M&T Bank Corporation Issues Revised 2013 Results Based On Litigation Settlement

BUFFALO, N.Y., Feb. 12, 2014 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported that on February 10, 2014 it reached a settlement in the previously disclosed matter of Mennen, et al v. Mennen, Wilmington Trust Company, et al that was scheduled for a trial to commence yesterday in the Delaware Chancery Court.  Following that settlement, M&T recognized an increase to its reserve for litigation as of December 31, 2013 of $40 million that reduced net income from that which M&T reported on January 17, 2014 by $24 million.  The impact on diluted earnings per common share was $.18 for each of the quarter and the year ended December 31, 2013.

The effect of this increased reserve on M&T's financial information as of and for the three months and full-year ended December 31, 2013 is included in the accompanying tables.

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.

 

 

M&T BANK CORPORATION

Impact on Previously Reported Financial Information















Three months ended



Year ended

Dollars in thousands,


December 31, 2013



December 31, 2013

 except per share


Initially


As



Initially


As



Reported


Revised



Reported


Revised











Other costs of operations 

$

261,422


301,422


$

820,327


860,327

Income before income taxes 


367,658


327,658



1,757,549


1,717,549

Applicable income taxes 


121,936


106,236



594,769


579,069

Net income  


245,722


221,422



1,162,780


1,138,480

Net income available to common shareholders 


227,449


203,451



1,086,481


1,062,496

Diluted earnings per common share 


1.74


1.56



8.38


8.20

































At December 31, 2013








Initially


As








Reported


Revised














Other assets 

$

5,900,032


5,915,732






Accrued interest and other liabilities 


1,328,922


1,368,922






Total shareholders' equity 


11,329,832


11,305,532






Tangible common equity to tangible assets ratio 


8.42

%

8.39

%





Estimated Tier 1 common ratio 


9.25

%

9.22

%





Estimated Common Equity Tier 1 ratio (Basel III) 


9.01

%

8.98

%





 

M&T BANK CORPORATION

Financial Highlights





Three months ended







Year ended




Amounts in thousands,



December 31







December 31




 except per share



2013


2012


Change





2013


2012


Change




















Performance




































Net income 


$

221,422


296,193


-25

%


$

1,138,480


1,029,498


11

%

Net income available to common shareholders 



203,451


276,605


-26

%



1,062,496


953,429


11

%



















Per common share:


















  Basic earnings


$

1.57


2.18


-28

%


$

8.26


7.57


9

%

  Diluted earnings 



1.56


2.16


-28

%



8.20


7.54


9

%

  Cash dividends 


$

.70


.70


-




$

2.80


2.80


-




















Common shares outstanding:


















  Average - diluted (1) 



130,464


127,800


2

%



129,603


126,405


3

%

  Period end (2) 



130,564


128,234


2

%



130,564


128,234


2

%



















Return on (annualized):


















  Average total assets 



1.03

%

1.45

%






1.36

%

1.29

%



  Average common shareholders' equity  



7.99

%

12.10

%






10.93

%

10.96

%





















Taxable-equivalent net interest income 


$

672,683


673,929


-




$

2,698,200


2,624,907


3

%



















Yield on average earning assets 



3.92

%

4.17

%






4.03

%

4.22

%



Cost of interest-bearing liabilities 



.56

%

.67

%






.60

%

.74

%



Net interest spread 



3.36

%

3.50

%






3.43

%

3.48

%



Contribution of interest-free funds 



.20

%

.24

%






.22

%

.25

%



Net interest margin 



3.56

%

3.74

%






3.65

%

3.73

%





















Net charge-offs to average total 


















  net loans (annualized) 



.26

%

.27

%






.28

%

.30

%





















Net operating results (3)




































Net operating income  


$

227,797


304,657


-25

%


$

1,174,635


1,072,510


10

%

Diluted net operating earnings per common share 



1.61


2.23


-28

%



8.48


7.88


8

%

Return on (annualized):


















  Average tangible assets 



1.11

%

1.56

%






1.47

%

1.40

%



  Average tangible common equity 



12.67

%

20.46

%






17.79

%

19.42

%



Efficiency ratio 



65.48

%

53.63

%






57.05

%

56.19

%







































(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.

 

M&T BANK CORPORATION

Condensed Consolidated Statement of Income



















Three months ended






Year ended






December 31






December 31




Dollars in thousands


2013


2012


Change




2013


2012


Change


















Interest income 

$

734,466


745,353


-1

%


$

2,957,334


2,941,685


1

%

Interest expense 


67,982


77,931


-13




284,105


343,169


-17


















Net interest income 


666,484


667,422


-




2,673,229


2,598,516


3


















Provision for credit losses 


42,000


49,000


-14




185,000


204,000


-9


















Net interest income after
















   provision for credit losses 


624,484


618,422


1




2,488,229


2,394,516


4


















Other income
















     Mortgage banking revenues 


82,169


116,546


-29




331,265


349,064


-5


     Service charges on deposit accounts 


110,436


112,364


-2




446,941


446,698


-


     Trust income 


125,876


116,915


8




496,008


471,852


5


     Brokerage services income 


15,807


14,872


6




65,647


59,059


11


     Trading account and foreign exchange gains 


13,690


10,356


32




40,828


35,634


15


     Gain on bank investment securities 


-


-


-




56,457


9


-


     Other-than-temporary impairment losses 
















        recognized in earnings 


-


(14,491)


-




(9,800)


(47,822)


-


     Equity in earnings of Bayview Lending Group LLC 


(6,136)


(4,941)


-




(16,126)


(21,511)


