M&T Bank Corporation Announces Second Quarter Results

July 21, 2021 at 6:41 AM EDT

BUFFALO, N.Y., July 21, 2021 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2021.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") were $3.41 in the second quarter of 2021, up from $1.74 in the year-earlier quarter and $3.33 in the first quarter of 2021. GAAP-basis net income was $458 million in the recent quarter, $241 million in the second quarter of 2020 and $447 million in the initial 2021 quarter. GAAP-basis net income for the second 2021 quarter expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.22% and 11.55%, respectively, compared with .71% and 6.13%, respectively, in the corresponding 2020 period and 1.22% and 11.57%, respectively, in the first 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 $4 million ($3 million after tax-effect, or $.02 of diluted earnings per common share), compared with $10 million ($8 million after tax-effect, or $.06 of diluted earnings per common share) in the first quarter of 2021.

Commenting on M&T's results for the second quarter of 2021, Darren J. King, Executive Vice President and Chief Financial Officer, noted, "Reflecting signs of economic recovery, we were encouraged by the increased customer activity experienced during the recent quarter, particularly associated with debit and credit cards.  M&T's trust businesses continued their strong performance, with revenues up seven percent from last year's second quarter.  The year-over-year expense growth largely resulted from increased costs for incentives and other investments that had been curtailed in 2020 due to the pandemic.  M&T's balance sheet remains solid, highlighted by an allowance for credit losses to loans ratio of 1.62% and a Common Equity Tier 1 Capital Ratio of 10.7%, up from 10.4% at March 31, 2021."

Earnings Highlights





































Change 2Q21 vs.


($ in millions, except per share data)


2Q21



2Q20



1Q21



2Q20



1Q21























Net income


$

458



$

241



$

447




90

%



2

%

Net income available to common shareholders  ̶  diluted


$

439



$

223



$

428




97

%



2

%

Diluted earnings per common share


$

3.41



$

1.74



$

3.33




96

%



2

%

Annualized return on average assets



1.22

%



.71

%



1.22

%









Annualized return on average common equity



11.55

%



6.13

%



11.57

%









For the first six-months of 2021, diluted earnings per common share rose 83% to $6.73 from $3.67 in the year-earlier period.  GAAP-basis net income for the first half of 2021 increased to $905 million from $510 million in the corresponding 2020 period.  Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income in the six-month period ended June 30, 2021 was 1.22% and 11.56%, respectively, improved from .80% and 6.56%, respectively, in the similar 2020 period.

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 increased to $3.45 in the second quarter of 2021 from $1.76 and $3.41 in the year-earlier quarter and the first quarter of 2021, respectively.  Net operating income totaled $463 million in 2021's second quarter, $244 million in the second quarter of 2020 and $457 million in the initial 2021 quarter.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income in the recent quarter was 1.27% and 16.68%, respectively, .74% and 9.04%, respectively, in the corresponding 2020 quarter and 1.29% and 17.05%, respectively, in the first quarter of 2021.

Diluted net operating earnings per common share in the first six months of 2021 rose to $6.84 from $3.71 in the similar 2020 period.  Net operating income during the first half of 2021 was $920 million, up from $516 million in the six-month period ended June 30, 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 16.86%, respectively, in the initial six months of 2021, compared with .84% and 9.71% respectively, in the similar 2020 period.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis totaled $946 million in the recent quarter, compared with $961 million in the second quarter of 2020 and $985 million in the initial 2021 quarter.  The decrease in the recent quarter as compared with the earlier quarters was due to a narrowing of the net interest margin to 2.77% in the second quarter of 2021 from 3.13% in the year-earlier quarter and 2.97% in the first quarter of 2021.  The decreased net interest margin resulted from lower interest rates earned on loans and higher amounts of low-yielding balances at the Federal Reserve Bank of New York.  Interest income from Paycheck Protection Program ("PPP") loans, including recognition of fees associated with repaid loans, was $51 million in the recent quarter, $29 million in the year-earlier quarter and $70 million in the first quarter of 2021.






















Taxable-equivalent Net Interest Income





































Change 2Q21 vs.


