M&T Bank Corporation Announces Second Quarter Results

BUFFALO, N.Y., July 17, 2014 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2014.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the second quarter of 2014 were $1.98, up 23% from $1.61 in the first quarter of 2014.  GAAP-basis net income in the recent quarter totaled $284 million, compared with $229 million in the initial 2014 quarter.  Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income for the recent quarter was 1.27% and 9.79%, respectively, compared with 1.07% and 8.22%, respectively, in the first quarter of 2014.

The recent quarter's results reflect two noteworthy, but largely offsetting, items. The resolution with tax authorities of previously uncertain tax positions required M&T to reduce its accrual for income taxes and increase net income by $8 million, while an increase to M&T's litigation reserves of $12 million reduced net income by $7 million after applicable tax effect. Both accrual items were associated with pre-acquisition activities of M&T's Wilmington Trust entities.

Diluted earnings per common share and net income in last year's second quarter were $2.55 and $348 million, respectively.  Those results include after-tax gains from the sale of investment securities of $34 million and the effect of the reversal of an accrual for a contingent compensation obligation assumed in the May 2011 acquisition of Wilmington Trust that resulted in a reduction of expenses having an after-tax impact of $15 million. Those items increased diluted earnings per common share by $.38 in 2013's second quarter.

Reflecting on the recent quarter's performance, Rene F. Jones,  Vice Chairman and Chief Financial Officer, noted, "Results for the second quarter reflected an improvement in revenue from the first quarter in the areas of mortgage banking, trust and deposit services.  M&T's credit quality measures were strong during the quarter.  While operating expense levels continue to be elevated, significant progress has been made on several key initiatives related to BSA/AML activities, Compliance, Risk Management and Capital Planning." 

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.    

Diluted net operating earnings per common share were $2.02 in the recent quarter, compared with $1.66 and $2.65 in the initial quarter of 2014 and last year's second quarter, respectively.  Net operating income during the second quarter of 2014 was $290 million, compared with $235 million in the first quarter of 2014 and $361 million in the second quarter of 2013.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.35% and 14.92%, respectively, in the second quarter of 2014.  The comparable returns were 1.15% and 12.76% in the first quarter of 2014 and 1.81% and 22.72% in the second quarter of 2013.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis aggregated $675 million in the second quarter of 2014, down slightly from $684 million in the year-earlier period. The effect of growth in average earning assets, predominantly due to a $5.7 billion rise in average investment securities, was offset by a 31 basis point narrowing of the net interest margin to 3.40% in the recent quarter from 3.71% in the second quarter of 2013.  The significant increase in investment securities reflects M&T's continued efforts to meet proposed regulatory liquidity requirements.  Taxable-equivalent net interest income in the recent quarter was up 2% from $662 million in the first quarter of 2014.  That improvement reflects a $3.3 billion increase in average earning assets, including a $1.7 billion or 18% rise in average investment securities resulting from continued purchases of mortgage-backed securities, partially offset by a 12 basis point decline in the net interest margin.  The narrowing of the recent quarter's net interest margin as compared with the second quarter of 2013 and the initial 2014 quarter reflects continuing downward pressure on loan yields, increased balances of investment securities and higher levels of deposits held at the Federal Reserve Bank of New York.

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $30 million in the second quarter of 2014, compared with $57 million and $32 million in the year-earlier quarter and the first quarter of 2014, respectively.  Net charge-offs of loans were $29 million during the recent quarter, improved from $57 million in the second quarter of 2013 and $32 million in the first quarter of 2014.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .18% and .35% in the second quarters of 2014 and 2013, respectively, and .20% in the first quarter of 2014.

Loans classified as nonaccrual declined to $880 million, or 1.36% of total loans outstanding at June 30, 2014, compared with $965 million or 1.46% a year earlier and $891 million or 1.39% at March 31, 2014.  Assets taken in foreclosure of defaulted loans were $60 million at June 30, 2014, improved from $82 million at June 30, 2013 and comparable to $59 million at March 31, 2014.

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 $918 million or 1.42% of loans outstanding at June 30, 2014, compared with $927 million or 1.41% of loans at June 30, 2013 and $917 million or 1.43% of loans at March 31, 2014. 

Noninterest Income and Expense.  Noninterest income aggregated $456 million in the second quarter of 2014, compared with $509 million in the year-earlier quarter and $420 million in the first quarter of 2014.  Reflected in the second quarter of 2013 were net pre-tax gains of $56 million from the noted sales of investment securities.  Excluding those gains, noninterest income in the second quarter of 2014 was up from $452 million in the year-earlier quarter and was 9% higher than the $420 million in the initial quarter of 2014.  Higher mortgage banking revenues and trust income in the recent quarter contributed to those improvements.

