M&T Bank Corporation Announces Third Quarter Profits

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

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the third quarter of 2013 were $2.11, compared with $2.17 in the year-earlier quarter and $2.55 in the second quarter of 2013.  GAAP-basis net income in the recently completed quarter aggregated $294 million, compared with $293 million and $348 million in the third quarter of 2012 and the second quarter of 2013, respectively.  GAAP-basis net income for the third quarter of 2013 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.39% and 11.06%, respectively, compared with 1.45% and 12.40%, respectively, in the year-earlier quarter and 1.68% and 13.78%, respectively, in 2013's second quarter.

Reflected in the recent quarter's results were after-tax gains of $34 million from loan securitization transactions, or $.26 per diluted common share, while the results for the immediately preceding quarter included net after-tax gains from similar securitization transactions and from sales of investment securities totaling $38 million, or $.29 per diluted common share.  As compared with the third quarter of 2012 and the second quarter of 2013, declines in mortgage banking revenues and higher operating expenses significantly affected the recent quarter's results.

Commenting on M&T's financial performance in the third quarter of 2013, Rene F. Jones, Executive Vice President and Chief Financial Officer, noted, "Profits clearly softened during the quarter relative to our strong second quarter performance.  The higher interest rate environment resulted in a significant reduction in mortgage banking revenues, while operating expenses for the quarter were up as a result of investments we are making in several key areas, including risk management, capital planning and stress testing, regulatory compliance, and our technology and operating infrastructure.  The recent quarter was also marked by continued strengthening of our core capital position, as reflected in the 52 basis point jump in our Tier 1 common ratio from June 30 to September 30, to 9.07%."

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 amounts 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, were $2.16 in the recent quarter, compared with $2.24 and $2.65 in the third quarter of 2012 and the second quarter of 2013, respectively.  Net operating income during the third quarter of 2013 was $301 million, compared with $302 million in the year-earlier quarter and $361 million in 2013's second quarter.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.48% and 17.64%, respectively, in the recent quarter, compared with 1.56% and 21.53%, respectively, in the third quarter of 2012 and 1.81% and 22.72%, respectively, in the second quarter of 2013. 

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income totaled $679 million in the third quarter of 2013, compared with $684 million in the immediately preceding quarter.  That decline was due largely to a 10 basis point narrowing of the net interest margin, partially offset by a $706 million increase in average earning assets.  The narrowing of the net interest margin from 3.71% in the second quarter of 2013 to 3.61% in the recent quarter was largely the result of lower levels of prepayment fees and interest on nonaccrual loans.  Average earning assets rose in the recent quarter as compared with the second quarter of 2013 largely due to purchases of Ginnie Mae mortgage-backed securities.  The $1.7 billion increase in average investment securities also reflected the recent quarter's securitization of approximately $1.0 billion of residential real estate loans guaranteed by the FHA that were previously held in the loan portfolio.  Late in 2013's third quarter, M&T securitized and sold approximately $1.4 billion of automobile loans held in its loan portfolio.  M&T securitized the loans as a result of changing regulatory liquidity and capital requirements.  Taxable-equivalent net interest income in the recent quarter rose $10 million from $669 million in the third quarter of 2012.  That improvement resulted from a $4.0 billion increase in average earning assets, offset in part by a 16 basis point narrowing of the net interest margin that reflects the impact in the recent quarter of significantly higher balances of lower yielding interest-bearing deposits at the Federal Reserve Bank of New York.

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $48 million in the recent quarter, compared with $46 million in the third quarter of 2012 and $57 million in 2013's second quarter.  The provision was equal to net charge-offs in the second and third quarters of 2013, and exceeded net charge-offs by $4 million in the third quarter of 2012.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .29% and .26% in the third quarter of 2013 and 2012, respectively, and .35% in the second quarter of 2013.

Loans classified as nonaccrual declined to $916 million, or 1.44% of total loans outstanding at September 30, 2013, improved from $925 million or 1.44% at September 30, 2012 and $965 million or 1.46% at June 30, 2013.  Assets taken in foreclosure of defaulted loans totaled $89 million at September 30, 2013, compared with $112 million and $82 million at September 30, 2012 and June 30, 2013, respectively.

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 aggregated $916 million at September 30, 2013, compared with $921 million at September 30, 2012 and $927 million at June 30, 2013.  During the recent quarter, the allowance was reduced by $11 million as a result of the securitization and sale of $1.4 billion of automobile loans held in M&T's loan portfolio.  The allowance expressed as a percentage of outstanding loans was 1.44% at each of September 30, 2013 and 2012, compared with 1.41% at June 30, 2013.

