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Press release from PR Newswire

M&T Bank Corporation Announces Third Quarter Profits

Wednesday, October 17, 2012

M&T Bank Corporation Announces Third Quarter Profits08:08 EDT Wednesday, October 17, 2012BUFFALO, N.Y., Oct. 17, 2012 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2012.GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the third quarter of 2012 rose 64% to $2.17 from $1.32 in the year-earlier quarter and were 27% higher than $1.71 in the second quarter of 2012.  GAAP-basis net income in the recent quarter aggregated $293 million, up from $183 million and $233 million in the third quarter of 2011 and the second quarter of 2012, respectively.  GAAP-basis net income for the third quarter of 2012 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.45% and 12.40%, respectively, compared with .94% and 7.84%, respectively, in the year-earlier quarter and 1.17% and 10.12%, respectively, in the second quarter of 2012.The recent quarter's results as compared with each of the third quarter of 2011 and the second quarter of 2012 reflect higher mortgage banking revenues, increases in taxable-equivalent net interest income and a lower provision for credit losses. In addition, expenses in the recent quarter declined $46 million, or 7%, from the year-earlier quarter, predominantly due to the integration of the operations obtained in the May 2011 acquisition of Wilmington Trust Corporation.Commenting on M&T's financial performance in the third quarter of 2012, Rene F. Jones, Executive Vice President and Chief Financial Officer, said, "Earnings for the quarter were exceptionally strong.  While revenue from mortgage banking activities rose $37 million, or 54%, from the second quarter, loan growth, wider margins, prudent expense management and continuing improvement in credit quality combined for an impressive quarter.  Revenue from residential mortgage banking activities rose 76% from the second quarter and net interest income increased due to solid loan growth and a 3 basis point expansion of the net interest margin.  Credit metrics continued to improve, as nonaccrual loans declined from June 30, and the ratio of net charge-offs to average loans improved to .26% in the recent quarter, a level not seen since the beginning of the economic recession in late-2007."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 $2.24 in the recent quarter, up 46% and 23% from $1.53 and $1.82 in the third quarter of 2011 and the second quarter of 2012, respectively.  Net operating income during the third quarter of 2012 was $302 million, improved from $210 million in the year-earlier quarter and $247 million in 2012's second quarter.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.56% and 21.53%, respectively, in the recent quarter, compared with 1.14% and 16.07%, respectively, in the third quarter of 2011 and 1.30% and 18.54%, respectively, in the second quarter of 2012.Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income totaled $669 million in the third quarter of 2012, up an annualized 9% from $655 million in the second quarter of 2012.  That improvement was due largely to a 3 basis point widening of the net interest margin and a $212 million increase in average earning assets.  The net interest margin was 3.77% in the recent quarter, compared with 3.74% in the second quarter of 2012.  The higher level of average earning assets in the recent quarter as compared with the second quarter of 2012 was predominantly due to a $1.6 billion increase in average loans and leases, largely offset by declines in average balances of lower yielding money-market assets and investment securities.  Taxable-equivalent net interest income in the recent quarter rose $46 million from $623 million in the third quarter of 2011.  That improvement reflected a $3.4 billion increase in average earning assets and a 9 basis point widening of the net interest margin.Provision for Credit Losses/Asset Quality.  The provision for credit losses was $46 million in the recent quarter, improved from $58 million in the third quarter of 2011 and $60 million in 2012's second quarter.  Net charge-offs of loans totaled $42 million during the third quarter of 2012, down from $57 million and $52 million in the quarters ended September 30, 2011 and June 30, 2012, respectively.