M&T BANK CORPORATION ANNOUNCES THIRD QUARTER RESULTS

October 19, 2022 at 6:11 AM EDT

BUFFALO, N.Y., Oct. 19, 2022 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2022.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") were $3.53 in the third quarter of 2022, compared with $3.69 in the year-earlier quarter and $1.08 in the second quarter of 2022. GAAP-basis net income was $647 million in the recent quarter, $495 million in the third quarter of 2021 and $218 million in the second 2022 quarter. GAAP-basis net income expressed as an annualized rate of return on average assets was 1.28% in each of the third quarters of 2022 and 2021, and .42% in the second quarter of 2022. That net income produced a return on average common shareholders' equity of 10.43% in the recent quarter, 12.16% in the similar 2021 period and 3.21% in the second quarter of 2022. The results reflect non-operating merger-related expenses associated with the acquisition of People's United Financial, Inc. ("People's United") of $53 million ($39 million after-tax effect, or $0.22 of diluted earnings per common share) in the recent quarter, compared with $9 million ($7 million after-tax effect, or $.05 of diluted earnings per common share) in the year-earlier quarter and $465 million ($346 million after-tax effect, or $1.94 of diluted earnings per share) in the second quarter of 2022.

Darren J. King, Chief Financial Officer, commenting on M&T's results noted, "We are pleased with the recent quarter gains in net operating income which are up 21% from the second quarter and 39% year over year. That improvement reflects increases in taxable-equivalent net interest income of 19% and 74%, coupled with low credit losses and well-controlled expenses. We are excited to continue our integration work to build a preeminent commercial bank across the eastern United States and we are committed to the success of the consumers, small businesses and communities across our expanded footprint."

Earnings Highlights

 
                               
                     

Change 3Q22 vs.

 

($ in millions, except per share data)

 

3Q22

   

3Q21

   

2Q22

   

3Q21

   

2Q22

 
                               

Net income

 

$

647

   

$

495

   

$

218

     

31

%

   

197

%

Net income available to common shareholders  ̶  diluted

 

$

621

   

$

476

   

$

192

     

30

%

   

223

%

Diluted earnings per common share

 

$

3.53

   

$

3.69

   

$

1.08

     

-4

%

   

227

%

Annualized return on average assets

   

1.28

%

   

1.28

%

   

.42

%

           

Annualized return on average common equity

   

10.43

%

   

12.16

%

   

3.21

%

           

For the first nine months of 2022, diluted earnings per common share were $7.14, compared with $10.43 in the year-earlier period. GAAP-basis net income was $1.23 billion and $1.40 billion in the first three quarters of 2022 and 2021, respectively. Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income in the nine-month period ended September 30, 2022 was .87% and 7.24%, respectively, compared with 1.24% and 11.76%, respectively, in the similar 2021 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.

Merger-related expenses generally consist of professional services and other temporary help fees associated with actual or planned conversions of systems and/or integration of operations, costs related to terminations of existing contractual arrangements to purchase various services, severance and travel costs. Reflected in merger-related expenses in the second quarter of 2022 was a provision for credit losses of $242 million. GAAP requires that acquired loans be recorded at estimated fair value, which includes the use of interest rate and expected credit loss assumptions to forecast estimated cash flows. GAAP also provides that an allowance for credit losses on loans acquired, but not classified as purchased credit deteriorated ("PCD") also be recognized. Accordingly, M&T recorded a $242 million provision related to such loans obtained in the People's United acquisition. Given the requirement to recognize such losses above and beyond the impact of forecasted losses used in determining the fair value of acquired loans, M&T considers that provision to be a merger-related expense. 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 $3.83 in the third quarter of 2022, compared with $3.76 in the year-earlier quarter and $3.10 in the second quarter of 2022. Net operating income aggregated $700 million in the recent quarter, $504 million in the third quarter of 2021 and $578 million in 2022's second quarter. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income in the third quarter of 2022 was 1.44% and 17.89%, respectively, 1.34% and 17.54%, respectively, in the similar quarter of 2021 and 1.16% and 14.41%, respectively, in the second quarter of 2022.

Diluted net operating earnings per common share in the first nine months of 2022 totaled $9.78, compared with $10.61 in the similar 2021 period. Net operating income during the first nine months of 2022 was $1.65 billion, up from $1.42 billion in the nine-month period ended September 30, 2021. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.23% and 15.13%, respectively, in the initial nine months of 2022, compared with 1.30% and 17.10%, respectively, in the similar 2021 period.