Noninterest Income and Expense.  Noninterest income totaled $477 million in the recent quarter, compared with $446 million and $509 million in the third quarter of 2012 and the second quarter of 2013, respectively.  Reflected in those amounts were gains from loan securitization activities of $56 million in the recent quarter and $7 million in the second quarter of 2013.  Also reflected in noninterest income were net pre-tax gains from investment securities of $56 million in the second quarter of 2013, compared with net pre-tax losses of $5 million in the third quarter of 2012.

Excluding gains from loan securitization activities and gains and losses from investment securities in all periods, noninterest income in the third quarter of 2013 aggregated $421 million, compared with $451 million in the year-earlier quarter and $446 million in 2013's second quarter.  The predominant contributors to the decline in such income in the recent quarter as compared with the third quarter of 2012 and the second quarter of 2013 were decreases in residential and commercial mortgage banking revenues.  Those decreases resulted largely from lower origination activities, in addition to a narrowing of gain on sale margins related to residential mortgage banking activities.  As compared with the third quarter of 2012, partially offsetting the lower mortgage banking revenues in the recent quarter was higher trust income, due largely to wealth advisory services.

Noninterest expense in the third quarter of 2013 totaled $659 million, compared with $616 million in the year-earlier quarter and $599 million in the second 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 $648 million in the recent quarter, compared with $602 million in the third quarter of 2012 and $578 million in 2013's second quarter.  The rise in noninterest operating expenses in the recent quarter was largely attributable to higher costs for salaries and professional services.  The higher salaries expenses reflect costs incurred during the quarter to increase M&T's loan servicing capacity to accommodate a subservicing arrangement whereby M&T added approximately $35 billion of residential real estate loans to its subservicing portfolio.  Also contributing to the increased salaries and to the higher professional services expenses in the recent quarter were costs related to risk management, capital planning and stress testing, BSA/AML compliance, and operational and technology initiatives.  Reducing expenses in the second quarter of 2013 was the reversal of a $26 million accrual for a contingent compensation obligation assumed in the May 2011 acquisition of Wilmington Trust that expired. 

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 and merger-related gains), measures the relationship of operating expenses to revenues.  M&T's efficiency ratio was 56.0% in the recent quarter, compared with 53.7% and 50.9% in the year-earlier quarter and the second quarter of 2013, respectively.

Balance Sheet.  M&T had total assets of $84.4 billion at September 30, 2013, compared with $81.1 billion at September 30, 2012.  Loans and leases, net of unearned discount, totaled $63.7 billion at September 30, 2013, compared with $64.1 billion a year earlier.  Total deposits aggregated $66.6 billion at the recent quarter-end, up 4% from $64.0 billion at September 30, 2012. 

Total shareholders' equity rose 11% to $11.0 billion at September 30, 2013 from $9.9 billion a year earlier, representing 13.05% and 12.27%, respectively, of total assets.  Common shareholders' equity was $10.1 billion, or $77.81 per share, at September 30, 2013, compared with $9.1 billion, or $71.17 per share, at September 30, 2012.  Tangible equity per common share rose 18% to $50.32 at September 30, 2013 from $42.80 at September 30, 2012.  Common shareholders' equity per share and tangible equity per common share were $75.98 and $48.26, respectively, at June 30, 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 8.11% at September 30, 2013, compared with 7.04% and 7.85% at September 30, 2012 and June 30, 2013, respectively.  M&T's estimated Tier 1 common ratio, a regulatory capital measure, rose to 9.07% at September 30, 2013, up from 7.46% and 8.55% at September 30, 2012 and June 30, 2013, respectively.  M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under the new capital rules approved in July 2013 on a fully phased-in basis was approximately 8.75% as of September 30, 2013.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss third 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 #76901603.  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 until October 20, 2013 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #76901603.  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






Nine months ended




Amounts in thousands,


September 30






September 30




 except per share


2013


2012


Change




2013


2012


Change



















Performance

































Net income 

$

294,479


293,462


-

%


$

917,058


733,305


25

%

Net income available to common shareholders 


275,356


273,896


1

%



859,000


676,842


27

%


















Per common share:
















  Basic earnings 

$

2.13


2.18


-2

%


$

6.69


5.39


24

%

  Diluted earnings 


2.11


2.17


-3

%



6.64


5.37


24

%

  Cash dividends 

$

.70


.70


-



$

2.10


2.10


-



















Common shares outstanding:
















  Average - diluted (1)


130,265


126,292


3

%



129,312


125,936


3

%

  Period end (2) 


130,241


127,461


2

%



130,241


127,461


2

%


















Return on (annualized):
