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .26% and .39% in the third quarter of 2012 and 2011, respectively, and .34% in the second quarter of 2012.Loans classified as nonaccrual declined to $925 million, or 1.44% of total loans outstanding at September 30, 2012, improved from $1.11 billion or 1.91% at September 30, 2011 and $968 million or 1.54% at June 30, 2012.Assets taken in foreclosure of defaulted loans were $112 million at September 30, 2012, down from $150 million at September 30, 2011 and $116 million at June 30, 2012.  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 $921 million at September 30, 2012, compared with $909 million at September 30, 2011 and $917 million at June 30, 2012.  The allowance expressed as a percentage of outstanding loans was 1.44% at September 30, 2012, down from 1.56% at September 30, 2011 and 1.46% at June 30, 2012. Noninterest Income and Expense.  Noninterest income totaled $446 million in the recent quarter, compared with $368 million and $392 million in the third quarter of 2011 and the second quarter of 2012, respectively.  Reflected in those amounts were net pre-tax losses from investment securities of $5 million, $10 million and $17 million in the recent quarter, the third quarter of 2011, and the second quarter of 2012, respectively. The net securities losses were predominantly due to other-than-temporary impairment charges related to certain of M&T's holding of privately issued collateralized mortgage obligations.  Excluding losses from investment securities in all periods, noninterest income in the third quarter of 2012 aggregated $451 million, up from $378 million in the third quarter of 2011 and $408 million in 2012's second quarter.  The rise in noninterest income in the recent quarter as compared with the year-earlier quarter and the second quarter of 2012 was predominantly due to higher mortgage banking revenues.  Noninterest expense in the third quarter of 2012 totaled $616 million, compared with $662 million in the year-earlier quarter and $627 million in the second quarter of 2012.  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 $602 million in the recent quarter, down from $619 million in the third quarter of 2011 and $604 million in 2012's second quarter, due largely to the continued realization of synergies from the integration into M&T of the operations obtained from Wilmington Trust Corporation.  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 53.7% in the recent quarter, significantly improved from 61.8% and 56.9% in the year-earlier quarter and the second quarter of 2012, respectively. Balance Sheet.  M&T had total assets of $81.1 billion at September 30, 2012, compared with $77.9 billion at September 30, 2011.  Loans and leases, net of unearned discount, increased $5.7 billion, or 10%, to $64.1 billion at September 30, 2012 from $58.4 billion a year earlier.  Total deposits aggregated $64.0 billion at the recent quarter-end, up 8% from $59.5 billion at September 30, 2011.  Total shareholders' equity rose 6% to $9.9 billion at September 30, 2012 from $9.4 billion a year earlier, representing 12.27% and 12.04%, respectively, of total assets.  Common shareholders' equity was $9.1 billion, or $71.17 per share, at September 30, 2012, compared with $8.5 billion, or $67.70 per share, at September 30, 2011.  Tangible equity per common share rose 11% to $42.80 at September 30, 2012 from $38.56 at September 30, 2011. Common shareholders' equity per share and tangible equity per common share were $69.15 and $40.52, respectively, at June 30, 2012.  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 7.04% at September 30, 2012, compared with 6.53% and 6.65% at September 30, 2011 and June 30, 2012, respectively.  M&T's estimated Tier 1 common ratio, a regulatory capital measure, rose to 7.47% at September 30, 2012, improved from 6.87% and 7.15% at September 30, 2011 and June 30, 2012, respectively.Other notable events during the third quarter of 2012 included the announcement that M&T and Hudson City Bancorp, Inc. ("Hudson City") had entered into a definitive merger agreement whereby M&T would acquire Hudson City.  