M&T Bank Corporation Announces Third Quarter Profits

Oct 20, 2010, 08:17 ET from M&T Bank Corporation

BUFFALO, N.Y., Oct. 20 /PRNewswire-FirstCall/ -- M&T Bank Corporation ("M&T")(NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2010.

GAAP Results of Operations.  Diluted  earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the third quarter of 2010 rose 53% to $1.48 from $.97 in the year-earlier quarter and were 1% above the $1.46 earned in the second quarter of 2010.  GAAP-basis net income in the recent quarter aggregated $192 million, up from $128 million and $189 million in the third quarter of 2009 and the second 2010 quarter, respectively.  GAAP-basis net income for the third quarter of 2010 expressed as an annualized rate of return on average assets and average common stockholders' equity was 1.12% and 9.56%, respectively, compared with .73% and 6.72%, respectively, in the year-earlier quarter and 1.11% and 9.67%, respectively, in the second quarter of 2010.

Commenting on M&T's financial results in the recent quarter, Rene F. Jones, Executive Vice President and Chief Financial Officer, noted, "Revenues and net income held up nicely this quarter and were each improved from a year-earlier, despite lower fee income from deposit service charges resulting from the recently adopted changes in regulation.  Once again, credit costs remained well-controlled.  Customer loan balances charged off during the recent quarter declined by $49 million, or 34%, from last year's third quarter.  This represents a welcome sign of the improvement in economic conditions relative to a year ago."

The recent quarter's earnings as compared with the third quarter of 2009 reflect higher net interest income, resulting from a widening of the net interest margin, and a lower provision for credit losses.  Also contributing to the improved performance as compared with the year-earlier quarter were lower other-than-temporary impairment charges on certain available-for-sale investment securities, which after applicable tax effect totaled $6 million and $29 million during the quarters ended September 30, 2010 and 2009, respectively.  Reflected in the results for the third quarter of 2009 were net merger-related gains of $9 million (after-tax), or $.08 of diluted earnings per common share, related to 2009 acquisitions.  As compared with the second quarter of 2010, a recent quarter rise in mortgage banking revenues and lower other-than-temporary impairment charges on available-for-sale investment securities were partially offset by a decline in service charges on deposit accounts.

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 expenses and gains 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, rose for the sixth consecutive quarter, totaling $1.55 in the recent quarter, improved from $.98 in the third quarter of 2009 and $1.53 in the second quarter of 2010.  Net operating income during the third quarter of 2010 was $200 million, up from $129 million and $198 million in the third quarter of 2009 and the second quarter of 2010, respectively.  Expressed as an annualized rate of return on average tangible assets and average tangible common stockholders' equity, net operating income was 1.24% and 19.58%, respectively, in the recent quarter, compared with .78% and 14.87% in the year-earlier quarter and 1.23% and 20.36% in the second quarter of 2010.

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income totaled $576 million in the third quarter of 2010, up from $553 million in the year-earlier period and $573 million in the second quarter of 2010.  The improvement in such income from the third quarter of 2009 reflects a 26 basis point widening of the net interest margin, which rose to 3.87% from 3.61%.  As compared with the second quarter of 2010, a 3 basis point improvement in the recent quarter's net interest margin was partly offset by a 1% decline in average earning assets.

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $93 million in the recent quarter, compared with $154 million in the third quarter of 2009 and $85 million in 2010's second quarter.  Net charge-offs of loans totaled $93 million during the third quarter of 2010, compared with $141 million and $82 million in the quarters ended September 30, 2009 and June 30, 2010, respectively.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .73% and 1.07% in the third quarter of 2010 and 2009, respectively, and .64% in the second quarter of 2010.

Loans classified as nonaccrual totaled $1.10 billion, or 2.16% of total loans at September 30, 2010, compared with $1.23 billion or 2.35% a year earlier and $1.09 billion or 2.13% at June 30, 2010.  Assets taken in foreclosure of defaulted loans were $193 million at each of June 30 and September 30, 2010, up from $85 million at September 30, 2009.  The higher level of such assets at the two most recent quarter-ends resulted from the second quarter 2010 transfer of $98 million of collateral related to a single commercial real estate loan.  The ratio of nonperforming assets to total loans plus real estate and other foreclosed assets was 2.53% at September 30, 2010, compared with 2.51% and 2.50% at September 30, 2009 and June 30, 2010, respectively.