Noninterest expense in the second quarter of 2014 totaled $681 million, up from $599 million in the year-earlier quarter, but down from $702 million in the first quarter of 2014.  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 $672 million in the recent quarter, compared with $578 million in the second quarter of 2013 and $692 million in 2014's initial quarter.  The higher level of operating expenses in the recent quarter as compared with the year-earlier period was predominantly the result of costs for professional services and salaries associated with BSA/AML activities, compliance, capital planning and stress testing, risk management, and other operational initiatives.  As compared with the first quarter of 2014, 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, which were seasonally higher in the initial 2014 period, partially offset by the noted increase in litigation reserves. 

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 59.4% in the second quarter of 2014, compared with 50.9% in the year-earlier quarter and 63.9% in the first quarter of 2014. 

Balance Sheet.  M&T had total assets of $90.8 billion at June 30, 2014, up 9% from $83.2 billion a year earlier.  Investment securities were $12.1 billion at June 30, 2014, up $6.9 billion or 133% from June 30, 2013.  M&T has added investment securities during 2013 and 2014 through purchase and loan securitization transactions in order to enhance its liquidity position in response to proposed regulatory requirements.  Loans and leases, net of unearned discount, totaled $64.7 billion at the recent quarter-end, compared with $66.0 billion at June 30, 2013.  Total deposits rose 6% to $69.8 billion at June 30, 2014 from $65.7 billion a year earlier.

Total shareholders' equity rose 14% to $12.2 billion at June 30, 2014 from $10.7 billion a year earlier, representing 13.40% and 12.88%, respectively, of total assets.  Common shareholders' equity was $10.9 billion, or $82.86 per share, at June 30, 2014, up from $9.8 billion, or $75.98 per share, at June 30, 2013.  Tangible equity per common share rose 16% to $55.89 at the recent quarter-end from $48.26 a year earlier.  Common shareholders' equity per share and tangible equity per common share were $81.05 and $53.92, respectively, at March 31, 2014.  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 estimated Tier 1 common ratio, a regulatory capital measure, was 9.62% at June 30, 2014, compared with 8.55% and 9.45% at June 30, 2013 and March 31, 2014, respectively.  M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under the capital rules approved in July 2013 on a fully phased-in basis was approximately 9.35% as of June 30, 2014.

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# 66984191. 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 Sunday, July 20, 2014 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID# 66984191.  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.

INVESTOR CONTACT:

Donald J. MacLeod 


(716) 842-5138



MEDIA CONTACT:   

C. Michael Zabel


(716) 842-5385

 

M&T BANK CORPORATION













Financial Highlights
















Three months ended







Six months ended




Amounts in thousands,



June 30







June 30




 except per share



2014


2013


Change





2014


2013


Change




















Performance




































Net income


$

284,336


348,466


-18

%


$

513,353


622,579


-18

%

Net income available to common shareholders 



260,695


328,557


-21





472,429


583,633


-19




















Per common share:


















  Basic earnings 


$

1.99


2.56


-22

%


$

3.62


4.56


-21

%

  Diluted earnings 



1.98


2.55


-22





3.59


4.53


-21


  Cash dividends 


$

.70


.70


-




$

1.40


1.40


-




















Common shares outstanding:


















  Average - diluted (1) 



131,828


129,017


2

%



131,479


128,828


2

%

  Period end (2) 



131,953


129,464


2





131,953


129,464


2




















Return on (annualized):


















  Average total assets 



1.27

%

1.68

%






1.17

%

1.52

%



  Average common shareholders' equity 



9.79

%

13.78

%






9.02

%

12.47

%





















Taxable-equivalent net interest income 


$

674,963


683,804


-1

%


$

1,337,341


1,346,304


-1

%



















Yield on average earning assets 



3.73

%

4.10

%






3.80

%

4.12

%



Cost of interest-bearing liabilities 



.51

%

.62

%






.53

%

.63

%



Net interest spread 



3.22

%

3.48

%






3.27

%

3.49

%



Contribution of interest-free funds 



.18

%

.23

%






.19

%

.22

%



Net interest margin  



3.40

%

3.71

%






3.46

%

3.71

%





















Net charge-offs to average total 


















  net loans (annualized) 