Completing M&T's exit from the TARP program, the United States Treasury Department ("U.S. Treasury") sold M&T Series A and Series C Preferred Stock to the public and no longer holds any shares of M&T's preferred stock.  Subject to common shareholder approval, M&T had modified certain of the terms of its Series A and Series C Preferred Stock which had been held by the U.S. Treasury. 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 #38101096.  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, 2012 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #38101096.  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) 842-5462MEDIA CONTACT:    C. Michael Zabel(716) 842-5385 M&T BANK CORPORATIONFinancial HighlightsThree months endedNine months endedAmounts in thousands,September 30September 30 except per share20122011Change20122011ChangePerformanceNet income$293,462183,10860%$733,305711,7393%Net income available to common shareholders 273,896164,67166%676,842651,9664%Per common share:  Basic earnings $2.181.3265%$5.395.341%  Diluted earnings 2.171.3264%5.375.321%  Cash dividends $.70.70-$2.102.10-Common shares outstanding:  Average - diluted (1) 126,292124,8601%125,936122,5213%  Period end (2) 127,461125,6781%127,461125,6781%Return on (annualized):  Average total assets 1.45%.94%1.23%1.31%  Average common shareholders' equity 12.40%7.84%10.55%10.94%Taxable-equivalent net interest income $669,256623,2657%$1,950,9781,791,0669%Yield on average earning assets 4.23%4.29%4.24%4.42%Cost of interest-bearing liabilities .71%.86%.76%.89%Net interest spread 3.52%3.43%3.48%3.53%Contribution of interest-free funds .25%.25%.25%.25%Net interest margin 3.77%3.68%3.73%3.78%Net charge-offs to average total   net loans (annualized) .26%.39%.31%.46%Net operating results (3)Net operating income $302,060209,99644%$767,853715,8437%Diluted net operating earnings per common share2.241.5346%5.645.365%Return on (annualized):  Average tangible assets 1.56%1.14%1.35%1.39%  Average tangible common equity 21.53%16.07%19.03%20.03%Efficiency ratio 53.73%61.79%57.11%57.84% At September 30Loan quality20122011ChangeNonaccrual loans $925,2311,113,788-17%Real estate and other foreclosed assets 112,160149,868-25%  Total nonperforming assets $1,037,3911,263,656-18%Accruing loans past due 90 days or more (4) $309,420239,97029%Government guaranteed loans included in totals  above:  Nonaccrual loans $54,58332,93766%  Accruing loans past due 90 days or more 280,410210,40733%Renegotiated loans $266,526223,23319%Acquired accruing loans past due 90 days or more (5) $161,424211,958-24%Purchased impaired loans (6):  Outstanding customer balance $978,7311,393,777-30%  Carrying amount 528,001703,632-25%Nonaccrual loans to total net loans 1.44%1.91%Allowance for credit losses to total loans 1.44%1.56%(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 CORPORATIONFinancial Highlights, Five Quarter TrendThree months endedAmounts in thousands,September 30,June 30,March 31,December 31,September 30, except per share20122012201220112011PerformanceNet income $293,462233,380206,463147,740183,108Net income available to common shareholders 273,896214,716188,241129,804164,671Per common share:  Basic earnings $2.181.711.501.041.32  Diluted earnings 2.171.711.501.041.32  Cash dividends $.70.70.70.70.70Common shares outstanding:  Average - diluted (1) 126,292125,897125,616124,736124,860  Period end (2) 127,461126,645126,534125,752125,678Return on (annualized):  Average total assets 1.45%1.17%1.06%.75%.94%  Average common shareholders' equity 12.40%10.12%9.04%6.12%7.84%Taxable-equivalent net interest income $669,256654,628627,094624,566623,265Yield on average earning assets 4.23%4.25%4.24%4.17%4.29%Cost of interest-bearing liabilities .71%.76%.80%.82%.86%Net interest spread 3.52%3.49%3.44%3.35%3.43%Contribution of interest-free funds .25%.25%.25%.25%.25%Net interest margin  3.77%3.74%3.69%3.60%3.68%Net charge-offs to average total   net loans (annualized) .26%.34%.32%.50%.39%Net operating results (3)Net operating income  $302,060247,433218,360168,410209,996Diluted net operating earnings per common share 2.241.821.591.201.53Return on (annualized):  Average tangible assets 1.56%1.30%1.18%.89%1.14%  Average tangible common equity 21.53%18.54%16.79%12.36%16.07%Efficiency ratio 53.73%56.86%61.09%67.38%61.79%September 30,June 30,March 31,December 31,September 