M&T Bank Corporation Announces Third Quarter Results

October 17, 2018 at 6:35 AM EDT

BUFFALO, N.Y., Oct. 17, 2018 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2018.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the third quarter of 2018 were $3.53, 60% higher than $2.21 in the year-earlier quarter and 8% above $3.26 recorded in the second quarter of 2018.  GAAP-basis net income in the recent quarter was $526 million, up from $356 million in the third quarter of 2017 and $493 million in the second 2018 quarter. GAAP-basis net income for the third quarter of 2018 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.80% and 14.08%, respectively, improved from 1.18% and 8.89%, respectively, in the similar 2017 period and 1.70% and 13.32%, respectively, in the second quarter of 2018. As compared with 2017, income tax expense in 2018 reflects the reduction of the corporate Federal income tax rate from 35% to 21%.

Commenting on M&T's results for the recent quarter, Darren J. King, Executive Vice President and Chief Financial Officer, noted, "M&T posted another quarter of strong financial results. Growth in net interest income, fueled by a wider net interest margin, reduced credit costs and controlled operating expenses led to an 8% rise in diluted earnings per common share compared with the second quarter. Reflecting the consistency of our earnings, we increased the quarterly common stock dividend by 25% to $1.00 per share."

Earnings Highlights





































Change 3Q18 vs.


($ in millions, except per share data)


3Q18



3Q17



2Q18



3Q17



2Q18























Net income


$

526



$

356



$

493




48

%



7

%

Net income available to common shareholders - diluted


$

505



$

336



$

473




50

%



7

%

Diluted earnings per common share


$

3.53



$

2.21



$

3.26




60

%



8

%

Annualized return on average assets



1.80

%



1.18

%



1.70

%









Annualized return on average common equity



14.08

%



8.89

%



13.32

%









For the first nine months of 2018, diluted earnings per common share were $9.00, up 35% from $6.69 in the year-earlier period. GAAP-basis net income for the nine-month period ended September 30, 2018 totaled $1.37 billion, 26% above $1.09 billion in the corresponding 2017 period. Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income in the first nine months of 2018 was 1.57% and 12.16%, respectively, improved from 1.20% and 9.15%, respectively, in the year-earlier 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, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T, 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 $3.56 in the recent quarter, up from $2.24 in the third quarter of 2017 and $3.29 in the second quarter of 2018.  Net operating income for the third quarter of 2018 was $531 million, compared with $361 million in the year-earlier period and $498 million in 2018'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 recent quarter was 1.89% and 21.00%, respectively, improved from 1.25% and 13.03%, respectively, in the similar 2017 quarter and 1.79% and 19.91%, respectively, in the second quarter of 2018.

Diluted net operating earnings per common share in the first nine months of 2018 increased to $9.10 from $6.78 in the corresponding 2017 period. Net operating income during the nine-month period ended September 30, 2018 was $1.39 billion, up from $1.10 billion in the year-earlier period. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.65% and 18.09%, respectively, in the first nine months of 2018, compared with 1.26% and 13.42%, respectively, in the year-earlier period.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis totaled $1.03 billion in 2018's third quarter, 7% higher than $966 million in the year-earlier quarter and 2% above $1.01 billion in the second quarter of 2018. That growth resulted from a widening of the net interest margin to 3.88% in the recent quarter from 3.53% in the third quarter of 2017 and 3.83% in the second quarter of 2018. In each quarterly comparison, the impact of the improved margin was partially offset by lower average balances of loans and investment securities.






















Taxable-equivalent Net Interest Income





































Change 3Q18 vs.


($ in millions)


3Q18



3Q17



2Q18



3Q17



2Q18























Average earning assets


$

105,835



$

108,642



$

106,210




-3

%



—


Net interest income  ̶  taxable-equivalent


$

1,035



$

966



$

1,014




7

%



2

%

Net interest margin



3.88

%



3.53

%



3.83

%









Provision for Credit Losses/Asset Quality.  The provision for credit losses was $16 million in the third quarter of 2018, compared with $30 million in the year-earlier quarter and $35 million in 2018's second quarter. Reflecting significantly higher recoveries of previously charged-off loans, net loan charge-offs were $16 million during the recent quarter, compared with $25 million in the third quarter of 2017 and $35 million in the second quarter of 2018.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .07% and .11% in the third quarters of 2018 and 2017, respectively, and .16% in the second quarter of 2018.