.18

%

.35

%






.19

%

.29

%





















Net operating results (3)




































Net operating income  


$

289,974


360,734


-20

%


$

525,136


645,870


-19

%


















Diluted net operating earnings per common share 



2.02


2.65


-24





3.68


4.71


-22


Return on (annualized):


















  Average tangible assets 



1.35

%

1.81

%






1.25

%

1.65

%



  Average tangible common equity 



14.92

%

22.72

%






13.86

%

20.76

%



Efficiency ratio 



59.39

%

50.92

%






61.62

%

53.36

%




























































At  June 30













Loan quality



2014


2013


Change





























Nonaccrual loans 


$

880,134


964,906


-9

%









Real estate and other foreclosed assets 



59,793


82,088


-27

%









  Total nonperforming assets 


$

939,927


1,046,994


-10

%



























Accruing loans past due 90 days or more (4) 


$

289,016


340,467


-15

%



























Government guaranteed loans included in totals


















  above:


















  Nonaccrual loans 


$

81,817


69,508


18

%









  Accruing loans past due 90 days or more 



275,846


315,281


-13

%



























Renegotiated loans 


$

270,223


263,351


3

%



























Acquired accruing loans past due 90 


















  days or more (5) 


$

124,217


155,686


-20

%



























Purchased impaired loans (6):


















  Outstanding customer balance 


$

504,584


725,196


-30

%









  Carrying amount 



282,517


394,697


-28

%



























Nonaccrual loans to total net loans 



1.36

%

1.46

%






























Allowance for credit losses to total loans 



1.42

%

1.41

%
















































(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 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



2014


2014



2013



2013


2013




















Performance




































Net income 


$

284,336



229,017



221,422



294,479



348,466



Net income available to common shareholders 



260,695



211,731



203,451



275,356



328,557





















Per common share:


















  Basic earnings 


$

1.99



1.63



1.57



2.13



2.56



  Diluted earnings 



1.98



1.61



1.56



2.11



2.55



  Cash dividends 


$

.70



.70



.70



.70



.70





















Common shares outstanding:


















  Average - diluted (1) 



131,828



131,126



130,464



130,265



129,017



  Period end (2) 



131,953



131,431



130,564



130,241



129,464





















Return on (annualized):


















  Average total assets 



1.27

%


1.07

%


1.03

%


1.39

%


1.68

%


  Average common shareholders' equity 



9.79

%


8.22

%


7.99

%


11.06

%


13.78

%




















Taxable-equivalent net interest income 


$

674,963



662,378



672,683



679,213



683,804





















Yield on average earning assets 



3.73

%


3.87

%


3.92

%


3.98

%


4.10

%


Cost of interest-bearing liabilities 



.51

%


.55

%


.56

%


.58

%


.62

%


Net interest spread 



3.22

%


3.32

%


3.36

%


3.40

%


3.48

%


Contribution of interest-free funds 



.18

%


.20

%


.20

%


.21

%


.23

%


Net interest margin 



3.40

%


3.52

%


3.56

%


3.61

%


3.71

%




















Net charge-offs to average total 


















  net loans (annualized) 



.18

%


.20

%


.26

%


.29

%


.35

%




















Net operating results (3)




































Net operating income 


$

289,974



235,162



227,797



300,968



360,734





















Diluted net operating earnings per common share 



2.02



1.66



1.61



2.16



2.65



Return on (annualized):


















  Average tangible assets 



1.35

%


1.15

%


1.11

%


1.48

%


1.81

%


  Average tangible common equity 



14.92

%


12.76

%


12.67

%


17.64

%


22.72

%


Efficiency ratio 



59.39

%


63.95

%


65.48

%


56.03

%


50.92

%

































































June 30,


March 31,


December 31,


September 30,


June 30,


Loan quality



2014


2014


2013


2013


2013




















Nonaccrual loans 


$

880,134



890,893



874,156



915,871



964,906



Real estate and other foreclosed assets 



59,793



59,407



66,875



89,203



82,088



  Total nonperforming assets 


$

939,927



950,300



941,031



1,005,074



1,046,994





















Accruing loans past due 90 days or more (4) 


$

289,016



307,017



368,510



339,792



340,467





















Government guaranteed loans included in totals


















  above:


















  Nonaccrual loans 


$

81,817



75,959



63,647



68,519



69,508



  Accruing loans past due 90 days or more 



275,846



291,418



297,918



320,732



315,281





















Renegotiated loans 


$

270,223



257,889



257,092



259,301



263,351





















Acquired accruing loans past due 90 


















  days or more (5) 


