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Press release from PR Newswire

M&T Bank Corporation Announces Second Quarter Results

Thursday, July 17, 2014

M&T Bank Corporation Announces Second Quarter Results

08:00 EDT Thursday, July 17, 2014

BUFFALO, N.Y., July 17, 2014 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2014.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the second quarter of 2014 were $1.98, up 23% from $1.61 in the first quarter of 2014.  GAAP-basis net income in the recent quarter totaled $284 million, compared with $229 million in the initial 2014 quarter.  Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income for the recent quarter was 1.27% and 9.79%, respectively, compared with 1.07% and 8.22%, respectively, in the first quarter of 2014.

The recent quarter's results reflect two noteworthy, but largely offsetting, items. The resolution with tax authorities of previously uncertain tax positions required M&T to reduce its accrual for income taxes and increase net income by $8 million, while an increase to M&T's litigation reserves of $12 million reduced net income by $7 million after applicable tax effect. Both accrual items were associated with pre-acquisition activities of M&T's Wilmington Trust entities.

Diluted earnings per common share and net income in last year's second quarter were $2.55 and $348 million, respectively.  Those results include after-tax gains from the sale of investment securities of $34 million and the effect of the reversal of an accrual for a contingent compensation obligation assumed in the May 2011 acquisition of Wilmington Trust that resulted in a reduction of expenses having an after-tax impact of $15 million. Those items increased diluted earnings per common share by $.38 in 2013's second quarter.

Reflecting on the recent quarter's performance, Rene F. Jones,  Vice Chairman and Chief Financial Officer, noted, "Results for the second quarter reflected an improvement in revenue from the first quarter in the areas of mortgage banking, trust and deposit services.  M&T's credit quality measures were strong during the quarter.  While operating expense levels continue to be elevated, significant progress has been made on several key initiatives related to BSA/AML activities, Compliance, Risk Management and Capital Planning." 

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 items 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.    

Diluted net operating earnings per common share were $2.02 in the recent quarter, compared with $1.66 and $2.65 in the initial quarter of 2014 and last year's second quarter, respectively.  Net operating income during the second quarter of 2014 was $290 million, compared with $235 million in the first quarter of 2014 and $361 million in the second quarter of 2013.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.35% and 14.92%, respectively, in the second quarter of 2014.  The comparable returns were 1.15% and 12.76% in the first quarter of 2014 and 1.81% and 22.72% in the second quarter of 2013.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis aggregated $675 million in the second quarter of 2014, down slightly from $684 million in the year-earlier period. The effect of growth in average earning assets, predominantly due to a $5.7 billion rise in average investment securities, was offset by a 31 basis point narrowing of the net interest margin to 3.40% in the recent quarter from 3.71% in the second quarter of 2013.  The significant increase in investment securities reflects M&T's continued efforts to meet proposed regulatory liquidity requirements.  Taxable-equivalent net interest income in the recent quarter was up 2% from $662 million in the first quarter of 2014.  That improvement reflects a $3.3 billion increase in average earning assets, including a $1.7 billion or 18% rise in average investment securities resulting from continued purchases of mortgage-backed securities, partially offset by a 12 basis point decline in the net interest margin.  The narrowing of the recent quarter's net interest margin as compared with the second quarter of 2013 and the initial 2014 quarter reflects continuing downward pressure on loan yields, increased balances of investment securities and higher levels of deposits held at the Federal Reserve Bank of New York.

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $30 million in the second quarter of 2014, compared with $57 million and $32 million in the year-earlier quarter and the first quarter of 2014, respectively.  Net charge-offs of loans were $29 million during the recent quarter, improved from $57 million in the second quarter of 2013 and $32 million in the first quarter of 2014.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .18% and .35% in the second quarters of 2014 and 2013, respectively, and .20% in the first quarter of 2014.

Loans classified as nonaccrual declined to $880 million, or 1.36% of total loans outstanding at June 30, 2014, compared with $965 million or 1.46% a year earlier and $891 million or 1.39% at March 31, 2014.  Assets taken in foreclosure of defaulted loans were $60 million at June 30, 2014, improved from $82 million at June 30, 2013 and comparable to $59 million at March 31, 2014.

Allowance for Credit Losses.  M&T regularly performs detailed analyses of individual borrowers and portfolios for purposes of assessing the adequacy of the allowance for credit losses.  As a result of those analyses, the allowance totaled $918 million or 1.42% of loans outstanding at June 30, 2014, compared with $927 million or 1.41% of loans at June 30, 2013 and $917 million or 1.43% of loans at March 31, 2014. 