  Average total assets 


1.39

%

1.45

%





1.48

%

1.23

%



  Average common shareholders' equity  


11.06

%

12.40

%





11.98

%

10.55

%




















Taxable-equivalent net interest income 

$

679,213


669,256


1

%


$

2,025,517


1,950,978


4

%


















Yield on average earning assets 


3.98

%

4.23

%





4.07

%

4.24

%



Cost of interest-bearing liabilities 


.58

%

.71

%





.61

%

.76

%



Net interest spread


3.40

%

3.52

%





3.46

%

3.48

%



Contribution of interest-free funds 


.21

%

.25

%





.22

%

.25

%



Net interest margin  


3.61

%

3.77

%





3.68

%

3.73

%




















Net charge-offs to average total 
















  net loans (annualized) 


.29

%

.26

%





.29

%

.31

%




















Net operating results (3)

































Net operating income 

$

300,968


302,060


-

%


$

946,838


767,853


23

%

Diluted net operating earnings per common share 


2.16


2.24


-4

%



6.87


5.64


22

%

Return on (annualized):
















  Average tangible assets 


1.48

%

1.56

%





1.59

%

1.35

%



  Average tangible common equity 


17.64

%

21.53

%





19.66

%

19.03

%



Efficiency ratio 


56.03

%

53.73

%





54.27

%

57.11

%

























































At September 30












Loan quality


2013


2012


Change



























Nonaccrual loans 

$

915,871


925,231


-1

%









Real estate and other foreclosed assets



89,203


112,160


-20

%









  Total nonperforming assets 

$

1,005,074


1,037,391


-3

%

























Accruing loans past due 90 days or more (4) 

$

339,792


309,420


10

%


























Government guaranteed loans included in totals
















  above:
















  Nonaccrual loans 

$

68,519


54,583


26

%









  Accruing loans past due 90 days or more 


320,732


280,410


14

%


























Renegotiated loans 

$

259,301


266,526


-3

%


























Acquired accruing loans past due 90 days or more (5) 

$

153,585


161,424


-5

%


























Purchased impaired loans (6):
















  Outstanding customer balance 

$

648,118


978,731


-34

%









  Carrying amount 


357,337


528,001


-32

%


























Nonaccrual loans to total net loans 


1.44

%

1.44

%




























Allowance for credit losses to total loans 


1.44

%

1.44

%













































(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,



September 30,


June 30,


March 31,


December 31,


September 30,

 except per share



2013


2013


2013


2012


2012



















Performance



































Net income 


$

294,479



348,466



274,113



296,193



293,462


Net income available to common shareholders 



275,356



328,557



255,096



276,605



273,896




















Per common share:

















  Basic earnings 


$

2.13



2.56



2.00



2.18



2.18


  Diluted earnings 



2.11



2.55



1.98



2.16



2.17


  Cash dividends 


$

.70



.70



.70



.70



.70




















Common shares outstanding:

















  Average - diluted (1) 




130,265



129,017



128,636



127,800



126,292


  Period end (2) 




130,241



129,464



128,999



128,234



127,461




















Return on (annualized):


















  Average total assets 




1.39

%


1.68

%


1.36

%


1.45

%


1.45

%

  Average common shareholders' equity 




11.06

%


13.78

%


11.10

%


12.10

%


12.40

%



















Taxable-equivalent net interest income 



$

679,213



683,804



662,500



673,929



669,256




















Yield on average earning assets 




3.98

%


4.10

%


4.13

%


4.17

%


4.23

%

Cost of interest-bearing liabilities 




.58

%


.62

%


.64

%


.67

%


.71

%

Net interest spread 




3.40

%


3.48

%


3.49

%


3.50

%


3.52

%

Contribution of interest-free funds 




.21

%


.23

%


.22

%


.24

%


.25

%

Net interest margin 




3.61

%


3.71

%


3.71

%


3.74

%


3.77

%



















Net charge-offs to average total 


















  net loans (annualized) 




.29

%


.35

%


.23

%


.27

%


.26

%



















Net operating results (3)




































Net operating income  



$

300,968



360,734



285,136



304,657



302,060


Diluted net operating earnings per common share 



2.16



2.65



2.06



2.23



2.24


Return on (annualized):


















  Average tangible assets 




1.48

%


1.81

%


1.48

%


1.56

%


1.56

%

  Average tangible common equity 




17.64

%


22.72

%


18.71

%


20.46

%


21.53

%

Efficiency ratio 




56.03

%


50.92

%


55.88

%


53.63

%


53.73

%

































































September 30,


June 30,


March 31,


December 31,


September 30,

Loan quality




2013


2013


2013


2012


2012



















Nonaccrual loans 



$

915,871



964,906



1,052,794



1,013,176



925,231


Real estate and other foreclosed assets 




89,203



82,088



95,680



104,279



112,160


  Total nonperforming assets 



$

1,005,074



1,046,994



1,148,474



1,117,455



1,037,391




















Accruing loans past due 90 days or more (4) 



