BUFFALO, N.Y. - M&T Bank Corporation (NYSE: MTB), a financial holding company, today announced a reduction in its stress capital buffer (SCB) requirement as determined by the Federal Reserve Board. The preliminary SCB requirement has been set at 3.8%, a decrease from the prior 4.0%. The final SCB requirement is expected to be issued by August 31, 2024, and will be effective starting October 1, 2024.
The bank's regulatory minimum Common Equity Tier 1 (CET1) capital ratio, which is implied by the preliminary SCB, is now 8.3%, reduced from 8.5%. M&T also anticipates that its CET1 ratio for the second quarter of 2024 will exceed 11.35%.
Daryl Bible, the Chief Financial Officer of M&T, commented on the results of the stress test, attributing the strong capital position to the company's robust core earnings, effective capital management, and comprehensive risk management practices.
The CFO highlighted the reduction in commercial real estate concentration as a key factor. Bible expressed that the favorable capital position underpins the bank's ability to pursue organic growth, foster new customer relationships, and progressively return capital to shareholders.
In a recent development, the board of directors of M&T declared a quarterly cash dividend of $1.35 per share on its common stock, which marks a 4 percent increase from the previous dividend of $1.30 per share. The dividend is to be paid today to shareholders who were on record as of June 3, 2024.
M&T Bank Corporation, based in Buffalo, New York, operates its principal banking subsidiary, M&T Bank, across 12 states in the eastern United States, providing a range of banking services. The company also offers trust-related services in selected U.S. markets and internationally through Wilmington Trust-affiliated entities and M&T Bank.
This news is based on a press release statement. The forward-looking statements included in the release are subject to risks, uncertainties, and assumptions, which may cause actual financial results and performance to differ materially from those projected. M&T has outlined these factors in its annual report and other SEC filings.
In other recent news, M&T Bank has announced the departure of Senior Executive Vice President Darren J. King, effective August 10, 2024. The bank has not yet revealed the reasons for King's exit or named a successor.
As part of recent developments, Citi reaffirmed a Buy rating on M&T Bank, highlighting its strong capitalization and potential for strategic maneuvers. Jefferies also raised its price target for the bank to $160, emphasizing the company's ongoing technology investments and organic growth initiatives.
M&T Bank, along with other major US banks, is preparing for the Federal Reserve's annual stress tests. Analysts from Keefe, Bruyette & Woods anticipate that M&T Bank may show strong performance due to adjustments in their balance sheet compositions.
The bank has also announced a dividend increase to $1.35 per share, indicating a stable financial position and is expected to resume its share buyback program in the near future.
Piper Sandler maintained an Overweight rating on M&T Bank, adjusting its net interest income (NII) expectations to approximately $6.85 billion. Meanwhile, Jefferies increased its price target for M&T Bank to $160, citing the bank's ongoing technology investments and organic growth initiatives. These recent developments provide investors with a comprehensive view of M&T Bank's current position and future prospects.
InvestingPro Insights
M&T Bank Corporation (NYSE: MTB) has demonstrated a solid commitment to shareholder returns, as evidenced by its consistent dividend growth. An important InvestingPro Tip highlights that MTB has raised its dividend for 7 consecutive years, underlining its financial stability and commitment to shareholders. This is further supported by the company's ability to maintain dividend payments for an impressive 46 consecutive years, suggesting a robust financial posture that investors often look for in long-term investments.
From a valuation standpoint, MTB's current P/E ratio stands at a modest 10.16, as per the latest InvestingPro Data. This is slightly higher than the last twelve months as of Q1 2024, where the adjusted P/E ratio was 10.25.
The company is trading at a low PEG ratio of 0.65 for the same period, which could indicate that the stock is potentially undervalued relative to its near-term earnings growth prospects. Moreover, the dividend yield as of mid-2024 is attractive at 3.66%, reinforcing the company's appeal to income-focused investors.
For readers looking to delve deeper into M&T Bank's financials and future prospects, InvestingPro offers a wealth of additional InvestingPro Tips. With 5 analysts having revised their earnings downwards for the upcoming period, it is crucial for investors to consider both the potential risks and rewards. To access these insights and more, visit https://www.investing.com/pro/MTB and remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 6 additional tips available on InvestingPro, providing a comprehensive analysis for informed investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.