$

124,217



120,996



130,162



153,585



155,686





















Purchased impaired loans (6):


















  Outstanding customer balance 


$

504,584



534,331



579,975



648,118



725,196



  Carrying amount 



282,517



303,388



330,792



357,337



394,697





















Nonaccrual loans to total net loans 



1.36

%


1.39

%


1.36

%


1.44

%


1.46

%




















Allowance for credit losses to total loans 



1.42

%


1.43

%


1.43

%


1.44

%


1.41

%






































(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 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


2014


2013


Change




2014


2013


Change


















Interest income 

$

734,290


750,207


-2

%


$

1,457,242


1,480,182


-2

%

Interest expense 


65,176


72,620


-10




131,695


146,545


-10


















Net interest income 


669,114


677,587


-1




1,325,547


1,333,637


-1


















Provision for credit losses 


30,000


57,000


-47




62,000


95,000


-35


















Net interest income after
















   provision for credit losses 


639,114


620,587


3




1,263,547


1,238,637


2


















Other income
















     Mortgage banking revenues 


95,656


91,262


5




175,705


184,365


-5


     Service charges on deposit accounts 


107,368


111,717


-4




211,566


222,666


-5


     Trust income  


129,893


124,728


4




251,145


246,331


2


     Brokerage services income 


17,487


17,258


1




33,987


32,969


3


     Trading account and foreign exchange gains 


8,042


9,224


-13




14,489


18,151


-20


     Gain on bank investment securities 


-


56,457


-




-


56,457


-


     Other-than-temporary impairment losses 
















        recognized in earnings 


-


-


-




-


(9,800)


-


     Equity in earnings of Bayview Lending Group LLC 


(4,055)


(2,453)


-




(8,509)


(6,109)


-


     Other revenues from operations 


102,021


100,496


2




198,136


196,541


1


          Total other income 


456,412


508,689


-10




876,519


941,571


-7


















Other expense
















     Salaries and employee benefits 


339,713


323,136


5




711,039


679,687


5


     Equipment and net occupancy 


68,084


64,278


6




139,251


129,437


8


     Printing, postage and supplies 


9,180


10,298


-11




20,136


20,997


-4


     Amortization of core deposit and other 
















        intangible assets 


9,234


12,502


-26




19,296


25,845


-25


     FDIC assessments 


15,155


17,695


-14




30,643


37,133


-17


     Other costs of operations 


239,828


170,682


41




463,100


341,088


36


          Total other expense 


681,194


598,591


14




1,383,465


1,234,187


12


















Income before income taxes 


414,332


530,685


-22




756,601


946,021


-20


















Applicable income taxes 


129,996


182,219


-29




243,248


323,442


-25


















Net income 

$

284,336


348,466


-18

%


$

513,353


622,579


-18

%

 

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


2014


2014



2013



2013



2013


















Interest income 

$

734,290



722,952



734,466



742,686



750,207


Interest expense 


65,176



66,519



67,982



69,578



72,620


















Net interest income 


669,114



656,433



666,484



673,108



677,587


















Provision for credit losses 


30,000



32,000



42,000



48,000



57,000


















Net interest income after
















   provision for credit losses 


639,114



624,433



624,484



625,108



620,587


















Other income
















     Mortgage banking revenues 


95,656



80,049



82,169



64,731



91,262


     Service charges on deposit accounts 


107,368



104,198



110,436



113,839



111,717


     Trust income 


129,893



121,252



125,876



123,801



124,728


     Brokerage services income 


17,487



16,500



15,807



16,871



17,258


     Trading account and foreign exchange gains 


8,042



6,447



13,690



8,987



9,224


     Gain on bank investment securities 


-



-



-



-



56,457


     Equity in earnings of Bayview Lending Group LLC 


(4,055)



(4,454)



(6,136)



(3,881)



(2,453)


     Other revenues from operations 


102,021



96,115



104,404



153,040



100,496


          Total other income 


456,412



420,107



446,246



477,388



508,689


















Other expense
















     Salaries and employee benefits 


339,713



371,326



336,159



339,332



323,136


     Equipment and net occupancy 


68,084



71,167



68,670



66,220



64,278


     Printing, postage and supplies 


9,180



10,956



8,808



9,752



10,298


     Amortization of core deposit and other 
















        intangible assets 


9,234



10,062



10,439



10,628



12,502


     FDIC assessments 


15,155



15,488



17,574



14,877



17,695


     Other costs of operations 


239,828



223,272



301,422



217,817



170,682


          Total other expense 


681,194



702,271



743,072



658,626



598,591


















Income before income taxes 


414,332



342,269



327,658



443,870



530,685


















Applicable income taxes 


129,996



113,252



106,236



149,391



182,219


















Net income 

$

284,336



229,017



221,422



294,479



348,466


















 

