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Press release from PR Newswire

M&T Bank Corporation Announces 2012 Fourth Quarter And Full-Year Profits

Wednesday, January 16, 2013

M&T Bank Corporation Announces 2012 Fourth Quarter And Full-Year Profits08:09 EST Wednesday, January 16, 2013BUFFALO, N.Y., Jan. 16, 2013 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for 2012. GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the fourth quarter of 2012 rose 108% to $2.16 from $1.04 in the year-earlier quarter and were comparable to $2.17 in the third quarter of 2012.  GAAP-basis net income in the recent quarter totaled $296 million, up from $148 million and $293 million in the fourth quarter of 2011 and the third quarter of 2012, respectively.  Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income for the recent quarter was 1.45% and 12.10%, respectively, compared with .75% and 6.12%, respectively, in the year-earlier quarter and 1.45% and 12.40%, respectively, in the third quarter of 2012.For the year ended December 31, 2012, diluted earnings per common share were $7.54, up 19% from $6.35 in 2011.  Net income rose to $1.03 billion in 2012 from $859 million in the previous year.  Expressed as a rate of return on average assets and average common shareholders' equity, net income in 2012 was 1.29% and 10.96%, respectively, compared with 1.16% and 9.67%, respectively, in 2011.  Commenting on M&T's performance, Rene F. Jones, Executive Vice President and Chief Financial Officer, noted, "This was a year of tremendous accomplishment, in which M&T recorded record levels of net income and earnings per share.  Revenues were up in most major categories, led by exceptional growth in mortgage banking.  We continued to extend credit throughout the communities we serve, and as a result, loans rose an impressive $6.5 billion or 11% from the end of 2011, all while improving our capital base and expanding the services we offer our customers.  The fourth quarter was a continuation of those trends, positioning us well for continued success in 2013.  As we await shareholder and regulatory approvals for our proposed acquisition of Hudson City Bancorp, Inc., we are working diligently to prepare to welcome our new employees and customers to M&T."While there were no unusual items included in M&T's results during the recent quarter, the fourth quarter of 2011 included several items of note:  a $79 million (pre-tax effect) other-than-temporary impairment charge related to M&T's 20% investment in Bayview Lending Group LLC ("BLG"); $55 million of income in full settlement of a lawsuit arising from a 2007 investment in collateralized debt obligations; and a $30 million tax-deductible cash contribution to The M&T Charitable Foundation.  The after-tax impact of those three items reduced the previous year's fourth quarter net income by $33 million, or $.26 of diluted earnings per common share. 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, were $2.23 in the recent quarter, compared with $1.20 in the year-earlier period and $2.24 in the third quarter of 2012.  Net operating income for the fourth quarter of 2012 was $305 million, improved from $168 million in the year-earlier quarter and $302 million in the third quarter of 2012.  For the three months ended December 31, 2012, net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.56% and 20.46%, respectively, compared with .89% and 12.36% in the corresponding 2011 period and 1.56% and 21.53%, respectively, in the third quarter of 2012.Diluted net operating earnings per common share rose 20% to $7.88 in 2012 from $6.55 in 2011.  Net operating income for 2012 and 2011 totaled $1.07 billion and $884 million, respectively.  Net operating income in 2012 expressed as a rate of return on average tangible assets and average tangible common shareholders' equity was 1.40% and 19.42%, respectively, compared with 1.26% and 17.96%, respectively, in 2011.Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income aggregated $674 million in the recent quarter, up from $669 million in the third quarter of 2012.  