What happened
Shares of M&T Bank (MTB -0.94%) traded as much as 11.3% higher Wednesday morning after it reported earnings results for the first quarter. As of 1:53 p.m. ET, the stock was trading up by 8.3%.
So what
For the quarter, the large regional financial institution reported diluted earnings per share of $2.62 on revenue of roughly $1.45 billion. Earnings easily beat analysts' consensus expectations, while revenue was in line with estimates.
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During the quarter, M&T also received approval from the Federal Reserve to acquire People's United Financial, a significant deal that propelled the bank to well over $200 billion in assets. With the acquisition now closed, M&T expects to soon resume share repurchases -- the board of directors recently reauthorized an $800 million stock buyback program.
"The first quarter results continue to reflect M&T's strong credit underwriting as evidenced by historically low charge-offs for the quarter and a stable allowance for credit losses," CFO Darren King said in a statement. "Revenues were in line with expectations and expenses, which include the usual seasonal increase in salaries and employee benefits expense, were prudently managed."
King also said on the Q1 earnings call that the bank expects solid loan growth for the rest of the year, and that management anticipates that net interest income (the profit a bank makes on loans, securities, and cash after funding those assets) will rise significantly as the Federal Reserve boosts benchmark interest rates.
Now what
After some delays, M&T was finally able to close its acquisition of People's United. Now, it can get to work on realizing cost savings and finding revenue synergies. Additionally, M&T can resume share repurchases and should benefit from rising interest rates, so the bank looks well-positioned this year.