M&T BANK CORPORATION









Condensed Consolidated Balance Sheet





















June 30




Dollars in thousands



2014


2013


Change











ASSETS


















Cash and due from banks 


$

1,827,197


1,350,015


35

%










Interest-bearing deposits at banks 



3,032,530


2,555,354


19











Federal funds sold and agreements









  to resell securities 



90,239


124,487


-28











Trading account assets 



313,325


378,235


-17











Investment securities 



12,120,195


5,210,526


133











Loans and leases:


















   Commercial, financial, etc. 



19,105,892


18,021,812


6


   Real estate - commercial 



26,374,274


26,116,394


1


   Real estate - consumer 



8,656,766


10,399,749


-17


   Consumer 



10,610,761


11,433,911


-7


     Total loans and leases, net of unearned discount 



64,747,693


65,971,866


-2


        Less: allowance for credit losses 



917,666


927,065


-1











  Net loans and leases 



63,830,027


65,044,801


-2











Goodwill 



3,524,625


3,524,625


-











Core deposit and other intangible assets 



49,555


89,918


-45











Other assets 



6,047,309


4,951,044


22











  Total assets 


$

90,835,002


83,229,005


9

%



















LIABILITIES AND SHAREHOLDERS' EQUITY


















Noninterest-bearing deposits 


$

26,088,763


24,074,815


8

%










Interest-bearing deposits 



43,502,602


41,302,212


5











Deposits at Cayman Islands office 



237,890


284,443


-16











  Total deposits 



69,829,255


65,661,470


6











Short-term borrowings 



161,631


307,740


-47











Accrued interest and other liabilities 



1,283,430


1,421,067


-10











Long-term borrowings 



7,391,931


5,122,398


44











  Total liabilities 



78,666,247


72,512,675


8











Shareholders' equity:


















   Preferred 



1,231,500


876,796


40


   Common (1)  



10,937,255


9,839,534


11











     Total shareholders' equity 



12,168,755


10,716,330


14











  Total liabilities and shareholders' equity 


$

90,835,002


83,229,005


9

%



















(1)  Reflects accumulated other comprehensive income, net of applicable income tax effect, of $40.3 million at June 30,

       2014 and accumulated other comprehensive loss, net of applicable income tax effect, of $227.8 million at June 30, 2013.

 

M&T BANK CORPORATION

















Condensed Consolidated Balance Sheet, Five Quarter Trend























June 30,


March 31,



December 31,



September 30,



June 30,


Dollars in thousands



2014


2014



2013



2013



2013



















ASSETS


































Cash and due from banks 


$

1,827,197



1,671,052



1,573,361



1,941,944



1,350,015



















Interest-bearing deposits at banks 



3,032,530



3,299,185



1,651,138



1,925,811



2,555,354



















Federal funds sold and agreements

















  to resell securities 



90,239



92,066



99,573



117,809



124,487



















Trading account assets 



313,325



314,807



376,131



371,370



378,235



















Investment securities 



12,120,195



10,364,249



8,796,497



8,309,773



5,210,526



















Loans and leases:


































   Commercial, financial, etc. 