That improvement resulted from an increase in average earning assets, most notably a $1.6 billion rise in average loans and leases, partially offset by a 3 basis point narrowing of the net interest margin to 3.74% in the fourth quarter, compared with 3.77% in the immediately preceding quarter.  Taxable-equivalent net interest income in the recent quarter increased $49 million from $625 million in the fourth quarter of 2011 reflecting a $2.9 billion rise in average earning assets and a 14 basis point widening of the net interest margin.  For the year ended December 31, 2012, net interest income on a taxable-equivalent basis rose 9% to $2.62 billion from $2.42 billion in 2011 as a result of a 12%, or $6.5 billion, increase in average loans and leases.  Significantly, the net interest margin held steady at 3.73% in 2012 as compared with the prior year despite a challenging low interest rate environment. Provision for Credit Losses/Asset Quality.  Credit quality remained strong. The provision for credit losses was $49 million during the fourth quarter of 2012, compared with $74 million in the year-earlier quarter and $46 million in the third quarter of 2012.  Net charge-offs of loans were $44 million in the recent quarter, representing an annualized .27% of average loans outstanding, compared with $74 million or .50% in the final quarter of 2011 and $42 million or .26% in 2012's third quarter.  The provision for credit losses declined 24% to $204 million for the year ended December 31, 2012 from $270 million in 2011.  Net loan charge-offs for the year totaled $186 million, or .30% of average loans outstanding, compared with $265 million, or .47% of average loans in 2011.Loans classified as nonaccrual totaled $1.01 billion, or 1.52% of total loans at December 31, 2012, compared with $1.10 billion or 1.83% a year earlier and $925 million or 1.44% at September 30, 2012.  The increase in nonaccrual loans from September 30, 2012 resulted largely from the addition of $64 million of loans to a single borrower that are fully secured by residential real estate. Assets taken in foreclosure of defaulted loans were $104 million at December 31, 2012, down from $157 million and $112 million at December 31, 2011 and September 30, 2012, respectively.  Allowance for Credit Losses.  M&T regularly performs detailed analyses of individual borrowers and portfolios for purposes of assessing the adequacy of the allowance for credit losses.  Reflecting those analyses, the allowance for credit losses was $926 million at December 31, 2012, compared with $908 million a year earlier and $921 million at September 30, 2012.  The allowance expressed as a percentage of outstanding loans was 1.39% at the recent quarter-end, compared with 1.51% at December 31, 2011 and 1.44% at September 30, 2012.  Noninterest Income and Expense.  Noninterest income totaled $453 million in the recently completed quarter, compared with $398 million and $446 million in the final quarter of 2011 and the third quarter of 2012, respectively.  Reflected in those amounts were net losses from investment securities of $14 million, $25 million and $5 million, each predominantly due to other-than-temporary impairment charges.  Also included in noninterest income in the fourth quarter of 2011 was the $55 million favorable litigation settlement related to M&T's 2007 investment in certain collateralized debt obligations, as previously noted.  Excluding the specific items referred to in the preceding paragraph, noninterest income was $468 million in the recent quarter, increasing from $368 million in the year-earlier quarter and $451 million in the third quarter of 2012.  The rise in noninterest income in the recent quarter as compared with those earlier quarters was predominantly due to higher mortgage banking revenues.  Noninterest income aggregated $1.67 billion and $1.58 billion during the years ended December 31, 2012 and 2011, respectively. The most significant contributors to the rise in noninterest income in 2012 as compared with 2011 were higher mortgage banking revenues and trust income, the latter reflecting the full-year impact of the acquisition of Wilmington Trust Corporation ("Wilmington Trust").  