Noninterest Income and Expense.  Noninterest income aggregated $456 million in the second quarter of 2014, compared with $509 million in the year-earlier quarter and $420 million in the first quarter of 2014.  Reflected in the second quarter of 2013 were net pre-tax gains of $56 million from the noted sales of investment securities.  Excluding those gains, noninterest income in the second quarter of 2014 was up from $452 million in the year-earlier quarter and was 9% higher than the $420 million in the initial quarter of 2014.  Higher mortgage banking revenues and trust income in the recent quarter contributed to those improvements.

Noninterest expense in the second quarter of 2014 totaled $681 million, up from $599 million in the year-earlier quarter, but down from $702 million in the first quarter of 2014.  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 $672 million in the recent quarter, compared with $578 million in the second quarter of 2013 and $692 million in 2014's initial quarter.  The higher level of operating expenses in the recent quarter as compared with the year-earlier period was predominantly the result of costs for professional services and salaries associated with BSA/AML activities, compliance, capital planning and stress testing, risk management, and other operational initiatives.  As compared with the first quarter of 2014, the recent quarter's lower level of operating expenses was due, in large part, to a decline in salaries and employee benefits, including stock-based compensation, which were seasonally higher in the initial 2014 period, partially offset by the noted increase in litigation reserves. 

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), measures the relationship of operating expenses to revenues.  M&T's efficiency ratio was 59.4% in the second quarter of 2014, compared with 50.9% in the year-earlier quarter and 63.9% in the first quarter of 2014. 

Balance Sheet.  M&T had total assets of $90.8 billion at June 30, 2014, up 9% from $83.2 billion a year earlier.  Investment securities were $12.1 billion at June 30, 2014, up $6.9 billion or 133% from June 30, 2013.  M&T has added investment securities during 2013 and 2014 through purchase and loan securitization transactions in order to enhance its liquidity position in response to proposed regulatory requirements.  Loans and leases, net of unearned discount, totaled $64.7 billion at the recent quarter-end, compared with $66.0 billion at June 30, 2013.  Total deposits rose 6% to $69.8 billion at June 30, 2014 from $65.7 billion a year earlier.

Total shareholders' equity rose 14% to $12.2 billion at June 30, 2014 from $10.7 billion a year earlier, representing 13.40% and 12.88%, respectively, of total assets.  Common shareholders' equity was $10.9 billion, or $82.86 per share, at June 30, 2014, up from $9.8 billion, or $75.98 per share, at June 30, 2013.  Tangible equity per common share rose 16% to $55.89 at the recent quarter-end from $48.26 a year earlier.  Common shareholders' equity per share and tangible equity per common share were $81.05 and $53.92, respectively, at March 31, 2014.  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 estimated Tier 1 common ratio, a regulatory capital measure, was 9.62% at June 30, 2014, compared with 8.55% and 9.45% at June 30, 2013 and March 31, 2014, respectively.  M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under the capital rules approved in July 2013 on a fully phased-in basis was approximately 9.35% as of June 30, 2014.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss second quarter financial results today at 11:00 a.m. Eastern Time.  Those wishing to participate in the call may dial (877)780-2276.  International participants, using any applicable international calling codes, may dial (973)582-2700.  Callers should reference M&T Bank Corporation or the conference ID# 66984191. 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 through Sunday, July 20, 2014 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID# 66984191.  The event will also be archived and available by 7:00 p.m. today on M&T's website at http://ir.mandtbank.com/events.cfm.

M&T is a financial holding company headquartered in Buffalo, New York.  M&T's principal banking subsidiary, M&T Bank, operates banking offices in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware and the District of Columbia.  Trust-related services are provided by M&T's Wilmington Trust-affiliated companies and by M&T Bank.

Forward-Looking Statements.  This news release contains forward-looking statements that are based on current expectations, estimates and projections about M&T's business, management's beliefs and assumptions made by management.  These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

Future Factors include changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation; regulatory supervision and oversight, including monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

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

INVESTOR CONTACT:

Donald J. MacLeod 

(716) 842-5138

MEDIA CONTACT:   

C. Michael Zabel

(716) 842-5385

 

M&T BANK CORPORATION

Financial Highlights

Three months ended

Six months ended

Amounts in thousands,

June 30

June 30

 except per share

2014

2013

Change

2014

2013

Change

Performance

Net income

$

284,336

348,466

-18

%

$

513,353

622,579

-18

%

Net income available to common shareholders 

260,695

328,557

-21

472,429

583,633

-19

Per common share:

  Basic earnings 

$

1.99

2.56

-22

%

$

3.62

4.56

-21

%

  Diluted earnings 

1.98

2.55

-22

3.59

4.53

-21

  Cash dividends 

$

.70

.70

-

$

1.40

1.40

-

Common shares outstanding:

