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What's in the Cards for M&T Bank (MTB) This Earnings Season?

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M&T Bank Corporation MTB is scheduled to report first-quarter 2021 results on Apr 19, before the bell. While the company’s revenues are expected to have declined year over year, earnings might have increased. However, rise in provisions and expenses were headwinds.

M&T Bank delivered a positive earnings surprise of 19.6% in the fourth quarter. Fee income growth on higher mortgage banking revenues supported the results.

Notably, M&T Bank has a decent earnings surprise history, having surpassed estimates in three of the trailing four quarters, with the beat being 10.72%, on average.

M&T Bank Corporation Price and EPS Surprise

M&T Bank Corporation Price and EPS Surprise
M&T Bank Corporation Price and EPS Surprise

M&T Bank Corporation price-eps-surprise | M&T Bank Corporation Quote

Key Factors

Net Interest Income (NII): The overall lending scenario was muted during the January-March quarter, with commercial and industrial, and real estate loan portfolios witnessing a decline. This, along with near-zero interest rates, is likely to have hurt M&T Bank’s NII.

Nevertheless, low deposit costs, steepening of yield curve and higher average interest earning assets might have been offsetting factors.

The Zacks Consensus Estimate of $129.7 billion for the first-quarter average interest earning assets suggests a 19.8% rise from the prior-year quarter’s reported number. The consensus estimate of $981 million for overall NII suggests marginal fall on a year-over-year basis.

Fee Income: The company is anticipated to have witnessed growth in trust revenues on strong equity markets during the to-be-reported quarter. The Zacks Consensus Estimate of $153 million for the same implies a 2.7% year-over-year improvement.

Mortgage banking revenues are likely to have continued benefiting from lower mortgage rates. Also, the bank is likely to have registered a rise in service charge on deposits, as the deposit balance is expected to have increased. Thus, overall growth in other income is projected for the quarter.

Higher Expenses: While the absence of considerable legal expenses is encouraging, increased investments in technology to improve digital offerings might have escalated costs to an extent.

Here is what our quantitative model predicts:

M&T Bank doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for M&T Bank is -0.02%.

Zacks Rank: M&T Bank currently carries a Zacks Rank of 3.

The Zacks Consensus Estimate of $2.96 for quarterly earnings indicates 51.8% growth from the year-ago reported number. However, the consensus estimate for sales of $1.47 billion suggests a 2.1% decline.

Banks Worth a Look

Here are a few bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:

The Earnings ESP for BankUnited BKU is +0.64% and the stock carries a Zacks Rank of 3, at present. The company is slated to report first-quarter 2021 numbers on Apr 22. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Earnings ESP for Huntington Bancshares HBAN is +1.73% and it carries a Zacks Rank of 3, at present. The company is scheduled to report quarterly numbers on Apr 22.

New York Community Bancorp NYCB is slated to report quarterly earnings on Apr 28. The company, which carries a Zacks Rank of 2 (Buy) at present, has an Earnings ESP of +2.02%.

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