$

339,792



340,467



331,283



358,397



309,420




















Government guaranteed loans included in totals


















  above:


















  Nonaccrual loans 



$

68,519



69,508



63,385



57,420



54,583


  Accruing loans past due 90 days or more 




320,732



315,281



311,579



316,403



280,410




















Renegotiated loans 



$

259,301



263,351



272,285



271,971



266,526




















Acquired accruing loans past due 90 days or more (5) 


$

153,585



155,686



157,068



166,554



161,424




















Purchased impaired loans (6):


















  Outstanding customer balance 



$

648,118



725,196



790,048



828,571



978,731


  Carrying amount 




357,337



394,697



425,232



447,114



528,001




















Nonaccrual loans to total net loans 




1.44

%


1.46

%


1.60

%


1.52

%


1.44

%



















Allowance for credit losses to total loans 




1.44

%


1.41

%


1.41

%


1.39

%


1.44

%



















(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






Nine months ended






September 30






September 30




Dollars in thousands


2013


2012


Change




2013


2012


Change


















Interest income 

$

742,686


744,851


-

%


$

2,222,868


2,196,332


1

%

Interest expense 


69,578


82,129


-15




216,123


265,238


-19


















Net interest income 


673,108


662,722


2




2,006,745


1,931,094


4


















Provision for credit losses 


48,000


46,000


4




143,000


155,000


-8


















Net interest income after
















   provision for credit losses 


625,108


616,722


1




1,863,745


1,776,094


5


















Other income
















     Mortgage banking revenues 


64,731


106,812


-39




249,096


232,518


7


     Service charges on deposit accounts 


113,839


114,463


-1




336,505


334,334


1


     Trust income  


123,801


115,709


7




370,132


354,937


4


     Brokerage services income 


16,871


14,114


20




49,840


44,187


13


     Trading account and foreign exchange gains 


8,987


8,469


6




27,138


25,278


7


     Gain on bank investment securities 


-


372


-




56,457


9


-


     Other-than-temporary impairment losses 
















        recognized in earnings 


-


(5,672)


-




(9,800)


(33,331)


-


     Equity in earnings of Bayview Lending Group LLC 


(3,881)


(5,183)


-




(9,990)


(16,570)


-


     Other revenues from operations 


153,040


96,649


58




349,581


272,744


28


          Total other income 


477,388


445,733


7




1,418,959


1,214,106


17


















Other expense
















     Salaries and employee benefits 


339,332


321,746


5




1,019,019


991,530


3


     Equipment and net occupancy 


66,220


64,248


3




195,657


194,667


1


     Printing, postage and supplies 


9,752


8,272


18




30,749


31,512


-2


     Amortization of core deposit and other 
















        intangible assets 


10,628


14,085


-25




36,473


46,766


-22


     FDIC assessments 


14,877


23,801


-37




52,010


77,712


-33


     Other costs of operations 


217,817


183,875


18




558,905


540,927


3


          Total other expense 


658,626


616,027


7




1,892,813


1,883,114


1


















Income before income taxes 


443,870


446,428


-1




1,389,891


1,107,086


26


















Applicable income taxes 


149,391


152,966


-2




472,833


373,781


27


















Net income 

$

294,479


293,462


-

%


$

917,058


733,305


25

%

















 

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend



















Three months ended



September 30,


June 30,


March 31,


December 31,


September 30,

Dollars in thousands


2013


2013


2013


2012


2012

















Interest income 

$

742,686



750,207



729,975



745,353



744,851


Interest expense 


69,578



72,620



73,925



77,931



82,129


















Net interest income 


673,108



677,587



656,050



667,422



662,722


















Provision for credit losses 


48,000



57,000



38,000



49,000



46,000


















Net interest income after
















   provision for credit losses 


625,108



620,587



618,050



618,422



616,722


















Other income
















     Mortgage banking revenues 


64,731



91,262



93,103



116,546



106,812


     Service charges on deposit accounts 


113,839



111,717



110,949



112,364



114,463


     Trust income  


123,801



124,728



121,603



116,915



115,709


     Brokerage services income 


16,871



17,258



15,711



14,872



14,114


     Trading account and foreign exchange gains 


8,987



9,224



8,927



10,356



8,469


     Gain on bank investment securities 


-



56,457



-



-



372


     Other-than-temporary impairment losses 
















        recognized in earnings 


-



-



(9,800)



