M&T Bank Corporation Announces Second Quarter Profits

Jul 17, 2013, 08:15 ET from M&T Bank Corporation

BUFFALO, N.Y., July 17, 2013 /PRNewswire/ -- M&T Bank Corporation ("M&T")(NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2013.

GAAP Results of Operations.  Diluted  earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the second quarter of 2013 were $2.55, up 49% from $1.71 in the year-earlier quarter and 29% higher than $1.98 in the initial 2013 quarter.  GAAP-basis net income in the recent quarter totaled $348 million, 49% higher than $233 million in the second quarter of 2012 and 27% above $274 million in the first quarter of 2013.  GAAP-basis net income for the second quarter of 2013 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.68% and 13.78%, respectively, improved from 1.17% and 10.12%, respectively, in the second quarter of 2012 and from 1.36% and 11.10%, respectively, in the initial 2013 quarter.

Reflected in the recent quarter's results were certain noteworthy items.  M&T sold substantially all of its privately issued collateralized mortgage obligations that were in the available-for-sale investment securities portfolio for an after-tax loss of $28 million, or $.22 per diluted common share.  In addition, M&T's holdings of Visa and MasterCard shares were sold for an after-tax gain of $62 million, or $.48 per diluted common share.  Finally, during the recent quarter M&T reversed an accrual for a contingent compensation obligation assumed in the May 2011 acquisition of Wilmington Trust, resulting in a reduction of expenses having an after-tax impact of $15 million, or $.12 of diluted earnings per common share.

Reflecting on the recent quarter's performance, Rene F. Jones, Executive Vice President and Chief Financial Officer, commented, "Earnings quality in the second quarter continued to be supported by improved net interest income and strong mortgage banking revenues.  These factors combined with above average credit quality.  During the quarter, we took advantage of market conditions to reduce our exposure to private label mortgage-backed securities in favor of more liquid Ginnie Mae securities and we also liquidated our positions in Visa and MasterCard stock, for which the value had risen significantly.  These actions combined with strong earnings resulted in a 62 basis point increase on our Tier 1 common ratio from March 31, while improving M&T's liquidity profile.  All in all, we are quite pleased with our second quarter results."

Supplemental Reporting of Non-GAAP Results of Operations.  M&T consistently provides supplemental reporting of its results on a "net operating" or "tangible" basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and gains and expenses associated with merging acquired operations into M&T, since such items are considered by management to be "nonoperating" in nature.  Although "net operating income" as defined by M&T is not a GAAP measure, M&T's management believes that this information helps investors understand the effect of acquisition activity in reported results.  Reconciliations of GAAP to non-GAAP measures are provided in the financial tables included herein. 

Diluted net operating earnings per common share, which exclude the impact of amortization of core deposit and other intangible assets and merger-related gains and expenses, but include the effect of securities gains and losses, were $2.65 in the recent quarter, compared with $1.82 and $2.06 in the second quarter of 2012 and the first quarter of 2013, respectively.  Net operating income during the second quarter of 2013 was $361 million, compared with $247 million in the year-earlier quarter and $285 million in the initial 2013 quarter.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income in the recently completed quarter was 1.81% and 22.72%, respectively, compared with 1.30% and 18.54% in the second quarter of 2012 and 1.48% and 18.71% in the first quarter of 2013.

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income totaled $684 million in the second quarter of 2013, up 3% from $663 million in the immediately preceding quarter.  The net interest margin was 3.71% in each of the two most recent quarters.  The recent quarter's net interest margin reflects an additional $13 million of interest income which resulted from an improvement in estimated cash flows expected to be collected on acquired loans.  Stabilizing economic conditions and better than previously expected repayments led to a reduction in estimated expected credit losses on acquired loans of $130 million, resulting in a 2% increase in projected cash flows that will be recognized as interest income over the remaining terms of those loans.  Taxable-equivalent net interest income in the recent quarter was up 4% from $655 million in the second quarter of 2012.  That improvement reflects a $3.5 billion increase in average earning assets, including a $4.2 billion or 7% rise in average loans outstanding, partially offset by a 3 basis point decline in the net interest margin.

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $57 million in the recent quarter, compared with $60 million in the year-earlier quarter and $38 million in the initial 2013 quarter.  Net charge-offs of loans were $57 million during the recent quarter, compared with $52 million and $37 million in the second quarter of 2012 and the first quarter of 2013, respectively.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .35% and .34% in the second quarters of 2013 and 2012, respectively, and .23% in the initial quarter of 2013.

Loans classified as nonaccrual declined to $965 million, or 1.46% of total loans outstanding at June 30, 2013, improved from $968 million or 1.54% a year earlier and $1.05 billion or 1.60% at March 31, 2013.  Assets taken in foreclosure of defaulted loans declined to $82 million at June 30, 2013, improved from $116 million at June 30, 2012 and $96 million at March 31, 2013.