Loans classified as nonaccrual totaled $871 million or 1.00% of total loans outstanding at September 30, 2018, compared with $869 million or .99% a year earlier and $820 million or .93% at June 30, 2018. Assets taken in foreclosure of defaulted loans were $87 million at September 30, 2018, improved from $111 million at September 30, 2017 and $98 million at June 30, 2018.

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 $1.02 billion or 1.18% of loans outstanding at September 30, 2018, compared with $1.01 billion or 1.15% at September 30, 2017 and $1.02 billion or 1.16% at June 30, 2018.

Asset Quality Metrics





































Change 3Q18 vs.


($ in millions)


3Q18



3Q17



2Q18



3Q17



2Q18























At end of quarter





















Nonaccrual loans


$

871



$

869



$

820




—




6

%

Real estate and other foreclosed assets


$

87



$

111



$

98




-21

%



-11

%

Total nonperforming assets


$

958



$

980



$

918




-2

%



4

%

Accruing loans past due 90 days or more (1)


$

254



$

261



$

223




-3

%



14

%

Nonaccrual loans as % of loans outstanding



1.00

%



.99

%



.93

%






























Allowance for credit losses


$

1,019



$

1,013



$

1,019




1

%



—


Allowance for credit losses as % of loans outstanding



1.18

%



1.15

%



1.16

%






























For the period





















Provision for credit losses


$

16



$

30



$

35




-47

%



-54

%

Net charge-offs


$

16



$

25



$

35




-37

%



-56

%

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



.07

%



.11

%



.16

%









_________________________________________

(1)      Excludes loans acquired at a discount.  Predominantly residential real estate loans.

Noninterest Income and Expense.  Noninterest income totaled $459 million in each of the third quarters of 2018 and 2017 and $457 million in the second quarter of 2018. As compared with the third quarter of 2017, higher trust income and credit-related fees in the recent quarter were predominantly offset by lower mortgage banking revenues and valuation losses on equity securities. Higher credit-related fees in the recent quarter were offset by a decline in mortgage banking revenues, seasonally lower trust income and valuation losses on equity securities as compared with the second quarter of 2018.

Noninterest Income





































Change 3Q18 vs.


($ in millions)


3Q18



3Q17



2Q18



3Q17



2Q18























Mortgage banking revenues


$

88



$

97



$

92




-9

%



-4

%

Service charges on deposit accounts



109




109




107




-1

%



2

%

Trust income



133




125




138




7

%



-3

%

Brokerage services income



12




15




13




-16

%



-3

%

Trading account and foreign exchange gains



6




7




5




-14

%



16

%

Gain (loss) on bank investment securities



(3)




—




2




—




—


Other revenues from operations



114




106




100




7

%



13

%

Total other income


$

459



$

459



$

457




—




—


Noninterest expense aggregated $776 million in the third quarter of 2018, $806 million in the year-earlier quarter and $777 million in the second quarter of 2018.  Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets, noninterest operating expenses were $770 million in each of the two most recent quarters and $798 million in the third quarter of 2017. The decline in noninterest expense in the third quarter of 2018 as compared with the year-earlier quarter reflected a $50 million increase to the reserve for legal matters in the third quarter of 2017 that was partially offset by higher salaries and employee benefits expenses in the recent quarter. As compared with the second quarter of 2018, lower costs for professional services in the recent quarter were largely offset by higher salaries and employee benefits expenses.

Noninterest Expense





































Change 3Q18 vs.


($ in millions)


3Q18



3Q17



2Q18



3Q17



2Q18























Salaries and employee benefits


$

431



$

399



$

419




8

%



3

%

Equipment and net occupancy



77




75




73




3

%



6

%

Outside data processing and software



51




46




49




11

%



2

%

FDIC assessments



19




24




20




-21

%



-4

%

Advertising and marketing



22




17




22




25

%



—


Printing, postage and supplies



9




9




9




1

%



1

%

Amortization of core deposit and other intangible assets



6




8




6




-21

%



-4

%

Other costs of operations



161




228




179




-30

%



-10

%

Total other expense


$

776



$

806



$

777




-4

%



—


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 51.4% in the third quarter of 2018, 56.0% in the corresponding 2017 quarter and 52.4% in the second quarter of 2018.

Balance Sheet.  M&T had total assets of $116.8 billion at September 30, 2018, compared with $120.4 billion and $118.4 billion at September 30, 2017 and June 30, 2018, respectively. Loans and leases, net of unearned discount, were $86.7 billion at September 30, 2018, $87.9 billion at September 30, 2017 and $87.8 billion at June 30, 2018. The decline from September 30, 2017 reflects repayments of acquired residential mortgage loans, partially offset by growth in commercial real estate loans and consumer loans. The lower outstanding balances of loans and leases at the recent quarter-end as compared with June 30, 2018 reflect acquired residential mortgage loan repayments and a decline in commercial real estate loans, predominantly loans held for sale. Total deposits were $89.1 billion at the recent quarter-end, compared with $93.5 billion at September 30, 2017 and $89.3 billion at June 30, 2018. The decrease from September 30, 2017 reflects maturities of time deposits, and lower commercial savings and noninterest-bearing deposits.

