BUFFALO, N.Y., April 14, 2014 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended March 31, 2014.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the first quarter of 2014 were $1.61, compared with $1.98 in the year-earlier quarter and $1.56 in the fourth quarter of 2013.  GAAP-basis net income in the recent quarter was $229 million, compared with $274 million in the initial 2013 quarter and $221 million in the final quarter of 2013.  Net income for the first three months of 2014 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.07% and 8.22%, respectively, compared with 1.36% and 11.10%, respectively, in the similar 2013 period and 1.03% and 7.99%, respectively, in the fourth quarter of 2013. 

Commenting on M&T's results for the recent quarter, Rene F. Jones, Vice Chairman and Chief Financial Officer, noted, "Revenue trends for the quarter were dampened by lower than normal levels of customer activity during the first two months of the period followed by a rebound in March. Overall, however, the recent quarter was a productive one for M&T.  We received a non-objection to our capital plan and proposed capital actions from the Federal Reserve, successfully accessed the debt and preferred equity markets and continued to progress on our infrastructure projects related to BSA/AML compliance, risk management, and capital plan and stress testing efforts.  While these initiatives contributed to operating expenses that were higher than M&T's normal run rate, they position us well for the future."

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 $1.66 in the recent quarter, compared with $2.06 and $1.61 in the first and fourth quarters of 2013, respectively.  Net operating income for the first three months of 2014 totaled $235 million.  Net operating income was $285 million and $228 million in the quarters ended March 31, 2013 and December 31, 2013, respectively.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.15% and 12.76%, respectively, in the first quarter of 2014.  The comparable returns were 1.48% and 18.71% in the year-earlier quarter and 1.11% and 12.67% in the fourth quarter of 2013.

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income totaled $662 million in 2014's initial quarter, nearly unchanged from the year-earlier period.  Growth in average earning assets, led by a $3.5 billion rise in average investment securities, was offset by a 19 basis point narrowing of the net interest margin to 3.52% in the recent quarter from 3.71% in the first quarter of 2013.  The increase in investment securities reflects M&T's significant loan securitization activities in 2013.

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $32 million in the first quarter of 2014, improved from $38 million and $42 million in the first and fourth quarters of 2013, respectively.  Net charge-offs of loans during the recent quarter were also $32 million, down from $37 million in the first quarter of 2013 and $42 million in the final 2013 quarter.  Net charge-offs expressed as an annualized percentage of average loans outstanding were .20% during the first three months of 2014, compared with .23% and .26% in the first and fourth quarters of 2013, respectively. 

Loans classified as nonaccrual totaled $891 million or 1.39% of total loans outstanding at March 31, 2014, compared with $1.05 billion or 1.60% a year earlier and $874 million or 1.36% at December 31, 2013. Assets taken in foreclosure of defaulted loans continued to decline and totaled $59 million at March 31, 2014, compared with $96 million and $67 million at March 31, 2013 and December 31, 2013, respectively. 

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

Noninterest Income and Expense.  Noninterest income totaled $420 million in the first quarter of 2014, $433 million a year earlier and $446 million in the fourth quarter of 2013.  Noninterest income trends for the recent quarter reflected a slowdown in customer activity across most income categories during January and February. The largest factor contributing to the decline from 2013's first quarter was a $13 million decrease in mortgage banking revenues, resulting from lower originated loan volumes. 

Noninterest expense in the first quarter of 2014 totaled $702 million, compared with $636 million and $743 million in the first and fourth quarters of 2013, respectively.  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 $692 million in the recently completed quarter, $618 million in the first quarter of 2013 and $733 million in the final 2013 quarter.  The higher level of operating expenses in the recent quarter as compared with the year-earlier period was predominantly the result of expenses for professional services and salaries associated with BSA/AML compliance, capital planning and stress testing, risk management, and other operational initiatives.  The decline in noninterest operating expenses in 2014's first quarter as compared with the final 2013 quarter was largely due to the impact of a $40 million litigation-related accrual in 2013 and lower professional services costs in 2014 that were partially offset by seasonally higher stock-based compensation and employee benefits expenses. 

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 63.9% in the first quarter of 2014, 55.9% in the year-earlier quarter and 65.5% in the fourth quarter of 2013.

Balance Sheet.  M&T had total assets of $88.5 billion at March 31, 2014, up 7% from $82.8 billion a year earlier.  Investment securities at March 31, 2014 were $10.4 billion, up $4.7 billion or 83% from March 31, 2013.  M&T added investment securities through purchase and loan securitization transactions in order to enhance its liquidity position as a result of changing regulatory requirements.  Loans and leases, net of unearned discount, and deposits totaled $64.1 billion and $68.7 billion, respectively, at the recent quarter-end, compared with $65.9 billion and $65.1 billion, respectively, a year earlier. 

Total shareholders' equity increased 14% to $11.9 billion at March 31, 2014 from $10.4 billion at March 31, 2013, representing 13.43% and 12.59%, respectively, of total assets.  During the recent quarter, M&T issued $350 million of 6.45% preferred stock and redeemed a like amount of 8.50% trust preferred securities.  Common shareholders' equity was $10.6 billion, or $81.05 per share at March 31, 2014, up from $9.5 billion, or $73.99 per share, a year earlier.  Tangible equity per common share rose 17% to $53.92 at March 31, 2014 from $46.11 a year earlier.  Common shareholders' equity per share and tangible equity per common share were $79.81 and $52.45, respectively, at December 31, 2013.  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 9.45% at March 31, 2014, compared with 7.93% and 9.22% at March 31, 2013 and December 31, 2013, respectively.  M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under the new capital rules approved in July 2013 on a fully phased-in basis was approximately 9.22% as of March 31, 2014.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss first quarter financial results today at 10:00 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 #22896274.  The conference call will be webcast live through M&T's website at http://ir.mandtbank.com/events.cfm.  A replay of the call will be available until Thursday, April 17, 2014 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to the ID #22896274.  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.

 

 

 

 

 

 

 

 

 

SOURCE M&T Bank Corporation