M&T BANK CORPORATION ANNOUNCES FOURTH QUARTER AND FULL-YEAR RESULTS

January 20, 2022 at 6:37 AM EST

BUFFALO, N.Y., Jan. 20, 2022 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the full year and quarter ended December 31, 2021.

 

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") were $3.37 in the fourth quarter of 2021, compared with $3.52 in the year-earlier quarter and $3.69 in the third quarter of 2021. GAAP-basis net income was $458 million in the recent quarter, $471 million in the fourth quarter of 2020 and $495 million in the third 2021 quarter. GAAP-basis net income for the fourth quarter of 2021 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.15% and 10.91%, respectively, compared with 1.30% and 12.07%, respectively, in the similar 2020 period and 1.28% and 12.16%, respectively, in the third quarter of 2021. Included in noninterest expenses in the recent quarter were merger-related expenses associated with M&T's proposed acquisition of People's United Financial, Inc. of $21 million ($16 million after-tax effect, or $.12 of diluted earnings per common share), compared with $9 million ($7 million after-tax effect, or $.05 of diluted earnings per common share) in the third quarter of 2021. There were no merger-related expenses in the fourth quarter of 2020.

Darren J. King, Executive Vice President and Chief Financial Officer, commented on M&T's results, "Despite last year's challenging environment, M&T realized significant increases in both diluted earnings per share and net income. These results reflect our prudent credit underwriting, improved economic conditions and growth in noninterest income. Our capital position remains very strong. During the year we saw our Common Equity Tier 1 ratio increase to 11.4% from 10.0% at the end of 2020. Looking forward, we stand ready to complete our acquisition of People's United and to strategically deploy our excess liquidity and capital as we manage through a likely period of rising interest rates and elevated inflation."

Earnings Highlights

 
                                         
                           

Change 4Q21 vs.

 

($ in millions, except per share data)

 

4Q21

   

4Q20

   

3Q21

   

4Q20

   

3Q21

 
                                         

Net income

 

$

458

   

$

471

   

$

495

     

-3

%

   

-8

%

Net income available to common shareholders  ̶  diluted

 

$

434

   

$

452

   

$

476

     

-4

%

   

-9

%

Diluted earnings per common share

 

$

3.37

   

$

3.52

   

$

3.69

     

-4

%

   

-9

%

Annualized return on average assets

   

1.15

%

   

1.30

%

   

1.28

%

               

Annualized return on average common equity

   

10.91

%

   

12.07

%

   

12.16

%

               

For the year ended December 31, 2021 diluted earnings per common share were $13.80, up 39% from $9.94 in 2020. GAAP-basis net income in 2021 totaled $1.86 billion, improved significantly from $1.35 billion in 2020. Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income in 2021 was 1.22% and 11.54%, respectively, and 1.00% and 8.72%, respectively, in 2020. Merger-related expenses in 2021 were $44 million ($34 million after-tax effect, or $.25 of diluted earnings per common share). There were no merger-related expenses in 2020.

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 and core deposit and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T (when incurred), since such items are considered by management to be "nonoperating" in nature. The amounts of such "nonoperating" expenses are presented in the tables that accompany this release. 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 $3.50 in the final quarter of 2021, compared with $3.54 in the fourth quarter of 2020 and $3.76 in the third quarter of 2021. Net operating income aggregated $475 million in the recent quarter, $473 million in the fourth quarter of 2020 and $504 million in 2021's third quarter. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income in the fourth quarter of 2021 was 1.23% and 15.98%, respectively, 1.35% and 17.53%, respectively, in the similar quarter of 2020 and 1.34% and 17.54%, respectively, in the third quarter of 2021.

Diluted net operating earnings per common share for the years ended December 31, 2021 and 2020 were $14.11 and $10.02, respectively. Net operating income in 2021 was $1.90 billion, compared with $1.36 billion in 2020. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.28% and 16.80%, respectively, in 2021 and 1.04% and 12.79%, respectively, in 2020.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis totaled $937 million in the recent quarter, down from $993 million in the fourth quarter of 2020 and $971 million in the third quarter of 2021. The decrease compared with the earlier quarters reflects lower outstanding average loan balances and a reduced net interest margin. Average loans outstanding and the net interest margin were $93.3 billion and 2.58%, respectively, in the recent quarter, compared with $98.7 billion and 3.00%, respectively, in the year earlier quarter and $95.3 billion and 2.74%, respectively, in the third quarter of 2021. Outstanding loans under the Paycheck Protection Program ("PPP") averaged $1.65 billion in 2021's fourth quarter, compared with $6.18 billion in the fourth quarter of 2020 and $3.26 billion in the third quarter of 2021. Interest income from PPP loans, including recognition of fees associated with repaid loans, was $41 million in the recent quarter, compared with $73 million in the fourth quarter of 2020 and $71 million in the third quarter of 2021. Taxable equivalent net interest income for the full year of 2021 was $3.84 billion and in 2020 was $3.88 billion. Average loans outstanding were $96.6 billion in each of 2021 and 2020, but the net interest margin declined to 2.76% in 2021 from 3.16% in 2020.