(14,491)



(5,672)


     Equity in earnings of Bayview Lending Group LLC 


(3,881)



(2,453)



(3,656)



(4,941)



(5,183)


     Other revenues from operations 


153,040



100,496



96,045



101,543



96,649


          Total other income 


477,388



508,689



432,882



453,164



445,733


















Other expense
















     Salaries and employee benefits 


339,332



323,136



356,551



323,010



321,746


     Equipment and net occupancy 


66,220



64,278



65,159



62,884



64,248


     Printing, postage and supplies 


9,752



10,298



10,699



10,417



8,272


     Amortization of core deposit and other 
















        intangible assets 


10,628



12,502



13,343



13,865



14,085


     FDIC assessments 


14,877



17,695



19,438



23,398



23,801


     Other costs of operations  


217,817



170,682



170,406



192,572



183,875


          Total other expense 


658,626



598,591



635,596



626,146



616,027


















Income before income taxes 


443,870



530,685



415,336



445,440



446,428


















Applicable income taxes 


149,391



182,219



141,223



149,247



152,966


















Net income 

$

294,479



348,466



274,113



296,193



293,462


















 

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet













September 30




Dollars in thousands



2013


2012


Change











ASSETS


















Cash and due from banks 


$

1,941,944


1,622,928


20

%










Interest-bearing deposits at banks 



1,925,811


411,994


367











Federal funds sold and agreements









  to resell securities 



117,809


-


-











Trading account assets 



371,370


526,844


-30











Investment securities 



8,309,773


6,624,004


25











Loans and leases:


















   Commercial, financial, etc 



17,911,149


16,704,575


7


   Real estate - commercial 



26,345,267


24,970,416


6


   Real estate - consumer



9,228,003


10,808,220


-15


   Consumer 



10,174,623


11,628,744


-13


     Total loans and leases, net of unearned discount 



63,659,042


64,111,955


-1


        Less: allowance for credit losses 



916,370


921,223


-1











  Net loans and leases 



62,742,672


63,190,732


-1











Goodwill 



3,524,625


3,524,625


-











Core deposit and other intangible assets 



79,290


129,628


-39





.






Other assets 



5,414,191


5,054,478


7











  Total assets 


$

84,427,485


81,085,233


4

%



















LIABILITIES AND SHAREHOLDERS' EQUITY


















Noninterest-bearing deposits 


$

24,150,771


22,968,401


5

%










Interest-bearing deposits 



42,084,860


39,636,104


6











Deposits at Cayman Islands office 



316,510


1,402,753


-77











  Total deposits 



66,552,141


64,007,258


4











Short-term borrowings 



246,019


592,154


-58











Accrued interest and other liabilities  



1,491,797


1,570,758


-5











Long-term borrowings 



5,121,326


4,969,536


3











  Total liabilities 



73,411,283


71,139,706


3











Shareholders' equity:


















   Preferred 



879,010


870,416


1


   Common (1) 



10,137,192


9,075,111


12











     Total shareholders' equity 



11,016,202


9,945,527


11











  Total liabilities and shareholders' equity 


$

84,427,485


81,085,233


4

%



















(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $198.1 million


       at September 30, 2013 and $230.1 million at September 30, 2012.











 

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend









September 30,


June 30,



March 31,



December 31,



September 30,


Dollars in thousands



2013


2013



2013



2012



2012



















ASSETS


































Cash and due from banks 


$

1,941,944



1,350,015



1,231,091



1,983,615



1,622,928



















Interest-bearing deposits at banks 



1,925,811



2,555,354



1,304,770



129,945



411,994



















Federal funds sold and agreements

















  to resell securities 



117,809



124,487



594,976



3,000



-



















Trading account assets 



371,370



378,235



420,144



488,966



526,844



















Investment securities 



8,309,773



5,210,526



5,660,831



6,074,361



6,624,004



















Loans and leases:


