($ in millions)


2Q21



2Q20



1Q21



2Q20



1Q21























Average earning assets


$

136,951



$

123,492



$

134,355




11

%



2

%

Net interest income  ̶  taxable-equivalent


$

946



$

961



$

985




-2

%



-4

%

Net interest margin



2.77

%



3.13

%



2.97

%









Provision for Credit Losses/Asset Quality.  Recaptures of the provision for credit losses of $15 million and $25 million were recorded in the second and first quarters of 2021, respectively.  The provision for credit losses was $325 million in the second quarter of 2020.  The provision in each quarter adjusts the allowance for credit losses to reflect expected losses that are based on economic forecasts as of each quarter-end date. Net loan charge-offs were $46 million during the recent quarter, down from $71 million in the second quarter of 2020 and $75 million in the first quarter of 2021. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .19% and .29% in the second quarters of 2021 and 2020, respectively, and .31% in the first quarter of 2021.

Nonaccrual loans totaled $2.24 billion or 2.31% of total loans outstanding at June 30, 2021, compared with $1.96 billion or 1.97% of total loans at March 31, 2021 and $1.16 billion or 1.18% at June 30, 2020.  The increase in nonaccrual loans from June 30, 2020 to the two most recent quarter-ends reflects the continuing impact of the pandemic on borrowers' ability to make contractual payments on their loans, most notably loans in the hospitality sector.  Assets taken in foreclosure of defaulted loans were $28 million at June 30, 2021, $67 million a year earlier and $30 million at March 31, 2021.

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 for credit losses totaled $1.58 billion or 1.62% of loans outstanding at June 30, 2021, compared with $1.64 billion or 1.68% at June 30, 2020 and $1.64 billion or 1.65% at March 31, 2021. The allowance at June 30, 2021, June 30, 2020, and March 31, 2021 represented 1.69%, 1.79%, and 1.75%, respectively, of total loans on those dates, excluding outstanding balances of PPP loans.

Asset Quality Metrics















Change 2Q21 vs.


($ in millions)


2Q21



2Q20



1Q21



2Q20



1Q21























At end of quarter





















Nonaccrual loans


$

2,242



$

1,157



$

1,957




94

%



15

%

Real estate and other foreclosed assets


$

28



$

67



$

30




-58

%



-6

%

Total nonperforming assets


$

2,270



$

1,224



$

1,987




86

%



14

%

Accruing loans past due 90 days or more (1)


$

1,077



$

536



$

1,085




101

%



-1

%

Nonaccrual loans as % of loans outstanding



2.31

%



1.18

%



1.97

%






























Allowance for credit losses


$

1,575



$

1,638



$

1,636




-4

%



-4

%

Allowance for credit losses as % of loans outstanding



1.62

%



1.68

%



1.65

%






























For the period





















Provision for credit losses


$

(15)



$

325



$

(25)








Net charge-offs


$

46



$

71



$

75




-35

%



-39

%

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



.19

%



.29

%



.31

%


































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

Noninterest Income and Expense.  Noninterest income increased to $514 million in the second quarter of 2021 from $487 million in the year-earlier quarter and $506 million in the first quarter of 2021. The higher level of the recent quarter's noninterest income when compared with the earlier quarters resulted largely from higher service charges on deposit accounts, merchant discount and credit card fees, and trust income.

Noninterest Income





































Change 2Q21 vs.


($ in millions)


2Q21



2Q20



1Q21



2Q20



1Q21























Mortgage banking revenues


$

133



$

145



$

139




-8

%



-4

%

Service charges on deposit accounts



99




78




93




27

%



6

%

Trust income



163




152




156




7

%



4

%

Brokerage services income



10




10




13




-2

%



-22

%

Trading account and foreign exchange gains



7




8




6




-22

%



3

%

Gain (loss) on bank investment securities



(11)




7




(12)






Other revenues from operations



113




87




111




29

%



2

%

Total


$

514



$

487



$

506




5

%



2

%

Noninterest expense totaled $865 million in the second quarter of 2021, compared with $807 million in the corresponding quarter of 2020 and $919 million in the first 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 $859 million in the recent quarter, $803 million in the second quarter of 2020 and $907 million in 2021's initial 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, outside data processing and software, and professional services. As compared with the first quarter of 2021, the lower level of noninterest expenses in the recent quarter was predominantly attributable to a decline in expenses for salaries and employee benefits, reflecting seasonally higher stock-based compensation and employee benefits expenses during the initial 2021 quarter.  Reflecting the impact of lower interest rates on expected prepayments of serviced residential mortgage loans, M&T recorded an $8 million increase in the valuation allowance for capitalized residential mortgage servicing rights in the recent quarter, compared with a decrease in that valuation allowance of $9 million in the initial 2021 quarter.