Taxable-equivalent Net Interest Income

 
                                         
                           

Change 4Q21 vs.

 

($ in millions)

 

4Q21

   

4Q20

   

3Q21

   

4Q20

   

3Q21

 
                                         

Average earning assets

 

$

144,420

   

$

131,916

   

$

140,420

     

9

%

   

3

%

Net interest income  ̶  taxable-equivalent

 

$

937

   

$

993

   

$

971

     

-6

%

   

-3

%

Net interest margin

   

2.58

%

   

3.00

%

   

2.74

%

               

Provision for Credit Losses/Asset Quality.  Reflecting improvements in economic conditions and the credit environment, recaptures of the provision for credit losses of $15 million and $20 million were recorded in the fourth and third quarters of 2021, respectively, compared with a provision of $75 million in the fourth quarter of 2020. A recapture of $75 million was recorded for the year ended December 31, 2021, compared with $800 million of provision for credit losses in 2020. Net loan charge-offs were $31 million during the recent quarter, compared with $97 million in the final quarter of 2020 and $40 million in the third quarter of 2021. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .13% and .39% in the fourth quarters of 2021 and 2020, respectively, and .17% in the third quarter of 2021. Net loan charge-offs during all of 2021 and 2020 aggregated $192 million and $247 million, respectively, representing .20% and .26%, respectively, of average loans outstanding.

Loans classified as nonaccrual totaled $2.06 billion at December 31, 2021, up from $1.89 billion at December 31, 2020, but down from $2.24 billion at September 30, 2021. As a percentage of loans outstanding, nonaccrual loans were 2.22%, 1.92% and 2.40% at December 31, 2021, December 31, 2020 and September 30, 2021, respectively. Assets taken in foreclosure of defaulted loans were $24 million at December 31, 2021, $35 million a year earlier and $25 million at September 30, 2021.

Allowance for Credit Losses.  M&T regularly performs comprehensive analyses of its loan portfolios for purposes of assessing the adequacy of the allowance for credit losses. As a result of those analyses, the allowance for credit losses totaled $1.47 billion or 1.58% of loans outstanding at December 31, 2021, compared with $1.74 billion or 1.76% at December 31, 2020 and $1.52 billion or 1.62% at September 30, 2021. The allowance at December 31, 2021, December 31, 2020, and September 30, 2021 represented 1.60%, 1.86%, and 1.66%, respectively, of total loans on those dates, excluding outstanding balances of PPP loans.

Asset Quality Metrics

 
                           

Change 4Q21 vs.

 

($ in millions)

 

4Q21

   

4Q20

   

3Q21

   

4Q20

   

3Q21

 
                                         

At end of quarter

                                       

Nonaccrual loans

 

$

2,060

   

$

1,893

   

$

2,242

     

9

%

   

-8

%

Real estate and other foreclosed assets

 

$

24

   

$

35

   

$

25

     

-31

%

   

-4

%

Total nonperforming assets

 

$

2,084

   

$

1,928

   

$

2,267

     

8

%

   

-8

%

Accruing loans past due 90 days or more (1)

 

$

963

   

$

859

   

$

1,026

     

12

%

   

-6

%

Nonaccrual loans as % of loans outstanding

   

2.22

%

   

1.92

%

   

2.40

%

               
                                         

Allowance for credit losses

 

$

1,469

   

$

1,736

   

$

1,515

     

-15

%

   

-3

%

Allowance for credit losses as % of loans outstanding

   

1.58

%

   

1.76

%

   

1.62

%

               
                                         

For the period

                                       

Provision for credit losses

 

$

(15)

   

$

75

   

$

(20)

     

-120

%

   

-25

%

Net charge-offs

 

$

31

   

$

97

   

$

40

     

-68

%

   

-23

%

Net charge-offs as % of average loans (annualized)

   

.13

%

   

.39

%

   

.17

%

               
                                       

(1)         Predominantly government-guaranteed residential real estate loans.

Noninterest Income and Expense.  Noninterest income was $579 million in the fourth quarter of 2021, compared with $551 million in the year-earlier quarter and $569 million in the third quarter of 2021. As compared with the final quarter of 2020, the increased level of noninterest income in the recent quarter resulted largely from higher trust income, service charges on deposit accounts and brokerage services income. The final quarter of 2021 and 2020 each reflected a $30 million distribution from Bayview Lending Group LLC ("BLG"). Compared with the third quarter of 2021, higher noninterest income in the recent quarter reflected the distribution from BLG and increased trust income, offset by lower mortgage banking revenues that reflect M&T's decision to retain recently originated mortgage loans in portfolio rather than sell such loans. No distributions from BLG were received in the third quarter of 2021.