19,105,892



18,896,070



18,705,216



17,911,149



18,021,812


   Real estate - commercial 



26,374,274



26,104,086



26,148,208



26,345,267



26,116,394


   Real estate - consumer 



8,656,766



8,774,095



8,928,221



9,228,003



10,399,749


   Consumer 



10,610,761



10,360,827



10,291,514



10,174,623



11,433,911


     Total loans and leases, net of unearned discount 



64,747,693



64,135,078



64,073,159



63,659,042



65,971,866


        Less: allowance for credit losses 



917,666



916,768



916,676



916,370



927,065



















  Net loans and leases 



63,830,027



63,218,310



63,156,483



62,742,672



65,044,801



















Goodwill 



3,524,625



3,524,625



3,524,625



3,524,625



3,524,625



















Core deposit and other intangible assets 



49,555



58,789



68,851



79,290



89,918



















Other assets 



6,047,309



5,987,277



5,915,732



5,414,191



4,951,044



















  Total assets 


$

90,835,002



88,530,360



85,162,391



84,427,485



83,229,005




































LIABILITIES AND SHAREHOLDERS' EQUITY


































Noninterest-bearing deposits 


$

26,088,763



25,244,200



24,661,007



24,150,771



24,074,815



















Interest-bearing deposits 



43,502,602



43,207,286



42,134,859



42,084,860



41,302,212



















Deposits at Cayman Islands office 



237,890



247,880



322,746



316,510



284,443



















  Total deposits 



69,829,255



68,699,366



67,118,612



66,552,141



65,661,470



















Short-term borrowings 



161,631



230,209



260,455



246,019



307,740



















Accrued interest and other liabilities 



1,283,430



1,462,725



1,368,922



1,491,797



1,421,067



















Long-term borrowings 



7,391,931



6,251,197



5,108,870



5,121,326



5,122,398



















  Total liabilities 



78,666,247



76,643,497



73,856,859



73,411,283



72,512,675



















Shareholders' equity:


































   Preferred 



1,231,500



1,231,500



881,500



879,010



876,796


   Common (1) 



10,937,255



10,655,363



10,424,032



10,137,192



9,839,534



















     Total shareholders' equity 



12,168,755



11,886,863



11,305,532



11,016,202



10,716,330



















  Total liabilities and shareholders' equity 


$

90,835,002



88,530,360



85,162,391



84,427,485



83,229,005




































(1)  Reflects accumulated other comprehensive income, net of applicable income tax effect, of $40.3 million at June 30, 2014, and accumulated other comprehensive loss, net of applicable income tax effect, of $25.3 million at March 31, 2014, $64.2 million at December 31, 2013, $198.1 million at September 30, 2013 and $227.8 million at June 30, 2013.



 

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, 2014 from



June 30




Dollars in millions



2014


2013


2014


June 30,


March 31,



2014


2013


Change in





Balance

Rate


Balance

Rate


Balance

Rate


2013


2014



Balance

Rate


Balance 

Rate


balance


ASSETS






















































Interest-bearing deposits at banks 


$

4,080

.25

%

2,403

.24

%

3,089

.25

%

70

%


32

%


$

3,587

.25

%

1,470

.24

%

144

%




























Federal funds sold and agreements



























  to resell securities 



90

.07


199

.09


100

.07


-55



-9




95

.07


141

.10


-32





























Trading account assets 



84

1.25


86

1.43


71

2.68


-2



18




78

1.91


81

2.45


-4





























Investment securities 



10,959

3.19


5,293

3.34


9,265

3.34


107



18




10,117

3.26


5,546

3.33


82





























Loans and leases, net of unearned discount



























  Commercial, financial, etc. 



