(Reuters) - M&T Bank Corp (NYSE:MTB) beat Wall Street estimates for first-quarter profit on Monday, as the U.S. Federal Reserve's rapid rate hikes to tame high inflation boosted the lender's interest income.
U.S. banking heavyweights have also reaped windfalls from higher interest payments in the first quarter, brushing off a crisis prompted by the collapse of two regional lenders.
Fed's aggressive monetary tightening that has benefited most consumer-facing lenders, has also roiled markets and the outlook for the economy.
Shares of M&T Bank rose nearly 3% to $120 in premarket trading. They have lost roughly 20% of their value this year.
Net interest income for the bank doubled to $1.83 billion in the first quarter ended March 31, compared with $907 million, a year earlier.
Total deposits for M&T Bank fell nearly 3% to $159.1 billion, compared with $163.5 billion at the end of the previous quarter.
Analysts have said that while they expect deposit outflows to slow in the coming months, the banking crisis has whipsawed investor confidence in the sector and it is not likely to recover in the near term without a strong display of earnings power.
M&T Bank reported a profit of $4.01 per share in the quarter, above analysts' average estimate of $3.99 per share, according to Refinitiv IBES data.
In the backdrop of turbulent economic forecasts, the bank set aside $120 million to cover for loans that could potentially sour, compared with $10 million in the year-earlier quarter.