Noninterest Income

 
                                         
                           

Change 4Q21 vs.

 

($ in millions)

 

4Q21

   

4Q20

   

3Q21

   

4Q20

   

3Q21

 
                                         

Mortgage banking revenues

 

$

139

   

$

140

   

$

160

     

-1

%

   

-13

%

Service charges on deposit accounts

   

105

     

96

     

105

     

10

%

   

 

Trust income

   

169

     

151

     

157

     

12

%

   

8

%

Brokerage services income

   

19

     

12

     

20

     

55

%

   

-8

%

Trading account and foreign exchange gains

   

6

     

7

     

6

     

-16

%

   

8

%

Gain (loss) on bank investment securities

   

2

     

2

     

     

-12

%

   

 

Other revenues from operations

   

139

     

143

     

121

     

-3

%

   

15

%

Total

 

$

579

   

$

551

   

$

569

     

5

%

   

2

%

Noninterest income rose to $2.17 billion in 2021 from $2.09 billion in 2020. The increase resulted from a $43 million, or 7%, increase in trust income and higher service charges on deposit accounts and brokerage services income, partially offset by lower trading account and foreign exchange gains.

Noninterest expense totaled $928 million in the fourth quarter of 2021, compared with $845 million in the corresponding quarter of 2020 and $899 million in the third quarter of 2021. Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets and merger-related expenses, noninterest operating expenses were $904 million in the recent quarter, $842 million in the fourth quarter of 2020 and $888 million in 2021's third quarter. Factors contributing to the increase in noninterest operating expenses in the recent quarter as compared with the year-earlier quarter were higher costs for salaries and employee benefits (including increased incentive compensation expenses), outside data processing and software, and professional services. As compared with the third quarter of 2021, the greater level of noninterest operating expenses in the recent quarter resulted largely from seasonally higher advertising and marketing costs, increased salaries and employee benefits, and a rise in outside data processing and software.

Noninterest Expense

 
                                         
                           

Change 4Q21 vs.

 

($ in millions)

 

4Q21

   

4Q20

   

3Q21

   

4Q20

   

3Q21

 
                                         

Salaries and employee benefits

 

$

515

   

$

476

   

$

510

     

8

%

   

1

%

Equipment and net occupancy

   

83

     

84

     

81

     

-2

%

   

2

%

Outside data processing and software

   

79

     

68

     

73

     

16

%

   

8

%

FDIC assessments

   

19

     

15

     

19

     

24

%

   

 

Advertising and marketing

   

21

     

18

     

15

     

19

%

   

40

%

Printing, postage and supplies

   

8

     

9

     

8

     

-2

%

   

3

%

Amortization of core deposit and other intangible assets

   

2

     

3

     

3

     

-38

%

   

-29

%

Other costs of operations

   

201

     

172

     

190

     

17

%

   

5

%

Total

 

$

928

   

$

845

   

$

899

     

10

%

   

3

%

                                         

For the year ended December 31, 2021, noninterest expense was $3.61 billion compared with $3.39 billion in 2020. Noninterest operating expenses aggregated $3.56 billion in 2021 and $3.37 billion in 2020. As compared with the prior year, salaries and employee benefits (predominantly incentive compensation expenses), outside data processing and software, and professional services were higher in 2021.

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 59.7% in the fourth quarter of 2021, 54.6% in the year-earlier quarter and 57.7% in the third quarter of 2021. The efficiency ratio for the full year 2021 was 59.0%, compared with 56.3% in 2020.

Balance Sheet.  M&T had total assets of $155.1 billion at December 31, 2021, compared with $142.6 billion and $151.9 billion at December 31, 2020 and September 30, 2021, respectively. Loans and leases, net of unearned discount, were $92.9 billion at December 31, 2021, compared with $98.5 billion at December 31, 2020 and $93.6 billion at September 30, 2021. The lower level of loans and leases at the recent quarter-end as compared with December 31, 2020 reflects a $4.1 billion decline in commercial loans resulting from reduced balances of PPP loans outstanding. PPP loans totaled $1.2 billion at December 31, 2021, compared with $5.4 billion at December 31, 2020 and $2.2 billion at September 30, 2021. Total deposits were $131.5 billion at the recent quarter-end, $119.8 billion at December 31, 2020 and $128.7 billion at September 30, 2021. The higher amount of deposits at the two most recent quarter-ends as compared with December 31, 2020 resulted from increased non-interest bearing deposits.

