M&T Announces 14% Increase in Cash Earnings Per Share
BUFFALO, N.Y. - April 17, 2001--M&T Bank Corporation ("M&T")(NYSE: MTB) today reported diluted cash earnings per share for the quarter ended March 31, 2001 of $1.14, an increase of 14% from $1.00 in the first quarter of 2000.
Cash net income for the recent quarter was $112.4 million, an increase of 41% from $79.8 million in the corresponding quarter of last year. Expressed as an annualized rate of return on average tangible assets, cash net income was 1.59% in the initial quarter of 2001, compared with 1.47% in the year-earlier quarter. Cash return on average tangible common equity was an annualized 27.93% in the first quarter of this year, compared with 26.95% in the first quarter of 2000. Cash earnings exclude the after-tax effect of expenses associated with merging acquired operations into M&T and amortization of goodwill and core deposit intangible. Robert G. Wilmers, Chairman of the Board, President and Chief Executive Officer noted, "Our 14% growth in cash earnings per share in the first quarter reflects strong performance in many of M&T's business units and the smooth integration of our recent acquisitions."
Taxable-equivalent net interest income increased 40% to $276.4 million in the recent quarter, compared with $197.3 million in the year-earlier quarter. The improvement reflects an increase in average loans outstanding and a widening of M&T's net interest margin, or taxable equivalent net interest income expressed as an annualized percentage of average earnings assets. Reflecting the $4.8 billion and $1.0 billion of loans and leases obtained at the time of the October 6, 2000 acquisition of Keystone Financial, Inc. ("Keystone") and the February 9, 2001 acquisition of Premier National Bancorp, Inc. ("Premier"), respectively, average loans and leases outstanding during the initial quarter of 2001 were $23.4 billion, up 34% from $17.5 billion in the year-earlier quarter. Supplementing the favorable impact of higher balances of loans and leases was a 22 basis point (hundredths of one percent) increase in the net interest margin to 4.16% in 2001's first quarter from 3.94% in the comparable 2000 quarter.
The provision for credit losses was $18.5 million in the recent quarter, up from $9.0 million in the first quarter of 2000. Net charge-offs of loans also increased during the first quarter of 2001, rising to $15.9 million from $6.6 million a year earlier. The annualized ratio of net charge-offs to average loans outstanding was .28% in the initial 2001 quarter, compared with .15% in the first quarter of 2000. Nonperforming loans totaled $160.8 million, or .67% of total loans at March 31, 2001, compared with $67.0 million or .38% a year earlier. Loans past due 90 days or more and accruing interest were $141.4 million at the recent quarter-end, up from $29.4 million a year earlier. The increase in these loans resulted primarily from the inclusion at March 31, 2001 of approximately $101 million of one-to-four family residential mortgage loans serviced by M&T and repurchased during the fourth quarter of 2000 and the first quarter of 2001 from the Government National Mortgage Association. The outstanding principal balances of these loans are fully guaranteed by government agencies. The loans were repurchased to reduce servicing costs associated with the loans. Included in the March 31, 2001 totals of nonperforming loans and loans past due 90 days or more and accruing interest were loans obtained in the Keystone acquisition of $55 million and $12 million, respectively, and loans obtained in the Premier acquisition of $6 million and $7 million, respectively. M&T's allowance for credit losses totaled $399.4 million as of March 31, 2001, compared with $318.6 million a year earlier. As a percentage of total loans, the allowance was 1.65% and 1.80% at March 31, 2001 and 2000, respectively. The ratio of the allowance for credit losses to nonperforming loans was 248% and 476% at March 31, 2001 and 2000, respectively. Assets taken in foreclosure of defaulted loans were $13.1 million at the recent quarter-end, compared with $9.2 million a year earlier.
Noninterest income in the recent quarter totaled $111.7 million, up significantly from $72.0 million in the first quarter of 2000. Approximately one-half of the increase was attributable to revenues related to operations in market areas associated with the Keystone acquisition. In addition, lower interest rates in 2001 and the January 1, 2001 implementation of Statement of Financial Accounting Standards("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," contributed to an increase in mortgage banking revenues to $25.7 million in the recent quarter from $14.6 million a year-earlier.
Noninterest expenses associated with operations, which exclude amortization of goodwill and core deposit intangible and nonrecurring expenses associated with merging acquired operations into M&T, were $197.0 million in the recent quarter, compared with $136.2 million in the corresponding 2000 period. Expenses related to the acquired operations of Keystone and, to a lesser extent, Premier were large contributors to the higher expense levels. The efficiency ratio, or noninterest operating expense divided by the sum of taxable-equivalent net interest income and noninterest income, measures how much of a company's revenue is consumed by operating expenses. M&T's cash-basis efficiency ratio, calculated using the operating expense totals noted above and excluding gains or losses from sales of bank investment securities from noninterest income, was 50.8% in the first quarter of 2001, up slightly from 50.6% a year earlier.