Allowance for Credit Losses.  M&T regularly performs detailed analyses of individual borrowers and portfolios for purposes of assessing the adequacy of the allowance for credit losses.  As a result of those analyses, the allowance totaled $927 million at each of March 31 and June 30, 2013, compared with $917 million at June 30, 2012.  The allowance expressed as a percentage of outstanding loans was 1.41% at the two most recent quarter-ends, compared with 1.46% at June 30, 2012. 

Noninterest Income and Expense.  Noninterest income totaled $509 million in the second quarter of 2013, compared with $392 million and $433 million in the year-earlier quarter and the first quarter of 2013, respectively.  Reflected in those amounts were net pre-tax gains from investment securities of $56 million in the second quarter of 2013 and net pre-tax losses on investment securities of $17 million and $10 million in the second quarter of 2012 and the first quarter of 2013, respectively.  The net securities gains in the recent quarter resulted from $103 million of gains realized on the sale of M&T's holdings of shares of Visa and MasterCard, offset in part by $46 million of losses recognized from the sale of M&T's privately issued collateralized mortgage obligations that had been held in its available-for-sale investment securities portfolio.  The investment securities were sold as a result of favorable market conditions, thereby enhancing M&T's liquidity and capital.  The net securities losses in 2012's second quarter and in the initial 2013 quarter were predominantly due to other-than-temporary impairment charges related to a subset of those same privately issued collateralized mortgage obligations. 

Excluding gains and losses from investment securities in all periods, noninterest income in the second quarter of 2013 aggregated $452 million, up from $408 million in the year-earlier quarter and $443 million in the initial quarter of 2013.  The most significant factor in the recent quarter's improvement as compared with the year-earlier quarter was higher mortgage banking revenues. Relative to 2013's first quarter, declines in residential mortgage banking revenues due to lower gain on sale margins were largely offset by higher commercial mortgage banking revenues.

Noninterest expense in the second quarter of 2013 totaled $599 million, down from $627 million in the year-earlier quarter and $636 million in the first quarter of 2013.  Included in such amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets and merger-related expenses.  Exclusive of those expenses, noninterest operating expenses were $578 million in the recent quarter, compared with $604 million in the second quarter of 2012 and $618 million in 2013's initial quarter.  Factors contributing to the lower level of operating expenses in the recent quarter as compared with the year-earlier quarter were the reversal of an accrual for a contingent compensation obligation assumed in the May 2011 acquisition of Wilmington Trust and declines in FDIC assessments and expenses related to foreclosed assets, partially offset by higher costs for professional services.  As compared with the first quarter of 2013, the recent quarter's lower level of operating expenses was due, in large part, to a decline in salaries and employee benefits, including stock-based compensation, and the favorable resolution of the Wilmington Trust-related compensation contingency, partially offset by higher costs for professional services and advertising and promotion. 

The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities), measures the relationship of operating expenses to revenues.  M&T's efficiency ratio was 50.9% in the second quarter of 2013, compared with 56.9% in the year-earlier period and 55.9% in the first quarter of 2013. 

Balance Sheet.  M&T had total assets of $83.2 billion at June 30, 2013, compared with $80.8 billion at June 30, 2012.  Loans and leases, net of unearned discount, increased $3.1 billion or 5% to $66.0 billion at the recent quarter-end, from $62.9 billion a year earlier.  Total deposits rose 5% to $65.7 billion at June 30, 2013 from $62.5 billion at June 30, 2012.

Total shareholders' equity increased 11% to $10.7 billion at June 30, 2013 from $9.6 billion a year earlier, representing 12.88% and 11.92%, respectively, of total assets.  Common shareholders' equity was $9.8 billion, or $75.98 per share, at June 30, 2013, compared with $8.8 billion, or $69.15 per share, at June 30, 2012.  Tangible equity per common share rose 19% to $48.26 at the recent quarter-end from $40.52 a year earlier.  Common shareholders' equity per share and tangible equity per common share were $73.99 and $46.11, respectively, at March 31, 2013.  In the calculation of tangible equity per common share, common shareholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances.  M&T's tangible common equity to tangible assets ratio was 7.85% at June 30, 2013, improved from 6.65% and 7.51% at June 30, 2012 and March 31, 2013, respectively. M&T's estimated Tier 1 common ratio, a regulatory capital measure, was 8.55% at June 30, 2013, improved from 7.15% and 7.93% at June 30, 2012 and March 31, 2013, respectively.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss second quarter financial results today at 11:00 a.m. Eastern Time.  Those wishing to participate in the call may dial (877)780-2276.  International participants, using any applicable international calling codes, may dial (973)582-2700.  Callers should reference M&T Bank Corporation or the conference ID# 12309206. The conference call will be webcast live through M&T's website at http://ir.mandtbank.com/events.cfm.  A replay of the call will be available through Saturday, July 20, 2013 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID# 12309206.  The event will also be archived and available by 7:00 p.m. today on M&T's website at http://ir.mandtbank.com/events.cfm.  