Loans past due 90 days or more and accruing interest totaled $215 million at the end of the recent quarter, including loans guaranteed by government-related entities of $194 million.  Such past due loans were $183 million and $203 million at September 30, 2009 and June 30, 2010, respectively, including $173 million and $188 million of government guaranteed loans at those respective dates.

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.  Reflecting those analyses, the allowance for credit losses was $895 million at each of June 30 and September 30, 2010, compared with $868 million at September 30, 2009.  That allowance expressed as a percentage of outstanding loans was 1.76% at the recent quarter-end, compared with 1.66% at September 30, 2009 and 1.75% at June 30, 2010.  Beginning in 2009, GAAP requires that expected credit losses associated with loans obtained in an acquisition be reflected in the estimation of loan fair value as of each respective acquisition date and prohibits any carry-over of the acquired entity's allowance for credit losses.  Excluding amounts related to loans obtained in 2009 acquisition transactions, the allowance-to-legacy loan ratio was 1.86% at the two most recent quarter-ends, compared with 1.81% at September 30, 2009.

Noninterest Income and Expense.  Noninterest income totaled $290 million in the recent quarter, compared with $278 million and $274 million in the third quarter of 2009 and the second quarter of 2010, respectively.  Reflected in those amounts were net losses from investment securities of $8 million, $47 million and $22 million, each predominantly due to other-than-temporary impairment charges.  During each of those quarters, such charges reflected write-downs of certain of M&T's holdings of privately issued collateralized mortgage obligations and collateralized debt obligations backed by pooled trust preferred securities.  In addition, during 2010's second quarter, other-than-temporary impairment charges included a $12 million write-down of American Depositary Shares of Allied Irish Banks, p.l.c., which were obtained in M&T's acquisition of Allfirst Financial Inc. in 2003.  Excluding gains and losses from investment securities and a pre-tax merger-related gain of $29 million in the third quarter of 2009, noninterest income in the third quarter of 2010 aggregated $298 million, up from $296 million in each of the third quarter of 2009 and the second 2010 quarter.  The higher level of noninterest income in the recent quarter resulted largely from higher mortgage banking revenues that were largely offset by declines in service charges on deposit accounts.  The lower level of deposit service charge revenues was attributable to new regulations that went into effect July 1, 2010 for new customers and August 15, 2010 for pre-existing customers.  Such regulations require depositors to elect to be subject to fees for certain deposit account services.

Noninterest expense in the third quarter of 2010 aggregated $480 million, compared with $500 million in the year-earlier quarter and $476 million in the second quarter of 2010.  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 these expenses, noninterest operating expenses were $467 million in the recent quarter, compared with $469 million in the third quarter of 2009 and $461 million in 2010's second quarter.  

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 expenses and gains), measures the relationship of operating expenses to revenues.  M&T's efficiency ratio was 53.4% in the recent quarter, compared with 55.2% and 53.1% in the year-earlier quarter and the second quarter of 2010, respectively.  

Balance Sheet.  M&T had total assets of $68.2 billion at September 30, 2010, compared with $69.0 billion at September 30, 2009.  Loans and leases, net of unearned discount, were $50.8 billion at September 30, 2010, down 3% from $52.2 billion a year earlier.  Total deposits aggregated $48.7 billion at the recent quarter-end, up 4% from $46.9 billion at September 30, 2009.  Reflecting a $1.9 billion or 15% increase in noninterest-bearing deposits, deposits at domestic offices rose $2.5 billion, or 5%, to $48.0 billion at the recent quarter-end from $45.5 billion at September 30, 2009.  

Total stockholders' equity rose 8% to $8.2 billion at September 30, 2010 from $7.6 billion a year earlier, representing 12.06% and 11.03%, respectively, of total assets.  Common stockholders' equity was $7.5 billion, or $62.69 per share, at September 30, 2010, compared with $6.9 billion, or $58.22 per share, at September 30, 2009.  Tangible equity per common share rose to $32.23 at September 30, 2010 from $27.03 at September 30, 2009.  In the calculation of tangible equity per common share, common stockholders' 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 5.96% at September 30, 2010, compared with 4.89% and 5.75% at September 30, 2009 and June 30, 2010, respectively.

Allied Irish Banks, p.l.c. initiated steps in early October to divest its holdings of M&T common shares. In a public offering, 26.7 million of Contingent Mandatorily Exchangeable Notes, each note exchangeable for one share of M&T common stock, were sold in a single day.  The notes were distributed directly to one hundred twenty-three institutional investors as well as through retail delivery channels.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss third quarter financial results today at 10:30 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 #17941643.  The conference call will be webcast live on M&T's website at http://ir.mandtbank.com/conference.cfm.  A replay of the call will be available until Friday, October 22, 2010 by calling (800)642-1687, or (706)645-9291 for international participants, and by making reference to ID #17941643.  The event will also be archived and available by 6:00 p.m. today on M&T's website at http://ir.mandtbank.com/conference.cfm.

