M&T Bank cited strong performance in its indirect RV lending portfolio among the top performing financial categories in the first quarter of 2024.
Company Senior Executive Vice President and Chief Financial Officer Daryl Bible said the bank prudently managed expenses in the quarter.
“We are off to a solid start in 2024,” he said, “as we were able to grow certain sectors of our commercial and consumer loan portfolios, while continuing to shrink our commercial real estate exposure.”
Bible said the bank grew its rate spread on auto and RV lending. In RV lending, he said rate spreads were 63 basis points higher in RV than the previous year. Comparing loans made in the quarter to RV loans paid off during that time, RV yields rose 140 basis points.
Bible said the RV lending performed well because of the company’s prime-bases consumer loan credit box.
“If you look at the average FICO score that we have in that portfolio, it is 790,” Bible said. “It is pretty pristine in there, and we feel good about the performance of that portfolio.”
Where M&T is seeing some loan concerns is in its floorplan financing. The bank reported its criticized loan balances for motor vehicle and recreational finance dealers rose during the quarter. Criticized loans are ones that are still performing but that show some weakness in safety or soundness.
“The stress is in the floorplanning business for the non-auto, so RV and Marine,” Bible said. “That is where the stress is. … The non-auto dealer, RV and Marine, has some specific items where some of those dealers built up inventory post-Covid in 2022 and had to flush that inventory at losses. That hurt their operating performance, coupled with higher rates … so they had some issues there.”