Total shareholders' equity was $15.4 billion at September 30, 2018 and $16.3 billion a year earlier, representing 13.21% and 13.55%, respectively, of total assets. Total shareholders' equity was $15.6 billion, or 13.15% of total assets at June 30, 2018. Common shareholders' equity was $14.2 billion, or $100.38 per share, at September 30, 2018, compared with $15.1 billion, or $99.70 per share, a year-earlier and $14.3 billion, or $99.43 per share, at June 30, 2018.  Tangible equity per common share was $67.64 at September 30, 2018, compared with $69.02 at September 30, 2017 and $67.29 at June 30, 2018. 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 10.44% at September 30, 2018.

In accordance with its 2018 capital plan, M&T repurchased 2,844,159 shares of its common stock during the recent quarter at an average cost per share of $175.27, for a total cost of $498 million. In the aggregate, during the first nine months of 2018, M&T repurchased 9,235,817 shares of common stock at a total cost of $1.7 billion.

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 (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 #1797788.  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 until Wednesday, October 24, by calling (800) 585-8367, or (404) 537-3406 for international participants, and by making reference to ID #1797788.  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.

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.

Forward-Looking Statements.  This news release contains forward-looking statements that are based on current expectations, estimates and projections about M&T's business, management's beliefs and assumptions made by management.  These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. 

Future Factors include changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation; regulatory supervision and oversight, including monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

These are representative of the Future Factors that could affect the outcome of the forward-looking statements.  In addition, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other Future Factors.

Financial Highlights



Three months ended







Nine months ended








September 30







September 30






Amounts in thousands, except per share


2018



2017



Change



2018



2017



Change


Performance

























Net income


$

526,091




355,923




48

%


$

1,371,861




1,085,903




26

%

Net income available to common shareholders



505,365




335,804




50

%



1,310,703




1,025,023




28

%

Per common share:

























Basic earnings


$

3.54




2.22




59

%


$

9.01




6.71




34

%

Diluted earnings



3.53




2.21




60

%



9.00




6.69




35

%

Cash dividends


$

1.00




.75




33

%


$

2.55




2.25




13

%

Common shares outstanding:

























Average - diluted (1)



142,976




151,691




-6

%



145,605




153,293




-5

%

Period end (2)



141,479




151,291




-6

%



141,479




151,291




-6

%

Return on (annualized):

























Average total assets



1.80

%



1.18

%







1.57

%



1.20

%





Average common shareholders' equity



14.08

%



8.89

%







12.16

%



9.15

%





Taxable-equivalent net interest income


$

1,034,771




965,962




7

%


$

3,029,281




2,835,157




7

%

Yield on average earning assets



4.40

%



3.89

%







4.26

%



3.79

%





Cost of interest-bearing liabilities



.82

%



.57

%







.72

%



.54

%





Net interest spread



3.58

%



3.32

%







3.54

%



3.25

%





Contribution of interest-free funds



.30

%



.21

%







.27

%



.19

%





Net interest margin



3.88

%



3.53

%







3.81

%



3.44

%





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



.07

%



.11

%







.14

%



.17

%





Net operating results (3)

























Net operating income


$

530,619




360,658




47

%


$

1,385,986




1,100,667




26

%

Diluted net operating earnings per common share



3.56




2.24




59

%



9.10




6.78




34

%

Return on (annualized):

























Average tangible assets



1.89

%



1.25

%







1.65

%



1.26

%





Average tangible common equity



21.00

%



13.03

%







18.09

%



13.42

%





Efficiency ratio



51.41

%



56.00

%







55.87

%



55.21

%
































At September 30
















Loan quality


2018



2017



Change














Nonaccrual loans


$

870,832




869,362




—














Real estate and other foreclosed assets



87,333




110,515




-21

%













Total nonperforming assets


$

958,165




979,877




-2

%













Accruing loans past due 90 days or more (4)


$

254,360




261,288




-3

%













Government guaranteed loans included in totals above:

























Nonaccrual loans


$

33,570




34,687




-3

%













Accruing loans past due 90 days or more



195,450




252,072




-22

%













Renegotiated loans


$

242,892




226,672




7

%













Accruing loans acquired at a discount past due 90 days or more (5)


$

47,681




56,225




-15

%













Purchased impaired loans (6):

























Outstanding customer balance


$

572,979




779,340




-26

%













Carrying amount



325,980




466,943




-30

%













Nonaccrual loans to total net loans



1.00

%



.99

%

















Allowance for credit losses to total loans



1.18

%



1.15

%

















___________________________

(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)      Excludes loans acquired at a discount.  Predominantly residential real estate loans.