30,Loan quality20122012201220112011Nonaccrual loans $925,231968,3281,065,2291,097,5811,113,788Real estate and other foreclosed assets 112,160115,580140,297156,592149,868  Total nonperforming assets $1,037,3911,083,9081,205,5261,254,1731,263,656Accruing loans past due 90 days or more (4) $309,420274,598273,081287,876239,970Government guaranteed loans included in totals  above:  Nonaccrual loans $54,58348,71244,71740,52932,937  Accruing loans past due 90 days or more 280,410255,495252,622252,503210,407Renegotiated loans $266,526267,111213,024214,379223,233Acquired accruing loans past due 90 days or more (5) $161,424162,487165,163163,738211,958Purchased impaired loans (6):  Outstanding customer balance $978,7311,037,4581,158,8291,267,7621,393,777  Carrying amount 528,001560,700604,779653,362703,632Nonaccrual loans to total net loans 1.44%1.54%1.75%1.83%1.91%Allowance for credit losses to total loans 1.44%1.46%1.49%1.51%1.56%(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 CORPORATIONCondensed Consolidated Statement of IncomeThree months endedNine months endedSeptember 30September 30Dollars in thousands20122011Change20122011ChangeInterest income $744,851720,3513%$2,196,3322,076,0876%Interest expense 82,129103,632-21265,238304,362-13Net interest income 662,722616,71971,931,0941,771,7259Provision for credit losses 46,00058,000-21155,000196,000-21Net interest income after   provision for credit losses 616,722558,719101,776,0941,575,72513Other income     Mortgage banking revenues 106,81238,141180232,518125,44885     Service charges on deposit accounts 114,463121,577-6334,334351,024-5     Trust income  115,709113,6522354,937218,56562     Brokerage services income 14,11413,907144,18743,1292     Trading account and foreign exchange gains 8,4694,17610325,27819,25331     Gain on bank investment securities 37289-9150,186-     Other-than-temporary impairment losses         recognized in earnings (5,672)(9,642)-(33,331)(52,213)-     Equity in earnings of Bayview Lending Group LLC (5,183)(6,911)-(16,570)(18,812)-     Other revenues from operations 96,64993,3933272,744347,878-22          Total other income 445,733368,382211,214,1061,184,4583Other expense     Salaries and employee benefits 321,746325,197-1991,530891,46511     Equipment and net occupancy 64,24868,101-6194,667184,4346     Printing, postage and supplies 8,27210,593-2231,51229,5187     Amortization of core deposit and other         intangible assets 14,08517,401-1946,76644,4555     FDIC assessments 23,80126,701-1177,71272,4047     Other costs of operations 183,875214,026-14540,927516,2095          Total other expense 616,027662,019-71,883,1141,738,4858Income before income taxes 446,428265,082681,107,0861,021,6988Applicable income taxes 152,96681,97487373,781309,95921Net income $293,462183,10860%$733,305711,7393% M&T BANK CORPORATIONCondensed Consolidated Statement of Income, Five Quarter TrendThree months endedSeptember 30,June 30,March 31,December 31,September 30,Dollars in thousands20122012201220112011Interest income $744,851737,386714,095716,000720,351Interest expense 82,12989,40393,70697,969103,632Net interest income 662,722647,983620,389618,031616,719Provision for credit losses 46,00060,00049,00074,00058,000Net interest income after   provision for credit losses 616,722587,983571,389544,031558,719Other income     Mortgage banking revenues 106,81269,51456,19240,57338,141     Service charges on deposit accounts 114,463110,982108,889104,071121,577     Trust income 115,709122,275116,953113,820113,652     Brokerage services income 14,11416,17213,90113,34113,907     Trading account and foreign exchange gains 8,4696,23810,5717,9714,176     Gain (loss) on bank investment securities 372(408)45189     Other-than-temporary impairment losses         recognized in earnings (5,672)(16,173)(11,486)(24,822)(9,642)     Equity in earnings of Bayview Lending Group LLC (5,183)(6,635)(4,752)(5,419)(6,911)     Other revenues from operations 96,64989,68586,410148,91893,393          Total other income 445,733391,650376,723398,454368,382Other expense     Salaries and employee benefits 321,746323,686346,098312,528325,197     Equipment and net occupancy 64,24865,37665,04365,08068,101     Printing, postage and supplies 8,27211,36811,87211,39910,593     Amortization of core deposit and