  Average - diluted (1) 

131,828

129,017

2

%

131,479

128,828

2

%

  Period end (2) 

131,953

129,464

2

131,953

129,464

2

Return on (annualized):

  Average total assets 

1.27

%

1.68

%

1.17

%

1.52

%

  Average common shareholders' equity 

9.79

%

13.78

%

9.02

%

12.47

%

Taxable-equivalent net interest income 

$

674,963

683,804

-1

%

$

1,337,341

1,346,304

-1

%

Yield on average earning assets 

3.73

%

4.10

%

3.80

%

4.12

%

Cost of interest-bearing liabilities 

.51

%

.62

%

.53

%

.63

%

Net interest spread 

3.22

%

3.48

%

3.27

%

3.49

%

Contribution of interest-free funds 

.18

%

.23

%

.19

%

.22

%

Net interest margin  

3.40

%

3.71

%

3.46

%

3.71

%

Net charge-offs to average total 

  net loans (annualized) 

.18

%

.35

%

.19

%

.29

%

Net operating results (3)

Net operating income  

$

289,974

360,734

-20

%

$

525,136

645,870

-19

%

Diluted net operating earnings per common share 

2.02

2.65

-24

3.68

4.71

-22

Return on (annualized):

  Average tangible assets 

1.35

%

1.81

%

1.25

%

1.65

%

  Average tangible common equity 

14.92

%

22.72

%

13.86

%

20.76

%

Efficiency ratio 

59.39

%

50.92

%

61.62

%

53.36

%

At  June 30

Loan quality

2014

2013

Change

Nonaccrual loans 

$

880,134

964,906

-9

%

Real estate and other foreclosed assets 

59,793

82,088

-27

%

  Total nonperforming assets 

$

939,927

1,046,994

-10

%

Accruing loans past due 90 days or more (4) 

$

289,016

340,467

-15

%

Government guaranteed loans included in totals

  above:

  Nonaccrual loans 

$

81,817

69,508

18

%

  Accruing loans past due 90 days or more 

275,846

315,281

-13

%

Renegotiated loans 

$

270,223

263,351

3

%

Acquired accruing loans past due 90 

  days or more (5) 

$

124,217

155,686

-20

%

Purchased impaired loans (6):

  Outstanding customer balance 

$

504,584

725,196

-30

%

  Carrying amount 

282,517

394,697

-28

%

Nonaccrual loans to total net loans 

1.36

%

1.46

%

Allowance for credit losses to total loans 

1.42

%

1.41

%

(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 expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects.  Reconciliations of net income with net operating income appear herein.

(4)  Excludes acquired loans. 

(5)  Acquired loans that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

(6)  Accruing loans that were impaired at acquisition date and recorded at fair value.

 

M&T BANK CORPORATION

Financial Highlights, Five Quarter Trend

Three months ended

Amounts in thousands,

June 30,

March 31,

December 31,

September 30,

June 30,

 except per share

2014

2014

2013

2013

2013

Performance

Net income 

$

284,336

229,017

221,422

294,479

348,466

Net income available to common shareholders 

260,695

211,731

203,451

275,356

328,557

Per common share:

  Basic earnings 

$

1.99

1.63

1.57

2.13

2.56

  Diluted earnings 

1.98

1.61

1.56

2.11

2.55

  Cash dividends 

$

.70

.70

.70

.70

.70

Common shares outstanding:

  Average - diluted (1) 

131,828

131,126

130,464

130,265

129,017

  Period end (2) 

131,953

131,431

130,564

130,241

129,464

Return on (annualized):

  Average total assets 

1.27

%

1.07

%

1.03

%

1.39

%

1.68

%

  Average common shareholders' equity 

9.79

%

8.22

%

7.99

%

11.06

%

13.78

%

Taxable-equivalent net interest income 

$

674,963

662,378

672,683

679,213

683,804

Yield on average earning assets 

3.73

%

3.87

%

3.92

%

3.98

%

4.10

%

Cost of interest-bearing liabilities 

.51

%

.55

%

.56

%

.58

%

.62

%

Net interest spread 

3.22

%

3.32

%

3.36

%

3.40

%

3.48

%

Contribution of interest-free funds 

.18

%

.20

%

.20

%

.21

%

.23

%

Net interest margin 

3.40

%

3.52

%

3.56

%

3.61

%

3.71

%

Net charge-offs to average total 

  net loans (annualized) 

.18

%

.20

%

.26

%

.29

%

.35

%

Net operating results (3)

Net operating income 

$

289,974

235,162

227,797

300,968

360,734

Diluted net operating earnings per common share 

2.02

1.66

1.61

2.16

2.65

Return on (annualized):