Partially offsetting those factors were net gains from investment securities, the previously noted litigation settlement and merger-related gains, all reflected in M&T's 2011 results.  Noninterest expense in the fourth quarter of 2012 totaled $626 million, compared with $740 million in the year-earlier quarter and $616 million in 2012's third quarter.  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 $612 million in the recent quarter, compared with $706 million and $602 million in the fourth quarter of 2011 and the third quarter of 2012, respectively.  Reflected in noninterest expense in the fourth quarter of 2011 was the aforementioned $79 million impairment charge related to BLG and the $30 million charitable contribution.For the year ended December 31, 2012, noninterest expense aggregated $2.51 billion, compared with $2.48 billion in the previous year.  Excluding those previously noted expenses considered to be nonoperating in nature, noninterest operating expenses were $2.44 billion in 2012 and $2.33 billion in 2011.  That increase was largely attributable to the full-year impact of the operations obtained in the Wilmington Trust acquisition.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.  As a result of revenue growth that has outpaced increases in operating expenses, M&T's efficiency ratio improved to 53.6% in the recent quarter from 67.4% in the year-earlier quarter and 53.7% in the third quarter of 2012.  The efficiency ratio for the year ended December 31, 2012 was 56.2%, also improved, from 60.4% in 2011.  The improved efficiency ratio reflects the significant progress made in the integration of the operations obtained in the May 2011 acquisition of Wilmington Trust.   Balance Sheet.  M&T had total assets of $83.0 billion at December 31, 2012, up from $77.9 billion a year earlier.  Loans and leases, net of unearned discount, totaled $66.6 billion at the 2012 year-end, $6.5 billion or 11% higher than $60.1 billion at December 31, 2011.  The pace of growth in outstanding loans and leases during 2012's final quarter remained robust, increasing $2.5 billion, or 4%, from $64.1 billion at September 30, 2012.  That growth reflects increases in commercial loans, commercial real estate loans and residential real estate loans.  Total deposits were $65.6 billion at December 31, 2012, $6.2 billion or 10% higher than $59.4 billion a year earlier and $1.6 billion or 3% above $64.0 billion at September 30, 2012.  Total shareholders' equity rose 10% to $10.2 billion at December 31, 2012 from $9.3 billion a year earlier, representing 12.29% and 11.90% respectively, of total assets.  Common shareholders' equity was $9.3 billion, or $72.73 per share at December 31, 2012, compared with $8.4 billion, or $66.82 per share, a year earlier.  Tangible equity per common share rose 18% to $44.61 at December 31, 2012 from $37.79 a year earlier.  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 7.20% at December 31, 2012, compared with 6.40% and 7.04% at December 31, 2011 and September 30, 2012, respectively. M&T's estimated Tier 1 common ratio was 7.57% at December 31, 2012, compared with 6.86% and 7.46% at December 31, 2011 and September 30, 2012, respectively.Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss fourth quarter and full-year 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 #86834125.  The conference call will be webcast live on M&T's website at http://ir.mandtbank.com/events.cfm.  A replay of the call will  be available until January 19, 2013 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #86834125.  