the bank's deposit growth outside the Hudson City runoff still appeared weak. King said the bank has seen increased activity and sensitivity to deposit pricing among its high-balance consumer customers. He also said small business borrowers continue to be skewed toward short-term deposit products.

The bank's rates on liabilities moved up slightly in the third quarter to 57 basis points on all interest-bearing liabilities, up from 52 basis points in the second quarter. Looking forward, bank management said it expects net interest income in the fourth quarter to be "flat to maybe slightly down." As for the benefit of a potential rate increase in December, management said the bank continues to expect a 25-basis-point increase to be worth 6 to 10 basis points on the net interest margin.