M&T is a bank holding company headquartered in Buffalo, New York.  M&T's banking subsidiaries, M&T Bank and M&T Bank, National Association, operate retail and commercial bank branches in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Jersey, the District of Columbia and Ontario, Canada.

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; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation; regulatory supervision and oversight, including monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

These are representative of the Future Factors that could affect the outcome of the forward-looking statements.  In addition, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other Future Factors.

M&T BANK CORPORATION

Financial Highlights

Three months ended

Nine months ended

Amounts in thousands,

September 30

September 30

except per share

 2010

 2009

Change

 2010

 2009

Change

Performance

Net income

$

192,015

127,664

50

%

$

531,719

243,073

119

%

Net income available to common equity

179,306

115,143

56

493,735

211,429

134

Per common share:

 Basic earnings

$

1.49

.97

54

%

$

4.12

1.84

124

%

 Diluted earnings

1.48

.97

53

4.10

1.84

123

 Cash dividends

$

.70

.70

-

$

2.10

2.10

         -

Common shares outstanding:

 Average - diluted (1)

119,155

117,547

1

%

118,766

113,800

4

%

 Period end (2)

119,435

118,156

1

119,435

118,156

1

Return on (annualized):

 Average total assets

1.12

%

.73

%

1.04

%

.49

%

 Average common stockholders' equity

9.56

%

6.72

%

9.05

%

4.35

%

Taxable-equivalent net interest income

$

575,733

553,450

4

%

$

1,711,322

1,512,971

13

%

Yield on average earning assets

4.65

%

4.60

%

4.62

%

4.62

%

Cost of interest-bearing liabilities

1.03

%

1.26

%

1.04

%

1.49

%

Net interest spread

3.62

%

3.34

%

3.58

%

3.13

%

Contribution of interest-free funds

.25

%

.27

%

.25

%

.28

%

Net interest margin  

3.87

%

3.61

%

3.83

%

3.41

%

Net charge-offs to average total

 net loans (annualized)

.73

%

1.07

%

.70

%

1.00

%

Net operating results (3)

Net operating income  

$

200,225

128,761

56

%

$

558,930

304,600

83

%

Diluted net operating earnings per common share

1.55

.98

58

4.33

2.37

83

Return on (annualized):

 Average tangible assets

1.24

%

.78

%

1.16

%

.64

%

 Average tangible common equity

19.58

%

14.87

%

19.13

%

12.19

%

Efficiency ratio

53.40

%

55.21

%

54.10

%

57.90

%

At September 30

Loan quality

 2010

 2009

Change

Nonaccrual loans

$

1,099,560

1,228,341

-10

%

Real estate and other foreclosed assets

192,600

84,676

127

%

 Total nonperforming assets

$

1,292,160

1,313,017

-2

%

Accruing loans past due 90 days or more

$

214,769

182,750

18

%

Renegotiated loans

$

233,671

190,917

22

%

Government guaranteed loans included in totals

 above:

 Nonaccrual loans

$

38,232

38,590

-1

%

 Accruing loans past due 90 days or more

194,223

172,701

12

%

Purchased impaired loans (4):

 Outstanding customer balance

$

113,964

209,138

-46

%

 Carrying amount

52,728

108,058

-51

%

Nonaccrual loans to total net loans

2.16

%

2.35

%

Allowance for credit losses to:

 Legacy loans

1.86

%

1.81

%

 Total loans

1.76

%

1.66

%

(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)  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

2010

2010

2010

2009

2009

Performance

Net income

$

192,015

188,749

150,955

136,818

127,664

Net income available to common equity

179,306

176,088

138,341

124,251

115,143

Per common share:

 Basic earnings

$

1.49

1.47

1.16

1.05

.97

 Diluted earnings

1.48

1.46

1.15

1.04

.97

 Cash dividends

$

.70

.70

.70

.70

.70

Common shares outstanding:

 Average - diluted (1)

119,155

118,878

118,256

117,672

117,547

 Period end (2)

119,435

119,161

118,823

118,298

118,156

Return on (annualized):