Total shareholders' equity was $17.9 billion, or 11.54% of total assets at December 31, 2021, $16.2 billion, or 11.35% at December 31, 2020 and $17.5 billion, or 11.54% at September 30, 2021. Common shareholders' equity was $16.2 billion, or $125.51 per share, at December 31, 2021, compared with $14.9 billion, or $116.39 per share, a year-earlier and $15.8 billion, or $122.60 per share, at September 30, 2021. Tangible equity per common share was $89.80 at December 31, 2021, $80.52 at December 31, 2020 and $86.88 at September 30, 2021. 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 estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under regulatory capital rules was approximately 11.4% at December 31, 2021, up from 11.1% three months earlier and 10.0% at December 31, 2020.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss fourth quarter financial results today at 11:00 a.m. Eastern Time. Those wishing to participate in the call may dial (866) 518-6930. International participants, using any applicable international calling codes, may dial (203) 518-9797. Callers should reference M&T Bank Corporation or the conference ID #MTBQ421. The conference call will be webcast live through M&T's website at https://ir.mtb.com/events-presentations. A replay of the call will be available through Thursday January 27, 2022 by calling (800) 934-2127, or (402) 220-1139 for international participants. No conference ID is required. The event will also be archived and available by 3:00 p.m. today on M&T's website at https://ir.mtb.com/events-presentations.

About M&T.  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, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Virginia, West Virginia and the District of Columbia.  Trust-related services are provided by M&T's Wilmington Trust-affiliated companies and by M&T Bank.

Who We Are.  We are a bank for communities – bringing the capabilities of a large bank with the care of a locally focused institution. Our purpose is to make a difference in people's lives serving all our stakeholders. The keys to our approach are characterized by responsible lending based on the advantages of local knowledge and scale, and our long history of being prudent stewards of our shareholders' capital.

In October 2021 M&T announced its Community Growth Plan, to provide $43 billion in loans, investments, and other financial support to create greater economic opportunity for low-to-moderate income families and neighborhoods, as well as people and communities of color. The bank's five-year Community Growth Plan has been developed in collaboration with the National Community Reinvestment Coalition in conjunction with M&T's proposed acquisition of People's United Financial Inc. and will become operational shortly after closing of the transaction.

In keeping with its community-focused approach to banking, M&T announced an expansion of the services it provides to communities with high concentrations of ethnic and racial diversity by designating an additional 99 bank branches as multicultural centers, bringing the total to 118 such centers. Located in cities across the Northeast and Mid-Atlantic, the centers will offer banking and other financial services in customers' preferred languages and employ bankers from the community who understand the cultural nuances of the individuals and neighborhoods they serve.

Forward-Looking Statements.  This news release and related conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the rules and regulations of the SEC. Any statement that does not describe historical or current facts is a forward-looking statement, including statements based on current expectations, estimates and projections about M&T's business, and management's beliefs and assumptions.

Statements regarding the potential effects of the COVID-19 pandemic on M&T's business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond M&T's control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on customers, clients, third parties and M&T.

Also as described further below, statements regarding M&T's expectations or predictions regarding the proposed transaction between M&T and People's United Financial, Inc. ("People's United") are forward-looking statements, including statements regarding the expected timing, completion and effects of the proposed transaction as well as M&T's and People's United's expected financial results, prospects, targets, goals and outlook.  

Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," or "potential," by future conditional verbs such as "will," "would," "should," "could," or "may," or by variations of such words or by similar expressions. 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 risks, predictions and uncertainties relating to the impact of the People's United transaction (as described in the next paragraph); the impact of the COVID-19 pandemic; 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 or regulations affecting the financial services industry and/or M&T and its subsidiaries individually or collectively, including tax policy; 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, regulatory agencies or legislation; increasing price, product and 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 and 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.

In addition, future factors related to the proposed transaction between M&T and People's United include, among others: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between M&T and People's United; the outcome of any legal proceedings that may be instituted against M&T or People's United; the possibility that the proposed transaction will not close when expected or at all because required regulatory or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated; the risk that any announcements relating to the proposed combination could have adverse effects on the market price of the common stock of either or both parties to the combination; the possibility that the anticipated benefits of the transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where M&T and People's United do business; certain restrictions during the pendency of the merger that may impact the parties' ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; M&T's and People's United's success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the business, economic and political conditions in the markets in which the parties operate; and other factors that may affect future results of M&T and People's United. 

Future factors related to the proposed transaction also include risks, such as, among others: that the proposed combination and its announcement could have an adverse effect on either or both parties' ability to retain customers and retain or hire key personnel and maintain relationships with customers; that the proposed combination may be more difficult or time-consuming than anticipated, including in areas such as sales force, cost containment, asset realization, systems integration and other key strategies; and that revenues following the proposed combination may be lower than expected, including for possible reasons such as unexpected costs, charges or expenses resulting from the transactions; as well as the unforeseen risks relating to liabilities of M&T or People's United that may exist, and uncertainty as to the extent of the duration, scope, and impacts of the COVID-19 pandemic on People's United, M&T and the proposed combination.