M&T is a financial holding company headquartered in Buffalo, New York.  M&T's principal banking subsidiary, M&T Bank, operates banking offices in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware and the District of Columbia.  Trust-related services are provided by M&T's Wilmington Trust-affiliated companies and by M&T Bank.

Forward-Looking Statements.  This news release contains forward-looking statements that are based on current expectations, estimates and projections about M&T's business, management's beliefs and assumptions made by management.  These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

Future Factors include changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation; regulatory supervision and oversight, including monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

These are representative of the Future Factors that could affect the outcome of the forward-looking statements.  In addition, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other Future Factors.

 

M&T BANK CORPORATION

Financial Highlights

Three months ended

Six months ended

Amounts in thousands,

June 30

June 30

 except per share

2013

2012

Change

2013

2012

Change

Performance

Net income 

$

348,466

233,380

49

%

$

622,579

439,843

42

%

Net income available to common shareholders 

328,557

214,716

53

%

583,633

402,958

45

%

Per common share:

  Basic earnings 

$

2.56

1.71

50

%

$

4.56

3.21

42

%

  Diluted earnings 

2.55

1.71

49

%

4.53

3.20

42

%

  Cash dividends 

$

.70

.70

-

$

1.40

1.40

-

Common shares outstanding:

  Average - diluted (1) 

129,017

125,897

2

%

128,828

125,756

2

%

  Period end (2) 

129,464

126,645

2

%

129,464

126,645

2

%

Return on (annualized):

  Average total assets 

1.68

%

1.17

%

1.52

%

1.12

%

  Average common shareholders' equity 

13.78

%

10.12

%

12.47

%

9.58

%

Taxable-equivalent net interest income 

$

683,804

654,628

4

%

$

1,346,304

1,281,722

5

%

Yield on average earning assets 

4.10

%

4.25

%

4.12

%

4.24

%

Cost of interest-bearing liabilities 

.62

%

.76

%

.63

%

.78

%

Net interest spread 

3.48

%

3.49

%

3.49

%

3.46

%

Contribution of interest-free funds 

.23

%

.25

%

.22

%

.25

%

Net interest margin  

3.71

%

3.74

%

3.71

%

3.71

%

Net charge-offs to average total 

  net loans (annualized) 

.35

%

.34

%

.29

%

.33

%

Net operating results (3)

Net operating income 

$

360,734

247,433

46

%

$

645,870

465,793

39

%

Diluted net operating earnings per common share 

2.65

1.82

46

%

4.71

3.41

38

%

Return on (annualized):

  Average tangible assets 

1.81

%

1.30

%

1.65

%

1.24

%

  Average tangible common equity 

22.72

%

18.54

%

20.76

%

17.68

%

Efficiency ratio 

50.92

%

56.86

%

53.36

%

58.92

%

At  June 30

Loan quality

2013

2012

Change

Nonaccrual loans 

$

964,906

968,328

-

Real estate and other foreclosed assets 

82,088

115,580

-29

%

  Total nonperforming assets 

$

1,046,994

1,083,908

-3

%

Accruing loans past due 90 days or more (4) 

$

340,467

274,598

24

%

Government guaranteed loans included in totals

  above:

  Nonaccrual loans 

$

69,508

48,712

43

%

  Accruing loans past due 90 days or more 

315,281

255,495

23

%

Renegotiated loans 

$

263,351

267,111

-1

%

Acquired accruing loans past due 90 

  days or more (5) 

$

155,686

162,487

-4

%

Purchased impaired loans (6):

  Outstanding customer balance 

$

725,196

1,037,458

-30

%

  Carrying amount 

394,697

560,700

-30

%

Nonaccrual loans to total net loans 

1.46

%

1.54

%

Allowance for credit losses to total loans 

1.41

%

1.46

%

(1)  Includes common stock equivalents.

(2)  Includes common stock issuable under deferred compensation plans.

(3)  Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related gains and expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects.  Reconciliations of net income with net operating income appear herein.

(4)  Excludes acquired loans. 

(5)  Acquired loans that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

(6)  Accruing loans that were impaired at acquisition date and recorded at fair value.

 

M&T BANK CORPORATION

Financial Highlights, Five Quarter Trend

Three months ended

Amounts in thousands,

June 30,

March 31,

December 31,

September 30,

June 30,

 except per share

2013

2013

2012

2012

2012

Performance

Net income 

$

348,466

274,113

296,193

293,462

233,380

Net income available to common shareholders 

328,557

255,096

276,605

273,896

214,716

Per common share:

  Basic earnings 

$

2.56

2.00

2.18

2.18

1.71

  Diluted earnings 

2.55

1.98

2.16

2.17

1.71

  Cash dividends 

$

.70

.70

.70

.70

.70

Common shares outstanding:

  Average - diluted (1) 

129,017

128,636

127,800

126,292

125,897

  Period end (2) 