(5)      Loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

(6)      Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.

 

 

Financial Highlights, Five Quarter Trend



Three months ended




September 30,



June 30,



March 31,



December 31,



September 30,


Amounts in thousands, except per share


2018



2018



2018



2017



2017


Performance





















Net income


$

526,091




493,160




352,610




322,403




355,923


Net income available to common shareholders



505,365




472,600




332,749




302,486




335,804


Per common share:





















Basic earnings


$

3.54




3.26




2.24




2.01




2.22


Diluted earnings



3.53




3.26




2.23




2.01




2.21


Cash dividends


$

1.00




.80




.75




.75




.75


Common shares outstanding:





















Average - diluted (1)



142,976




144,998




148,905




150,348




151,691


Period end (2)



141,479




144,261




146,799




150,112




151,291


Return on (annualized):





















Average total assets



1.80

%



1.70

%



1.22

%



1.06

%



1.18

%

Average common shareholders' equity



14.08

%



13.32

%



9.15

%



8.03

%



8.89

%

Taxable-equivalent net interest income


$

1,034,771




1,014,184




980,326




980,457




965,962


Yield on average earning assets



4.40

%



4.28

%



4.11

%



3.93

%



3.89

%

Cost of interest-bearing liabilities



.82

%



.71

%



.64

%



.59

%



.57

%

Net interest spread



3.58

%



3.57

%



3.47

%



3.34

%



3.32

%

Contribution of interest-free funds



.30

%



.26

%



.24

%



.22

%



.21

%

Net interest margin



3.88

%



3.83

%



3.71

%



3.56

%



3.53

%

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



.07

%



.16

%



.19

%



.12

%



.11

%

Net operating results (3)





















Net operating income


$

530,619




497,869




357,498




326,664




360,658


Diluted net operating earnings per common share



3.56




3.29




2.26




2.04




2.24


Return on (annualized):





















Average tangible assets



1.89

%



1.79

%



1.28

%



1.12

%



1.25

%

Average tangible common equity



21.00

%



19.91

%



13.51

%



11.77

%



13.03

%

Efficiency ratio



51.41

%



52.42

%



63.98

%



54.65

%



56.00

%
























September 30,



June 30,



March 31,



December 31,



September 30,


Loan quality


2018



2018



2018



2017



2017


Nonaccrual loans


$

870,832




819,984




864,671




882,598




869,362


Real estate and other foreclosed assets



87,333




98,062




101,514




111,910




110,515


Total nonperforming assets


$

958,165




918,046




966,185




994,508




979,877


Accruing loans past due 90 days or more (4)


$

254,360




223,026




235,325




244,405




261,288


Government guaranteed loans included in totals above:





















Nonaccrual loans


$

33,570




34,870




36,618




35,677




34,687


Accruing loans past due 90 days or more



195,450




202,394




223,611




235,489




252,072


Renegotiated loans


$

242,892




242,528




226,829




221,513




226,672


Accruing loans acquired at a discount past due 90 days or

        more (5)


$

47,681




47,405




49,349




47,418




56,225


Purchased impaired loans (6):





















Outstanding customer balance


$

572,979




606,683




643,124




688,091




779,340


Carrying amount



325,980




352,465




378,000




410,015




466,943


Nonaccrual loans to total net loans



1.00

%



.93

%



.99

%



1.00

%



.99

%

Allowance for credit losses to total loans



1.18

%



1.16

%



1.16

%



1.16

%



1.15

%


(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)      Excludes loans acquired at a discount.  Predominantly residential real estate loans.

(5)      Loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

(6)      Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value. 