Taxable-equivalent Net Interest Income.   Taxable-equivalent net interest income totaled $1.69 billion in the recent quarter, up from $971 million in the third quarter of 2021 and $1.42 billion in the second quarter of 2022. The increase compared with the earlier quarters reflects a higher net interest margin and, additionally, when compared with the year-earlier quarter, the impact of earning assets obtained in the acquisition of People's United. Average earning assets totaled $182.4 billion in the recent quarter, compared with $140.4 billion in the third quarter of 2021 and $189.8 billion in the second quarter of 2022. Average loans outstanding were $127.5 billion in the third quarter of 2022, compared with $95.3 billion in the year earlier quarter and $127.6 billion in the second quarter of 2022. The higher average balances of both earnings assets and loans outstanding in the second and third quarters of 2022 compared with the third quarter of 2021 reflect the impact of additional earning assets obtained in the acquisition of People's United. Reflecting the impact of rising interest rates, the net interest margin increased to 3.68% in the third quarter of 2022, up from 2.74% in the corresponding quarter of 2021 and 3.01% in the second quarter of 2022.

                               

Taxable-equivalent Net Interest Income

 
                               
                     

Change 3Q22 vs.

 

($ in millions)

 

3Q22

   

3Q21

   

2Q22

   

3Q21

   

2Q22

 
                               

Average earning assets

 

$

182,382

   

$

140,420

   

$

189,755

     

30

%

   

-4

%

Net interest income  ̶  taxable-equivalent

 

$

1,691

   

$

971

   

$

1,422

     

74

%

   

19

%

Net interest margin

   

3.68

%

   

2.74

%

   

3.01

%

           

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $115 million in the third quarter of 2022 and $302 million in the second quarter of 2022, compared with a $20 million recapture of provision in the third quarter of 2021. Included in the second quarter of 2022 was a $242 million provision, recorded in accordance with GAAP, related to loans obtained in the People's United acquisition that were considered non-PCD. GAAP provides that an allowance for credit losses on such loans be recorded beyond the recognition of the fair value of the loans at the acquisition date. In addition to that merger-related provision, M&T recorded a provision for credit losses of $60 million in the second quarter of 2022. Net loan charge-offs were $63 million in the third quarter of 2022, $40 million in the third quarter of 2021 and $50 million in 2022's second quarter. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .20% and .17% in the third quarters of 2022 and 2021, respectively, and .16% in the second quarter of 2022.

Loans classified as nonaccrual totaled $2.43 billion at September 30, 2022, compared with $2.24 billion at September 30, 2021 and $2.63 billion at June 30, 2022. The balance of nonaccrual loans at the end of the two most recent quarters as compared with September 30, 2021 reflects loans obtained in the acquisition of People's United. Nonaccrual loans as a percentage of total loans were 1.89% at September 30, 2022, improved from 2.40% a year earlier and 2.05% at June 30, 2022. Assets taken in foreclosure of defaulted loans were $37 million at September 30, 2022, $25 million a year earlier and $29 million at June 30, 2022.

Allowance for Credit Losses.  M&T regularly performs comprehensive analyses of its loan portfolios and assesses forecasted economic conditions for purposes of determining the adequacy of the allowance for credit losses. As a result of those procedures, the allowance for credit losses totaled $1.88 billion or 1.46% of loans outstanding at September 30, 2022 compared with $1.52 billion or 1.62% of loans outstanding at September 30, 2021 and $1.82 billion or 1.42% at June 30, 2022. The acquisition of People's United loans and leases resulted in a $341 million increase in the allowance for credit losses as of April 1, 2022, including $99 million related to PCD loans and $242 million related to non-PCD loans. Including the impact of the acquisition, M&T's allowance for credit losses was $1.81 billion on April 1, 2022, or 1.42% of then outstanding loans. The higher allowance for credit losses as a percentage of outstanding loans at the recent quarter end as compared with June 30, 2022 reflects a modestly less optimistic macroeconomic forecast.

Asset Quality Metrics

 
                     

Change 3Q22 vs.