   Commercial, financial, etc 



17,911,149



18,021,812



17,469,138



17,776,953



16,704,575


   Real estate - commercial 



26,345,267



26,116,394



25,944,819



25,993,790



24,970,416


   Real estate - consumer 



9,228,003



10,399,749



11,094,577



11,240,837



10,808,220


   Consumer 



10,174,623



11,433,911



11,415,733



11,559,377



11,628,744


     Total loans and leases, net of unearned discount 



63,659,042



65,971,866



65,924,267



66,570,957



64,111,955


        Less: allowance for credit losses 



916,370



927,065



927,117



925,860



921,223



















  Net loans and leases 



62,742,672



65,044,801



64,997,150



65,645,097



63,190,732



















Goodwill 



3,524,625



3,524,625



3,524,625



3,524,625



3,524,625



















Core deposit and other intangible assets 



79,290



89,918



102,420



115,763



129,628



















Other assets 



5,414,191



4,951,044



4,975,950



5,043,431



5,054,478



















  Total assets 


$

84,427,485



83,229,005



82,811,957



83,008,803



81,085,233




































LIABILITIES AND SHAREHOLDERS' EQUITY


































Noninterest-bearing deposits 


$

24,150,771



24,074,815



23,603,971



24,240,802



22,968,401



















Interest-bearing deposits 



42,084,860



41,302,212



41,219,679



40,325,932



39,636,104



















Deposits at Cayman Islands office 



316,510



284,443



266,076



1,044,519



1,402,753



















  Total deposits 



66,552,141



65,661,470



65,089,726



65,611,253



64,007,258



















Short-term borrowings 



246,019



307,740



374,593



1,074,482



592,154



















Accrued interest and other liabilities 



1,491,797



1,421,067



1,530,118



1,512,717



1,570,758



















Long-term borrowings 



5,121,326



5,122,398



5,394,563



4,607,758



4,969,536



















  Total liabilities 



73,411,283



72,512,675



72,389,000



72,806,210



71,139,706



















Shareholders' equity:


































   Preferred 



879,010



876,796



874,627



872,500



870,416


   Common (1)  



10,137,192



9,839,534



9,548,330



9,330,093



9,075,111



















     Total shareholders' equity 



11,016,202



10,716,330



10,422,957



10,202,593



9,945,527



















  Total liabilities and shareholders' equity 


$

84,427,485



83,229,005



82,811,957



83,008,803



81,085,233




































(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $198.1 million at September 30, 2013, $227.8 million


         at June 30, 2013, $226.0 million at March 31, 2013, $240.3 million at December 31, 2012 and $230.1 million at September 30, 2012.



















 

M&T BANK CORPORATION

Condensed Consolidated Average Balance Sheet

 and Annualized Taxable-equivalent Rates




































Three months ended


Change in balance



Nine months ended







September 30,


September 30,


June 30,


September 30, 2013 from



September 30




Dollars in millions



2013


2012


2013


September 30,


June 30,



2013


2012


Change in





Balance


Rate


Balance


Rate


Balance


Rate


2012


2013



Balance


Rate


Balance 


Rate


balance


ASSETS
































































Interest-bearing deposits at banks 


$

2,646


.25

%

298


.18

%

2,403


.24

%

786

%


10

%


$

1,866


.24

%

614


.24

%

204

%

































Federal funds sold and agreements
































  to resell securities 



117


.08


4


.55


199


.09


-



-41




133


.09


4


.55


-


































Trading account assets 



67


1.27


94


1.13


86


1.43


-29



-23




76


2.10


96


1.45


-20


































Investment securities 



6,979


3.31


6,811


3.39


5,293


3.34


2



32




6,030


3.33


7,195


3.47


-16


































Loans and leases, net of unearned discount
































  Commercial, financial, etc. 