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.

M&T provides further detail regarding these risks and uncertainties in its 2020 Form 10-K, including in the Risk Factors section of such report, as well as in other SEC filings. Forward-looking statements speak only as of the date made, and M&T does not assume any duty and does not undertake to update forward-looking statements.

INVESTOR CONTACT:

Brian Klock

Donald MacLeod

 

(716) 842-5138

 

MEDIA CONTACT:

Maya Dillon

 

(646) 735-1958

 

 

Financial Highlights

 
   

Three months ended

           

Year ended

         
   

December 31

           

December 31

         

Amounts in thousands, except per share

 

2021

   

2020

   

Change

   

2021

   

2020

   

Change

 

Performance

                                               

Net income

 

$

457,968

     

471,140

     

-3

%

 

$

1,858,746

     

1,353,152

     

37

%

Net income available to common shareholders

   

434,171

     

451,869

     

-4

%

   

1,776,987

     

1,279,068

     

39

%

Per common share:

                                               

Basic earnings

 

$

3.37

     

3.52

     

-4

%

 

$

13.81

     

9.94

     

39

%

Diluted earnings

   

3.37

     

3.52

     

-4

%

   

13.80

     

9.94

     

39

%

Cash dividends

 

$

1.20

     

1.10

     

9

%

 

$

4.50

     

4.40

     

2

%

Common shares outstanding:

                                               

Average - diluted (1)

   

128,888

     

128,379

     

     

128,812

     

128,704

     

 

Period end (2)

   

128,705

     

128,333

   

     

128,705

     

128,333

   

 

Return on (annualized):

                                               

Average total assets

   

1.15

%

   

1.30

%

           

1.22

%

   

1.00

%

       

Average common shareholders' equity

   

10.91

%

   

12.07

%

           

11.54

%

   

8.72

%

       

Taxable-equivalent net interest income

 

$

937,356

     

993,252

     

-6

%

 

$

3,839,509

     

3,883,605

     

-1

%

Yield on average earning assets

   

2.64

%

   

3.15

%

           

2.84

%

   

3.43

%

       

Cost of interest-bearing liabilities

   

.12

%

   

.25

%

           

.14

%

   

.43

%

       

Net interest spread

   

2.52

%

   

2.90

%

           

2.70

%

   

3.00

%

       

Contribution of interest-free funds

   

.06

%

   

.10

%

           

.06

%

   

.16

%

       

Net interest margin

   

2.58

%

   

3.00

%

           

2.76

%

   

3.16

%

       

Net charge-offs to average total net loans (annualized)

   

.13

%

   

.39

%

           

.20

%

   

.26

%

       

Net operating results (3)

                                               

Net operating income

 

$

475,477

     

473,453

   

   

$

1,899,838

     

1,364,145

     

39

%

Diluted net operating earnings per common share

   

3.50

     

3.54

     

-1

%

   

14.11

     

10.02

     

41

%

Return on (annualized):

                                               

Average tangible assets

   

1.23

%

   

1.35

%

           

1.28

%

   

1.04

%

       

Average tangible common equity

   

15.98

%

   

17.53

%

           

16.80

%

   

12.79

%

       

Efficiency ratio

   

59.7

%

   

54.6

%

           

59.0

%

   

56.3

%

       
                                                 
   

At December 31

                             

Loan quality

 

2021

   

2020

   

Change

                         

Nonaccrual loans

 

$

2,060,083

     

1,893,299

     

9

%

                       

Real estate and other foreclosed assets

   

23,901

     

34,668

     

-31

%

                       

Total nonperforming assets

 

$

2,083,984

     

1,927,967

     

8

%

                       

Accruing loans past due 90 days or more (4)

 

$

963,399

     

859,208

     

12

%

                       

Government guaranteed loans included in totals above:

                                               

Nonaccrual loans

 

$

51,429

     

48,820

     

5

%

                       

Accruing loans past due 90 days or more

   

927,788

     

798,121

     

16

%

                       

Renegotiated loans

 

$

230,408

     

238,994

     

-4

%

                       

Nonaccrual loans to total net loans

   

2.22

%

   

1.92

%

                               

Allowance for credit losses to total loans

   

1.58

%

   

1.76

%

                               
 
         

(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)

Predominantly residential real estate loans.