 

($ in millions)

 

3Q22

   

3Q21

   

2Q22

   

3Q21

   

2Q22

 
                               

At end of quarter

                             

Nonaccrual loans

 

$

2,429

   

$

2,242

   

$

2,633

     

8

%

   

-8

%

Real estate and other foreclosed assets

 

$

37

   

$

25

   

$

29

     

49

%

   

29

%

Total nonperforming assets

 

$

2,466

   

$

2,267

   

$

2,662

     

9

%

   

-7

%

Accruing loans past due 90 days or more (1)

 

$

477

   

$

1,026

   

$

524

     

-54

%

   

-9

%

Nonaccrual loans as % of loans outstanding

   

1.89

%

   

2.40

%

   

2.05

%

           
                               

Allowance for credit losses

 

$

1,876

   

$

1,515

   

$

1,824

     

24

%

   

3

%

Allowance for credit losses as % of loans outstanding

   

1.46

%

   

1.62

%

   

1.42

%

           
                               

For the period

                             

Provision for credit losses

 

$

115

   

$

(20)

   

$

302

     

     

-62

%

Net charge-offs (2)

 

$

63

   

$

40

   

$

50

     

58

%

   

27

%

Net charge-offs as % of average loans (annualized) (2)

   

.20

%

   

.17

%

   

.16

%

           

 

                 

(1)

Predominantly government-guaranteed residential real estate loans.

(2)

For the quarter-ended June 30, 2022, net charge-offs and related data do not reflect $33 million of charge-offs related to PCD acquired loans.

Noninterest Income and Expense.  Noninterest income totaled $563 million in the third quarter of 2022, compared with $569 million in the year-earlier quarter. Trust income, service charges on deposit accounts and credit-related fees included in other revenues from operations all increased reflecting the acquisition of People's United, but were offset by a decline in mortgage banking revenues resulting from M&T's decision to retain recently originated mortgage loans in portfolio rather than sell such loans. Noninterest income was $571 million in this year's second quarter. The comparative decline in the recent quarter was predominantly the result of lower service charges on deposit accounts and trust income, offset by higher credit-related fees.

Noninterest Income

 
                               
                     

Change 3Q22 vs.

 

($ in millions)

 

3Q22

   

3Q21

   

2Q22

   

3Q21

   

2Q22

 
                               

Mortgage banking revenues

 

$

83

   

$

160

   

$

83

     

-48

%

   

 

Service charges on deposit accounts

   

115

     

105

     

124

     

9

%

   

-7

%

Trust income

   

187

     

157

     

190

     

19

%

   

-2

%

Brokerage services income

   

21

     

20

     

24

     

3

%

   

-13

%

Trading account and non-hedging derivative gains

   

5

     

6

     

2

     

-9

%

   

122

%

Gain (loss) on bank investment securities

   

(1)

     

     

     

     

 

Other revenues from operations

   

153

     

121

     

148

     

27

%

   

4

%

Total

 

$

563

   

$

569

   

$

571

     

-1

%

   

-1

%

Noninterest expense totaled $1.28 billion in the third quarter of 2022, compared with $899 million in the similar quarter of 2021 and $1.40 billion in the second quarter of 2022. 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 $1.21 billion in the recent quarter, $888 million in the third quarter of 2021 and $1.16 billion in 2022's second quarter. The most significant factor for the higher level of operating expenses in the recent quarter as compared with the year-earlier quarter was the impact of operations obtained in the People's United acquisition. Compared with the second quarter of 2022, the $46 million increase in operating expenses in 2022's third quarter predominantly resulted from a $32 million rise in salaries and benefits expenses attributable to an additional pay day in the third quarter and M&T's continued investment in its talent base through salaries and incentive compensation.

Noninterest Expense

 
                               
                     

Change 3Q22 vs.

 

($ in millions)

 

3Q22

   

3Q21

   

2Q22

   

3Q21

   

2Q22

 
                               

Salaries and employee benefits

 

$

736

   

$

510

   

$

776

     

44

%

   

-5

%

Equipment and net occupancy

   

127

     

81

     

125

     

57

%

   

2

%

Outside data processing and software

   

95

     

73

     

94

     

31

%

   

1

%

FDIC assessments

   

28

     

19

     

22

     

49

%

   

24

%

Advertising and marketing

   

21

     

15

     

21

     

41

%

   

4

%

Printing, postage and supplies

   

15

     

8

     

16

     

87

%

   

-5

%

Amortization of core deposit and other intangible assets

   

18

     

3

     

18

     

571

%

   

 

Other costs of operations

   

239

     

190

     

331

     

25

%

   

-28

%

Total

 

$

1,279

   

$

899

   

$

1,403

     

42

%

   

-9

%

                               

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 53.6% in the third quarter of 2022, 57.7% in the year-earlier quarter and 58.3% in the second quarter of 2022.