 Average total assets  

1.12

%

1.11

%

.89

%

.79

%

.73

%

 Average common stockholders' equity

9.56

%

9.67

%

7.86

%

7.09

%

6.72

%

Taxable-equivalent net interest income

$

575,733

573,332

562,257

564,606

553,450

Yield on average earning assets

4.65

%

4.63

%

4.59

%

4.58

%

4.60

%

Cost of interest-bearing liabilities

1.03

%

1.04

%

1.04

%

1.13

%

1.26

%

Net interest spread

3.62

%

3.59

%

3.55

%

3.45

%

3.34

%

Contribution of interest-free funds

.25

%

.25

%

.23

%

.26

%

.27

%

Net interest margin

3.87

%

3.84

%

3.78

%

3.71

%

3.61

%

Net charge-offs to average total

 net loans (annualized)

.73

%

.64

%

.74

%

1.03

%

1.07

%

Net operating results (3)

Net operating income

$

200,225

197,752

160,953

150,776

128,761

Diluted net operating earnings per common share

1.55

1.53

1.23

1.16

.98

Return on (annualized):

 Average tangible assets

1.24

%

1.23

%

1.00

%

.92

%

.78

%

 Average tangible common equity

19.58

%

20.36

%

17.34

%

16.73

%

14.87

%

Efficiency ratio

53.40

%

53.06

%

55.88

%

52.69

%

55.21

%

September 30,

June 30,

March 31,

December 31,

September 30,

Loan quality

2010

2010

2010

2009

2009

Nonaccrual loans

$

1,099,560

1,090,135

1,339,992

1,331,702

1,228,341

Real estate and other foreclosed assets

192,600

192,631

95,362

94,604

84,676

 Total nonperforming assets

$

1,292,160

1,282,766

1,435,354

1,426,306

1,313,017

Accruing loans past due 90 days or more

$

214,769

203,081

203,443

208,080

182,750

Renegotiated loans

$

233,671

228,847

220,885

212,548

190,917

Government guaranteed loans included in totals

 above:

 Nonaccrual loans

$

38,232

40,271

37,048

38,579

38,590

 Accruing loans past due 90 days or more

194,223

187,682

194,523

193,495

172,701

Purchased impaired loans (4):

 Outstanding customer balance

$

113,964

130,808

148,686

172,772

209,138

 Carrying amount

52,728

61,524

73,890

88,170

108,058

Nonaccrual loans to total net loans

2.16

%

2.13

%

2.60

%

2.56

%

2.35

%

Allowance for credit losses to:

 Legacy loans

1.86

%

1.86

%

1.86

%

1.83

%

1.81

%

 Total loans

1.76

%

1.75

%

1.73

%

1.69

%

1.66

%

(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)  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

 2010

 2009

Change

 2010

 2009

Change

Interest income

$

685,900

700,593

-2

%

$

2,047,070

2,032,528

1

%

Interest expense

116,032

152,938

-24

353,641

535,499

-34

Net interest income

569,868

547,655

4

1,693,429

1,497,029

13

Provision for credit losses

93,000

154,000

-40

283,000

459,000

-38

Net interest income after

  provision for credit losses

476,868

393,655

21

1,410,429

1,038,029

36

Other income

    Mortgage banking revenues

61,052

48,169

27

149,612

157,385

-5

    Service charges on deposit accounts

117,733

128,502

-8

367,004

342,010

7

    Trust income  

30,485

31,586

-3

91,582

98,908

-7

    Brokerage services income

12,127

14,329

-15

38,021

43,215

-12

    Trading account and foreign exchange gains

6,035

7,478

-19

14,531

16,456

-12

    Gain (loss) on bank investment securities

1,440

(56)

-

1,909

811

-

    Other-than-temporary impairment losses

       recognized in earnings

(9,532)

(47,033)

-

(58,714)

(104,001)

-

    Equity in earnings of Bayview Lending Group LLC

(6,460)

(10,912)

-

(18,353)

(15,263)