The impact of merger-related expenses was $4.8 million ($8.0 million pre-tax) or $.05 per diluted share for the first quarter of 2001. There were no similar expenses in the first 2000 quarter. Non-cash charges for amortization of goodwill and core deposit intangible, after tax effect, amounted to $23.9 million ($29.8 million pre-tax) and $11.6 million ($14.4 million pre-tax) during the first quarter of 2001 and 2000, respectively. Including the impact of these items, diluted earnings per share for the quarter ended March 31, 2001 were $.85, compared with $.86 in the corresponding quarter of 2000. On the same basis, net income for the recent quarter was $83.7 million, compared with $68.2 million in the year-earlier quarter. Net income for the initial 2001 quarter expressed as an annualized rate of return on average assets and average common stockholders' equity was 1.14% and 11.84%, respectively. The comparable rates for the year-earlier quarter were 1.22% and 15.14%.
At March 31, 2001, M&T had total assets of $30.9 billion, up 36% from $22.8 billion a year earlier. Loans and leases, net of unearned discount, increased 37% to $24.2 billion from $17.7 billion at March 31, 2000. Deposits were $21.0 billion at the recent quarter-end, compared with $15.2 billion at March 31, 2000. Assets, loans and deposits obtained in the Keystone transaction on the October 6, 2000 acquisition date were $7.4 billion, $4.8 billion and $5.2 billion, respectively. Assets, loans and deposits obtained in the February 9, 2001 acquisition of Premier were $1.8 billion, $1.0 billion and $1.4 billion, respectively. Total stockholders' equity was $3.0 billion at March 31, 2001, representing 9.68% of total assets, compared with $1.8 billion or 8.05% a year earlier. Common stockholders' equity per share was $30.84 at the recent quarter-end, an increase of 29% from $23.83 at March 31, 2000. Tangible equity per common share was $17.33 and $15.79 at March 31, 2001 and 2000, respectively.
In November 1999, M&T announced a plan torepurchase up to 1,904,650 common shares for reissuance upon the possible future exercise of outstanding stock options. However, following the announcement of the Keystone acquisition in May 2000, M&T has not been repurchasing stock, instead using the Company's internal generation of capital to support the completed Keystone and Premier acquisitions.Prior to the May 2000 announcement, M&T had repurchased 1,632,860 shares of common stock pursuant to such plan at an average cost of $42.74 per share.
Investors will have an opportunity to listen to M&T's conference call to discuss first quarter financial results at 9:00 a.m. on Wednesday, April 18, 2001. Those wishing to participate in the call may dial 877-232-1251. The conference call will also be ebcast live by Vcall through M&T's website. To access the live webcast please visit M&T's website at http://ir.mandtbank.com/calendar.cfm. A replay of the call will be available until April 19, 2001 by calling 800-642-1687, code 500736. The event will also be archived and available by noon, April 18, 2001 at http://ir.mandtbank.com/calendar.cfm .
M&T BANK CORPORATION
Financial Highlights
Three months ended
Amounts in thousands, March 31
except per share 2001 2000 Change
--------- -------- --------
Performance
-----------
Net income $ 83,666 68,235 23 %
Per common share:
Basic earnings $ .88 .89 -1 %
Diluted earnings .85 .86 -1
Cash dividends $ .25 .125 100
Common shares outstanding:
Average - diluted (1) 98,605 79,222 24 %
Period end (2) 97,013 76,901 26
Return on (annualized):
Average total assets 1.14% 1.22%
Average common stockholders' equity 11.84% 15.14%
Taxable-equivalent net
interest income $ 276,368 197,333 40 %
Yield on average earning assets (3) 8.33% 8.01%
Cost of interest-bearing liabilities 4.78% 4.64%
Net interest spread (3) 3.55% 3.37%
Contribution of interest-free funds .61% .57%
Net interest margin (3) 4.16% 3.94%
Net charge-offs to average total
net loans (annualized) .28% .15%
Cash operating results (4)
--------------------------
Cash net income $ 107,547 79,844 35 %
Cash net income, excluding
acquisition-related expenses 112,391 79,844 41
Diluted cash earnings per common share 1.09 1.00 9
Diluted cash earnings per common share,
excluding acquisition-related
expenses 1.14 1.00 14
Return on (annualized):
Average tangible assets 1.52% 1.47%
Average tangible assets, excluding
acquisition-related expenses 1.59% 1.47%
Average tangible common equity 26.73% 26.95%
Average tangible common equity,
excluding acquisition-related
expenses 27.93% 26.95%
Efficiency ratio, excluding
acquisition-related expenses 50.77% 50.57%
At March 31
--------------------
2001 2000 Change
--------- ------- --------
Loan quality
------------
Nonaccrual loans $ 151,927 58,060 162 %
Renegotiated loans 8,864 8,910 -1