Balance Sheet.  M&T had total assets of $198.0 billion at September 30, 2022, compared with $151.9 billion and $204.0 billion at September 30, 2021 and June 30, 2022, respectively. Loans and leases, net of unearned discount, were $128.2 billion at September 30, 2022, compared with $93.6 billion at September 30, 2021 and $128.5 billion at June 30, 2022. The higher level of loans and leases at the recent quarter-end and June 30, 2022 as compared with September 30, 2021 is largely a reflection of balances associated with the acquisition of People's United. Also reflective of that acquisition, total deposits were $163.8 billion at the recent quarter-end and $170.4 billion at June 30, 2022, compared with $128.7 billion at September 30, 2021.

Total shareholders' equity was $25.3 billion or 12.76% of total assets at September 30, 2022, $17.5 billion or 11.54% at September 30, 2021 and $25.8 billion or 12.64% at June 30, 2022. Common shareholders' equity was $23.2 billion, or $134.45 per share, at September 30, 2022, compared with $15.8 billion, or $122.60 per share, a year-earlier and $23.8 billion, or $135.16 per share, at June 30, 2022. Tangible equity per common share was $84.28 at September 30, 2022, $86.88 at September 30, 2021 and $85.78 at June 30, 2022. 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 September 30, 2022, compared with 10.9% three months earlier and 11.1% at September 30, 2021.

In accordance with its capital plan, M&T repurchased 3,282,449 shares of its common stock during the recent quarter at an average cost per share of $182.79 resulting in a total cost of $600 million.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss third quarter financial results today at 11:00 a.m. Eastern Time. Those wishing to participate in the call may dial (800) 225-9448. International participants, using any applicable international calling codes, may dial (203) 518-9708. Callers should reference M&T Bank Corporation or the conference ID #MTBQ322. 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 October 26, 2022 by calling (800) 688-7339, or (402) 220-1347 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, provides banking products and services in 12 states across the eastern U.S. from Maine to Virginia and Washington, D.C. Trust-related services are provided in select markets in the U.S. and abroad by M&T's Wilmington Trust-affiliated companies and by M&T Bank. For more information on M&T Bank, visit www.mtb.com.

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 events or factors specific to the Company and/or the financial industry as a whole, as well as national and global events generally, on the Company's business, financial condition, liquidity and results of operations may constitute forward-looking statements. Such statements 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 the Company's control. As described further below, statements regarding M&T's expectations or predictions regarding the acquisition of People's United are also forward-looking statements, including statements regarding the 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 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.

Examples of future factors include: the impact of the People's United acquisition (as described in the next paragraph); economic conditions including inflation and supply chain issues; the impact of international conflicts or other events; 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 and/or regulations affecting the financial services industry or M&T and its subsidiaries individually or collectively, including tax policy; regulatory supervision and oversight, including monetary policy and capital requirements; governmental and public policy changes; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; 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; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; 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 acquisition of People's United include, among others: the outcome of any legal proceedings that may be instituted against M&T or its subsidiaries; 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 the Company does business; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships; the Company's success in executing its business plans and strategies and managing the risks involved in the foregoing; the business, economic and political conditions in the markets in which the Company operates; and other factors that may affect future results of the Company.

Future factors related to the acquisition also include risks, such as, among others: that there could be an adverse effect on the Company's ability to retain customers and retain or hire key personnel and maintain relationships with customers; that integration efforts 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; that profitability following the combination may be lower than expected including for possible reasons such as lower than expected revenues or higher or unexpected costs, charges or expenses resulting from the transaction; unforeseen risks that may exist; and other factors that may affect future results of the Company.

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 Form 10-K for the year ended December 31, 2021, 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

 
   

(716) 842-5138

 
       

MEDIA CONTACT:  

 

Maya Dillon

 
   

(646) 735-1958

 

 

Financial Highlights

 
 

Three months ended

         

Nine months ended

       
 

September 30

         

September 30

       

Amounts in thousands, except per share

2022

   

2021

   

Change

   

2022

   

2021

   

Change

 

Performance

                                 

Net income

$

646,596

     

495,460

     

31

%

 

$

1,226,292

     

1,400,778

     

-12

%

Net income available to common shareholders

 

620,554

     

475,961

     

30

%

   

1,152,406

     

1,342,812

     

-14

%

Per common share:

                                 

Basic earnings

$

3.55

     

3.70

     

-4

%

 

$

7.18

     

10.44

     

-31

%

Diluted earnings

 

3.53

     

3.69

     

-4

%

   

7.14

     

10.43

     

-32

%

Cash dividends

$

1.20

     

1.10

     

9

%

 

$

3.60

     

3.30

     