129,464

128,999

128,234

127,461

126,645

Return on (annualized):

  Average total assets  

1.68

%

1.36

%

1.45

%

1.45

%

1.17

%

  Average common shareholders' equity 

13.78

%

11.10

%

12.10

%

12.40

%

10.12

%

Taxable-equivalent net interest income 

$

683,804

662,500

673,929

669,256

654,628

Yield on average earning assets 

4.10

%

4.13

%

4.17

%

4.23

%

4.25

%

Cost of interest-bearing liabilities 

.62

%

.64

%

.67

%

.71

%

.76

%

Net interest spread 

3.48

%

3.49

%

3.50

%

3.52

%

3.49

%

Contribution of interest-free funds 

.23

%

.22

%

.24

%

.25

%

.25

%

Net interest margin 

3.71

%

3.71

%

3.74

%

3.77

%

3.74

%

Net charge-offs to average total 

  net loans (annualized) 

.35

%

.23

%

.27

%

.26

%

.34

%

Net operating results (3)

Net operating income 

$

360,734

285,136

304,657

302,060

247,433

Diluted net operating earnings per common share 

2.65

2.06

2.23

2.24

1.82

Return on (annualized):

  Average tangible assets 

1.81

%

1.48

%

1.56

%

1.56

%

1.30

%

  Average tangible common equity 

22.72

%

18.71

%

20.46

%

21.53

%

18.54

%

Efficiency ratio 

50.92

%

55.88

%

53.63

%

53.73

%

56.86

%

June 30,

March 31,

December 31,

September 30,

June 30,

Loan quality

2013

2013

2012

2012

2012

Nonaccrual loans 

$

964,906

1,052,794

1,013,176

925,231

968,328

Real estate and other foreclosed assets 

82,088

95,680

104,279

112,160

115,580

  Total nonperforming assets 

$

1,046,994

1,148,474

1,117,455

1,037,391

1,083,908

Accruing loans past due 90 days or more (4) 

$

340,467

331,283

358,397

309,420

274,598

Government guaranteed loans included in totals

  above:

  Nonaccrual loans 

$

69,508

63,385

57,420

54,583

48,712

  Accruing loans past due 90 days or more 

315,281

311,579

316,403

280,410

255,495

Renegotiated loans 

$

263,351

272,285

271,971

266,526

267,111

Acquired accruing loans past due 90 

  days or more (5) 

$

155,686

157,068

166,554

161,424

162,487

Purchased impaired loans (6):

  Outstanding customer balance 

$

725,196

790,048

828,571

978,731

1,037,458

  Carrying amount 

394,697

425,232

447,114

528,001

560,700

Nonaccrual loans to total net loans 

1.46

%

1.60

%

1.52

%

1.44

%

1.54

%

Allowance for credit losses to total loans 

1.41

%

1.41

%

1.39

%

1.44

%

1.46

%

(1)  Includes common stock equivalents.

(2)  Includes common stock issuable under deferred compensation plans.

(3)  Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related gains and expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. Reconciliations of net income with net operating income appear herein.

(4)  Excludes acquired loans. 

(5)  Acquired loans that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

(6)  Accruing loans that were impaired at acquisition date and recorded at fair value.

 

M&T BANK CORPORATION

Condensed Consolidated Statement of Income

Three months ended

Six months ended

June 30

June 30

Dollars in thousands

2013

2012

Change

2013

2012

Change

Interest income 

$

750,207

737,386

2

%

$

1,480,182

1,451,481

2

%

Interest expense 

72,620

89,403

-19

146,545

183,109

-20

Net interest income 

677,587

647,983

5

1,333,637

1,268,372

5

Provision for credit losses 

57,000

60,000

-5

95,000

109,000

-13

Net interest income after

   provision for credit losses 

620,587

587,983

6

1,238,637

1,159,372

7

Other income

     Mortgage banking revenues 

91,262

69,514

31

184,365

125,706

47

     Service charges on deposit accounts 

111,717

110,982

1

222,666

219,871

1

     Trust income  

124,728

122,275

2

246,331

239,228

3

     Brokerage services income 

17,258

16,172

7

32,969

30,073

10

     Trading account and foreign exchange gains 

9,224

6,238

48

18,151

16,809

8

     Gain (loss) on bank investment securities 

56,457

(408)

-

56,457

(363)

-

     Other-than-temporary impairment losses 

        recognized in earnings 

-

(16,173)

-

(9,800)

(27,659)

-

     Equity in earnings of Bayview Lending Group LLC 

(2,453)

(6,635)

-

(6,109)

(11,387)