-

    Other revenues from operations

77,019

106,163

-27

235,570

242,695

-3

         Total other income

289,899

278,226

4

821,162

782,216

5

Other expense

    Salaries and employee benefits

246,389

255,449

-4

756,296

754,793

-

    Equipment and net occupancy

54,353

58,195

-7

165,185

157,688

5

    Printing, postage and supplies

7,820

8,229

-5

25,412

28,878

-12

    Amortization of core deposit and other

       intangible assets

13,526

16,924

-20

44,834

47,525

-6

    FDIC assessments

18,039

21,124

-15

60,995

76,617

-20

    Other costs of operations  

140,006

140,135

-

392,841

436,611

-10

         Total other expense

480,133

500,056

-4

1,445,563

1,502,112

-4

Income before income taxes

286,634

171,825

67

786,028

318,133

147

Applicable income taxes

94,619

44,161

114

254,309

75,060

239

Net income

$

192,015

127,664

50

%

$

531,719

243,073

119

%

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

 2010

2010

2010

2009

2009

Interest income

$

685,900

684,784

676,386

692,669

700,593

Interest expense

116,032

117,557

120,052

133,950

152,938

Net interest income

569,868

567,227

556,334

558,719

547,655

Provision for credit losses

93,000

85,000

105,000

145,000

154,000

Net interest income after

  provision for credit losses

476,868

482,227

451,334

413,719

393,655

Other income

    Mortgage banking revenues

61,052

47,084

41,476

50,176

48,169

    Service charges on deposit accounts

117,733

128,976

120,295

127,185

128,502

    Trust income

30,485

30,169

30,928

29,660

31,586

    Brokerage services income

12,127

12,788

13,106

14,396

14,329

    Trading account and foreign exchange gains

6,035

3,797

4,699

6,669

7,478

    Gain (loss) on bank investment securities

1,440

10

459

354

(56)

    Other-than-temporary impairment losses

       recognized in earnings

(9,532)

(22,380)

(26,802)

(34,296)

(47,033)

    Equity in earnings of Bayview Lending Group LLC

(6,460)

(6,179)

(5,714)

(10,635)

(10,912)

    Other revenues from operations

77,019

79,292

79,259

82,381

106,163

         Total other income

289,899

273,557

257,706

265,890

278,226

Other expense

    Salaries and employee benefits

246,389

245,861

264,046

247,080

255,449

    Equipment and net occupancy

54,353

55,431

55,401

53,703

58,195

    Printing, postage and supplies

7,820

8,549

9,043

9,338

8,229

    Amortization of core deposit and other

       intangible assets

13,526

14,833

16,475

16,730

16,924

    FDIC assessments

18,039

21,608

21,348

19,902

21,124

    Other costs of operations  

140,006

129,786

123,049

131,698

140,135

         Total other expense

480,133

476,068

489,362

478,451

500,056

Income before income taxes

286,634

279,716

219,678

201,158

171,825

Applicable income taxes

94,619

90,967

68,723

64,340

44,161

Net income

$

192,015

188,749

150,955

136,818

127,664

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet

September 30

Dollars in thousands

 2010

 2009

Change

ASSETS

Cash and due from banks

$

1,070,625

1,356,508

-21

%

Interest-bearing deposits at banks

401,624

54,443

638

Federal funds sold and agreements

 to resell securities

443,700

17,206

-

Trading account assets

536,702

497,064

8

Investment securities

7,662,715

7,634,262

-

Loans and leases:

  Commercial, financial, etc

12,788,136

13,517,538

-5

  Real estate - commercial

20,580,450

21,007,376

-2

  Real estate - consumer

5,754,432

5,427,260

6

  Consumer

11,668,540

12,251,598

-5

    Total loans and leases, net of unearned discount

50,791,558

52,203,772

-3

       Less: allowance for credit losses

894,720

867,874

3

 Net loans and leases

49,896,838

51,335,898

-3

Goodwill

3,524,625

3,524,625

-

Core deposit and other intangible assets

139,186

199,148

-30

Other assets

4,570,822

4,378,296

4

 Total assets

$

68,246,837

68,997,450

-1

%

LIABILITIES AND STOCKHOLDERS' EQUITY

Noninterest-bearing deposits at U.S. offices

$

14,665,603

12,730,083

15

%

Other deposits at U.S. offices

33,335,104

32,813,698

2

Deposits at foreign office

653,916

1,318,070

-50

 Total deposits

48,654,623

46,861,851

4

Short-term borrowings

1,211,683

2,927,268

-59

Accrued interest and other liabilities

1,157,250

1,241,576

-7

Long-term borrowings

8,991,508

10,354,392

-13

 Total liabilities

60,015,064

61,385,087

-2

Stockholders' equity:

  Preferred

737,979

727,748

1

  Common (1)

7,493,794

6,884,615

9

    Total stockholders' equity

8,231,773

7,612,363

8

 Total liabilities and stockholders' equity

$

68,246,837

68,997,450

-1

%

(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $192.6 million

      at September 30, 2010 and $419.3 million at September 30, 2009.