 

Noninterest Expense





































Change 2Q21 vs.


($ in millions)


2Q21



2Q20



1Q21



2Q20



1Q21























Salaries and employee benefits


$

479



$

459



$

541




4

%



-11

%

Equipment and net occupancy



81




77




82




5

%



-2

%

Outside data processing and software



74




61




66




21

%



13

%

FDIC assessments



18




14




14




26

%



26

%

Advertising and marketing



13




10




15




36

%



-9

%

Printing, postage and supplies



11




11




9




-1

%



19

%

Amortization of core deposit and other intangible assets



3




4




3




-30

%



Other costs of operations



186




171




189




9

%



-2

%

Total


$

865



$

807



$

919




7

%



-6

%






















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 58.4% in the second quarter of 2021, 55.7% in the year-earlier quarter and 60.3% in the first quarter of 2021.

Balance Sheet.  M&T had total assets of $150.6 billion at June 30, 2021, compared with $139.5 billion and $150.5 billion at June 30, 2020 and March 31, 2021, respectively. Loans and leases, net of unearned discount, were $97.1 billion at June 30, 2021, compared with $97.8 billion at June 30, 2020 and $99.3 billion at March 31, 2021. The lower level of loans and leases at the recent quarter-end as compared with June 30, 2020 reflects a $3.8 billion decline in commercial loans, largely offset by growth in consumer loans and residential real estate loans of $1.7 billion and $1.1 billion, respectively.  The lower commercial loan balances reflect declines in PPP and dealer floor plan loans.  The rise in consumer loans resulted from higher balances of recreational finance and automobile loans, while the increase in residential real estate loans was attributable to purchased government-guaranteed loans.  The decline in total loans and leases at the recent quarter-end as compared with the first quarter of 2021 resulted largely from lower commercial loans of $2.4 billion and residential real estate loans of $645 million, partially offset by a rise in consumer loans of $728 million. The decrease in commercial loans reflects lower balances of PPP loans. Those loans totaled $4.3 billion at June 30, 2021, compared with $6.5 billion at June 30, 2020 and $6.2 billion at March 31, 2021. The consumer loans increase reflects higher balances of recreational finance and automobile loans.  Total deposits were $128.3 billion at the recent quarter-end, compared with $115.0 billion at June 30, 2020 and $128.5 billion at March 31, 2021. The increased levels of deposits at the two most recent quarter-ends as compared with June 30, 2020 reflect higher levels of liquidity being maintained by many commercial and consumer customers.  During the recent quarter, M&T stopped accepting deposits for its Cayman Islands office.

Total shareholders' equity was $16.7 billion, or 11.10% of total assets at June 30, 2021, $15.9 billion, or 11.43% at June 30, 2020 and $16.4 billion, or 10.93% at March 31, 2021. Common shareholders' equity was $15.5 billion, or $120.22 per share, at June 30, 2021, compared with $14.7 billion, or $114.54 per share, a year-earlier and $15.2 billion, or $118.12 per share, at March 31, 2021. Tangible equity per common share was $84.47 at June 30, 2021, $78.62 at June 30, 2020 and $82.35 at March 31, 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 10.7% at June 30, 2021, up from 10.4% three months earlier.

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 #1338608.  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 Wednesday, July 28, 2021 by calling (800) 585-8367, or (404) 537-3406 for international participants, and by making reference to the ID #1338608.  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. For more on our approach as a bank for communities, we committed to communicating our efforts transparently, in our inaugural ESG Report launched this quarter.

We have once again received an "Outstanding" Community Reinvestment Act (CRA) rating from the Federal Reserve Bank of New York – a streak of earning the regulatory agency's highest rating for meeting the credit needs of the bank's communities that dates to 1982. While these acknowledgements might not be the biggest markers of corporate financial success, they are some of the most important to us, because it recognizes our work to improve the quality of lives in all of our communities and for all of our stakeholders.  This, we believe, is the hallmark of building a healthier company.