other         intangible assets 14,08515,90716,77417,16217,401     FDIC assessments 23,80124,96228,94927,82626,701     Other costs of operations  183,875186,093170,959305,588214,026          Total other expense 616,027627,392639,695739,583662,019Income before income taxes 446,428352,241308,417202,902265,082Applicable income taxes 152,966118,861101,95455,16281,974Net income $293,462233,380206,463147,740183,108M&T BANK CORPORATIONCondensed Consolidated Balance SheetSeptember 30Dollars in thousands20122011ChangeASSETSCash and due from banks $1,622,9281,349,05720%Interest-bearing deposits at banks411,9942,226,779-81Federal funds sold and agreements  to resell securities -5,000-Trading account assets 526,844605,557-13Investment securities 6,624,0047,173,797-8Loans and leases:   Commercial, financial, etc 16,704,57515,218,50210   Real estate - commercial 24,970,41623,961,3064   Real estate - consumer 10,808,2207,065,45153   Consumer 11,628,74412,156,005-4     Total loans and leases, net of unearned discount 64,111,95558,401,26410        Less: allowance for credit losses 921,223908,5251  Net loans and leases 63,190,73257,492,73910Goodwill 3,524,6253,524,625-Core deposit and other intangible assets 129,628193,556-33Other assets 5,054,4785,292,781-5  Total assets $81,085,23377,863,8914%LIABILITIES AND SHAREHOLDERS' EQUITYNoninterest-bearing deposits $22,968,40119,637,49117%Interest-bearing deposits 39,636,10439,330,0271Deposits at Cayman Islands office 1,402,753514,871172  Total deposits 64,007,25859,482,3898Short-term borrowings592,154694,398-15Accrued interest and other liabilities 1,570,7581,563,121-Long-term borrowings 4,969,5366,748,857-26  Total liabilities 71,139,70668,488,7654Shareholders' equity:   Preferred 870,416862,7171   Common (1)  9,075,1118,512,4097     Total shareholders' equity 9,945,5279,375,1266  Total liabilities and shareholders' equity $81,085,23377,863,8914%(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $230.1 million       at September 30, 2012 and $192.5 million at September 30, 2011. M&T BANK CORPORATIONCondensed Consolidated Balance Sheet, Five Quarter TrendSeptember 30,June 30,March 31,December 31,September 30,Dollars in thousands20122012201220112011ASSETSCash and due from banks $1,622,9281,421,8311,344,0921,449,5471,349,057Interest-bearing deposits at banks 411,9941,069,7171,282,040154,9602,226,779Federal funds sold and agreements  to resell securities -1,000-2,8505,000Trading account assets 526,844544,938517,620561,834605,557Investment securities 6,624,0047,057,3007,195,2967,673,1547,173,797Loans and leases:   Commercial, financial, etc 16,704,57516,395,58715,938,67215,734,43615,218,502   Real estate - commercial 24,970,41624,898,70724,486,55524,411,11423,961,306   Real estate - consumer 10,808,2209,811,5258,696,5947,923,1657,065,451   Consumer 11,628,74411,745,45311,799,92912,027,29012,156,005     Total loans and leases, net of unearned discount 64,111,95562,851,27260,921,75060,096,00558,401,264        Less: allowance for credit losses 921,223917,028909,006908,290908,525  Net loans and leases 63,190,73261,934,24460,012,74459,187,71557,492,739Goodwill 3,524,6253,524,6253,524,6253,524,6253,524,625Core deposit and other intangible assets 129,628143,713159,619176,394193,556Other assets 5,054,4785,110,2105,150,8515,193,2085,292,781  Total assets $81,085,23380,807,57879,186,88777,924,28777,863,891LIABILITIES AND SHAREHOLDERS' EQUITYNoninterest-bearing deposits $22,968,40122,854,79420,648,97020,017,88319,637,491Interest-bearing deposits 39,636,10439,327,84939,868,78239,020,83939,330,027Deposits at Cayman Islands office 1,402,753366,164395,191355,927514,871  Total deposits 64,007,25862,548,80760,912,94359,394,64959,482,389Short-term borrowings 592,154975,575511,981782,082694,398Accrued interest and other liabilities 1,570,7581,965,4211,856,7491,790,1211,563,121Long-term borrowings 4,969,5365,687,8686,476,5266,686,2266,748,857  Total liabilities71,139,70671,177,67169,758,19968,653,07868,488,765Shareholders' equity:   Preferred 870,416868,433866,489864,585862,717   Common (1)  9,075,1118,761,4748,562,1998,406,6248,512,409     Total shareholders' equity 9,945,5279,629,9079,428,6889,271,2099,375,126  Total liabilities and shareholders' equity $81,085,23380,807,57879,186,88777,924,28777,863,891(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $230.1 