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) 842-5138MEDIA CONTACT: C. Michael Zabel(716) 842-5385 M&T BANK CORPORATIONFinancial HighlightsThree months endedYear endedAmounts in thousands,December 31December 31 except per share20122011Change20122011ChangePerformanceNet income$296,193147,740100%$1,029,498859,47920%Net income available to common shareholders276,605129,804113953,429781,76522Per common share:  Basic earnings $2.181.04110%$7.576.3719%  Diluted earnings 2.161.041087.546.3519  Cash dividends $.70.70-$2.802.80-Common shares outstanding:  Average - diluted (1) 127,800124,7362%126,405123,0793%  Period end (2) 128,234125,7522128,234125,7522Return on (annualized):  Average total assets 1.45%.75%1.29%1.16%  Average common shareholders' equity 12.10%6.12%10.96%9.67%Taxable-equivalent net interest income $673,929624,5668%$2,624,9072,415,6329%Yield on average earning assets 4.17%4.17%4.22%4.35%Cost of interest-bearing liabilities .67%.82%.74%.87%Net interest spread 3.50%3.35%3.48%3.48%Contribution of interest-free funds .24%.25%.25%.25%Net interest margin 3.74%3.60%3.73%3.73%Net charge-offs to average total   net loans (annualized) .27%.50%.30%.47%Net operating results (3)Net operating income $304,657168,41081%$1,072,510884,25321%Diluted net operating earnings per common share 2.231.20867.886.5520Return on (annualized):  Average tangible assets 1.56%.89%1.40%1.26%  Average tangible common equity 20.46%12.36%19.42%17.96%Efficiency ratio 53.63%67.38%56.19%60.43%At December 31Loan quality20122011ChangeNonaccrual loans $1,013,1761,097,581-8%Real estate and other foreclosed assets 104,279156,592-33%  Total nonperforming assets $1,117,4551,254,173-11%Accruing loans past due 90 days or more (4) $358,397287,87624%Government guaranteed loans included in totals  above:  Nonaccrual loans $57,42040,52942%  Accruing loans past due 90 days or more 316,403252,50325%Renegotiated loans $271,971214,37927%Acquired accruing loans past due 90 days or more (5) $166,554163,7382%Purchased impaired loans (6):  Outstanding customer balance $828,5711,267,762-35%  Carrying amount 447,114653,362-32%Nonaccrual loans to total net loans 1.52%1.83%Allowance for credit losses to total loans 1.39%1.51%(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,December 31,September 30,June 30,March 31,December 31, except per share20122012201220122011PerformanceNet income$296,193293,462233,380206,463147,740Net income available to common shareholders 276,605273,896214,716188,241129,804Per common share:  Basic earnings $2.182.181.711.501.04  Diluted earnings 2.162.171.711.501.04  Cash dividends $.70.70.70.70.70Common shares outstanding:  Average - diluted (1) 127,800126,292125,897125,616124,736  Period end (2) 128,234127,461126,645126,534125,752Return on (annualized):  Average total assets 1.45%1.45%1.17%1.06%.75%  Average common shareholders' equity 12.10%12.40%10.12%9.04%6.12%Taxable-equivalent net interest income $673,929669,256654,628627,094624,566Yield on average earning assets 4.17%4.23%4.25%4.24%4.17%Cost of interest-bearing liabilities .67%.71%.76%.80%.82%Net interest spread 3.50%3.52%3.49%3.44%3.35%Contribution of interest-free funds .24%.25%.25%.25%.25%Net interest margin  3.74%3.77%3.74%3.69%3.60%Net charge-offs to average total   net loans (annualized) .27%.26%.34%.32%.50%Net operating results (3)Net operating income  $304,657302,060247,433218,360168,410Diluted net operating earnings per common share 2.232.241.821.591.20Return on (annualized):  Average tangible assets 1.56%1.56%1.30%1.18%.89%  Average tangible common equity 20.46%21.53%18.54%16.79%12.36%Efficiency ratio 53.63%53.73%56.86%61.09%67.38%December 31,September 30,June 30,March 31,December 31,Loan quality20122012201220122011Nonaccrual loans $1,013,176925,231968,3281,065,2291,097,581Real estate and other foreclosed assets 104,279112,160115,580140,297156,592  Total nonperforming assets $1,117,4551,037,3911,083,9081,205,5261,254,173Accruing loans past due 90 days or more (4)$358,397309,420274,598273,081287,876Government guaranteed loans included in totals  above:  Nonaccrual loans $57,42054,58348,71244,71740,529  Accruing loans past due 90 days or more 316,403280,410255,495252,622252,503Renegotiated loans $271,971266,526267,111213,024214,379Acquired accruing loans past due 90 days or more (5) $166,554161,424162,487165,163163,738Purchased impaired loans (6):  Outstanding customer balance $828,571978,7311,037,4581,158,8291,267,762  