-

     Other revenues from operations 

100,496

89,685

12

196,541

176,095

12

          Total other income 

508,689

391,650

30

941,571

768,373

23

Other expense

     Salaries and employee benefits

323,136

323,686

-

679,687

669,784

1

     Equipment and net occupancy 

64,278

65,376

-2

129,437

130,419

-1

     Printing, postage and supplies 

10,298

11,368

-9

20,997

23,240

-10

     Amortization of core deposit and other 

        intangible assets 

12,502

15,907

-21

25,845

32,681

-21

     FDIC assessments 

17,695

24,962

-29

37,133

53,911

-31

     Other costs of operations 

170,682

186,093

-8

341,088

357,052

-4

          Total other expense 

598,591

627,392

-5

1,234,187

1,267,087

-3

Income before income taxes 

530,685

352,241

51

946,021

660,658

43

Applicable income taxes 

182,219

118,861

53

323,442

220,815

46

Net income 

$

348,466

233,380

49

%

$

622,579

439,843

42

%

 

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend

Three months ended

June 30,

March 31,

December 31,

September 30,

June 30,

Dollars in thousands

2013

2013

2012

2012

2012

Interest income 

$

750,207

729,975

745,353

744,851

737,386

Interest expense 

72,620

73,925

77,931

82,129

89,403

Net interest income 

677,587

656,050

667,422

662,722

647,983

Provision for credit losses 

57,000

38,000

49,000

46,000

60,000

Net interest income after

   provision for credit losses 

620,587

618,050

618,422

616,722

587,983

Other income

     Mortgage banking revenues

91,262

93,103

116,546

106,812

69,514

     Service charges on deposit accounts 

111,717

110,949

112,364

114,463

110,982

     Trust income  

124,728

121,603

116,915

115,709

122,275

     Brokerage services income 

17,258

15,711

14,872

14,114

16,172

     Trading account and foreign exchange gains 

9,224

8,927

10,356

8,469

6,238

     Gain (loss) on bank investment securities 

56,457

-

-

372

(408)

     Other-than-temporary impairment losses 

        recognized in earnings 

-

(9,800)

(14,491)

(5,672)

(16,173)

     Equity in earnings of Bayview Lending Group LLC 

(2,453)

(3,656)

(4,941)

(5,183)

(6,635)

     Other revenues from operations 

100,496

96,045

101,543

96,649

89,685

          Total other income 

508,689

432,882

453,164

445,733

391,650

Other expense

     Salaries and employee benefits 

323,136

356,551

323,010

321,746

323,686

     Equipment and net occupancy 

64,278

65,159

62,884

64,248

65,376

     Printing, postage and supplies 

10,298

10,699

10,417

8,272

11,368

     Amortization of core deposit and other 

        intangible assets 

12,502

13,343

13,865

14,085

15,907

     FDIC assessments 

17,695

19,438

23,398

23,801

24,962

     Other costs of operations  

170,682

170,406

192,572

183,875

186,093

          Total other expense 

598,591

635,596

626,146

616,027

627,392

Income before income taxes 

530,685

415,336

445,440

446,428

352,241

Applicable income taxes 

182,219

141,223

149,247

152,966

118,861

Net income 

$

348,466

274,113

296,193

293,462

233,380

 

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet

June 30

Dollars in thousands

2013

2012

Change

ASSETS

Cash and due from banks 

$

1,350,015

1,421,831

-5

%

Interest-bearing deposits at banks 

2,555,354

1,069,717

139

Federal funds sold and agreements

  to resell securities 

124,487

1,000

-

Trading account assets 

378,235

544,938

-31

Investment securities 

5,210,526

7,057,300

-26

Loans and leases:

   Commercial, financial, etc. 

18,021,812

16,395,587

10

   Real estate - commercial 

26,116,394

24,898,707

5

   Real estate - consumer 

10,399,749

9,811,525

6

   Consumer 

11,433,911

11,745,453

-3

     Total loans and leases, net of unearned discount 

65,971,866

62,851,272

5

        Less: allowance for credit losses 

927,065

917,028

1

  Net loans and leases 

65,044,801

61,934,244

5

Goodwill 

3,524,625

3,524,625

-

Core deposit and other intangible assets 

89,918

143,713

-37

Other assets 

4,951,044

5,110,210

-3

  Total assets 

$

83,229,005

80,807,578

3

%

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits 

$

24,074,815

22,854,794

5

%

Interest-bearing deposits 

41,302,212

39,327,849

5

Deposits at Cayman Islands office 

284,443

366,164

-22

  Total deposits 

65,661,470

62,548,807

5

Short-term borrowings 

307,740

975,575

-68

Accrued interest and other liabilities 

1,421,067

1,965,421

-28

Long-term borrowings 

5,122,398

5,687,868

-10

  Total liabilities 

72,512,675

71,177,671

2

Shareholders' equity:

   Preferred 

876,796

868,433

1

   Common (1)  

9,839,534

8,761,474

12

     Total shareholders' equity 

10,716,330

9,629,907

11

  Total liabilities and shareholders' equity 

$

83,229,005

80,807,578

3

%

(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $227.8 million at June 30, 2013 and $277.8 million at June 30, 2012.