Forward-Looking Statements.  This news release and related conference call may contain 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.  Any statement that does not describe historical or current facts is a forward-looking statement.

Statements regarding the potential effects of the Coronavirus Disease 2019 ("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 COVID-19 pandemic; the impact of the People's United transaction, as described further below; 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 as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation or regulation; 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 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.

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; and other factors that may affect future results of M&T and People's United; the business, economic and political conditions in the markets in which the parties operate; the risk 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; the risk 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; 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; 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 certain 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.    

Financial Highlights




Three months ended







Six months ended








June 30







June 30






Amounts in thousands, except per share


2021



2020



Change



2021



2020



Change


Performance

























Net income


$

458,069




241,054




90

%


$

905,318




509,876




78

%

Net income available to common shareholders



438,759




223,099




97

%



866,852




473,795




83

%

Per common share:

























Basic earnings


$

3.41




1.74




96

%


$

6.74




3.67




84

%

Diluted earnings



3.41




1.74




96

%



6.73




3.67




83

%

Cash dividends


$

1.10




1.10






$

2.20




2.20




Common shares outstanding:

























Average - diluted (1)



128,842




128,333







128,756




129,044




Period end (2)



128,686




128,294






128,686




128,294




Return on (annualized):

























Average total assets



1.22

%



.71

%







1.22

%



.80

%





Average common shareholders' equity



11.55

%



6.13

%







11.56

%



6.56

%





Taxable-equivalent net interest income


$

946,072




961,371




-2

%


$

1,931,200




1,943,239




-1

%

Yield on average earning assets



2.85

%



3.38

%







2.97

%



3.75

%





Cost of interest-bearing liabilities



.14

%



.40

%







.17

%



.60

%





Net interest spread



2.71

%



2.98

%







2.80

%



3.15

%





Contribution of interest-free funds



.06

%



.15

%







.07

%



.22

%





Net interest margin



2.77

%



3.13

%







2.87

%



3.37

%





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



.19

%



.29

%







.25

%



.26

%





Net operating results (3)

























Net operating income


$

462,959




243,958




90

%


$

920,331




515,663




78

%

Diluted net operating earnings per common share



3.45




1.76




96

%



6.84




3.71




84

%

Return on (annualized):

























Average tangible assets



1.27

%



.74

%







1.28

%



.84

%





Average tangible common equity



16.68

%



9.04

%







16.86

%



9.71

%





Efficiency ratio



58.4

%



55.7

%







59.4

%



57.4

%
































 At June 30




















Loan quality


2021



2020



Change














Nonaccrual loans


$

2,242,057




1,156,650




94

%













Real estate and other foreclosed assets



27,902




66,763




-58

%













Total nonperforming assets


$

2,269,959




1,223,413




86

%













Accruing loans past due 90 days or more (4)


$

1,077,227




535,755




101

%













Government guaranteed loans included in totals above:

























Nonaccrual loans


$

49,796




51,165




-3

%













Accruing loans past due 90 days or more



1,029,331




454,269




127

%













Renegotiated loans


$

236,377




234,768




1

%













Nonaccrual loans to total net loans



2.31

%



1.18

%

















Allowance for credit losses to total loans



1.62

%



1.68

%



























(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




June 30,



March 31,



December 31,



September 30,



June 30,


Amounts in thousands, except per share


2021



2021



2020



2020



2020


Performance





















Net income


$

458,069




447,249




471,140




372,136




241,054


Net income available to common shareholders



438,759




428,093




451,869




353,400




223,099


Per common share:





















Basic earnings


$

3.41




3.33




3.52




2.75




1.74


Diluted earnings



3.41




3.33




3.52




2.75




1.74


Cash dividends


$

1.10




1.10




1.10




1.10




1.10


Common shares outstanding:





















Average - diluted (1)



128,842




128,669




128,379




128,355




128,333


Period end (2)



128,686




128,658




128,333




128,303




128,294


Return on (annualized):





