 

Financial Highlights, Five Quarter Trend

 
   

Three months ended

 
   

December 31,

   

September 30,

   

June 30,

   

March 31,

   

December 31,

 

Amounts in thousands, except per share

 

2021

   

2021

   

2021

   

2021

   

2020

 

Performance

                                       

Net income

 

$

457,968

     

495,460

     

458,069

     

447,249

     

471,140

 

Net income available to common shareholders

   

434,171

     

475,961

     

438,759

     

428,093

     

451,869

 

Per common share:

                                       

Basic earnings

 

$

3.37

     

3.70

     

3.41

     

3.33

     

3.52

 

Diluted earnings

   

3.37

     

3.69

     

3.41

     

3.33

     

3.52

 

Cash dividends

 

$

1.20

     

1.10

     

1.10

     

1.10

     

1.10

 

Common shares outstanding:

                                       

Average - diluted (1)

   

128,888

     

128,844

     

128,842

     

128,669

     

128,379

 

Period end (2)

   

128,705

     

128,699

     

128,686

     

128,658

     

128,333

 

Return on (annualized):

                                       

Average total assets

   

1.15

%

   

1.28

%

   

1.22

%

   

1.22

%

   

1.30

%

Average common shareholders' equity

   

10.91

%

   

12.16

%

   

11.55

%

   

11.57

%

   

12.07

%

Taxable-equivalent net interest income

 

$

937,356

     

970,953

     

946,072

     

985,128

     

993,252

 

Yield on average earning assets

   

2.64

%

   

2.82

%

   

2.85

%

   

3.08

%

   

3.15

%

Cost of interest-bearing liabilities

   

.12

%

   

.14

%

   

.14

%

   

.18

%

   

.25

%

Net interest spread

   

2.52

%

   

2.68

%

   

2.71

%

   

2.90

%

   

2.90

%

Contribution of interest-free funds

   

.06

%

   

.06

%

   

.06

%

   

.07

%

   

.10

%

Net interest margin

   

2.58

%

   

2.74

%

   

2.77

%

   

2.97

%

   

3.00

%

Net charge-offs to average total net loans (annualized)

   

.13

%

   

.17

%

   

.19

%

   

.31

%

   

.39

%

Net operating results (3)

                                       

Net operating income

 

$

475,477

     

504,030

     

462,959

     

457,372

     

473,453

 

Diluted net operating earnings per common share

   

3.50

     

3.76

     

3.45

     

3.41

     

3.54

 

Return on (annualized):

                                       

Average tangible assets

   

1.23

%

   

1.34

%

   

1.27

%

   

1.29

%

   

1.35

%

Average tangible common equity

   

15.98

%

   

17.54

%

   

16.68

%

   

17.05

%

   

17.53

%

Efficiency ratio

   

59.7

%

   

57.7

%

   

58.4

%

   

60.3

%

   

54.6

%

                                         
   

December 31,

   

September 30,

   

June 30,

   

March 31,

   

December 31,

 

Loan quality

 

2021

   

2021

   

2021

   

2021

   

2020

 

Nonaccrual loans

 

$

2,060,083

     

2,242,263

     

2,242,057

     

1,957,106

     

1,893,299

 

Real estate and other foreclosed assets

   

23,901

     

24,786

     

27,902

     

29,797

     

34,668

 

Total nonperforming assets

 

$

2,083,984

     

2,267,049

     

2,269,959

     

1,986,903

     

1,927,967

 

Accruing loans past due 90 days or more (4)

 

$

963,399

     

1,026,080

     

1,077,227

     

1,084,553

     

859,208

 

Government guaranteed loans included in totals above:

                                       

Nonaccrual loans

 

$

51,429

     

47,358

     

49,796

     

51,668

     

48,820

 

Accruing loans past due 90 days or more

   

927,788

     

947,091

     

1,029,331

     

1,044,599

     

798,121

 

Renegotiated loans

 

$

230,408

     

242,955

     

236,377

     

242,121

     

238,994

 

Nonaccrual loans to total net loans

   

2.22

%

   

2.40

%

   

2.31

%

   

1.97

%

   

1.92

%

Allowance for credit losses to total loans

   

1.58

%

   

1.62

%

   

1.62

%

   

1.65

%

   

1.76

%

 
         

(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)

Predominantly residential real estate loans.