 

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend

June 30,

March 31,

December 31,

September 30,

June 30,

Dollars in thousands

2013

2013

2012

2012

2012

ASSETS

Cash and due from banks 

$

1,350,015

1,231,091

1,983,615

1,622,928

1,421,831

Interest-bearing deposits at banks 

2,555,354

1,304,770

129,945

411,994

1,069,717

Federal funds sold and agreements

  to resell securities 

124,487

594,976

3,000

-

1,000

Trading account assets 

378,235

420,144

488,966

526,844

544,938

Investment securities 

5,210,526

5,660,831

6,074,361

6,624,004

7,057,300

Loans and leases:

   Commercial, financial, etc. 

18,021,812

17,469,138

17,776,953

16,704,575

16,395,587

   Real estate - commercial 

26,116,394

25,944,819

25,993,790

24,970,416

24,898,707

   Real estate - consumer 

10,399,749

11,094,577

11,240,837

10,808,220

9,811,525

   Consumer 

11,433,911

11,415,733

11,559,377

11,628,744

11,745,453

     Total loans and leases, net of unearned discount 

65,971,866

65,924,267

66,570,957

64,111,955

62,851,272

        Less: allowance for credit losses 

927,065

927,117

925,860

921,223

917,028

  Net loans and leases 

65,044,801

64,997,150

65,645,097

63,190,732

61,934,244

Goodwill 

3,524,625

3,524,625

3,524,625

3,524,625

3,524,625

Core deposit and other intangible assets 

89,918

102,420

115,763

129,628

143,713

Other assets 

4,951,044

4,975,950

5,043,431

5,054,478

5,110,210

  Total assets 

$

83,229,005

82,811,957

83,008,803

81,085,233

80,807,578

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits 

$

24,074,815

23,603,971

24,240,802

22,968,401

22,854,794

Interest-bearing deposits 

41,302,212

41,219,679

40,325,932

39,636,104

39,327,849

Deposits at Cayman Islands office 

284,443

266,076

1,044,519

1,402,753

366,164

  Total deposits 

65,661,470

65,089,726

65,611,253

64,007,258

62,548,807

Short-term borrowings 

307,740

374,593

1,074,482

592,154

975,575

Accrued interest and other liabilities 

1,421,067

1,530,118

1,512,717

1,570,758

1,965,421

Long-term borrowings 

5,122,398

5,394,563

4,607,758

4,969,536

5,687,868

  Total liabilities

72,512,675

72,389,000

72,806,210

71,139,706

71,177,671

Shareholders' equity:

   Preferred

876,796

874,627

872,500

870,416

868,433

   Common (1) 

9,839,534

9,548,330

9,330,093

9,075,111

8,761,474

     Total shareholders' equity 

10,716,330

10,422,957

10,202,593

9,945,527

9,629,907

  Total liabilities and shareholders' equity 

$

83,229,005

82,811,957

83,008,803

81,085,233

80,807,578

(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $227.8 million at June 30, 2013, $226.0 million at March 31, 2013, $240.3 million at December 31, 2012, $230.1 million at September 30, 2012 and $277.8 million at June 30, 2012.

 

M&T BANK CORPORATION

Condensed Consolidated Average Balance Sheet

 and Annualized Taxable-equivalent Rates

Three months ended

Change in balance

Six months ended

June 30,

June 30,

March 31,

June 30, 2013 from

June 30

Dollars in millions

2013

2012

2013

June 30,

March 31,

2013

2012

Change in

Balance

Rate

Balance

Rate

Balance

Rate

2012

2013

Balance

Rate

Balance 

Rate

balance

ASSETS

Interest-bearing deposits at banks 

$

2,403

.24

%

1,247

.25

%

527

.21

%

93

%

356

%

$

1,470

.24

%

774

.25

%

90

%

Federal funds sold and agreements

  to resell securities 

199

.09

6

.56

81

.13

144

141

.10

4

.54

Trading account assets 

86

1.43

100

1.64

76

3.60

-14

14

81

2.45

97

1.61

-16

Investment securities 

5,293

3.34

7,271

3.47

5,803

3.33

-27

-9

5,546

3.33

7,389

3.51

-25

Loans and leases, net of unearned discount

  Commercial, financial, etc. 