million at September 30, 2012, $277.8 million         at June 30, 2012, $331.3 million at March 31, 2012, $356.4 million at December 31, 2011 and $192.5 million at September 30, 2011.M&T BANK CORPORATIONCondensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent RatesThree months endedChange in balanceNine months endedSeptember 30,September 30,June 30,September 30, 2012 fromSeptember 30Dollars in millions201220112012September 30,June 30,20122011Change inBalanceRateBalanceRateBalanceRate20112012BalanceRateBalance RatebalanceASSETSInterest-bearing deposits at banks $298.18%1,861.25%1,247.25%-84%-76%$614.24%933.24%-34%Federal funds sold and agreements  to resell securities 4.5576.146.56-94-254.55238.10-98Trading account assets 941.13851.751001.6411-6961.45981.55-2Investment securities 6,8113.397,0053.657,2713.47-3-67,1953.476,8723.955Loans and leases, net of unearned discount  Commercial, financial, etc 16,5043.7315,0073.8216,1043.7210216,1153.7214,4063.8812  Real estate - commercial 24,9954.6123,9794.6224,7374.654124,7644.5622,4954.6410  Real estate - consumer 10,2964.297,0024.959,2164.4347129,2704.436,5425.0042  Consumer 11,6604.7612,2004.9511,7694.82-4-111,7784.7911,7875.03-     Total loans and leases, net 63,4554.3458,1884.5161,8264.429361,9274.3755,2304.5712  Total earning assets 70,6624.2367,2154.2970,4504.255-69,8364.2463,3714.4210Goodwill 3,5253,5253,525--3,5253,525-Core deposit and other intangible assets  136202151-32-10152162-7Other assets 6,1095,9665,961226,0055,43111  Total assets $80,43276,90880,0875%-%$79,51872,48910%LIABILITIES AND SHAREHOLDERS' EQUITYInterest-bearing deposits  NOW accounts $875.15814.17841.208%4%$848.16729.1516%  Savings deposits 33,298.2031,654.2833,286.205-32,999.2129,804.2811  Time deposits 5,164.847,169.985,545.90-28-75,555.886,5141.15-15  Deposits at Cayman Islands office 702.19614.12457.201454552.19869.12-37     Total interest-bearing deposits 40,039.2840,251.4040,129.30-1-39,954.3037,916.425Short-term borrowings 976.15592.15875.166512893.15878.132Long-term borrowings 5,0064.276,8293.636,1023.90-27-185,8693.967,0893.45-17Total interest-bearing liabilities 46,021.7147,672.8647,106.76-3-246,716.7645,883.892Noninterest-bearing deposits 22,70418,22221,40125621,24016,32030Other liabilities 1,9181,6902,04413-61,9941,42040  Total liabilities 70,64367,58470,5515-69,95063,62310Shareholders' equity 9,7899,3249,536539,5688,8668  Total liabilities and shareholders' equity$80,43276,90880,0875%-%$79,51872,48910%Net interest spread 3.523.433.493.483.53Contribution of interest-free funds .25.25.25.25.25Net interest margin  3.77%3.68%3.74%3.73%3.78%M&T BANK CORPORATIONReconciliation of Quarterly GAAP to Non-GAAP MeasuresThree months endedNine months endedSeptember 30September 302012201120122011Income statement dataIn thousands, except per shareNet incomeNet income $293,462183,108$733,305711,739Amortization of core deposit and other  intangible assets (1) 8,59810,62228,54727,074Merger-related gain (1) ---(64,930)Merger-related expenses (1) -16,2666,00141,960  Net operating income $302,060209,996$767,853715,843Earnings per common shareDiluted earnings per common share $2.171.32$5.375.32Amortization of core deposit and other  intangible assets (1) .07.08.22.22Merger-related gain (1) ---(.52)Merger-related expenses (1) -.13.05.34  Diluted net operating earnings per common share $2.241.53$5.645.36Other expenseOther expense $616,027662,019$1,883,1141,738,485Amortization of core deposit and other  intangible assets (14,085)(17,401)(46,766)(44,455)Merger-related expenses -(26,003)(9,879)(67,294)  Noninterest operating expense $601,942618,615$1,826,4691,626,736Merger-related expensesSalaries and employee benefits $-285$4,99715,597Equipment and net occupancy -11915223Printing, postage and supplies -723-1,188Other costs of operations -24,8764,86750,286  Total $-26,003$9,87967,294Efficiency ratioNoninterest operating expense (numerator) $601,942618,615$1,826,4691,626,736Taxable-equivalent net interest income 669,256623,2651,950,9781,791,066Other income 445,733368,3821,214,1061,184,458Less:  Gain (loss) on bank investment securities 372899150,186           Net OTTI losses recognized in earnings (5,672)(9,642)(33,331)(52,213)           Merger-related gain ---64,930Denominator$1,120,2891,001,200$3,198,4062,812,621Efficiency ratio 53.73%61.79%57.11%57.84%Balance sheet dataIn millionsAverage assetsAverage assets $80,43276,908$79,51872,489Goodwill (3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets (136)(202)(152)(162)Deferred taxes 39584440  Average tangible assets $76,81073,239$75,88568,842Average common equityAverage total equity $9,7899,324$9,5688,866Preferred stock (870)(862)(868)(774)  Average common equity 8,9198,4628,7008,092Goodwill (3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets (136)(202)(152)(162)Deferred taxes 39584440  Average tangible common equity $5,2974,793$5,0674,445At end of quarterTotal assetsTotal assets $81,08577,864Goodwill (3,525)(3,525)Core deposit and other intangible assets (129)(193)Deferred taxes 3855  Total tangible assets $77,46974,201Total common equityTotal equity $9,9459,375Preferred stock(870)(863)Undeclared dividends - cumulative preferred stock (4)(3)  Common equity, net of undeclared cumulative    preferred dividends 9,0718,509Goodwill (3,525)(3,525)Core deposit and other intangible assets (129)(193)Deferred taxes 3855  Total tangible common equity $5,4554,846(1) After any related tax effect. M&T BANK CORPORATIONReconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter TrendThree months endedSeptember 30,June 30,March 31,December 31,September 30,20122012201220112011Income statement dataIn thousands, except per shareNet incomeNet income $293,462233,380206,463147,740183,108Amortization of core deposit and other  intangible assets (1) 8,5989,70910,24010,47610,622Merger-related expenses (1) -4,3441,65710,19416,266  Net operating income   $302,060247,433218,360168,410209,996Earnings per common shareDiluted earnings per common share $2.171.711.501.041.32Amortization of core deposit and other  intangible assets (1) .07.08.08.08.08Merger-related expenses (1) -.03.01.08.13  Diluted net operating earnings per common share $2.241.821.591.201.53Other expenseOther expense $616,027627,392639,695739,583662,019Amortization of core deposit and other  intangible assets (14,085)(15,907)(16,774)(17,162)(17,401)Merger-related expenses -(7,151)(2,728)(16,393)(26,003)  Noninterest operating expense $601,942604,334620,193706,028618,615Merger-related expensesSalaries and employee benefits $-3,0241,973534285Equipment and net occupancy --15189119Printing, postage and supplies ---1,475723Other costs of operations -4,12774014,19524,876  Total $-7,1512,72816,39326,003Efficiency ratioNoninterest operating expense (numerator)$601,942604,334620,193706,028618,615Taxable-equivalent net interest income 669,256654,628627,094624,566623,265Other income 445,733391,650376,723398,454368,382Less:  Gain (loss) on bank investment securities 372(408)45189           Net OTTI losses recognized in earnings (5,672)(16,173)(11,486)(24,822)(9,642)Denominator $1,120,2891,062,8591,015,2581,047,8411,001,200Efficiency ratio 53.73%56.86%61.09%67.38%61.79%Balance sheet dataIn millionsAverage assetsAverage assets $80,43280,08778,02678,39376,908Goodwill (3,525)(3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets (136)(151)(168)(185)(202)Deferred taxes 3944485458  Average tangible assets $76,81076,45574,38174,73773,239Average common equityAverage total equity $9,7899,5369,3769,4139,324Preferred stock (870)(868)(866)(864)(862)  Average common equity 8,9198,6688,5108,5498,462Goodwill (3,525)(3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets (136)(151)(168)(185)(202)Deferred taxes 3944485458  Average tangible common equity $5,2975,0364,8654,8934,793At end of quarterTotal assetsTotal assets $81,08580,80879,18777,92477,864Goodwill (3,525)(3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets(129)(143)(160)(176)(193)Deferred taxes 3841465155  Total tangible assets $77,46977,18175,54874,27474,201Total common equityTotal equity $9,9459,6309,4299,2719,375Preferred stock (870)(868)(867)(865)(863)Undeclared dividends - cumulative preferred stock (4)(4)(3)(3)(3)  Common equity, net of undeclared cumulative    preferred dividends 9,0718,7588,5598,4038,509Goodwill (3,525)(3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets (129)(143)(160)(176)(193)Deferred taxes 3841465155  Total tangible common equity $5,4555,1314,9204,7534,846(1) After any related tax effect.SOURCE M&T Bank Corporation