9

%

Common shares outstanding:

                                 

Average - diluted (1)

 

175,682

     

128,844

     

36

%

   

161,295

     

128,786

     

25

%

Period end (2)

 

172,900

     

128,699

     

34

%

   

172,900

     

128,699

     

34

%

Return on (annualized):

                                 

Average total assets

 

1.28

%

   

1.28

%

         

.87

%

   

1.24

%

     

Average common shareholders' equity

 

10.43

%

   

12.16

%

         

7.24

%

   

11.76

%

     

Taxable-equivalent net interest income

$

1,690,518

     

970,953

     

74

%

 

$

4,020,369

     

2,902,154

     

39

%

Yield on average earning assets

 

3.90

%

   

2.82

%

         

3.30

%

   

2.91

%

     

Cost of interest-bearing liabilities

 

.41

%

   

.14

%

         

.27

%

   

.15

%

     

Net interest spread

 

3.49

%

   

2.68

%

         

3.03

%

   

2.76

%

     

Contribution of interest-free funds

 

.19

%

   

.06

%

         

.12

%

   

.07

%

     

Net interest margin

 

3.68

%

   

2.74

%

         

3.15

%

   

2.83

%

     

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

 

.20

%

   

.17

%

         

.14

%

   

.22

%

     

Net operating results (3)

                                 

Net operating income

$

700,030

     

504,030

     

39

%

 

$

1,653,651

     

1,424,361

     

16

%

Diluted net operating earnings per common share

 

3.83

     

3.76

     

2

%

   

9.78

     

10.61

     

-8

%

Return on (annualized):

                                 

Average tangible assets

 

1.44

%

   

1.34

%

         

1.23

%

   

1.30

%

     

Average tangible common equity

 

17.89

%

   

17.54

%

         

15.13

%

   

17.10

%

     

Efficiency ratio

 

53.6

%

   

57.7

%

         

58.1

%

   

58.8

%

     
                                   
 

At September 30

                     

Loan quality

2022

   

2021

   

Change

                   

Nonaccrual loans

$

2,429,326

     

2,242,263

     

8

%

                 

Real estate and other foreclosed assets

 

37,031

     

24,786

     

49

%

                 

Total nonperforming assets

$

2,466,357

     

2,267,049

     

9

%

                 

Accruing loans past due 90 days or more (4)

$

476,503

     

1,026,080

     

-54

%

                 

Government guaranteed loans included in totals above:

                                 

Nonaccrual loans

$

44,797

     

47,358

     

-5

%

                 

Accruing loans past due 90 days or more

 

423,371

     

947,091

     

-55

%

                 

Renegotiated loans

$

356,797

     

242,955

     

47

%

                 

Nonaccrual loans to total net loans

 

1.89

%

   

2.40

%

                       

Allowance for credit losses to total loans

 

1.46

%

   

1.62

%

                       

 

               

(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 appears herein.

(4)

Predominantly residential real estate loans.

 

Financial Highlights, Five Quarter Trend

 
 

Three months ended

 
 

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

 

Amounts in thousands, except per share

2022

   

2022

   

2022

   

2021

   

2021

 

Performance

                           

Net income

$

646,596

     

217,522

     

362,174

     

457,968

     

495,460

 

Net income available to common shareholders

 

620,554

     

192,236

     

339,590

     

434,171

     

475,961

 

Per common share:

                           

Basic earnings

$

3.55

     

1.08

     

2.63

     

3.37

     

3.70

 

Diluted earnings

 

3.53

     

1.08

     

2.62

     

3.37

     

3.69

 

Cash dividends

$

1.20

     

1.20

     

1.20

     

1.20

     

1.10

 

Common shares outstanding:

                           

Average - diluted (1)

 

175,682

     

178,277

     

129,416

     

128,888

     

128,844

 

Period end (2)

 

172,900

     

175,969

     

129,080

     

128,705

     

128,699

 

Return on (annualized):

                           

Average total assets

 

1.28

%

   

.42

%

   

.97

%

   

1.15

%

   

1.28

%

Average common shareholders' equity

 

10.43

%

   

3.21

%

   

8.55

%

   

10.91

%

   

12.16

%

Taxable-equivalent net interest income

$

1,690,518

     

1,422,443

     

907,408

     

937,356

     

970,953

 

Yield on average earning assets

 

3.90

%

   

3.12

%

   

2.72

%

   

2.64

%

   

2.82

%

Cost of interest-bearing liabilities

 

.41

%

   

.20

%

   

.13

%

   

.12

%

   

