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M&T’s third-quarter profit falls on integration expense

BUFFALO, N.Y. — M&T Bank Corp. said Wednesday that its third-quarter profit fell in part due to the costs of integrating the recently acquired Wilmington Trust Corp. into its operations.

Even without the integration costs, its results missed Wall Street estimates and its shares fell almost 6 percent.

The Buffalo, N.Y.-based financial holding company reported net income of $164.7 million, or $1.32 per share, down from $176.8 million, or $1.48 per share, a year ago. M&T Bank’s market share is the second biggest in Maryland, behind Bank of America.

The results included expenses related to integrating Willington Trust of $16 million, or 13 cents per share. The expenses included systems conversions and other costs of integrating operations and introducing Wilmington Trust’s former customers to M&T’s products and services.

Excluding one-time costs, the company reported net operating income of $210 million, or $1.53 per share, compared with $200.2 million, or $1.55 per share.

Analysts surveyed by FactSet expected $1.66 per share.

Shares fell $4.28, or 5.6 percent, to close at $72.79. They have traded between $66.40 and $91.05 in the past 52 weeks.

The company said interest income rose 5 percent to $720 million and income from fees and other sources grew 27 percent to $368.4 million. But Chief Financial Officer Rene F. Jones said the economic environment and turbulent markets hurt the bank’s fee income relative to the second quarter, however.

Interest expense fell 11 percent but other expenses including salaries and benefits and FDIC assessments climbed 38 percent. The bank’s provision for loan losses declined 38 percent.

Net charge-offs of loans totaled $57 million, down from $93 million a year ago and the fourth consecutive quarter of declines.

Jones said M&T was “pleased with the credit performance for the period” and added the company “continued to experience solid growth in customer deposits.”

The company said foreclosures on defaulted loans fell to $150 million as of Sept. 30 from $193 million at the same point a year ago. About $51 million of the current total was assets related to the Wilmington Trust acquisition.

Loans past due 90 days or more and accruing interest totaled $310 million at the end of the quarter, up from the total of $215 million reported a year ago.

In addition to Maryland, M&T Bank operates branches in New York, Pennsylvania, Virginia, West Virginia, Delaware, New Jersey, the District of Columbia and Ontario, Canada.