18,978

3.34


17,713

3.61


18,476

3.37


7



3




18,728

3.35


17,522

3.64


7


  Real estate - commercial 



26,140

4.22


26,051

4.72


26,143

4.40







26,141

4.31


25,983

4.57


1


  Real estate - consumer 



8,746

4.36


10,806

4.05


8,844

4.19


-19



-1




8,795

4.27


10,973

4.07


-20


  Consumer 



10,479

4.52


11,409

4.58


10,300

4.59


-8



2




10,390

4.56


11,438

4.62


-9


     Total loans and leases, net 



64,343

4.05


65,979

4.32


63,763

4.14


-2



1




64,054

4.09


65,916

4.28


-3





























  Total earning assets 



79,556

3.73


73,960

4.10


76,288

3.87


8



4




77,931

3.80


73,154

4.12


7





























Goodwill 



3,525



3,525



3,525








3,525



3,525































Core deposit and other intangible assets 



53



95



64



-44



-15




59



102



-43





























Other assets 



6,739



5,772



6,788



17



-1




6,763



5,856



15





























  Total assets 


$

89,873



83,352



86,665



8

%


4

%


$

88,278



82,637



7

%


















































































LIABILITIES AND SHAREHOLDERS' EQUITY






















































Interest-bearing deposits



























  NOW accounts 


$

1,026

.13


941

.14


988

.12


9

%


4

%


$

1,007

.13


917

.14


10

%

  Savings deposits 



39,478

.11


36,459

.15


38,358

.12


8



3




38,921

.12


35,930

.16


8


  Time deposits 



3,350

.46


4,210

.71


3,460

.46


-20



-3




3,404

.46


4,323

.73


-21


  Deposits at Cayman Islands office 



339

.21


326

.25


380

.22


4



-11




360

.22


591

.20


-39


     Total interest-bearing deposits 



44,193

.14


41,936

.21


43,186

.15


5



2




43,692

.15


41,761

.22


5





























Short-term borrowings 



220

.05


343

.11


264

.05


-36



-17




242

.05


489

.13


-51


Long-term borrowings 



6,525

3.05


5,051

4.03


5,897

3.47


29



11




6,213

3.25


4,871

4.20


28





























Total interest-bearing liabilities 



50,938

.51


47,330

.62


49,347

.55


8



3




50,147

.53


47,121

.63


6





























Noninterest-bearing deposits 



25,466



23,744



24,141



7



5




24,807



23,352



6





























Other liabilities 



1,430



1,715



1,529



-17



-6




1,479



1,720



-14





























  Total liabilities 



77,834



72,789



75,017



7



4




76,433



72,193



6





























Shareholders' equity 



12,039



10,563



11,648



14



3




11,845



10,444



13





























  Total liabilities and shareholders' equity 


$

89,873



83,352



86,665



8

%


4

%


$

88,278



82,637



7

%























































Net interest spread 




3.22



3.48



3.32










3.27



3.49




Contribution of interest-free funds 




.18



.23



.20










.19



.22




Net interest margin 




3.40

%


3.71

%


3.52

%









3.46

%


3.71

%


 

M&T BANK CORPORATION













Reconciliation of Quarterly GAAP to Non-GAAP Measures







































Three months ended



Six months ended






June 30



June 30






2014


2013



2014


2013


Income statement data













In thousands, except per share













Net income













Net income 



$

284,336


348,466


$

513,353


622,579


Amortization of core deposit and other













  intangible assets (1) 




5,638


7,632



11,783


15,780


Merger-related expenses (1) 




-


4,636



-


7,511


  Net operating income 



$

289,974


360,734


$

525,136


645,870


Earnings per common share













Diluted earnings per common share 



$

1.98


2.55


$

3.59


4.53


Amortization of core deposit and other













  intangible assets (1) 




.04


.06



.09


.12


Merger-related expenses (1) 




-


.04



-


.06


  Diluted net operating earnings per common share 

$

2.02


2.65


$

3.68


4.71


Other expense













Other expense 



$

681,194


598,591


$

1,383,465


1,234,187


Amortization of core deposit and other













  intangible assets  




(9,234)


(12,502)



(19,296)


(25,845)


Merger-related expenses  




-


(7,632)



-


(12,364)


  Noninterest operating expense 



$

671,960


578,457


$

1,364,169


1,195,978


Merger-related expenses













Salaries and employee benefits 



$

-


300


$

-


836


Equipment and net occupancy 




-


489



-


690


Printing, postage and supplies 




-


998



-


1,825


Other costs of operations 




-


5,845



-


9,013


  Total 



$

-


7,632


$

-


12,364


Efficiency ratio













Noninterest operating expense (numerator) 


$

671,960


578,457


$

1,364,169


1,195,978


Taxable-equivalent net interest income 




674,963


683,804



1,337,341


1,346,304


Other income 




456,412


508,689



876,519


941,571


Less:  Gain on bank investment securities 



-


56,457



-


56,457


           Net OTTI losses recognized in earnings 


-


-



-


(9,800)


Denominator 



$

1,131,375


1,136,036


$

2,213,860


2,241,218


Efficiency ratio 




59.39

%

50.92

%


61.62

%

53.36

%



























Balance sheet data













In millions













Average assets













Average assets 



$

89,873


83,352


$

88,278


82,637


Goodwill 




(3,525)


(3,525)



(3,525)


(3,525)


Core deposit and other intangible assets 




(53)


(95)



(59)


(102)


Deferred taxes 




16


28



18


30


  Average tangible assets 



$

86,311


79,760


$

84,712


79,040


Average common equity













Average total equity 



$

12,039


10,563


$

11,845


10,444


Preferred stock 




(1,231)


(876)



(1,152)


(876)


  Average common equity 




10,808


9,687



10,693


9,568


Goodwill 




(3,525)


(3,525)



(3,525)


(3,525)


Core deposit and other intangible assets 




(53)


(95)



(59)


(102)


Deferred taxes 




16


28



18


30


  Average tangible common equity 



$

7,246


6,095


$

7,127


5,971















At end of quarter













Total assets













Total assets 



$

90,835


83,229







Goodwill 




(3,525)


(3,525)







