7 Things You Need to Know About M&T Bank
Apr 30th 2013 1:56PM
Updated Apr 30th 2013 2:50PM
M&T Bank Corporation is a regional bank, with 727 branch offices throughout the Mid-Atlantic. Big, but not so big it gets mixed up in the shenanigans typical of the country's biggest banks, M&T strikes the ideal balance between the "too big to fail" and "too small to matter."
In no particular order of importance, here are seven things you ought to know about M&T Bank.
1. It's bigger than you think
As of December 31, 2012, M&T was the country's 30th biggest bank-holding company, with total assets of just over $83 billion.
That puts it right behind Santander Holdings, the Spanish banking giant that operates Sovereign Bank here in the U.S., and two slots ahead of Deutsche Bank Trust, the American arm of German banking giant Deutsche Bank.
Bigger isn't always better, but size -- properly managed -- can be turned into strength, and profit.
2. Warren Buffet loves M&T
M&T is currently Berkshire Hathaway's 17th largest holding, with more than five million shares worth a 4.18% stake in the bank. Warren Buffet loves his banks. Wells Fargo is currently Berkshire's second largest holding, and Bank of New York Mellon is just one position above M&T.
You shouldn't buy any company just because someone else does, but given his level of long-term success, any company Buffett buys into is worth taking a serious look at.
3. M&T had a great quarter
For the quarter ending March 31, 2013, revenue was up 10.8% year over year, while net income was up 32.8% year over year. Revenue-wise, some of the country's biggest banks are struggling right now. JPMorgan Chase saw a 3.87% drop in revenue for the first quarter.
4. Great share-price performance over the past year
Shares in M&T are up 15.69% for the past year. Even fellow regional powerhouse PNC Financial can only boast a past-year return of 3.15%.
5. Strong return-on-equity
Return-on-equity, or ROE, gives you some notion of how much profit a company is generating with shareholder money. Post financial crash, anything north of 10% is solid.
M&T has an ROE of 11%. The famously efficient JPMorgan is only marginally better, with an ROE of 11.55%. Goldman Sachs -- another ultra-efficient, well-oiled machine -- has an ROE of 12.4%: something for M&T to aspire to, but 11% is more than solid.
6. M&T pays a healthy dividend
M&T currently pays a dividend of 2.8%, which is very respectable, especially for its size. Giants JPMorgan and Wells Fargo pay 3.1% and 3.2%, respectively. 2.8% is solid, backed up by real revenue growth, to boot.
7. Mortgage-banking revenue growth
We all know we're in the middle of a housing boom, and while it's questionable how long it will last, for the time being lending to homebuyers is a good business to be in. To that end, I'm happy to report that for the first quarter of 2013, M&T increased its mortgage-banking revenue by 66%.
Foolish bottom line
I don't want to necessarily characterize M&T bank as "the little bank that could," because it's far from little. But for not being one of America's banking giants, it's got a lot going for it, both as a business and as an investment. And those two things are rarely found on their own.
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The article 7 Things You Need to Know About M&T Bank originally appeared on Fool.com.Fool contributor John Grgurich owns shares of Goldman Sachs and JPMorgan Chase. Follow John's dispatches from the bleeding heart of capitalism on Twitter @TMFGrgurich . The Motley Fool recommends Berkshire Hathaway, Goldman Sachs, and Wells Fargo. The Motley Fool owns shares of Berkshire Hathaway, JPMorgan Chase, PNC Financial Services, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a gripping disclosure policy.
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