 

 

Condensed Consolidated Statement of Income



Three months ended







Nine months ended








September 30







September 30






Dollars in thousands


2018



2017



Change



2018



2017



Change


Interest income


$

1,167,375




1,057,210




10

%


$

3,378,430




3,093,656




9

%

Interest expense



138,337




100,076




38




365,088




284,062




29


Net interest income



1,029,038




957,134




8




3,013,342




2,809,594




7


Provision for credit losses



16,000




30,000




-47




94,000




137,000




-31


Net interest income after provision for credit losses



1,013,038




927,134




9




2,919,342




2,672,594




9


Other income

























Mortgage banking revenues



88,408




96,737




-9




268,213




267,592




—


Service charges on deposit accounts



108,647




109,356




-1




320,546




319,589




—


Trust income



133,545




124,900




7




402,561




371,712




8


Brokerage services income



12,267




14,676




-16




38,288




48,677




-21


Trading account and foreign exchange gains



6,073




7,058




-14




15,965




24,833




-36


Loss on bank investment securities



(3,415)




—




—




(10,520)




(17)




—


Other revenues from operations



113,769




106,702




7




340,351




334,704




2


Total other income



459,294




459,429




—




1,375,404




1,367,090




1


Other expense

























Salaries and employee benefits



431,371




398,605




8




1,313,336




1,246,400




5


Equipment and net occupancy



77,481




75,558




3




225,309




223,721




1


Outside data processing and software



50,678




45,761




11




148,819




134,637




11


FDIC assessments



18,849




23,969




-21




58,689




78,149




-25


Advertising and marketing



21,784




17,403




25




59,800




49,837




20


Printing, postage and supplies



8,843




8,732




1




26,881




27,397




-2


Amortization of core deposit and other
   intangible assets



6,143




7,808




-21




19,163




24,341




-21


Other costs of operations



160,830




228,189




-30




633,903




560,030




13


Total other expense



775,979




806,025




-4




2,485,900




2,344,512




6


Income before income taxes



696,353




580,538




20




1,808,846




1,695,172




7


Applicable income taxes



170,262




224,615




-24




436,985




609,269




-28


Net income


$

526,091




355,923




48

%


$

1,371,861




1,085,903




26

%

 

 

Condensed Consolidated Statement of Income, Five Quarter Trend



Three months ended




September 30,



June 30,



March 31,



December 31,



September 30,


Dollars in thousands


2018



2018



2018



2017



2017


Interest income


$

1,167,375




1,128,905




1,082,150




1,074,139




1,057,210


Interest expense



138,337




120,118




106,633




102,689




100,076


Net interest income



1,029,038




1,008,787




975,517




971,450




957,134


Provision for credit losses



16,000




35,000




43,000




31,000




30,000


Net interest income after provision for credit losses



1,013,038




973,787




932,517




940,450




927,134


Other income





















Mortgage banking revenues



88,408




92,499




87,306




96,235




96,737


Service charges on deposit accounts



108,647




106,784




105,115




107,783




109,356


Trust income



133,545




137,641




131,375




129,669




124,900


Brokerage services income



12,267




12,629




13,392




12,768




14,676


Trading account and foreign exchange gains



6,073




5,255




4,637




10,468




7,058


Gain (loss) on bank investment securities



(3,415)




2,326




(9,431)




21,296




—


Other revenues from operations



113,769




100,280




126,302




105,834




106,702


Total other income



459,294




457,414




458,696




484,053




459,429


Other expense





















Salaries and employee benefits



431,371




418,537




463,428




402,394




398,605


Equipment and net occupancy



77,481




73,031




74,797




71,363




75,558


Outside data processing and software



50,678




49,712




48,429




50,033




45,761


FDIC assessments



18,849




19,560




20,280




23,722




23,969


Advertising and marketing



21,784




21,768




16,248




19,366




17,403


Printing, postage and supplies



8,843




8,719




9,319




8,563




8,732


Amortization of core deposit and other
     
intangible assets



6,143




6,388




6,632




7,025




7,808


Other costs of operations



160,830




178,862




294,211




213,347




228,189


Total other expense



775,979




776,577




933,344




795,813




806,025


Income before income taxes



696,353




654,624




457,869




628,690




580,538


Applicable income taxes



170,262




161,464




105,259




306,287




224,615


Net income


$

526,091




493,160




352,610




322,403




355,923


 

 

Condensed Consolidated Balance Sheet



September 30







Dollars in thousands


2018



2017



Change



ASSETS














Cash and due from banks


$

1,311,611




1,368,252




-4


%

Interest-bearing deposits at banks



6,523,746




6,306,484




3



Trading account



125,038




170,516




-27



Investment securities



13,073,881




15,073,926




-13



Loans and leases:














Commercial, financial, etc.