 

Condensed Consolidated Statement of Income

 
 
   

Three months ended

           

Year ended

         
   

December 31

           

December 31

         

Dollars in thousands

 

2021

   

2020

   

Change

   

2021

   

2020

   

Change

 

Interest income

 

$

958,518

     

1,038,890

     

-8

%

 

$

3,938,784

     

4,192,712

     

-6

%

Interest expense

   

24,725

     

49,610

     

-50

     

114,006

     

326,395

     

-65

 

Net interest income

   

933,793

     

989,280

     

-6

     

3,824,778

     

3,866,317

     

-1

 

Provision for credit losses

   

(15,000)

     

75,000

     

-120

     

(75,000)

     

800,000

     

-109

 

Net interest income after provision for credit losses

   

948,793

     

914,280

     

4

     

3,899,778

     

3,066,317

     

27

 

Other income

                                               

Mortgage banking revenues

   

139,267

     

140,441

     

-1

     

571,329

     

566,641

     

1

 

Service charges on deposit accounts

   

105,392

     

95,817

     

10

     

402,113

     

370,788

     

8

 

Trust income

   

168,827

     

151,314

     

12

     

644,716

     

601,884

     

7

 

Brokerage services income

   

18,923

     

12,234

     

55

     

62,791

     

47,428

     

32

 

Trading account and foreign exchange gains

   

6,027

     

7,204

     

-16

     

24,376

     

40,536

     

-40

 

Gain (loss) on bank investment securities

   

1,426

     

1,619

     

-12

     

(21,220)

     

(9,421)

     

 

Other revenues from operations

   

138,775

     

142,621

     

-3

     

482,889

     

470,588

     

3

 

Total other income

   

578,637

     

551,250

     

5

     

2,166,994

     

2,088,444

     

4

 

Other expense

                                               

Salaries and employee benefits

   

515,043

     

476,110

     

8

     

2,045,677

     

1,950,692

     

5

 

Equipment and net occupancy

   

82,641

     

84,228

     

-2

     

326,698

     

322,037

     

1

 

Outside data processing and software

   

78,814

     

68,034

     

16

     

291,839

     

258,480

     

13

 

FDIC assessments

   

18,830

     

15,204

     

24

     

69,704

     

53,803

     

30

 

Advertising and marketing

   

21,228

     

17,832

     

19

     

64,428

     

61,904

     

4

 

Printing, postage and supplies

   

8,140

     

8,335

     

-2

     

36,507

     

39,869

     

-8

 

Amortization of core deposit and other

                                               

   intangible assets

   

1,954

     

3,129

     

-38

     

10,167

     

14,869

     

-32

 

Other costs of operations

   

200,850

     

172,136

     

17

     

766,603

     

683,586

     

12

 

Total other expense

   

927,500

     

845,008

     

10

     

3,611,623

     

3,385,240

     

7

 

Income before income taxes

   

599,930

     

620,522

     

-3

     

2,455,149

     

1,769,521

     

39

 

Applicable income taxes

   

141,962

     

149,382

     

-5

     

596,403

     

416,369

     

43

 

Net income

 

$

457,968

     

471,140

     

-3

%

 

$

1,858,746

     

1,353,152

     

37

%

 

Condensed Consolidated Statement of Income, Five Quarter Trend

 
 
   

Three months ended

 
   

December 31,

   

September 30,

   

June 30,

   

March 31,

   

December 31,

 

Dollars in thousands

 

2021

   

2021

   

2021

   

2021

   

2020

 

Interest income

 

$

958,518

     

992,946

     

970,358

     

1,016,962

     

1,038,890

 

Interest expense

   

24,725

     

25,696

     

28,018

     

35,567

     

49,610

 

Net interest income

   

933,793

     

967,250

     

942,340

     

981,395

     

989,280

 

Provision for credit losses

   

(15,000)

     

(20,000)

     

(15,000)

     

(25,000)

     

75,000

 

Net interest income after provision for credit losses

   

948,793

     

987,250

     

957,340

     

1,006,395

     

914,280

 

Other income

                                       

Mortgage banking revenues

   

139,267

     

159,995

     

133,313

     

138,754

     

140,441

 

Service charges on deposit accounts

   

105,392

     

105,426

     

98,518

     

92,777

     

95,817

 

Trust income

   

168,827

     

156,876

     

162,991

     

156,022

     

151,314

 

Brokerage services income

   

18,923

     

20,490

     

10,265

     

13,113

     

12,234

 

Trading account and foreign exchange gains

   

6,027

     

5,563

     

6,502

     

6,284

     

7,204

 

Gain (loss) on bank investment securities

   

1,426

     

291

     

(10,655)

     

(12,282)

     

1,619

 

Other revenues from operations

   

138,775

     

120,485

     

112,699

     

110,930

     

142,621

 

Total other income

   

578,637

     

569,126

     

513,633

     

505,598

     

551,250

 

Other expense

                                       

Salaries and employee benefits

   

515,043

     

510,422

     

479,134

     

541,078

     

476,110

 

Equipment and net occupancy

   

82,641

     

80,738

     

80,848

     

82,471

     

84,228

 

Outside data processing and software

   

78,814

     

72,782

     

74,492

     

65,751

     

68,034

 

FDIC assessments

   

18,830

     

18,810

     

17,876

     

14,188

     

15,204

 

Advertising and marketing

   

21,228

     

15,208

     

13,364

     

14,628

     

17,832

 

Printing, postage and supplies

   