Core deposit and other intangible assets 




(49)


(90)







Deferred taxes 




15


27







  Total tangible assets 



$

87,276


79,641







Total common equity













Total equity 



$

12,169


10,716







Preferred stock 




(1,232)


(877)







Undeclared dividends - cumulative preferred stock 


(3)


(3)







  Common equity, net of undeclared cumulative











    preferred dividends 




10,934


9,836







Goodwill 




(3,525)


(3,525)







Core deposit and other intangible assets 




(49)


(90)







Deferred taxes 




15


27







  Total tangible common equity 



$

7,375


6,248

































(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,






2014


2014


2013


2013


2013


Income statement data














In thousands, except per share














Net income














Net income 



$

284,336


229,017


221,422


294,479


348,466


Amortization of core deposit and other














  intangible assets (1) 




5,638


6,145


6,375


6,489


7,632


Merger-related expenses (1) 




-


-


-


-


4,636


  Net operating income 



$

289,974


235,162


227,797


300,968


360,734


Earnings per common share














Diluted earnings per common share 



$

1.98


1.61


1.56


2.11


2.55


Amortization of core deposit and other














  intangible assets (1) 




.04


.05


.05


.05


.06


Merger-related expenses (1) 




-


-


-


-


.04


  Diluted net operating earnings per common share 

$

2.02


1.66


1.61


2.16


2.65


Other expense














Other expense 



$

681,194


702,271


743,072


658,626


598,591


Amortization of core deposit and other














  intangible assets  




(9,234)


(10,062)


(10,439)


(10,628)


(12,502)


Merger-related expenses  




-


-


-


-


(7,632)


  Noninterest operating expense 



$

671,960


692,209


732,633


647,998


578,457


Merger-related expenses














Salaries and employee benefits 



$

-


-


-


-


300


Equipment and net occupancy 




-


-


-


-


489


Printing, postage and supplies 




-


-


-


-


998


Other costs of operations 




-


-


-


-


5,845


  Total 



$

-


-


-


-


7,632


Efficiency ratio














Noninterest operating expense (numerator) 


$

671,960


692,209


732,633


647,998


578,457


Taxable-equivalent net interest income 




674,963


662,378


672,683


679,213


683,804


Other income 




456,412


420,107


446,246


477,388


508,689


Less:  Gain on bank investment securities 



-


-


-


-


56,457


           Net OTTI losses recognized in earnings


-


-


-


-


-


Denominator 



$

1,131,375


1,082,485


1,118,929


1,156,601


1,136,036


Efficiency ratio 




59.39

%

63.95

%

65.48

%

56.03

%

50.92

%





























Balance sheet data














In millions














Average assets














Average assets 



$

89,873


86,665


85,330


84,011


83,352


Goodwill 




(3,525)


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets 




(53)


(64)


(74)


(84)


(95)


Deferred taxes 




16


20


23


25


28


  Average tangible assets 



$

86,311


83,096


81,754


80,427


79,760


Average common equity














Average total equity 



$

12,039


11,648


11,109


10,881


10,563


Preferred stock 




(1,231)


(1,072)


(881)


(878)


(876)


  Average common equity 




10,808


10,576


10,228


10,003


9,687


Goodwill 




(3,525)


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets 




(53)


(64)


(74)


(84)


(95)


Deferred taxes




16


20


23


25


28


  Average tangible common equity 



$

7,246


7,007


6,652


6,419


6,095
















At end of quarter














Total assets














Total assets 



$

90,835


88,530


85,162


84,427


83,229


Goodwill 




(3,525)


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets 




(49)


(59)


(69)


(79)


(90)


Deferred taxes 




15


19


21


24


27


  Total tangible assets 



$

87,276


84,965


81,589


80,847


79,641


Total common equity














Total equity 



$

12,169


11,887


11,306


11,016


10,716


Preferred stock 




(1,232)


(1,232)


(882)


(879)


(877)


Undeclared dividends - cumulative preferred stock 


(3)


(3)


(3)


(4)


(3)


  Common equity, net of undeclared cumulative












    preferred dividends 




10,934


10,652


10,421


10,133


9,836


Goodwill 




(3,525)


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets 




(49)


(59)


(69)


(79)


(90)


Deferred taxes




15


19


21


24


27


  Total tangible common equity 



$

7,375


7,087


6,848


6,553


6,248






























(1) After any related tax effect.














 

SOURCE M&T Bank Corporation



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http://www.mandtbank.com

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