-


     Other revenues from operations 


104,404


101,543


3




453,985


374,287


21


          Total other income 


446,246


453,164


-2




1,865,205


1,667,270


12


















Other expense
















     Salaries and employee benefits 


336,159


323,010


4




1,355,178


1,314,540


3


     Equipment and net occupancy 


68,670


62,884


9




264,327


257,551


3


     Printing, postage and supplies 


8,808


10,417


-15




39,557


41,929


-6


     Amortization of core deposit and other 
















        intangible assets 


10,439


13,865


-25




46,912


60,631


-23


     FDIC assessments 


17,574


23,398


-25




69,584


101,110


-31


     Other costs of operations 


301,422


192,572


57




860,327


733,499


17


          Total other expense 


743,072


626,146


19




2,635,885


2,509,260


5


















Income before income taxes 


327,658


445,440


-26




1,717,549


1,552,526


11


















Applicable income taxes 


106,236


149,247


-29




579,069


523,028


11


















Net income 

$

221,422


296,193


-25

%


$

1,138,480


1,029,498


11

%

 

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet













December 31




Dollars in thousands



2013


2012


Change











ASSETS


















Cash and due from banks 


$

1,573,361


1,983,615


-21

%










Interest-bearing deposits at banks 



1,651,138


129,945


-











Federal funds sold and agreements









  to resell securities 



99,573


3,000


-











Trading account assets 



376,131


488,966


-23











Investment securities 



8,796,497


6,074,361


45











Loans and leases:


















   Commercial, financial, etc 



18,705,216


17,776,953


5


   Real estate - commercial 



26,148,208


25,993,790


1


   Real estate - consumer 



8,928,221


11,240,837


-21


   Consumer 



10,291,514


11,559,377


-11


     Total loans and leases, net of unearned discount 



64,073,159


66,570,957


-4


        Less: allowance for credit losses 



916,676


925,860


-1











  Net loans and leases 



63,156,483


65,645,097


-4











Goodwill 



3,524,625


3,524,625


-











Core deposit and other intangible assets 



68,851


115,763


-41











Other assets 



5,915,732


5,043,431


17











  Total assets 


$

85,162,391


83,008,803


3

%



















LIABILITIES AND SHAREHOLDERS' EQUITY


















Noninterest-bearing deposits 


$

24,661,007


24,240,802


2

%










Interest-bearing deposits 



42,134,859


40,325,932


4











Deposits at Cayman Islands office 



322,746


1,044,519


-69











  Total deposits 



67,118,612


65,611,253


2











Short-term borrowings 



260,455


1,074,482


-76











Accrued interest and other liabilities 



1,368,922


1,512,717


-10











Long-term borrowings 



5,108,870


4,607,758


11











  Total liabilities 



73,856,859


72,806,210


1











Shareholders' equity:


















   Preferred 



881,500


872,500


1


   Common (1) 



10,424,032


9,330,093


12











     Total shareholders' equity 



11,305,532


10,202,593


11











  Total liabilities and shareholders' equity 


$

85,162,391


83,008,803


3

%



















(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $64.2 million

       at December 31, 2013 and $240.3 million at December 31, 2012.

 

M&T BANK CORPORATION

Reconciliation of GAAP to Non-GAAP Measures































Three months ended



Year ended






December 31



December 31






2013


2012



2013


2012


Income statement data











In thousands, except per share











Net income











Net income 

$

221,422


296,193


$

1,138,480


1,029,498


Amortization of core deposit and other











  intangible assets (1) 


6,375


8,464



28,644


37,011


Merger-related expenses (1)


-


-



7,511


6,001


  Net operating income 

$

227,797


304,657


$

1,174,635


1,072,510


Earnings per common share











Diluted earnings per common share 

$

1.56


2.16


$

8.20


7.54


Amortization of core deposit and other











  intangible assets (1) 


.05


.07



.22


.29


Merger-related expenses (1) 


-


-



.06


.05


  Diluted net operating earnings per common share

$

1.61


2.23


$

8.48


7.88


Other expense











Other expense 

$

743,072


626,146


$

2,635,885


2,509,260


Amortization of core deposit and other











  intangible assets  


(10,439)


(13,865)



(46,912)


(60,631)


Merger-related expenses 


-


-



(12,364)


(9,879)


  Noninterest operating expense 

$

732,633


612,281


$

2,576,609


2,438,750


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) 

$

732,633


612,281


$

2,576,609


2,438,750


Taxable-equivalent net interest income 


672,683


673,929



2,698,200


2,624,907


Other income 


446,246


453,164



1,865,205


1,667,270


Less:  Gain on bank investment securities 


-


-



56,457


9


           Net OTTI losses recognized in earnings 


-


(14,491)



(9,800)


(47,822)


Denominator 

$

1,118,929


1,141,584


$

4,516,748


4,339,990


Efficiency ratio 


65.48

%

53.63

%


57.05

%

56.19

%



























Balance sheet data











In millions











At end of quarter











Total assets











Total assets 

$

85,162


83,009







Goodwill 


(3,525)


(3,525)







Core deposit and other intangible assets 


(69)


(116)







Deferred taxes 


21


34







  Total tangible assets 

$

81,589


79,402







Total common equity











Total equity 

$

11,306


10,203







Preferred stock 


(882)


(873)







Undeclared dividends - cumulative preferred stock 


(3)


(3)







  Common equity, net of undeclared cumulative











    preferred dividends 


10,421


9,327







Goodwill 


(3,525)


(3,525)







Core deposit and other intangible assets 


(69)


(116)







Deferred taxes 


21


34







  Total tangible common equity 

$

6,848


5,720

































(1) After any related tax effect.

 

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

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

 

SOURCE M&T Bank Corporation



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