  Average tangible assets 

1.35

%

1.15

%

1.11

%

1.48

%

1.81

%

  Average tangible common equity 

14.92

%

12.76

%

12.67

%

17.64

%

22.72

%

Efficiency ratio 

59.39

%

63.95

%

65.48

%

56.03

%

50.92

%

June 30,

March 31,

December 31,

September 30,

June 30,

Loan quality

2014

2014

2013

2013

2013

Nonaccrual loans 

$

880,134

890,893

874,156

915,871

964,906

Real estate and other foreclosed assets 

59,793

59,407

66,875

89,203

82,088

  Total nonperforming assets 

$

939,927

950,300

941,031

1,005,074

1,046,994

Accruing loans past due 90 days or more (4) 

$

289,016

307,017

368,510

339,792

340,467

Government guaranteed loans included in totals

  above:

  Nonaccrual loans 

$

81,817

75,959

63,647

68,519

69,508

  Accruing loans past due 90 days or more 

275,846

291,418

297,918

320,732

315,281

Renegotiated loans 

$

270,223

257,889

257,092

259,301

263,351

Acquired accruing loans past due 90 

  days or more (5) 

$

124,217

120,996

130,162

153,585

155,686

Purchased impaired loans (6):

  Outstanding customer balance 

$

504,584

534,331

579,975

648,118

725,196

  Carrying amount 

282,517

303,388

330,792

357,337

394,697

Nonaccrual loans to total net loans 

1.36

%

1.39

%

1.36

%

1.44

%

1.46

%

Allowance for credit losses to total loans 

1.42

%

1.43

%

1.43

%

1.44

%

1.41

%

(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 expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. Reconciliations of net income with net operating income appear herein.

(4)  Excludes acquired loans. 

(5)  Acquired loans that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

(6)  Accruing loans that were impaired at acquisition date and recorded at fair value.

 

M&T BANK CORPORATION

Condensed Consolidated Statement of Income

Three months ended

Six months ended

June 30

June 30

Dollars in thousands

2014

2013

Change

2014

2013

Change

Interest income 

$

734,290

750,207

-2

%

$

1,457,242

1,480,182

-2

%

Interest expense 

65,176

72,620

-10

131,695

146,545

-10

Net interest income 

669,114

677,587

-1

1,325,547

1,333,637

-1

Provision for credit losses 

30,000

57,000

-47

62,000

95,000

-35

Net interest income after

   provision for credit losses 

639,114

620,587

3

1,263,547

1,238,637

2

Other income

     Mortgage banking revenues 

95,656

91,262

5

175,705

184,365

-5

     Service charges on deposit accounts 

107,368

111,717

-4

211,566

222,666

-5

     Trust income  

129,893

124,728

4

251,145

246,331

2

     Brokerage services income 

17,487

17,258

1

33,987

32,969

3

     Trading account and foreign exchange gains 

8,042

9,224

-13

14,489

18,151

-20

     Gain on bank investment securities 

-

56,457

-

-

56,457

-

     Other-than-temporary impairment losses 

        recognized in earnings 

-

-

-

-

(9,800)

-

     Equity in earnings of Bayview Lending Group LLC 

(4,055)

(2,453)

-

(8,509)

(6,109)

-

     Other revenues from operations 

102,021

100,496

2

198,136

196,541

1

          Total other income 

456,412

508,689

-10

876,519

941,571

-7

Other expense

     Salaries and employee benefits 

339,713

323,136

5

711,039

679,687

5

     Equipment and net occupancy 

68,084

64,278

6

139,251

129,437

8

     Printing, postage and supplies 

9,180

10,298

-11

20,136

20,997

-4

     Amortization of core deposit and other 

        intangible assets 

9,234

12,502

-26

19,296

25,845

-25

     FDIC assessments 

15,155

17,695

-14

30,643

37,133

-17

     Other costs of operations 

239,828

170,682

41

463,100

341,088

36

          Total other expense 

681,194

598,591

14

1,383,465

1,234,187

12

Income before income taxes 

414,332

530,685

-22

756,601

946,021

-20

Applicable income taxes 

129,996

182,219

-29

243,248

323,442

-25

Net income 

$

284,336

348,466

-18

%

$

513,353

622,579

-18

%

 