17,798


3.50


16,504


3.73


17,713


3.61


8



-




17,615


3.59


16,115


3.72


9


  Real estate - commercial 



26,129


4.51


24,995


4.61


26,051


4.72


5



-




26,033


4.55


24,764


4.56


5


  Real estate - consumer 



9,636


4.17


10,296


4.29


10,806


4.05


-6



-11




10,522


4.10


9,270


4.43


14


  Consumer 



11,295


4.57


11,660


4.76


11,409


4.58


-3



-1




11,389


4.61


11,778


4.79


-3


     Total loans and leases, net 



64,858


4.21


63,455


4.34


65,979


4.32


2



-2




65,559


4.26


61,927


4.37


6


































  Total earning assets 



74,667


3.98


70,662


4.23


73,960


4.10


6



1




73,664


4.07


69,836


4.24


5


































Goodwill 



3,525




3,525




3,525




-



-




3,525




3,525




-


































Core deposit and other intangible assets 



84




136




95




-38



-12




96




152




-37


































Other assets 



5,735




6,109




5,772




-6



-1




5,815




6,005




-3


































  Total assets


$

84,011




80,432




83,352




4

%


1

%


$

83,100




79,518




5

%

































































































LIABILITIES AND SHAREHOLDERS' EQUITY
































































Interest-bearing deposits
































  NOW accounts 


$

924


.14


875


.15


941


.14


6

%


-2

%


$

919


.14


848


.16


8

%

  Savings deposits 



36,990


.15


33,298


.20


36,459


.15


11



1




36,287


.15


32,999


.21


10


  Time deposits 



3,928


.62


5,164


.84


4,210


.71


-24



-7




4,190


.70


5,555


.88


-25


  Deposits at Cayman Islands office 



392


.22


702


.19


326


.25


-44



20




524


.20


552


.19


-5


     Total interest-bearing deposits  



42,234


.19


40,039


.28


41,936


.21


5



1




41,920


.21


39,954


.30


5


































Short-term borrowings 



299


.08


976


.15


343


.11


-69



-13




425


.12


893


.15


-52


Long-term borrowings 



5,010


3.89


5,006


4.27


5,051


4.03


-



-1




4,918


4.09


5,869


3.96


-16


































Total interest-bearing liabilities 



47,543


.58


46,021


.71


47,330


.62


3



-




47,263


.61


46,716


.76


1


































Noninterest-bearing deposits 



23,998




22,704




23,744




6



1




23,570




21,240




11


































Other liabilities 



1,589




1,918




1,715




-17



-7




1,676




1,994




-16


































  Total liabilities 



73,130




70,643




72,789




4



-




72,509




69,950




4


































Shareholders' equity 



10,881




9,789




10,563




11



3




10,591




9,568




11


































  Total liabilities and shareholders' equity 


$

84,011




80,432




83,352




4

%


1

%


$

83,100




79,518




5

%

































































Net interest spread 





3.40




3.52




3.48











3.46




3.48




Contribution of interest-free funds 





.21




.25




.23











.22




.25




Net interest margin  





3.61

%



3.77

%



3.71

%










3.68

%



3.73

%



































 

M&T BANK CORPORATION

Reconciliation of Quarterly GAAP to Non-GAAP Measures































Three months ended



Nine months ended






September 30



September 30






2013


2012



2013


2012


Income statement data











In thousands, except per share











Net income











Net income 

$

294,479


293,462


$

917,058


733,305


Amortization of core deposit and other











  intangible assets (1) 


6,489


8,598



22,269


28,547


Merger-related expenses (1) 


-


-



7,511


6,001


  Net operating income 

$

300,968


302,060


$

946,838


767,853


Earnings per common share











Diluted earnings per common share 

$

2.11


2.17


$

6.64


5.37


Amortization of core deposit and other











  intangible assets (1) 


.05


.07



.17


.22


Merger-related expenses (1) 


-


-



.06


.05


  Diluted net operating earnings per common share 

$

2.16


2.24


$

6.87


5.64


Other expense











Other expense 

$

658,626


616,027


$

1,892,813


1,883,114


Amortization of core deposit and other











  intangible assets 


(10,628)


(14,085)



(36,473)


(46,766)


Merger-related expenses 


-


-



(12,364)


(9,879)


  Noninterest operating expense 

$

647,998


601,942


$

1,843,976


1,826,469


Merger-related expenses











Salaries and employee benefits 

$

-


-


$

836


4,997


Equipment and net occupancy 


-


-



690


15


Printing, postage and supplies 


-


-



1,825


-


Other costs of operations 


-


-



9,013


4,867


  Total 

$

-


-


$

12,364


9,879


Efficiency ratio











Noninterest operating expense (numerator) 

$

647,998


601,942


$

1,843,976


1,826,469


Taxable-equivalent net interest income 


679,213


669,256



2,025,517


1,950,978


Other income 


477,388


445,733



1,418,959


1,214,106


Less:  Gain on bank investment securities 


-


372



56,457


9


           Net OTTI losses recognized in earnings 


-


(5,672)



(9,800)


(33,331)


Denominator 

$

1,156,601


1,120,289


$

3,397,819


3,198,406


Efficiency ratio 


56.03

%

53.73

%


54.27

%

57.11

%



























Balance sheet data











In millions











Average assets











Average assets 

$

84,011


80,432


$

83,100


79,518


Goodwill 


(3,525)


(3,525)



(3,525)


(3,525)


Core deposit and other intangible assets 


(84)


(136)



(96)


(152)


Deferred taxes 


25


39



28


44


  Average tangible assets 

$

80,427


76,810


$

79,507


75,885


Average common equity











Average total equity 

$

10,881


9,789


$

10,591


9,568


Preferred stock 


(878)


(870)



(876)


(868)


  Average common equity 


10,003


8,919



9,715


8,700


Goodwill 


(3,525)


(3,525)



(3,525)


(3,525)


Core deposit and other intangible assets 


(84)


(136)



(96)


(152)


Deferred taxes 


25


39



28


44


  Average tangible common equity 

$

6,419


5,297


$

6,122


5,067















At end of quarter











Total assets











Total assets 

$

84,427


81,085







Goodwill 


(3,525)