17,713

3.61

16,104

3.72

17,328

3.66

10

2

17,522

3.64

15,918

3.72

10

  Real estate - commercial 

26,051

4.72

24,737

4.65

25,915

4.41

5

1

25,983

4.57

24,648

4.54

5

  Real estate - consumer 

10,806

4.05

9,216

4.43

11,142

4.09

17

-3

10,973

4.07

8,751

4.51

25

  Consumer 

11,409

4.58

11,769

4.82

11,467

4.66

-3

11,438

4.62

11,838

4.81

-3

     Total loans and leases, net 

65,979

4.32

61,826

4.42

65,852

4.24

7

65,916

4.28

61,155

4.39

8

  Total earning assets

73,960

4.10

70,450

4.25

72,339

4.13

5

2

73,154

4.12

69,419

4.24

5

Goodwill 

3,525

3,525

3,525

3,525

3,525

Core deposit and other intangible assets 

95

151

109

-37

-12

102

159

-36

Other assets 

5,772

5,961

5,940

-3

-3

5,856

5,953

-2

  Total assets 

$

83,352

80,087

81,913

4

%

2

%

$

82,637

79,056

5

%

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing deposits

  NOW accounts 

$

941

.14

841

.20

893

.15

12

%

5

%

$

917

.14

834

.17

10

%

  Savings deposits 

36,459

.15

33,286

.20

35,394

.16

10

3

35,930

.16

32,848

.22

9

  Time deposits 

4,210

.71

5,545

.90

4,438

.75

-24

-5

4,323

.73

5,753

.90

-25

  Deposits at Cayman Islands office 

326

.25

457

.20

859

.18

-29

-62

591

.20

476

.19

24

     Total interest-bearing deposits 

41,936

.21

40,129

.30

41,584

.22

5

1

41,761

.22

39,911

.31

5

Short-term borrowings 

343

.11

875

.16

637

.15

-61

-46

489

.13

852

.15

-43

Long-term borrowings 

5,051

4.03

6,102

3.90

4,688

4.39

-17

8

4,871

4.20

6,304

3.84

-23

Total interest-bearing liabilities 

47,330

.62

47,106

.76

46,909

.64

1

47,121

.63

47,067

.78

Noninterest-bearing deposits

23,744

21,401

22,956

11

3

23,352

20,499

14

Other liabilities 

1,715

2,044

1,726

-16

-1

1,720

2,034

-15

  Total liabilities 

72,789

70,551

71,591

3

2

72,193

69,600

4

Shareholders' equity 

10,563

9,536

10,322

11

2

10,444

9,456

10

  Total liabilities and shareholders' equity 

$

83,352

80,087

81,913

4

%

2

%

$

82,637

79,056

5

%

Net interest spread 

3.48

3.49

3.49

3.49

3.46

Contribution of interest-free funds 

.23

.25

.22

.22

.25

Net interest margin 

3.71

%

3.74

%

3.71

%

3.71

%

3.71

%

 

M&T BANK CORPORATION

Reconciliation of Quarterly GAAP to Non-GAAP Measures

Three months ended

Six months ended

June 30

June 30

2013

2012

2013

2012

Income statement data

In thousands, except per share

Net income

Net income 

$

348,466

233,380

$

622,579

439,843

Amortization of core deposit and other

  intangible assets (1) 

7,632

9,709

15,780

19,949

Merger-related expenses (1) 

4,636

4,344

7,511

6,001

  Net operating income 

$

360,734

247,433

$

645,870

465,793

Earnings per common share

Diluted earnings per common share 

$

2.55

1.71

$

4.53

3.20

Amortization of core deposit and other

  intangible assets (1) 

.06

.08

.12

.16

Merger-related expenses (1) 

.04

.03

.06

.05

  Diluted net operating earnings per common share 

$

2.65

1.82

$

4.71

3.41

Other expense

Other expense 

$

598,591

627,392

$

1,234,187

1,267,087

Amortization of core deposit and other

  intangible assets  

(12,502)

(15,907)

(25,845)

(32,681)

Merger-related expenses  

(7,632)

(7,151)

(12,364)

(9,879)

  Noninterest operating expense 

$

578,457

604,334

$

1,195,978

1,224,527

Merger-related expenses

Salaries and employee benefits 

$

300

3,024

$

836

4,997

Equipment and net occupancy 

489

-

690

15

Printing, postage and supplies 

998

-

1,825

-

Other costs of operations 

5,845

4,127

9,013

4,867

  Total 

$

7,632

7,151

$

12,364

9,879

Efficiency ratio

Noninterest operating expense (numerator) 

$

578,457

604,334

$

1,195,978

1,224,527

Taxable-equivalent net interest income 

683,804

654,628

1,346,304

1,281,722

Other income 

508,689

391,650

941,571

768,373

Less:  Gain (loss) on bank investment securities 

56,457

(408)

56,457

(363)

           Net OTTI losses recognized in earnings 

-

(16,173)

(9,800)

(27,659)

Denominator 

$

1,136,036

1,062,859

$

2,241,218

2,078,117

Efficiency ratio 

50.92%

56.86%

53.36%

58.92%

Balance sheet data

In millions

Average assets

Average assets 

$

83,352

80,087

$

82,637

79,056

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(95)

(151)

(102)

(159)

Deferred taxes 

28

44

30

46

  Average tangible assets 

$

79,760

76,455

$

79,040

75,418

Average common equity

Average total equity 

$

10,563

9,536

$

10,444

9,456

Preferred stock 

(876)

(868)

(876)

(867)

  Average common equity 

9,687

8,668

9,568

8,589

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(95)

(151)

(102)