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend

Three months ended

June 30,

March 31,

December 31,

September 30,

June 30,

Dollars in thousands

2014

2014

2013

2013

2013

Interest income 

$

734,290

722,952

734,466

742,686

750,207

Interest expense 

65,176

66,519

67,982

69,578

72,620

Net interest income 

669,114

656,433

666,484

673,108

677,587

Provision for credit losses 

30,000

32,000

42,000

48,000

57,000

Net interest income after

   provision for credit losses 

639,114

624,433

624,484

625,108

620,587

Other income

     Mortgage banking revenues 

95,656

80,049

82,169

64,731

91,262

     Service charges on deposit accounts 

107,368

104,198

110,436

113,839

111,717

     Trust income 

129,893

121,252

125,876

123,801

124,728

     Brokerage services income 

17,487

16,500

15,807

16,871

17,258

     Trading account and foreign exchange gains 

8,042

6,447

13,690

8,987

9,224

     Gain on bank investment securities 

-

-

-

-

56,457

     Equity in earnings of Bayview Lending Group LLC 

(4,055)

(4,454)

(6,136)

(3,881)

(2,453)

     Other revenues from operations 

102,021

96,115

104,404

153,040

100,496

          Total other income 

456,412

420,107

446,246

477,388

508,689

Other expense

     Salaries and employee benefits 

339,713

371,326

336,159

339,332

323,136

     Equipment and net occupancy 

68,084

71,167

68,670

66,220

64,278

     Printing, postage and supplies 

9,180

10,956

8,808

9,752

10,298

     Amortization of core deposit and other 

        intangible assets 

9,234

10,062

10,439

10,628

12,502

     FDIC assessments 

15,155

15,488

17,574

14,877

17,695

     Other costs of operations 

239,828

223,272

301,422

217,817

170,682

          Total other expense 

681,194

702,271

743,072

658,626

598,591

Income before income taxes 

414,332

342,269

327,658

443,870

530,685

Applicable income taxes 

129,996

113,252

106,236

149,391

182,219

Net income 

$

284,336

229,017

221,422

294,479

348,466

 

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet

June 30

Dollars in thousands

2014

2013

Change

ASSETS

Cash and due from banks 

$

1,827,197

1,350,015

35

%

Interest-bearing deposits at banks 

3,032,530

2,555,354

19

Federal funds sold and agreements

  to resell securities 

90,239

124,487

-28

Trading account assets 

313,325

378,235

-17

Investment securities 

12,120,195

5,210,526

133

Loans and leases:

   Commercial, financial, etc. 

19,105,892

18,021,812

6

   Real estate - commercial 

26,374,274

26,116,394

1

   Real estate - consumer 

8,656,766

10,399,749

-17

   Consumer 

10,610,761

11,433,911

-7

     Total loans and leases, net of unearned discount 

64,747,693

65,971,866

-2

        Less: allowance for credit losses 

917,666

927,065

-1

  Net loans and leases 

63,830,027

65,044,801

-2

Goodwill 

3,524,625

3,524,625

-

Core deposit and other intangible assets 

49,555

89,918

-45

Other assets 

6,047,309

4,951,044

22

  Total assets 

$

90,835,002

83,229,005

9

%

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits 

$

26,088,763

24,074,815

8

%

Interest-bearing deposits 

43,502,602

41,302,212

5

Deposits at Cayman Islands office 

237,890

284,443

-16

  Total deposits 

69,829,255

65,661,470

6

Short-term borrowings 

161,631

307,740

-47

Accrued interest and other liabilities 

1,283,430

1,421,067

-10

Long-term borrowings 

7,391,931

5,122,398

44

  Total liabilities 

78,666,247

72,512,675

8

Shareholders' equity:

   Preferred 

1,231,500

876,796

40

   Common (1)  

10,937,255

9,839,534

11

     Total shareholders' equity 

12,168,755

10,716,330

14

  Total liabilities and shareholders' equity 

$

90,835,002

83,229,005

9

%

(1)  Reflects accumulated other comprehensive income, net of applicable income tax effect, of $40.3 million at June 30,

       2014 and accumulated other comprehensive loss, net of applicable income tax effect, of $227.8 million at June 30, 2013.

 

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend

June 30,

March 31,

December 31,

September 30,

June 30,

Dollars in thousands

2014

2014

2013

2013

2013

ASSETS

Cash and due from banks 

$

1,827,197

1,671,052

1,573,361

1,941,944

1,350,015

Interest-bearing deposits at banks 

3,032,530

3,299,185

1,651,138

1,925,811

2,555,354

Federal funds sold and agreements

  to resell securities 

90,239

92,066

99,573

117,809

124,487

Trading account assets 

313,325

314,807

376,131

371,370

378,235

Investment securities 

12,120,195

10,364,249

8,796,497

8,309,773

5,210,526

Loans and leases:

   Commercial, financial, etc. 