21,635,394




21,743,251




—



Real estate - commercial



33,518,375




32,914,288




2



Real estate - consumer



17,721,399




20,265,162




-13



Consumer



13,805,317




13,002,433




6



Total loans and leases, net of unearned discount



86,680,485




87,925,134




-1



Less: allowance for credit losses



1,019,488




1,013,326




1



Net loans and leases



85,660,997




86,911,808




-1



Goodwill



4,593,112




4,593,112




—



Core deposit and other intangible assets



52,426




78,614




-33



Other assets



5,486,826




5,899,092




-7



Total assets


$

116,827,637




120,401,804




-3


%















LIABILITIES AND SHAREHOLDERS' EQUITY














Noninterest-bearing deposits


$

31,773,560




33,111,246




-4


%

Interest-bearing deposits



56,919,549




60,170,133




-5



Deposits at Cayman Islands office



447,287




232,014




93



Total deposits



89,140,396




93,513,393




-5



Short-term borrowings



1,310,110




200,768




553



Accrued interest and other liabilities



1,800,778




1,791,946




—



Long-term borrowings



9,140,268




8,577,645




7



Total liabilities



101,391,552




104,083,752




-3



Shareholders' equity:














Preferred



1,231,500




1,231,500




—



Common



14,204,585




15,086,552




-6



Total shareholders' equity



15,436,085




16,318,052




-5



Total liabilities and shareholders' equity


$

116,827,637




120,401,804




-3


%

 

 

Condensed Consolidated Balance Sheet, Five Quarter Trend



September 30,



June 30,



March 31,



December 31,



September 30,


Dollars in thousands


2018



2018



2018



2017



2017


ASSETS





















Cash and due from banks


$

1,311,611




1,367,594




1,291,664




1,420,888




1,368,252


Interest-bearing deposits at banks



6,523,746




6,669,985




6,135,434




5,078,903




6,306,484


Federal funds sold



—




1,500




1,000




—




—


Trading account



125,038




148,303




141,134




132,909




170,516


Investment securities



13,073,881




13,283,002




14,066,564




14,664,525




15,073,926


Loans and leases:





















Commercial, financial, etc.



21,635,394




21,894,857




21,697,522




21,742,651




21,743,251


Real estate - commercial



33,518,375




34,137,937




33,753,506




33,366,373




32,914,288


Real estate - consumer



17,721,399




18,310,712




18,960,946




19,613,344




20,265,162


Consumer



13,805,317




13,453,944




13,298,775




13,266,615




13,002,433


Total loans and leases, net of unearned discount



86,680,485




87,797,450




87,710,749




87,988,983




87,925,134


Less: allowance for credit losses



1,019,488




1,019,248




1,019,671




1,017,198




1,013,326


Net loans and leases



85,660,997




86,778,202




86,691,078




86,971,785




86,911,808


Goodwill



4,593,112




4,593,112




4,593,112




4,593,112




4,593,112


Core deposit and other intangible assets



52,426




58,569




64,957




71,589




78,614


Other assets



5,486,826




5,525,786




5,637,881




5,659,776




5,899,092


Total assets


$

116,827,637




118,426,053




118,622,824




118,593,487




120,401,804























LIABILITIES AND SHAREHOLDERS' EQUITY





















Noninterest-bearing deposits


$

31,773,560




32,086,191




31,817,516




33,975,180




33,111,246


Interest-bearing deposits



56,919,549




56,924,970




58,851,050




58,278,970




60,170,133


Deposits at Cayman Islands office



447,287




261,427




278,064




177,996




232,014


Total deposits



89,140,396




89,272,588




90,946,630




92,432,146




93,513,393


Short-term borrowings



1,310,110




3,239,416




1,626,129




175,099




200,768


Accrued interest and other liabilities



1,800,778




1,953,848




1,749,320




1,593,993




1,791,946


Long-term borrowings



9,140,268




8,382,316




8,591,051




8,141,430




8,577,645


Total liabilities



101,391,552




102,848,168




102,913,130




102,342,668




104,083,752


Shareholders' equity:





















Preferred



1,231,500




1,231,500




1,231,500




1,231,500




1,231,500


Common



14,204,585




14,346,385




14,478,194




15,019,319




15,086,552


Total shareholders' equity



15,436,085




15,577,885




15,709,694




16,250,819




16,318,052


Total liabilities and shareholders' equity


$

116,827,637




118,426,053




118,622,824




118,593,487




120,401,804


 

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates



Three months ended



Change in balance




Nine months ended









September 30,



September 30,



June 30,



September 30, 2018 from




September 30,



Change



Dollars in millions


2018



2017



2018



September 30,



June 30,




2018



2017



in





Balance



Rate



Balance



Rate



Balance



Rate



2017



2018




Balance



Rate



Balance



Rate



balance




ASSETS


Interest-bearing deposits at banks


$

5,207




1.98

%



4,740




1.25

%



4,890




1.79

%



10

%



6

%



$

5,014




1.77

%



5,206




1.01

%



-4

%


Federal funds sold



—




—




—




—




1




2.23




—




—





1




1.92




—




—




—



Trading account



65




1.78




73




1.92




57




2.92




-11




14





59




2.52




66




1.87




-10



Investment securities



13,431




2.37




15,443




2.28




13,856




2.38




-13




-3





13,917




2.36




15,783




2.36




-12



Loans and leases, net of unearned discount























































Commercial, financial, etc.



