M&T Misses Forecasts on Credit Losses

M&T Bank, the first large U.S. bank to report quarterly results, said Thursday that third-quarter profit fell 5 percent, as revenue declined while losses from mortgages and other loans surged.

Results fell short of analyst forecasts, as M&T doubled the amount it set aside for credit losses to $34 million, and nonperforming loans more than doubled to $371.4 million.

M&T , which counts Warren Buffett's Berkshire Hathaway among its largest shareholders, also reported a $26 million increase in nonperforming residential real estate loans. It said many came from delinquencies in "Alt-A" mortgages, which often go to people who cannot document income or assets.

Credit conditions are causing "higher net charge-offs, delinquencies and nonperforming loans at M&T and throughout the banking industry," Buffalo, N.Y.-based M&T said.

Net income fell to $199.2 million, or $1.83 per share, from $210.4 million, or $1.85, a year earlier.

Operating profit, excluding an investment loss, fell 6 percent to $208.7 million, or $1.92 per share, from $223.2 million, or $1.96, M&T said.

Analysts on average forecast profit of $1.94 per share, according to Reuters Estimates.

Lending income rose 2 percent to $467.7 million from $457.2 million, while fee income fell 8 percent to $252.9 million from $273.9 million.

M&T said it has $60 billion of assets and more than 650 branches in seven mid-Atlantic states and Washington, D.C. Its results may foreshadow earnings disclosures at other large U.S. banks, most of which are scheduled to report next week.

Berkshire owned a roughly 6.3 percent stake in M&T as of June 30, according to Thomson ShareWatch. Only Allied Irish Banks and M&T Chief Executive Robert Wilmers held larger stakes, Thomson ShareWatch said.

Through Wednesday, M&T shares had fallen 14 percent this year, compared with a 7 percent decline in the Philadelphia KBW Bank Index.