M&T Bank Corporation Announces Third Quarter Profits

Oct 17, 2013, 08:00 ET from M&T Bank Corporation

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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