(159)

Deferred taxes 

28

44

30

46

  Average tangible common equity 

$

6,095

5,036

$

5,971

4,951

At end of quarter

Total assets

Total assets 

$

83,229

80,808

Goodwill 

(3,525)

(3,525)

Core deposit and other intangible assets 

(90)

(143)

Deferred taxes 

27

41

  Total tangible assets 

$

79,641

77,181

Total common equity

Total equity 

$

10,716

9,630

Preferred stock 

(877)

(868)

Undeclared dividends - cumulative preferred stock 

(3)

(4)

  Common equity, net of undeclared cumulative

    preferred dividends 

9,836

8,758

Goodwill 

(3,525)

(3,525)

Core deposit and other intangible assets 

(90)

(143)

Deferred taxes 

27

41

  Total tangible common equity 

$

6,248

5,131

(1) After any related tax effect.

 

M&T BANK CORPORATION

Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend

Three months ended

June 30,

March 31,

December 31,

September 30,

June 30,

2013

2013

2012

2012

2012

Income statement data

In thousands, except per share

Net income

Net income 

$

348,466

274,113

296,193

293,462

233,380

Amortization of core deposit and other

  intangible assets (1) 

7,632

8,148

8,464

8,598

9,709

Merger-related expenses (1) 

4,636

2,875

-

-

4,344

  Net operating income 

$

360,734

285,136

304,657

302,060

247,433

Earnings per common share

Diluted earnings per common share 

$

2.55

1.98

2.16

2.17

1.71

Amortization of core deposit and other

  intangible assets (1) 

.06

.06

.07

.07

.08

Merger-related expenses (1) 

.04

.02

-

-

.03

  Diluted net operating earnings per common share 

$

2.65

2.06

2.23

2.24

1.82

Other expense

Other expense 

$

598,591

635,596

626,146

616,027

627,392

Amortization of core deposit and other

  intangible assets  

(12,502)

(13,343)

(13,865)

(14,085)

(15,907)

Merger-related expenses  

(7,632)

(4,732)

-

-

(7,151)

  Noninterest operating expense 

$

578,457

617,521

612,281

601,942

604,334

Merger-related expenses

Salaries and employee benefits 

$

300

536

-

-

3,024

Equipment and net occupancy 

489

201

-

-

-

Printing, postage and supplies 

998

827

-

-

-

Other costs of operations 

5,845

3,168

-

-

4,127

  Total 

$

7,632

4,732

-

-

7,151

Efficiency ratio

Noninterest operating expense (numerator) 

$

578,457

617,521

612,281

601,942

604,334

Taxable-equivalent net interest income 

683,804

662,500

673,929

669,256

654,628

Other income 

508,689

432,882

453,164

445,733

391,650

Less:  Gain (loss) on bank investment securities 

56,457

-

-

372

(408)

           Net OTTI losses recognized in earnings

-

(9,800)

(14,491)

(5,672)

(16,173)

Denominator 

$

1,136,036

1,105,182

1,141,584

1,120,289

1,062,859

Efficiency ratio 

50.92%

55.88%

53.63%

53.73%

56.86%

Balance sheet data

In millions

Average assets

Average assets 

$

83,352

81,913

81,366

80,432

80,087

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(95)

(109)

(122)

(136)

(151)

Deferred taxes 

28

32

36

39

44

  Average tangible assets 

$

79,760

78,311

77,755

76,810

76,455

Average common equity

Average total equity

$

10,563

10,322

10,105

9,789

9,536

Preferred stock 

(876)

(874)

(872)

(870)

(868)

  Average common equity 

9,687

9,448

9,233

8,919

8,668

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(95)

(109)

(122)

(136)

(151)

Deferred taxes 

28

32

36

39

44

  Average tangible common equity 

$

6,095

5,846

5,622

5,297

5,036

At end of quarter

Total assets

Total assets 

$

83,229

82,812

83,009

81,085

80,808

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(90)

(102)

(116)

(129)

(143)

Deferred taxes 

27

30

34

38

41

  Total tangible assets 

$

79,641

79,215

79,402

77,469

77,181

Total common equity

Total equity 

$

10,716

10,423

10,203

9,945

9,630

Preferred stock 

(877)

(875)

(873)

(870)

(868)

Undeclared dividends - cumulative preferred stock 

(3)

(3)

(3)

(4)

(4)

  Common equity, net of undeclared cumulative

    preferred dividends 

9,836

9,545

9,327

9,071

8,758

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(90)

(102)

(116)

(129)

(143)

Deferred taxes

27

30

34

38

41

  Total tangible common equity

$

6,248

5,948

5,720

5,455

5,131

(1) After any related tax effect.

 

INVESTOR CONTACT: Donald J. MacLeod (716) 842-5138

MEDIA CONTACT: C. Michael Zabel (716) 842-5385

 

SOURCE M&T Bank Corporation



RELATED LINKS

http://www.mandtbank.com