M&T Bank Corporation reported higher earnings in the first quarter,while setting more money aside for pending litigation that includes a suit filed over actions taken by Wilmington Trust prior to its purchase by M&T.
General Accepted Accounting Principles net income in the recent quarter was $353 million, compared with $349 million in the first quarter of 2017 and $322 million recorded in the final 2017 quarter.
That increase, on an after-tax basis, reduced net income by $102 million. In addition, income tax expense in the first quarter of 2018 reflects the reduction of the corporate Federal income tax rate from 35 percent to 21 percent by the Tax Cuts and Jobs Act.
Darren J. King, executive vice president and chief financial officer, stated,“M&T’s results for the first quarter reflected several positive factors – a continued widening of the net interest margin, favorable credit results, and limited core expense growth. We continued with our capital plan by repurchasing $721 million of common stock during the quarter, while maintaining our regulatory capital levels far in excess of minimum requirements. M&T is off to a good start in 2018.”
M&T increased its reserve for litigation matters by $135 million to reflect the status of pre-existing litigation, the earnings report stated.
M&T’s Wilmington Trust Corporation subsidiary is facing a suit arising from actions undertaken by Wilmington Trust Corporation prior to M&T’s acquisition of Wilmington Trust Corporation.
The suits were consolidated, with M&T and Wilmington Trust losing a move to dismiss the suit in 2014.
The case is winding through the court process and no trial date has been set.
Last year, M&T entered into a $60 million settlement in a federal case over Wilmington Trust’s loan practices. Former Wilmington Trust executives are currently on trial in federal court. (See story below on settlement).