Carrying amount 447,114528,001560,700604,779653,362Nonaccrual loans to total net loans 1.52%1.44%1.54%1.75%1.83%Allowance for credit losses to total loans 1.39%1.44%1.46%1.49%1.51%(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 endedYear endedDecember 31December 31Dollars in thousands20122011Change20122011ChangeInterest income $745,353716,0004%$2,941,6852,792,0875%Interest expense 77,93197,969-20343,169402,331-15Net interest income 667,422618,03182,598,5162,389,7569Provision for credit losses 49,00074,000-34204,000270,000-24Net interest income after   provision for credit losses 618,422544,031142,394,5162,119,75613Other income     Mortgage banking revenues 116,54640,573187349,064166,021110     Service charges on deposit accounts 112,364104,0718446,698455,095-2     Trust income 116,915113,8203471,852332,38542     Brokerage services income 14,87213,3411159,05956,4705     Trading account and foreign exchange gains 10,3567,9713035,63427,22431     Gain on bank investment securities -1-9150,187-     Other-than-temporary impairment losses         recognized in earnings (14,491)(24,822)-(47,822)(77,035)-     Equity in earnings of Bayview Lending Group LLC (4,941)(5,419)-(21,511)(24,231)-     Other revenues from operations 101,543148,918-32374,287496,796-25          Total other income 453,164398,454141,667,2701,582,9125Other expense     Salaries and employee benefits 323,010312,52831,314,5401,203,9939     Equipment and net occupancy 62,88465,080-3257,551249,5143     Printing, postage and supplies 10,41711,399-941,92940,9172     Amortization of core deposit and other         intangible assets 13,86517,162-1960,63161,617-2     FDIC assessments 23,39827,826-16101,110100,2301     Other costs of operations 192,572305,588-37733,499821,797-11          Total other expense 626,146739,583-152,509,2602,478,0681Income before income taxes 445,440202,9021201,552,5261,224,60027Applicable income taxes 149,24755,162171523,028365,12143Net income $296,193147,740100%$1,029,498859,47920% M&T BANK CORPORATIONCondensed Consolidated Statement of Income, Five Quarter TrendThree months endedDecember 31,September 30,June 30,March 31,December 31,Dollars in thousands20122012201220122011Interest income $745,353744,851737,386714,095716,000Interest expense 77,93182,12989,40393,70697,969Net interest income 667,422662,722647,983620,389618,031Provision for credit losses 49,00046,00060,00049,00074,000Net interest income after   provision for credit losses618,422616,722587,983571,389544,031Other income     Mortgage banking revenues 116,546106,81269,51456,19240,573     Service charges on deposit accounts 112,364114,463110,982108,889104,071     Trust income  116,915115,709122,275116,953113,820     Brokerage services income 14,87214,11416,17213,90113,341     Trading account and foreign exchange gains 10,3568,4696,23810,5717,971     Gain (loss) on bank investment securities -372(408)451     Other-than-temporary impairment losses         recognized in earnings (14,491)(5,672)(16,173)(11,486)(24,822)     Equity in earnings of Bayview Lending Group LLC (4,941)(5,183)(6,635)(4,752)(5,419)     Other revenues from operations 101,54396,64989,68586,410148,918          Total other income 453,164445,733391,650376,723398,454Other expense     Salaries and employee benefits 323,010321,746323,686346,098312,528     Equipment and net occupancy 62,88464,24865,37665,04365,080     Printing, postage and supplies 10,4178,27211,36811,87211,399     Amortization of core deposit and other         intangible assets 13,86514,08515,90716,77417,162     FDIC assessments 23,39823,80124,96228,94927,826     Other costs of operations 192,572183,875186,093170,959305,588          Total other expense 626,146616,027627,392639,695739,583Income before income taxes 445,440446,428352,241308,417202,902Applicable income taxes 149,247152,966118,861101,95455,162Net income$296,193293,462233,380206,463147,740 M&T BANK CORPORATIONCondensed Consolidated Balance SheetDecember 31Dollars in thousands20122011ChangeASSETSCash and due from banks $1,983,6151,449,54737%Interest-bearing deposits at banks 