2014

M&T Bank Corporation Announces Second Quarter Profits

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

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