M&T reported higher earnings in the third quarter as a settlement with predecessor bank Wilmington Trust putting a dent in results.
Diluted earnings per common share measured in accordance with generally accepted accounting principles (GAPP for the third quarter of 2017 were $2.21 a share., up 5 percent from $2.10 in the year-earlier period.
GAAP-basis net income in the recently completed quarter totaled $356 million, 2 percent above the $350 million in the third quarter of 2016.
The earnings report noted that on On October 9, Wilmington Trust Corporation, a wholly owned subsidiary of M&T, reached an agreement with the U.S. Attorney’s Office for the District of Delaware related to alleged conduct that took place between 2009 and 2010 prior to the acquisition of Wilmington Trust Corporation by M&T.
Under terms of the agreement, Wilmington Trust Corporation was required to pay $60 million to settle the government’s claims. The settlement amount included $16 million previously paid to the U.S. Securities and Exchange Commission in a related action.
The result was a payment of $44 million that is not deductible for income tax purposes. Wilmington Trust did not admit any liability. The bank had been part of a criminal case involving former executives. The trial, which was slated to get underway in early October, was delayed until next year.
Commenting on M&T’s financial results for the recent quarter, Darren J. King, executive vice president and chief financial officer, stated, “Once again, M&T has delivered very strong financial results through its core businesses producing solid returns for shareholders. Performance in the third quarter benefited from a widening of the net interest margin, lower credit costs and continued strong fee income and well-controlled expenses. We believe the recently announced agreement between Wilmington Trust Corporation and the U.S. Attorney’s Office for the District of Delaware is in the company’s best interest and we are pleased to have that legal proceeding behind us.”
David Weiss, acting U.S. Attorney for Delaware stated that the role of Wilmington Trust in the community and the economy was one reason for the settlement. One skeptic said the settlement might reflect a weak government case.
M&T is headquarted in Buffalo, NY. It acquired Wilmington Trust, in a $300 million, due to bad loans that are the crux of the government’s case against former executives of the bank.
The Wilmington Trust name was retained for the M&T’s wealth management and corporate services activities.