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend

September 30,

June 30,

March 31,

December 31,

September 30,

Dollars in thousands

 2010

2010

2010

2009

2009

ASSETS

Cash and due from banks

$

1,070,625

1,045,886

1,033,269

1,226,223

1,356,508

Interest-bearing deposits at banks

401,624

117,826

121,305

133,335

54,443

Federal funds sold and agreements

 to resell securities

443,700

10,000

10,400

20,119

17,206

Trading account assets

536,702

487,692

403,476

386,984

497,064

Investment securities

7,662,715

8,097,572

8,104,646

7,780,609

7,634,262

Loans and leases:

  Commercial, financial, etc

12,788,136

13,017,598

13,220,181

13,479,447

13,517,538

  Real estate - commercial

20,580,450

20,612,905

20,724,118

20,949,931

21,007,376

  Real estate - consumer

5,754,432

5,729,126

5,664,159

5,463,463

5,427,260

  Consumer

11,668,540

11,701,657

11,835,583

12,043,845

12,251,598

    Total loans and leases, net of unearned discount

50,791,558

51,061,286

51,444,041

51,936,686

52,203,772

       Less: allowance for credit losses

894,720

     894,667

     891,265

        878,022

         867,874

 Net loans and leases

49,896,838

50,166,619

50,552,776

51,058,664

51,335,898

Goodwill

3,524,625

3,524,625

3,524,625

3,524,625

3,524,625

Core deposit and other intangible assets

139,186

152,712

167,545

182,418

199,148

Other assets

4,570,822

4,550,684

4,521,180

4,567,422

4,378,296

 Total assets

$

68,246,837

68,153,616

68,439,222

68,880,399

68,997,450

LIABILITIES AND STOCKHOLDERS' EQUITY

Noninterest-bearing deposits at U.S. offices

$

14,665,603

13,960,723

13,622,819

13,794,636

12,730,083

Other deposits at U.S. offices

33,335,104

33,010,520

33,125,761

32,604,764

32,813,698

Deposits at foreign office

653,916

551,428

789,825

1,050,438

1,318,070

 Total deposits

48,654,623

47,522,671

47,538,405

47,449,838

46,861,851

Short-term borrowings

1,211,683

2,158,957

1,870,763

2,442,582

2,927,268

Accrued interest and other liabilities

1,157,250

1,114,615

1,048,473

995,056

1,241,576

Long-term borrowings

8,991,508

9,255,529

10,065,894

10,240,016

10,354,392

 Total liabilities

60,015,064

60,051,772

60,523,535

61,127,492

61,385,087

Stockholders' equity:

  Preferred

737,979

735,350

732,769

730,235

         727,748

  Common (1)

7,493,794

7,366,494

7,182,918

7,022,672

6,884,615

    Total stockholders' equity

8,231,773

8,101,844

7,915,687

7,752,907

7,612,363

 Total liabilities and stockholders' equity

$

68,246,837

68,153,616

68,439,222

68,880,399

68,997,450

(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $192.6 million      at September 30, 2010, $197.2 million at June 30, 2010, $255.2 million at March 31, 2010, $336.0      million at December 31, 2009 and $419.3 million at September 30, 2009.

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, 2010 from

September 30

2010

2009

2010

September 30,

June 30,

2010

2009

Change in

Balance

Rate

Balance

Rate

Balance

Rate

2009

2010

Balance

Rate

Balance

Rate

balance

ASSETS

Interest-bearing deposits at banks

$

92

.15

%

66

.04

%

81

.02

%

41

%

14

%

$

100

.06

%

43

.06

%

134

%

Federal funds sold and agreements  to resell securities

64

.26

11

.58

10

.41

457

531

33

.27

62

.25

-47

Trading account assets

82

.65

83

.82

66

.96

-1

23

69

.79

92

.76

-24

Investment securities

7,993

4.16

8,420

4.81

8,376

4.27

-5

-5

8,180

4.29

8,472

4.84

-3

Loans and leases, net of unearned discount

Commercial, financial, etc

12,856

3.97

13,801

3.78

13,096

4.03

-7

-2

13,118

3.96

13,965

3.76

-6

Real estate - commercial.