8,140

     

7,917

     

11,133

     

9,317

     

8,335

 

Amortization of core deposit and other 

                                       

   intangible assets

   

1,954

     

2,738

     

2,737

     

2,738

     

3,129

 

Other costs of operations

   

200,850

     

190,719

     

185,761

     

189,273

     

172,136

 

Total other expense

   

927,500

     

899,334

     

865,345

     

919,444

     

845,008

 

Income before income taxes

   

599,930

     

657,042

     

605,628

     

592,549

     

620,522

 

Applicable income taxes

   

141,962

     

161,582

     

147,559

     

145,300

     

149,382

 

Net income

 

$

457,968

     

495,460

     

458,069

     

447,249

     

471,140

 

 

Condensed Consolidated Balance Sheet

 
   

December 31

           

Dollars in thousands

 

2021

   

2020

   

Change

   

ASSETS

                         

Cash and due from banks

 

$

1,337,577

     

1,552,743

     

-14

 

%

Interest-bearing deposits at banks

   

41,872,304

     

23,663,810

     

77

   

Trading account

   

468,031

     

1,068,581

     

-56

   

Investment securities

   

7,155,860

     

7,045,697

     

2

   

Loans and leases:

                         

Commercial, financial, etc.

   

23,473,324

     

27,574,564

     

-15

   

Real estate - commercial

   

35,389,730

     

37,637,889

     

-6

   

Real estate - consumer

   

16,074,445

     

16,752,993

     

-4

   

Consumer

   

17,974,953

     

16,570,421

     

8

   

Total loans and leases, net of unearned discount

   

92,912,452

     

98,535,867

     

-6

   

Less: allowance for credit losses

   

1,469,226

     

1,736,387

     

-15

   

Net loans and leases

   

91,443,226

     

96,799,480

     

-6

   

Goodwill

   

4,593,112

     

4,593,112

     

   

Core deposit and other intangible assets

   

3,998

     

14,165

     

-72

   

Other assets

   

8,233,052

     

7,863,517

     

5

   

Total assets

 

$

155,107,160

     

142,601,105

     

9

 

%

                           

LIABILITIES AND SHAREHOLDERS' EQUITY

                         

Noninterest-bearing deposits

 

$

60,131,480

     

47,572,884

     

26

 

%

Interest-bearing deposits

   

71,411,929

     

71,580,750

     

   

Deposits at Cayman Islands office

   

     

652,104

     

-100

   

Total deposits

   

131,543,409

     

119,805,738

     

10

   

Short-term borrowings

   

47,046

     

59,482

     

-21

   

Accrued interest and other liabilities

   

2,127,931

     

2,166,409

     

-2

   

Long-term borrowings

   

3,485,369

     

4,382,193

     

-20

   

Total liabilities

   

137,203,755

     

126,413,822

     

9

   

Shareholders' equity:

                         

Preferred

   

1,750,000

     

1,250,000

     

40

   

Common

   

16,153,405

     

14,937,283

     

8

   

Total shareholders' equity

   

17,903,405

     

16,187,283

     

11

   

Total liabilities and shareholders' equity

 

$

155,107,160

     

142,601,105

     

9

 

%

 

Condensed Consolidated Balance Sheet, Five Quarter Trend

 
   

December 31,

   

September 30,

   

June 30,

   

March 31,

   

December 31,

 

Dollars in thousands

 

2021

   

2021

   

2021

   

2021

   

2020

 

ASSETS

                                       

Cash and due from banks

 

$

1,337,577

     

1,479,712

     

1,410,468

     

1,258,989

     

1,552,743

 

Interest-bearing deposits at banks

   

41,872,304

     

38,445,788

     

33,864,824

     

31,407,227

     

23,663,810

 

Federal funds sold

   

     

     

     

1,000

     

 

Trading account

   

468,031

     

624,556

     

712,558

     

687,359

     

1,068,581

 

Investment securities

   

7,155,860

     

6,447,622

     

6,143,177

     

6,610,667

     

7,045,697

 

Loans and leases:

                                       

Commercial, financial, etc.

   

23,473,324

     

22,514,940

     

25,409,291

     

27,811,190

     

27,574,564

 

Real estate - commercial

   

35,389,730

     

37,023,952

     

37,558,775

     

37,425,974

     

37,637,889

 

Real estate - consumer

   

16,074,445

     

16,209,354

     

16,704,951

     

17,349,683

     

16,752,993

 

Consumer

   

17,974,953

     

17,834,648

     

17,440,415

     

16,712,233

     

16,570,421

 

Total loans and leases, net of unearned discount

   

92,912,452

     

93,582,894

     

97,113,432

     

99,299,080

     

98,535,867

 

Less: allowance for credit losses

   

1,469,226

     

1,515,024