19,105,892

18,896,070

18,705,216

17,911,149

18,021,812

   Real estate - commercial 

26,374,274

26,104,086

26,148,208

26,345,267

26,116,394

   Real estate - consumer 

8,656,766

8,774,095

8,928,221

9,228,003

10,399,749

   Consumer 

10,610,761

10,360,827

10,291,514

10,174,623

11,433,911

     Total loans and leases, net of unearned discount 

64,747,693

64,135,078

64,073,159

63,659,042

65,971,866

        Less: allowance for credit losses 

917,666

916,768

916,676

916,370

927,065

  Net loans and leases 

63,830,027

63,218,310

63,156,483

62,742,672

65,044,801

Goodwill 

3,524,625

3,524,625

3,524,625

3,524,625

3,524,625

Core deposit and other intangible assets 

49,555

58,789

68,851

79,290

89,918

Other assets 

6,047,309

5,987,277

5,915,732

5,414,191

4,951,044

  Total assets 

$

90,835,002

88,530,360

85,162,391

84,427,485

83,229,005

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits 

$

26,088,763

25,244,200

24,661,007

24,150,771

24,074,815

Interest-bearing deposits 

43,502,602

43,207,286

42,134,859

42,084,860

41,302,212

Deposits at Cayman Islands office 

237,890

247,880

322,746

316,510

284,443

  Total deposits 

69,829,255

68,699,366

67,118,612

66,552,141

65,661,470

Short-term borrowings 

161,631

230,209

260,455

246,019

307,740

Accrued interest and other liabilities 

1,283,430

1,462,725

1,368,922

1,491,797

1,421,067

Long-term borrowings 

7,391,931

6,251,197

5,108,870

5,121,326

5,122,398

  Total liabilities 

78,666,247

76,643,497

73,856,859

73,411,283

72,512,675

Shareholders' equity:

   Preferred 

1,231,500

1,231,500

881,500

879,010

876,796

   Common (1) 

10,937,255

10,655,363

10,424,032

10,137,192

9,839,534

     Total shareholders' equity 

12,168,755

11,886,863

11,305,532

11,016,202

10,716,330

  Total liabilities and shareholders' equity 

$

90,835,002

88,530,360

85,162,391

84,427,485

83,229,005

(1)  Reflects accumulated other comprehensive income, net of applicable income tax effect, of $40.3 million at June 30, 2014, and accumulated other comprehensive loss, net of applicable income tax effect, of $25.3 million at March 31, 2014, $64.2 million at December 31, 2013, $198.1 million at September 30, 2013 and $227.8 million at June 30, 2013.

 

M&T BANK CORPORATION

Condensed Consolidated Average Balance Sheet

 and Annualized Taxable-equivalent Rates

Three months ended

Change in balance

Six months ended

June 30,

June 30,

March 31,

June 30, 2014 from

June 30

Dollars in millions

2014

2013

2014

June 30,

March 31,

2014

2013

Change in

Balance

Rate

Balance

Rate

Balance

Rate

2013

2014

Balance

Rate

Balance 

Rate

balance

ASSETS

Interest-bearing deposits at banks 

$

4,080

.25

%

2,403

.24

%

3,089

.25

%

70

%

32

%

$

3,587

.25

%

1,470

.24

%

144

%

Federal funds sold and agreements

  to resell securities 

90

.07

199

.09

100

.07

-55

-9

95

.07

141

.10

-32

Trading account assets 

84

1.25

86

1.43

71

2.68

-2

18

78

1.91

81

2.45

-4

Investment securities 

10,959

3.19

5,293

3.34

9,265

3.34

107

18

10,117

3.26

5,546

3.33

82

Loans and leases, net of unearned discount

  Commercial, financial, etc. 

18,978

3.34

17,713

3.61

18,476

3.37

7

3

18,728

3.35

17,522

3.64

7

  Real estate - commercial 

26,140

4.22

26,051

4.72

26,143

4.40

?

?

26,141

4.31

25,983

4.57

1

  Real estate - consumer 

8,746

4.36

10,806

4.05

8,844

4.19

-19

-1

8,795

4.27

10,973

4.07

-20

  Consumer 

10,479

4.52

11,409

4.58

10,300

4.59

-8

2

10,390

4.56

11,438

4.62

-9

     Total loans and leases, net 

64,343

4.05

65,979

4.32

63,763

4.14

-2

1

64,054

4.09

65,916

4.28

-3

  Total earning assets 

79,556

3.73

73,960

4.10

76,288

3.87

8

4

77,931

3.80

73,154

4.12

7

Goodwill 

3,525

3,525

3,525

?

?

3,525

3,525

?