20,612

4.85

20,843

4.48

20,759

4.64

-1

-1

20,745

4.66

19,793

4.45

5

Real estate - consumer

5,680

5.30

5,429

5.43

5,653

5.35

5

-

5,691

5.32

5,243

5.47

9

Consumer

11,687

5.22

12,247

5.37

11,770

5.24

-5

-1

11,795

5.24

11,578

5.47

2

Total loans and leases, net

50,835

4.74

52,320

4.58

51,278

4.71

-3

-1

51,349

4.69

50,579

4.60

2

Total earning assets

59,066

4.65

60,900

4.60

59,811

4.63

-3

-1

59,731

4.62

59,248

4.62

1

Goodwill

3,525

3,525

3,525

-

-

3,525

3,349

5

Core deposit and other intangible assets

146

208

160

-30

-9

160

191

-16

Other assets

5,074

4,521

4,838

12

5

4,923

4,196

17

 Total assets

$

67,811

69,154

68,334

-2

%

-1

%

$

68,339

66,984

2

%

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest-bearing deposits

NOW accounts

$

592

.15

541

.21

619

.14

9

%

-4

%

$

599

.14

531

.22

13

%

Savings deposits

26,177

.33

23,367

.37

25,942

.33

12

1

25,733

.33

22,358

.54

15

Time deposits

6,312

1.46

9,246

2.17

6,789

1.55

-32

-7

6,767

1.56

8,943

2.49

-24

Deposits at foreign office

802

.16

1,444

.13

972

.16

-44

-18

1,002

.14

1,788

.15

-44

Total interest-bearing deposits

33,883

.53

34,598

.84

34,322

.56

-2

-1

34,101

.56

33,620

1.03

1

Short-term borrowings

1,858

.16

2,663

.26

1,763

.17

-30

5

1,994

.16

3,114

.26

-36

Long-term borrowings

8,948

3.10

11,008

2.80

9,454

2.91

-19

-5

9,516

2.91

11,376

3.17

-16

Total interest-bearing liabilities

44,689

1.03

48,269

1.26

45,539

1.04

-7

-2

45,611

1.04

48,110

1.49

-5

Noninterest-bearing deposits

13,647

12,122

13,610

13

-

13,518

10,416

30

Other liabilities

1,294

1,242

1,149

4

13

1,180

1,313

-10

Total liabilities

59,630

61,633

60,298

-3

-1

60,309

59,839

1

Stockholders' equity

8,181

7,521

8,036

9

2

8,030

7,145

12

Total liabilities and stockholders' equity

$

67,811

69,154

68,334

-2

%

-1

%

$

68,339

66,984

2

%

Net interest spread

3.62

3.34

3.59

3.58

3.13

Contribution of interest-free funds

.25

.27

.25

.25

.28

Net interest margin

3.87

%

3.61

%

3.84

%

3.83

%

3.41

%

M&T BANK CORPORATION

Reconciliation of Quarterly GAAP to Non-GAAP Measures

Three months ended

Nine months ended

September 30

September 30

2010

2009

2010

2009

Income statement data

In thousands, except per share

Net income

Net income

$

192,015

127,664

$

531,719

243,073

Amortization of core deposit and other

 intangible assets (1)

8,210

10,270

27,211

28,854

Merger-related gain (1)

-

(17,684)

(17,684)

Merger-related expenses (1)

-

8,511

-

50,357

 Net operating income

$

200,225

128,761

$

558,930

304,600

Earnings per common share

Diluted earnings per common share

$

1.48

.97

$

4.10

1.84

Amortization of core deposit and other

 intangible assets (1)

.07

.09

.23

.25

Merger-related gain (1)

-

(.15)

-

(.15)

Merger-related expenses (1)

-

.07

-

.43

 Diluted net operating earnings per common share

$

1.55

.98

$

4.33

2.37

Other expense

Other expense

$

480,133

500,056

$

1,445,563

1,502,112

Amortization of core deposit and other

 intangible assets  

(13,526)

(16,924)

(44,834)

(47,525)

Merger-related expenses  

-

(14,010)

-

(82,893)

 Noninterest operating expense

$

466,607

469,122

$

1,400,729

1,371,694

Merger-related expenses

Salaries and employee benefits

$

-

870

$

-

9,649

Equipment and net occupancy

-

1,845

-

2,430

Printing, postage and supplies

-

629

-

3,444

Other costs of operations

-

10,666

-

67,370

 Total

$

-

14,010

$

-

82,893

Balance sheet data

In millions

Average assets

Average assets

$

67,811

69,154

$

68,339

66,984

Goodwill

(3,525)

(3,525)

(3,525)

(3,349)

Core deposit and other intangible assets

(146)

(208)

(160)

(191)

Deferred taxes

27

41

30

31

 Average tangible assets

$

64,167

65,462

$

64,684

63,475

Average common equity

Average total equity

$

8,181

7,521

$

8,030

7,145

Preferred stock

(737)