Average total assets



1.22

%



1.22

%



1.30

%



1.06

%



.71

%

Average common shareholders' equity



11.55

%



11.57

%



12.07

%



9.53

%



6.13

%

Taxable-equivalent net interest income


$

946,072




985,128




993,252




947,114




961,371


Yield on average earning assets



2.85

%



3.08

%



3.15

%



3.13

%



3.38

%

Cost of interest-bearing liabilities



.14

%



.18

%



.25

%



.30

%



.40

%

Net interest spread



2.71

%



2.90

%



2.90

%



2.83

%



2.98

%

Contribution of interest-free funds



.06

%



.07

%



.10

%



.12

%



.15

%

Net interest margin



2.77

%



2.97

%



3.00

%



2.95

%



3.13

%

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



.19

%



.31

%



.39

%



.12

%



.29

%

Net operating results (3)





















Net operating income


$

462,959




457,372




473,453




375,029




243,958


Diluted net operating earnings per common share



3.45




3.41




3.54




2.77




1.76


Return on (annualized):





















Average tangible assets



1.27

%



1.29

%



1.35

%



1.10

%



.74

%

Average tangible common equity



16.68

%



17.05

%



17.53

%



13.94

%



9.04

%

Efficiency ratio



58.4

%



60.3

%



54.6

%



56.2

%



55.7

%
























June 30,



March 31,



December 31,



September 30,



June 30,


Loan quality


2021



2021



2020



2020



2020


Nonaccrual loans


$

2,242,057




1,957,106




1,893,299




1,239,972




1,156,650


Real estate and other foreclosed assets



27,902




29,797




34,668




49,872




66,763


Total nonperforming assets


$

2,269,959




1,986,903




1,927,967




1,289,844




1,223,413


Accruing loans past due 90 days or more (4)


$

1,077,227




1,084,553




859,208




527,258




535,755


Government guaranteed loans included in totals above:





















Nonaccrual loans


$

49,796




51,668




48,820




45,975




51,165


Accruing loans past due 90 days or more



1,029,331




1,044,599




798,121




505,446




454,269


Renegotiated loans


$

236,377




242,121




238,994




242,581




234,768


Nonaccrual loans to total net loans



2.31

%



1.97

%



1.92

%



1.26

%



1.18

%

Allowance for credit losses to total loans



1.62

%



1.65

%



1.76

%



1.79

%



1.68

%













(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







Six months ended








June 30







June 30






Dollars in thousands


2021



2020



Change



2021



2020



Change


Interest income


$

970,358




1,032,242




-6

%


$

1,987,320




2,152,661




-8

%

Interest expense



28,018




75,105




-63




63,585




218,719




-71


Net interest income



942,340




957,137




-2




1,923,735




1,933,942




-1


Provision for credit losses



(15,000)




325,000






(40,000)




575,000




Net interest income after provision for credit losses



957,340




632,137




51




1,963,735




1,358,942




45


Other income

























Mortgage banking revenues



133,313




145,024




-8




272,067




272,933




Service charges on deposit accounts



98,518




77,455




27




191,295




183,616




4


Trust income



162,991




151,882




7




319,013




300,633




6


Brokerage services income



10,265




10,463




-2




23,378




23,592




-1


Trading account and foreign exchange gains



6,502




8,290




-22




12,786




29,306




-56


Gain (loss) on bank investment securities



(10,655)




6,969






(22,937)




(13,813)





Other revenues from operations



112,699




87,190




29




223,629




220,366




1


Total other income



513,633




487,273




5




1,019,231




1,016,633





Other expense

























Salaries and employee benefits



479,134




458,842




4




1,020,212




995,685




2


Equipment and net occupancy



80,848




77,089




5




163,319




156,729




4


Outside data processing and software



74,492




61,376




21




140,243




125,786




11


FDIC assessments



17,876




14,207




26




32,064




26,478




21


Advertising and marketing



13,364




9,842




36




27,992




32,217




-13


Printing, postage and supplies



11,133




11,260




-1




20,450




22,112




-8


Amortization of core deposit and other

   intangible assets



2,737




3,913




-30




5,475




7,826




-30


Other costs of operations



185,761




170,513




9




375,034




346,625




8


Total other expense



865,345