Core deposit and other intangible assets 

53

95

64

-44

-15

59

102

-43

Other assets 

6,739

5,772

6,788

17

-1

6,763

5,856

15

  Total assets 

$

89,873

83,352

86,665

8

%

4

%

$

88,278

82,637

7

%

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing deposits

  NOW accounts 

$

1,026

.13

941

.14

988

.12

9

%

4

%

$

1,007

.13

917

.14

10

%

  Savings deposits 

39,478

.11

36,459

.15

38,358

.12

8

3

38,921

.12

35,930

.16

8

  Time deposits 

3,350

.46

4,210

.71

3,460

.46

-20

-3

3,404

.46

4,323

.73

-21

  Deposits at Cayman Islands office 

339

.21

326

.25

380

.22

4

-11

360

.22

591

.20

-39

     Total interest-bearing deposits 

44,193

.14

41,936

.21

43,186

.15

5

2

43,692

.15

41,761

.22

5

Short-term borrowings 

220

.05

343

.11

264

.05

-36

-17

242

.05

489

.13

-51

Long-term borrowings 

6,525

3.05

5,051

4.03

5,897

3.47

29

11

6,213

3.25

4,871

4.20

28

Total interest-bearing liabilities 

50,938

.51

47,330

.62

49,347

.55

8

3

50,147

.53

47,121

.63

6

Noninterest-bearing deposits 

25,466

23,744

24,141

7

5

24,807

23,352

6

Other liabilities 

1,430

1,715

1,529

-17

-6

1,479

1,720

-14

  Total liabilities 

77,834

72,789

75,017

7

4

76,433

72,193

6

Shareholders' equity 

12,039

10,563

11,648

14

3

11,845

10,444

13

  Total liabilities and shareholders' equity 

$

89,873

83,352

86,665

8

%

4

%

$

88,278

82,637

7

%

Net interest spread 

3.22

3.48

3.32

3.27

3.49

Contribution of interest-free funds 

.18

.23

.20

.19

.22

Net interest margin 

3.40

%

3.71

%

3.52

%

3.46

%

3.71

%

 

M&T BANK CORPORATION

Reconciliation of Quarterly GAAP to Non-GAAP Measures

Three months ended

Six months ended

June 30

June 30

2014

2013

2014

2013

Income statement data

In thousands, except per share

Net income

Net income 

$

284,336

348,466

$

513,353

622,579

Amortization of core deposit and other

  intangible assets (1) 

5,638

7,632

11,783

15,780

Merger-related expenses (1) 

-

4,636

-

7,511

  Net operating income 

$

289,974

360,734

$

525,136

645,870

Earnings per common share

Diluted earnings per common share 

$

1.98

2.55

$

3.59

4.53

Amortization of core deposit and other

  intangible assets (1) 

.04

.06

.09

.12

Merger-related expenses (1) 

-

.04

-

.06

  Diluted net operating earnings per common share 

$

2.02

2.65

$

3.68

4.71

Other expense

Other expense 

$

681,194

598,591

$

1,383,465

1,234,187

Amortization of core deposit and other

  intangible assets  

(9,234)

(12,502)

(19,296)

(25,845)

Merger-related expenses  

-

(7,632)

-

(12,364)

  Noninterest operating expense 

$

671,960

578,457

$

1,364,169

1,195,978

Merger-related expenses

Salaries and employee benefits 

$

-

300

$

-

836

Equipment and net occupancy 

-

489

-

690

Printing, postage and supplies 

-

998

-

1,825

Other costs of operations 

-

5,845

-

9,013

  Total 

$

-

7,632

$

-

12,364

Efficiency ratio

Noninterest operating expense (numerator) 

$

671,960

578,457

$

1,364,169

1,195,978

Taxable-equivalent net interest income 

674,963

683,804

1,337,341

1,346,304

Other income 

456,412

508,689

876,519

941,571

Less:  Gain on bank investment securities 

-

56,457

-

56,457

           Net OTTI losses recognized in earnings 

-

-

-

(9,800)

Denominator 

$

1,131,375

1,136,036

$

2,213,860

2,241,218

Efficiency ratio 

59.39

%

50.92

%

61.62

%

53.36

%

Balance sheet data

In millions

Average assets

Average assets 

$

89,873

83,352

$

88,278

82,637

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(53)

(95)

(59)

(102)

Deferred taxes 

16

28

18

30

  Average tangible assets 

$

86,311

79,760

$

84,712

79,040

Average common equity

Average total equity 

$

12,039

10,563

$

11,845

10,444

Preferred stock 

(1,231)

(876)

(1,152)

(876)

  Average common equity 

10,808

9,687

10,693

9,568

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(53)

(95)

(59)

(102)