129,945154,960-16Federal funds sold and agreements  to resell securities 3,0002,8505Trading account assets 488,966561,834-13Investment securities 6,074,3617,673,154-21Loans and leases:   Commercial, financial, etc 17,776,95315,734,43613   Real estate - commercial 25,993,79024,411,1146   Real estate - consumer 11,240,8377,923,16542   Consumer 11,559,37712,027,290-4     Total loans and leases, net of unearned discount 66,570,95760,096,00511        Less: allowance for credit losses 925,860908,2902  Net loans and leases 65,645,09759,187,71511Goodwill 3,524,6253,524,625-Core deposit and other intangible assets 115,763176,394-34Other assets 5,043,4315,193,208-3  Total assets $83,008,80377,924,2877%LIABILITIES AND SHAREHOLDERS' EQUITYNoninterest-bearing deposits $24,240,80220,017,88321%Interest-bearing deposits 40,325,93239,020,8393Deposits at Cayman Islands office 1,044,519355,927193  Total deposits 65,611,25359,394,64910Short-term borrowings 1,074,482782,08237Accrued interest and other liabilities 1,512,7171,790,121-15Long-term borrowings4,607,7586,686,226-31  Total liabilities 72,806,21068,653,0786Shareholders' equity:   Preferred 872,500864,5851   Common (1) 9,330,0938,406,62411     Total shareholders' equity 10,202,5939,271,20910  Total liabilities and shareholders' equity $83,008,80377,924,2877%(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $240.3 million       at December 31, 2012 and $356.4 million at December 31, 2011. M&T BANK CORPORATIONCondensed Consolidated Balance Sheet, Five Quarter TrendDecember 31,September 30,June 30,March 31,December 31,Dollars in thousands20122012201220122011ASSETSCash and due from banks $1,983,6151,622,9281,421,8311,344,0921,449,547Interest-bearing deposits at banks 129,945411,9941,069,7171,282,040154,960Federal funds sold and agreements  to resell securities 3,000?1,000?2,850Trading account assets 488,966526,844544,938517,620561,834Investment securities 6,074,3616,624,0047,057,3007,195,2967,673,154Loans and leases:   Commercial, financial, etc 17,776,95316,704,57516,395,58715,938,67215,734,436   Real estate - commercial 25,993,79024,970,41624,898,70724,486,55524,411,114   Real estate - consumer 11,240,83710,808,2209,811,5258,696,5947,923,165   Consumer 11,559,37711,628,74411,745,45311,799,92912,027,290     Total loans and leases, net of unearned discount 66,570,95764,111,95562,851,27260,921,75060,096,005        Less: allowance for credit losses 925,860921,223917,028909,006908,290  Net loans and leases 65,645,09763,190,73261,934,24460,012,74459,187,715Goodwill 3,524,6253,524,6253,524,6253,524,6253,524,625Core deposit and other intangible assets 115,763129,628143,713159,619176,394Other assets 5,043,4315,054,4785,110,2105,150,8515,193,208  Total assets $83,008,80381,085,23380,807,57879,186,88777,924,287LIABILITIES AND SHAREHOLDERS' EQUITYNoninterest-bearing deposits $24,240,80222,968,40122,854,79420,648,97020,017,883Interest-bearing deposits 40,325,93239,636,10439,327,84939,868,78239,020,839Deposits at Cayman Islands office 1,044,5191,402,753366,164395,191355,927  Total deposits 65,611,25364,007,25862,548,80760,912,94359,394,649Short-term borrowings 1,074,482592,154975,575511,981782,082Accrued interest and other liabilities 1,512,7171,570,7581,965,4211,856,7491,790,121Long-term borrowings 4,607,7584,969,5365,687,8686,476,5266,686,226  Total liabilities 72,806,21071,139,70671,177,67169,758,19968,653,078Shareholders' equity:   Preferred 872,500870,416868,433866,489864,585   Common (1)  9,330,0939,075,1118,761,4748,562,1998,406,624     Total shareholders' equity 10,202,5939,945,5279,629,9079,428,6889,271,209  Total liabilities and shareholders' equity $83,008,80381,085,23380,807,57879,186,88777,924,287(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $240.3 million at December 31, 2012,       $230.1 million at September 30, 2012, $277.8 million at June 30, 2012, $331.3 million at March 31, 2012 and $356.4 million at        December 31, 2011. M&T BANK CORPORATIONCondensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent RatesThree months endedChange in balanceYear endedDecember 