--------- --------
Total nonperforming loans $ 160,791 66,970 140
========= ========
Accruing loans past due 90 days or
more $ 141,355 29,407 381 %
Nonperforming loans to total net loans .67% .38%
Allowance for credit losses to total
net loans 1.65% 1.80%
----------------------------------------------------------------------
(1) Includes common stock equivalents
(2) Includes common stock issuable under deferred compensation plans
(3) On a fully taxable-equivalent basis
(4) Excludes amortization and balances related to goodwill and core
deposit intangible which, except in the calculation of the
efficiency ratio, are net of applicable income tax effects
M&T BANK CORPORATION
Condensed Consolidated Statement of Income
Three months ended
Amounts in thousands, March 31
except per share 2001 2000 Change
------ ------- --------
Interest income $ 548,578 398,858 38 %
Interest expense 276,597 203,731 36
------- -------
Net interest income 271,981 195,127 39
Provision for credit losses 18,500 9,000 106
------- -------
Net interest income after
provision for credit losses 253,481 186,127 36
Other income
Mortgage banking revenues 25,660 14,559 76
Service charges on deposit accounts 32,534 20,460 59
Trust income 15,827 9,980 59
Brokerage services income 10,010 9,408 6
Trading account and foreign exchange
gains 802 294 173
Gain on sales of bank investment
securities 79 - -
Other revenues from operations 26,815 17,297 55
-------- -------
Total other income 111,727 71,998 55
Other expense
Salaries and employee benefits 105,887 76,701 38
Equipment and net occupancy 28,158 18,119 55
Printing, postage and supplies 7,074 4,494 57
Amortization of goodwill and core
deposit intangible 29,811 14,407 107
Other costs of operations 63,871 36,876 73
-------- -------
Total other expense 234,801 150,597 56
Income before income taxes 130,407 107,528 21
Applicable income taxes 46,741 39,293 19
-------- -------
Net income $ 83,666 68,235 23 %
======== =======
M&T BANK CORPORATION
Condensed Consolidated Balance Sheet
March 31
---------------------
Dollars in thousands 2001 2000 Change
--------- --------- -------
ASSETS
Cash and due from banks $ 691,104 476,969 45 %
Money-market assets 53,527 1,238,957 -96
Investment securities 3,704,788 2,078,949 78
Loans and leases, net of unearned
discount 24,167,786 17,702,663 37
Less: Allowance for credit losses 399,412 318,595 25
--------- ---------
Net loans and leases 23,768,374 17,384,068 37
Goodwill and core deposit intangible 1,379,461 638,245 116
Other assets 1,327,289 944,366 41
--------- ---------
Total assets $30,924,543 22,761,554 36 %
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing deposits at U.S.
offices $ 3,236,649 2,140,782 51 %
Other deposits at U.S. offices 17,480,164 12,822,756 36
Deposits at foreign office 260,870 187,900 39
--------- ---------
Total deposits 20,977,683 15,151,438 38
Short-term borrowings 2,943,979 3,068,547 -4
Accrued interest and other
liabilities 520,376 934,857 -44
Long-term borrowings 3,490,447 1,774,456 97
--------- ---------
Total liabilities 27,932,485 20,929,298 33
Stockholders' equity(1) 2,992,058 1,832,256 63
--------- ---------
Total liabilities and
stockholders' equity $30,924,543 22,761,554 36 %
========== ==========
(1) Includes the after-tax impact of net unrealized gains on
investment securities classified as available for sale of $21.1
million at March 31, 2001 and net unrealized losses of $23.9
million at March 31, 2000.
M&T BANK CORPORATION
Condensed Consolidated Average Balance Sheet
Three months ended
March 31
----------------------
Dollars in thousands 2001 2000 Change
--------- -------- -------
ASSETS
Money-market assets $ 74,634 669,442 -89 %
Investment securities 3,470,016 1,976,514 76
Loans and leases, net of unearned
discount
Commercial, financial, etc. 5,178,321 3,740,576 38
Real estate - commercial 8,934,976 6,591,673 36
Real estate - consumer 4,991,217 4,062,627 23
Consumer 4,287,470 3,106,008 38
--------- ---------
Total loans and leases, net 23,391,984 17,500,884 34
--------- ---------
Total earning assets 26,936,634 20,146,840 34
Goodwill and core deposit intangible 1,300,212 642,196 102
Other assets 1,641,344 1,649,099 -
--------- ---------
Total assets $ 29,878,190 22,438,135 33 %
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits $ 17,548,687 13,144,562 34 %
Borrowings 5,894,637 4,526,649 30
--------- ---------
Total interest-bearing liabilities 23,443,324 17,671,211 33
Noninterest-bearing deposits 3,185,347 2,113,337 51
Other liabilities 383,129 840,818 -54
--------- ---------
Total liabilities 27,011,800 20,625,366 31
Stockholders' equity 2,866,390 1,812,769 58
--------- ---------
Total liabilities and
stockholders' equity $ 29,878,190 22,438,135 33 %
============ ==========
Contact:
M&T Bank Corporation
Michael S. Piemonte, 716/842-5445