(3,525)







Core deposit and other intangible assets 


(79)


(129)







Deferred taxes 


24


38







  Total tangible assets 

$

80,847


77,469







Total common equity











Total equity 

$

11,016


9,945







Preferred stock 


(879)


(870)







Undeclared dividends - cumulative preferred stock 


(4)


(4)







  Common equity, net of undeclared cumulative











    preferred dividends 


10,133


9,071







Goodwill 


(3,525)


(3,525)







Core deposit and other intangible assets 


(79)


(129)







Deferred taxes 


24


38







  Total tangible common equity 

$

6,553


5,455

































(1) After any related tax effect.














 

M&T BANK CORPORATION

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















































Three months ended






September 30,


June 30,


March 31,


December 31,


September 30,






2013


2013


2013


2012


2012


Income statement data












In thousands, except per share












Net income












Net income 

$

294,479


348,466


274,113


296,193


293,462


Amortization of core deposit and other












  intangible assets (1) 


6,489


7,632


8,148


8,464


8,598


Merger-related expenses (1) 


-


4,636


2,875


-


-


  Net operating income 

$

300,968


360,734


285,136


304,657


302,060


Earnings per common share












Diluted earnings per common share 

$

2.11


2.55


1.98


2.16


2.17


Amortization of core deposit and other












  intangible assets (1) 


.05


.06


.06


.07


.07


Merger-related expenses (1) 


-


.04


.02


-


-


  Diluted net operating earnings per common share 

$

2.16


2.65


2.06


2.23


2.24


Other expense












Other expense 

$

658,626


598,591


635,596


626,146


616,027


Amortization of core deposit and other












  intangible assets  


(10,628)


(12,502)


(13,343)


(13,865)


(14,085)


Merger-related expenses  


-


(7,632)


(4,732)


-


-


  Noninterest operating expense 

$

647,998


578,457


617,521


612,281


601,942


Merger-related expenses












Salaries and employee benefits 

$

-


300


536


-


-


Equipment and net occupancy 


-


489


201


-


-


Printing, postage and supplies 


-


998


827


-


-


Other costs of operations 


-


5,845


3,168


-


-


  Total 

$

-


7,632


4,732


-


-


Efficiency ratio












Noninterest operating expense (numerator) 

$

647,998


578,457


617,521


612,281


601,942


Taxable-equivalent net interest income 


679,213


683,804


662,500


673,929


669,256


Other income 


477,388


508,689


432,882


453,164


445,733


Less:  Gain on bank investment securities 


-


56,457


-


-


372


           Net OTTI losses recognized in earnings


-


-


(9,800)


(14,491)


(5,672)


Denominator 

$

1,156,601


1,136,036


1,105,182


1,141,584


1,120,289


Efficiency ratio


56.03

%

50.92

%

55.88

%

53.63

%

53.73

%





























Balance sheet data












In millions












Average assets












Average assets 

$

84,011


83,352


81,913


81,366


80,432


Goodwill 


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets 


(84)


(95)


(109)


(122)


(136)


Deferred taxes


25


28


32


36


39


  Average tangible assets 

$

80,427


79,760


78,311


77,755


76,810


Average common equity












Average total equity 

$

10,881


10,563


10,322


10,105


9,789


Preferred stock 


(878)


(876)


(874)


(872)


(870)


  Average common equity 


10,003


9,687


9,448


9,233


8,919


Goodwill 


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets 


(84)


(95)


(109)


(122)


(136)


Deferred taxes 


25


28


32


36


39


  Average tangible common equity 

$

6,419


6,095


5,846


5,622


5,297
















At end of quarter












Total assets












Total assets 

$

84,427


83,229


82,812


83,009


81,085


Goodwill 


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets 


(79)


(90)


(102)


(116)


(129)


Deferred taxes 


24


27


30


34


38


  Total tangible assets 

$

80,847


79,641


79,215


79,402


77,469


Total common equity












Total equity 

$

11,016


10,716


10,423


10,203


9,945


Preferred stock 


(879)


(877)


(875)


(873)


(870)


Undeclared dividends - cumulative preferred stock 


(4)


(3)


(3)


(3)


(4)


  Common equity, net of undeclared cumulative












    preferred dividends 


10,133


9,836


9,545


9,327


9,071


Goodwill 


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets 


(79)


(90)


(102)


(116)


(129)


Deferred taxes 


24


27


30


34


38


  Total tangible common equity 

$

6,553


6,248


5,948


5,720


5,455






























(1) After any related tax effect.















 

SOURCE M&T Bank Corporation



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