(727)

(735)

(644)

 Average common equity

7,444

6,794

7,295

6,501

Goodwill

(3,525)

(3,525)

(3,525)

(3,349)

Core deposit and other intangible assets

(146)

(208)

(160)

(191)

Deferred taxes

27

41

30

31

 Average tangible common equity

$

3,800

3,102

$

3,640

2,992

At end of quarter

Total assets

Total assets

$

68,247

68,997

Goodwill

(3,525)

(3,525)

Core deposit and other intangible assets

(139)

(199)

Deferred taxes

26

39

 Total tangible assets

$

64,609

65,312

Total common equity

Total equity

$

8,232

7,612

Preferred stock

(738)

(728)

Undeclared dividends - preferred stock

(6)

(5)

 Common equity, net of undeclared

   preferred dividends

7,488

6,879

Goodwill

(3,525)

(3,525)

Core deposit and other intangible assets

(139)

(199)

Deferred taxes

26

39

 Total tangible common equity

$

3,850

3,194

(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,

2010

2010

2010

2009

2009

Income statement data

In thousands, except per share

Net income

Net income

$

192,015

188,749

150,955

136,818

127,664

Amortization of core deposit and other

 intangible assets (1)

8,210

9,003

9,998

10,152

10,270

Merger-related gain (1)

-

-

-

-

(17,684)

Merger-related expenses (1)

-

-

-

3,806

8,511

 Net operating income

$

200,225

197,752

160,953

150,776

128,761

Earnings per common share

Diluted earnings per common share

$

1.48

1.46

1.15

1.04

.97

Amortization of core deposit and other

 intangible assets (1)

.07

.07

.08

.09

.09

Merger-related gain (1)

-

-

-

-

(.15)

Merger-related expenses (1)

-

-

-

.03

.07

 Diluted net operating earnings per common share

$

1.55

1.53

1.23

1.16

.98

Other expense

Other expense

$

480,133

476,068

489,362

478,451

500,056

Amortization of core deposit and other

 intangible assets  

(13,526)

(14,833)

(16,475)

(16,730)

(16,924)

Merger-related expenses  

-

-

-

(6,264)

(14,010)

 Noninterest operating expense

$

466,607

461,235

472,887

455,457

469,122

Merger-related expenses

Salaries and employee benefits

$

-

-

-

381

870

Equipment and net occupancy

-

-

-

545

1,845

Printing, postage and supplies

-

-

-

233

629

Other costs of operations

-

-

-

5,105

10,666

 Total

$

-

-

-

6,264

14,010

Balance sheet data

In millions

Average assets

Average assets

$

67,811

68,334

68,883

68,919

69,154

Goodwill

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets

(146)

(160)

(176)

(191)

(208)

Deferred taxes

27

30

34

37

41

 Average tangible assets

$

64,167

64,679

65,216

65,240

65,462

Average common equity

Average total equity

$

8,181

8,036

7,868

7,686

7,521

Preferred stock

(737)

(734)

(732)

(729)

(727)

 Average common equity

7,444

7,302

7,136

6,957

6,794

Goodwill

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets

(146)

(160)

(176)

(191)

(208)

Deferred taxes

27

30

34

37

41

 Average tangible common equity

$

3,800

3,647

3,469

3,278

3,102

At end of quarter

Total assets

Total assets

$

68,247

68,154

68,439

68,880

68,997

Goodwill

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets

(139)

(152)

(167)

(182)

(199)

Deferred taxes

26

28

31

35

39

 Total tangible assets

$

64,609

64,505

64,778

65,208

65,312

Total common equity

Total equity

$

8,232

8,102

7,916

7,753

7,612

Preferred stock

(738)

(735)

(733)

(730)

(728)

Undeclared dividends - preferred stock

(6)

(7)

(6)

(6)

(5)

 Common equity, net of undeclared

   preferred dividends

7,488

7,360

7,177

7,017

6,879

Goodwill

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets

(139)

(152)

(167)

(182)

(199)

Deferred taxes

26

28

31

35

39

 Total tangible common equity

$

3,850

3,711

3,516

3,345

3,194

(1) After any related tax effect.

INVESTOR CONTACT:

Donald J. MacLeod

(716) 842-5138

MEDIA CONTACT:

C. Michael Zabel

(716) 842-5385

SOURCE M&T Bank Corporation



RELATED LINKS

http://www.mandtbank.com