21,689




4.68




21,734




3.98




21,709




4.49




—




—





21,649




4.48




22,122




3.83




-2



Real estate - commercial



33,800




5.10




33,257




4.50




33,687




4.95




2




—





33,713




4.93




33,216




4.33




1



Real estate - consumer



18,006




4.21




20,609




3.96




18,644




4.15




-13




-3





18,637




4.14




21,363




3.94




-13



Consumer



13,637




5.26




12,786




4.89




13,366




5.14




7




2





13,433




5.14




12,444




4.79




8



Total loans and leases, net



87,132




4.86




88,386




4.32




87,406




4.73




-1




—





87,432




4.71




89,145




4.20




-2



Total earning assets



105,835




4.40




108,642




3.89




106,210




4.28




-3




—





106,423




4.26




110,200




3.79




-3



Goodwill



4,593








4,593








4,593








—




—





4,593








4,593








—



Core deposit and other intangible assets



55








82








62








-33




-10





62








90








-32



Other assets



5,514








6,198








5,548








-11




-1





5,598








6,190








-10



Total assets


$

115,997








119,515








116,413








-3

%



—

%



$

116,676








121,073








-4

%

























































LIABILITIES AND SHAREHOLDERS' EQUITY























































Interest-bearing deposits























































Savings and interest-checking deposits


$

51,552




.43




53,287




.28




52,547




.37




-3

%



-2

%



$

52,198




.37




53,386




.24




-2

%


Time deposits



5,826




.88




7,673




.72




5,997




.76




-24




-3





6,046




.78




8,591




.77




-30



Deposits at Cayman Islands office



407




1.52




169




.73




225




.97




140




81





294




1.13




175




.66




68



Total interest-bearing deposits



57,785




.49




61,129




.34




58,769




.41




-5




-2





58,538




.42




62,152




.31




-6



Short-term borrowings



374




1.70




244




.90




353




1.57




53




6





336




1.54




213




.72




57



Long-term borrowings



9,047




2.90




8,033




2.35




8,480




2.75




13




7





8,712




2.73




8,248




2.25




6



Total interest-bearing liabilities



67,206




.82




69,406




.57




67,602




.71




-3




-1





67,586




.72




70,613




.54




-4



Noninterest-bearing deposits



31,467








32,005








31,426








-2




—





31,644








32,382








-2



Other liabilities



1,775








1,803








1,852








-2




-4





1,734








1,775








-2



Total liabilities



100,448








103,214








100,880








-3




—





100,964








104,770








-4



Shareholders' equity



15,549








16,301








15,533








-5




—





15,712








16,303








-4



Total liabilities and shareholders' equity


$

115,997








119,515








116,413








-3

%



—

%



$

116,676








121,073








-4

%

























































Net interest spread







3.58








3.32








3.57

















3.54








3.25







Contribution of interest-free funds







.30








.21








.26

















.27








.19







Net interest margin







3.88

%







3.53

%







3.83

%
















3.81

%







3.44

%






 

 

Reconciliation of GAAP to Non-GAAP Measures



Three months ended



Nine months ended




September 30



September 30




2018



2017



2018



2017


Income statement data

















In thousands, except per share

















Net income

















Net income


$

526,091




355,923




1,371,861




1,085,903


Amortization of core deposit and other intangible assets (1)



4,528




4,735




14,125




14,764


Net operating income


$

530,619




360,658




1,385,986




1,100,667



















Earnings per common share

















Diluted earnings per common share


$

3.53




2.21




9.00




6.69


Amortization of core deposit and other intangible assets (1)



.03




.03




.10




.09


Diluted net operating earnings per common share


$

3.56




2.24




9.10




6.78



















Other expense

















Other expense


$

775,979




806,025




2,485,900




2,344,512


Amortization of core deposit and other intangible assets



(6,143)




(7,808)




(19,163)




(24,341)