31,December 31,September 30,December 31, 2012 fromDecember 31,Dollars in millions201220112012December 31,September 30,20122011Change inBalanceRateBalanceRateBalanceRate20112012BalanceRateBalance RatebalanceASSETSInterest-bearing deposits at banks $273.15%1,973.25%298.18%-86%-9%$528.23%1,195.25%-56%Federal funds sold and agreements  to resell securities 3.576.384.55-51-284.55180.11-98Trading account assets 971.45821.30941.13183961.45941.502Investment securities 6,2953.317,6333.486,8113.39-18-86,9693.447,0643.82-1Loans and leases, net of unearned discount  Commercial, financial, etc. 16,9953.6815,3923.7816,5043.7310316,3363.7114,6553.8511  Real estate - commercial 25,3324.5024,1084.4724,9954.615124,9074.5022,9014.599  Real estate - consumer 11,0874.107,4804.7710,2964.294889,7274.336,7784.9343  Consumer 11,5974.6912,0974.8711,6604.76-4-111,7324.7711,8654.99-1     Total loans and leases, net 65,01159,0774.3963,4554.3410262,70256,1994.5312  Total earning assets71,6794.1768,7714.1770,6624.234170,2994.2264,7324.359Goodwill 3,5253,5253,525--3,5253,525-Core deposit and other intangible assets 122185136-34-10144168-14Other assets 6,0405,9126,1092-16,0155,5528  Total assets $81,36678,39380,4324%1%$79,98373,9778%LIABILITIES AND SHAREHOLDERS' EQUITYInterest-bearing deposits  NOW accounts$881.14826.15875.157%1%$856.16753.1514%  Savings deposits 34,587.1932,179.2733,298.207433,398.2030,403.2810  Time deposits 4,727.796,379.935,164.84-26-85,347.866,4801.10-17  Deposits at Cayman Islands office 763.18512.15702.19499605.19779.12-22     Total interest-bearing deposits 40,958.2639,896.3740,039.283240,206.2938,415.415Short-term borrowings 677.16674.10976.15--31839.15827.121Long-term borrowings 4,5104.526,5743.665,0064.27-31-105,5274.086,9593.50-21Total interest-bearing liabilities 46,145.6747,144.8246,021.71-2-46,572.7446,201.871Noninterest-bearing deposits 23,31120,10322,70416321,76117,27326Other liabilities 1,8051,7331,9184-61,9471,49930  Total liabilities71,26168,98070,6433170,28064,9738Shareholders' equity10,1059,4139,789739,7039,0048  Total liabilities and shareholders' equity$81,36678,39380,4324%1%$79,98373,9778%Net interest spread 3.503.353.523.483.48Contribution of interest-free funds .24.25.25.25.25Net interest margin  3.74%3.60%3.77%3.73%3.73% M&T BANK CORPORATIONReconciliation of GAAP to Non-GAAP MeasuresThree months endedYear endedDecember 31December 312012201120122011Income statement dataIn thousands, except per shareNet incomeNet income $296,193147,740$1,029,498859,479Amortization of core deposit and other  intangible assets (1) 8,46410,47637,01137,550Merger-related gain (1) ---(64,930)Merger-related expenses (1) -10,1946,00152,154  Net operating income $304,657168,410$1,072,510884,253Earnings per common shareDiluted earnings per common share $2.161.04$7.546.35Amortization of core deposit and other  intangible assets (1) .07.08.29.30Merger-related gain (1) ---(.52)Merger-related expenses (1) -.08.05.42  Diluted net operating earnings per common share $2.231.20$7.886.55Other expenseOther expense $626,146739,583$2,509,2602,478,068Amortization of core deposit and other  intangible assets  (13,865)(17,162)(60,631)(61,617)Merger-related expenses  -(16,393)(9,879)(83,687)  Noninterest operating expense $612,281706,028$2,438,7502,332,764Merger-related expensesSalaries and employee benefits $-534$4,99716,131Equipment and net occupancy -18915412Printing, postage and supplies -1,475-2,663Other costs of operations -14,1954,86764,481  Total $-16,393$9,87983,687Efficiency ratioNoninterest operating expense (numerator) $612,281706,028$2,438,7502,332,764Taxable-equivalent net interest income 673,929624,5662,624,9072,415,632Other income 453,164398,4541,667,2701,582,912Less:  Gain (loss) on bank investment securities -19150,187           Net OTTI losses recognized in earnings (14,491)(24,822)(47,822)(77,035)           Merger-related gain ---64,930Denominator $1,141,5841,047,841$4,339,9903,860,462Efficiency ratio 53.63%67.38%56.19%60.43%Balance sheet dataIn millionsAverage assetsAverage assets $81,36678,393$79,98373,977Goodwill (3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets (122)(185)(144)(168)Deferred taxes 36544243  Average tangible assets $77,75574,737$76,35670,327Average common equityAverage total equity $10,1059,413$9,7039,004Preferred stock (872)(864)(869)(797)  Average common equity 9,2338,5498,8348,207Goodwill (3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets (122)(185)(144)(168)Deferred taxes 36544243  Average tangible common equity $5,6224,893$5,2074,557At end of quarterTotal assetsTotal assets $83,00977,924Goodwill (3,525)(3,525)Core deposit and other intangible assets (116)(176)Deferred taxes 3451  Total tangible assets $79,40274,274Total common equityTotal equity $10,2039,271Preferred stock (873)(865)Undeclared dividends - cumulative preferred stock(3)(3)  Common equity, net of undeclared cumulative    preferred dividends 9,3278,403Goodwill (3,525)(3,525)Core deposit and other intangible assets (116)(176)Deferred taxes 3451  Total tangible common equity $5,7204,753(1) After any related tax effect. M&T BANK CORPORATIONReconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter TrendThree months endedDecember 31,September 30,June 30,March 31,December 31,20122012201220122011Income statement dataIn thousands, except per shareNet incomeNet income $296,193293,462233,380206,463147,740Amortization of core deposit and other  intangible assets (1) 8,4648,5989,70910,24010,476Merger-related expenses (1) --4,3441,65710,194  Net operating income $304,657302,060247,433218,360168,410Earnings per common shareDiluted earnings per common share $2.162.171.711.501.04Amortization of core deposit and other  intangible assets (1) .07.07.08.08.08Merger-related expenses (1) --.03.01.08  Diluted net operating earnings per common share $2.232.241.821.591.20Other expenseOther expense $626,146616,027627,392639,695739,583Amortization of core deposit and other  intangible assets  (13,865)(14,085)(15,907)(16,774)(17,162)Merger-related expenses  --(7,151)(2,728)(16,393)  Noninterest operating expense $612,281601,942604,334620,193706,028Merger-related expensesSalaries and employee benefits $--3,0241,973534Equipment and net occupancy ---15189Printing, postage and supplies ----1,475Other costs of operations --4,12774014,195  Total $--7,1512,72816,393Efficiency ratioNoninterest operating expense (numerator) $612,281601,942604,334620,193706,028Taxable-equivalent net interest income 673,929669,256654,628627,094624,566Other income 453,164445,733391,650376,723398,454Less:  Gain (loss) on bank investment securities-372(408)451           Net OTTI losses recognized in earnings (14,491)(5,672)(16,173)(11,486)(24,822)Denominator $1,141,5841,120,2891,062,8591,015,2581,047,841Efficiency ratio 53.63%53.73%56.86%61.09%67.38%Balance sheet dataIn millionsAverage assetsAverage assets $81,36680,43280,08778,02678,393Goodwill (3,525)(3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets (122)(136)(151)(168)(185)Deferred taxes 3639444854  Average tangible assets $77,75576,81076,45574,38174,737Average common equityAverage total equity $10,1059,7899,5369,3769,413Preferred stock (872)(870)(868)(866)(864)  Average common equity 9,2338,9198,6688,5108,549Goodwill (3,525)(3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets (122)(136)(151)(168)(185)Deferred taxes 3639444854  Average tangible common equity $5,6225,2975,0364,8654,893At end of quarterTotal assetsTotal assets $83,00981,08580,80879,18777,924Goodwill (3,525)(3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets (116)(129)(143)(160)(176)Deferred taxes 3438414651  Total tangible assets $79,40277,46977,18175,54874,274Total common equityTotal equity $10,2039,9459,6309,4299,271Preferred stock (873)(870)(868)(867)(865)Undeclared dividends - cumulative preferred stock (3)(4)(4)(3)(3)  Common equity, net of undeclared cumulative    preferred dividends 9,3279,0718,7588,5598,403Goodwill (3,525)(3,525)(3,525)(3,525)(3,525)Core deposit and other intangible assets (116)(129)(143)(160)(176)Deferred taxes 3438414651  Total tangible common equity $5,7205,4555,1314,9204,753(1) After any related tax effect. SOURCE M&T Bank Corporation