Deferred taxes 

16

28

18

30

  Average tangible common equity 

$

7,246

6,095

$

7,127

5,971

At end of quarter

Total assets

Total assets 

$

90,835

83,229

Goodwill 

(3,525)

(3,525)

Core deposit and other intangible assets 

(49)

(90)

Deferred taxes 

15

27

  Total tangible assets 

$

87,276

79,641

Total common equity

Total equity 

$

12,169

10,716

Preferred stock 

(1,232)

(877)

Undeclared dividends - cumulative preferred stock 

(3)

(3)

  Common equity, net of undeclared cumulative

    preferred dividends 

10,934

9,836

Goodwill 

(3,525)

(3,525)

Core deposit and other intangible assets 

(49)

(90)

Deferred taxes 

15

27

  Total tangible common equity 

$

7,375

6,248

(1) After any related tax effect.

 

M&T BANK CORPORATION

Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend

Three months ended

June 30,

March 31,

December 31,

September 30,

June 30,

2014

2014

2013

2013

2013

Income statement data

In thousands, except per share

Net income

Net income 

$

284,336

229,017

221,422

294,479

348,466

Amortization of core deposit and other

  intangible assets (1) 

5,638

6,145

6,375

6,489

7,632

Merger-related expenses (1) 

-

-

-

-

4,636

  Net operating income 

$

289,974

235,162

227,797

300,968

360,734

Earnings per common share

Diluted earnings per common share 

$

1.98

1.61

1.56

2.11

2.55

Amortization of core deposit and other

  intangible assets (1) 

.04

.05

.05

.05

.06

Merger-related expenses (1) 

-

-

-

-

.04

  Diluted net operating earnings per common share 

$

2.02

1.66

1.61

2.16

2.65

Other expense

Other expense 

$

681,194

702,271

743,072

658,626

598,591

Amortization of core deposit and other

  intangible assets  

(9,234)

(10,062)

(10,439)

(10,628)

(12,502)

Merger-related expenses  

-

-

-

-

(7,632)

  Noninterest operating expense 

$

671,960

692,209

732,633

647,998

578,457

Merger-related expenses

Salaries and employee benefits 

$

-

-

-

-

300

Equipment and net occupancy 

-

-

-

-

489

Printing, postage and supplies 

-

-

-

-

998

Other costs of operations 

-

-

-

-

5,845

  Total 

$

-

-

-

-

7,632

Efficiency ratio

Noninterest operating expense (numerator) 

$

671,960

692,209

732,633

647,998

578,457

Taxable-equivalent net interest income 

674,963

662,378

672,683

679,213

683,804

Other income 

456,412

420,107

446,246

477,388

508,689

Less:  Gain on bank investment securities 

-

-

-

-

56,457

           Net OTTI losses recognized in earnings

-

-

-

-

-

Denominator 

$

1,131,375

1,082,485

1,118,929

1,156,601

1,136,036

Efficiency ratio 

59.39

%

63.95

%

65.48

%

56.03

%

50.92

%

Balance sheet data

In millions

Average assets

Average assets 

$

89,873

86,665

85,330

84,011

83,352

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(53)

(64)

(74)

(84)

(95)

Deferred taxes 

16

20

23

25

28

  Average tangible assets 

$

86,311

83,096

81,754

80,427

79,760

Average common equity

Average total equity 

$

12,039

11,648

11,109

10,881

10,563

Preferred stock 

(1,231)

(1,072)

(881)

(878)

(876)

  Average common equity 

10,808

10,576

10,228

10,003

9,687

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(53)

(64)

(74)

(84)

(95)

Deferred taxes

16

20

23

25

28

  Average tangible common equity 

$

7,246

7,007

6,652

6,419

6,095

At end of quarter

Total assets

Total assets 

$

90,835

88,530

85,162

84,427

83,229

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(49)

(59)

(69)

(79)

(90)

Deferred taxes 

15

19

21

24

27

  Total tangible assets 

$

87,276

84,965

81,589

80,847

79,641

Total common equity

Total equity 

$

12,169

11,887

11,306

11,016

10,716

Preferred stock 

(1,232)

(1,232)

(882)

(879)

(877)

Undeclared dividends - cumulative preferred stock 

(3)

(3)

(3)

(4)

(3)

  Common equity, net of undeclared cumulative

    preferred dividends 

10,934

10,652

10,421

10,133

9,836

Goodwill 

(3,525)

(3,525)

(3,525)

(3,525)

(3,525)

Core deposit and other intangible assets 

(49)

(59)

(69)

(79)

(90)

Deferred taxes

15

19

21

24

27

  Total tangible common equity 

$

7,375

7,087

6,848

6,553

6,248

(1) After any related tax effect.

 

SOURCE M&T Bank Corporation

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