.14

%

Net interest spread

 

3.49

%

   

2.92

%

   

2.59

%

   

2.52

%

   

2.68

%

Contribution of interest-free funds

 

.19

%

   

.09

%

   

.06

%

   

.06

%

   

.06

%

Net interest margin

 

3.68

%

   

3.01

%

   

2.65

%

   

2.58

%

   

2.74

%

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

 

.20

%

   

.16

%

   

.03

%

   

.13

%

   

.17

%

Net operating results (3)

                           

Net operating income

$

700,030

     

577,622

     

375,999

     

475,477

     

504,030

 

Diluted net operating earnings per common share

 

3.83

     

3.10

     

2.73

     

3.50

     

3.76

 

Return on (annualized):

                           

Average tangible assets

 

1.44

%

   

1.16

%

   

1.04

%

   

1.23

%

   

1.34

%

Average tangible common equity

 

17.89

%

   

14.41

%

   

12.44

%

   

15.98

%

   

17.54

%

Efficiency ratio

 

53.6

%

   

58.3

%

   

64.9

%

   

59.7

%

   

57.7

%

                             
 

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

 

Loan quality

2022

   

2022

   

2022

   

2021

   

2021

 

Nonaccrual loans

$

2,429,326

     

2,633,005

     

2,134,231

     

2,060,083

     

2,242,263

 

Real estate and other foreclosed assets

 

37,031

     

28,692

     

23,524

     

23,901

     

24,786

 

Total nonperforming assets

$

2,466,357

     

2,661,697

     

2,157,755

     

2,083,984

     

2,267,049

 

Accruing loans past due 90 days or more (4)

$

476,503

     

523,662

     

776,751

     

963,399

     

1,026,080

 

Government guaranteed loans included in totals above:

                           

Nonaccrual loans

$

44,797

     

46,937

     

46,151

     

51,429

     

47,358

 

Accruing loans past due 90 days or more

 

423,371

     

467,834

     

689,831

     

927,788

     

947,091

 

Renegotiated loans

$

356,797

     

276,584

     

242,108

     

230,408

     

242,955

 

Nonaccrual loans to total net loans

 

1.89

%

   

2.05

%

   

2.32

%

   

2.22

%

   

2.40

%

Allowance for credit losses to total loans

 

1.46

%

   

1.42

%

   

1.60

%

   

1.58

%

   

1.62

%

 

             

(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 appears herein.

(4)

Predominantly residential real estate loans.

 

Condensed Consolidated Statement of Income

 
   

Three months ended

         

Nine months ended

       
   

September 30

         

September 30

       

Dollars in thousands

 

2022

   

2021

   

Change

   

2022

   

2021

   

Change

 

Interest income

 

$

1,781,513

     

992,946

     

79

%

 

$

4,174,911

     

2,980,266

     

40

%

Interest expense

   

102,822

     

25,696

     

300

     

180,329

     

89,281

     

102

 

Net interest income

   

1,678,691

     

967,250

     

74

     

3,994,582

     

2,890,985

     

38

 

Provision for credit losses

   

115,000

     

(20,000)

     

     

427,000

     

(60,000)

     

 

Net interest income after provision for credit losses

   

1,563,691

     

987,250

     

58

     

3,567,582

     

2,950,985

     

21

 

Other income

                                   

Mortgage banking revenues

   

83,041

     

159,995

     

-48

     

275,115

     

432,062

     

-36

 

Service charges on deposit accounts

   

115,213

     

105,426

     

9

     

340,890

     

296,721

     

15

 

Trust income

   

186,577

     

156,876

     

19

     

545,874

     

475,889

     

15

 

Brokerage services income

   

21,086

     

20,490

     

3

     

65,414

     

43,868

     

49

 

Trading account and non-hedging derivative gains

   

5,081

     

5,563

     

-9

     

12,743

     

18,349

     

-31

 

Gain (loss) on bank investment securities

   

(1,108)

     

291

     

     

(1,913)

     

(22,646)

     

 

Other revenues from operations

   

153,189

     

120,485

     

27

     

436,943

     

344,114

     

27

 

Total other income

   

563,079

     

569,126

     

-1

     

1,675,066

     

1,588,357

     

5

 

Other expense

                                   

Salaries and employee benefits

   

736,354

     

510,422

     

44

     

2,090,075

     

1,530,634

     

37

 

Equipment and net occupancy

   

127,117

     

80,738

     

57

     

337,584

     

244,057

     

38

 

Outside data processing and software

   

95,068

     

72,782