Noninterest operating expense


$

769,836




798,217




2,466,737




2,320,171


Efficiency ratio

















Noninterest operating expense (numerator)


$

769,836




798,217




2,466,737




2,320,171


Taxable-equivalent net interest income



1,034,771




965,962




3,029,281




2,835,157


Other income



459,294




459,429




1,375,404




1,367,090


Less:  Loss on bank investment securities



(3,415)




—




(10,520)




(17)


Denominator


$

1,497,480




1,425,391




4,415,205




4,202,264


Efficiency ratio



51.41

%



56.00

%



55.87

%



55.21

%

Balance sheet data

















In millions

















Average assets

















Average assets


$

115,997




119,515




116,676




121,073


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(55)




(82)




(62)




(90)


Deferred taxes



14




32




16




35


Average tangible assets


$

111,363




114,872




112,037




116,425


Average common equity

















Average total equity


$

15,549




16,301




15,712




16,303


Preferred stock



(1,232)




(1,232)




(1,232)




(1,232)


Average common equity



14,317




15,069




14,480




15,071


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(55)




(82)




(62)




(90)


Deferred taxes



14




32




16




35


Average tangible common equity


$

9,683




10,426




9,841




10,423


At end of quarter

















Total assets

















Total assets


$

116,828




120,402










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(52)




(79)










Deferred taxes



14




31










Total tangible assets


$

112,197




115,761










Total common equity

















Total equity


$

15,436




16,318










Preferred stock



(1,232)




(1,232)










Undeclared dividends - cumulative preferred stock



(3)




(3)










Common equity, net of undeclared cumulative preferred dividends



14,201




15,083










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(52)




(79)










Deferred taxes



14




31










Total tangible common equity


$

9,570




10,442










________________________

(1)       After any related tax effect.

 

 

Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend



Three months ended




September 30,



June 30,



March 31,



December 31,



September 30,




2018



2018



2018



2017



2017


Income statement data





















In thousands, except per share





















Net income





















Net income


$

526,091




493,160




352,610




322,403




355,923


Amortization of core deposit and other intangible assets (1)



4,528




4,709




4,888




4,261




4,735


Net operating income


$

530,619




497,869




357,498




326,664




360,658























Earnings per common share





















Diluted earnings per common share


$

3.53




3.26




2.23




2.01




2.21


Amortization of core deposit and other intangible assets (1)



.03




.03




.03




.03




.03


Diluted net operating earnings per common share


$

3.56




3.29




2.26




2.04




2.24























Other expense





















Other expense


$

775,979




776,577




933,344




795,813




806,025


Amortization of core deposit and other intangible assets



(6,143)




(6,388)




(6,632)




(7,025)




(7,808)


Noninterest operating expense


$

769,836




770,189




926,712




788,788




798,217


Efficiency ratio





















Noninterest operating expense (numerator)


$

769,836




770,189




926,712




788,788




798,217


Taxable-equivalent net interest income



1,034,771




1,014,184




980,326




980,457




965,962


Other income



459,294




457,414




458,696




484,053




459,429


Less:  Gain (loss) on bank investment securities



(3,415)




2,326




(9,431)




21,296




—


Denominator


$

1,497,480




1,469,272




1,448,453




1,443,214




1,425,391


Efficiency ratio



51.41

%



52.42

%



63.98

%



54.65

%



56.00

%

Balance sheet data





















In millions





















Average assets





















Average assets


$

115,997




116,413




117,684




120,226




119,515


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(55)




(62)




(68)




(75)




(82)


Deferred taxes



14




17




18




26




32


Average tangible assets


$

111,363




111,775




113,041




115,584




114,872


Average common equity





















Average total equity


$

15,549




15,533




16,059




16,271




16,301


Preferred stock



(1,232)




(1,232)




(1,232)




(1,232)




(1,232)


Average common equity



14,317




14,301




14,827




15,039




15,069


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(55)




(62)




(68)




(75)




(82)


Deferred taxes



14




17




18




26




32


Average tangible common equity


$

9,683




9,663




10,184




10,397




10,426


At end of quarter





















Total assets





















Total assets


$

116,828




118,426




118,623




118,593




120,402


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(52)




(59)




(65)




(72)




(79)


Deferred taxes



14




16




17




19




31


Total tangible assets


$

112,197




113,790




113,982




113,947




115,761


Total common equity





















Total equity


$

15,436




15,578




15,710




16,251




16,318


Preferred stock



(1,232)




(1,232)




(1,232)




(1,232)




(1,232)


Undeclared dividends - cumulative preferred stock



(3)




(3)




(3)




(3)




(3)


Common equity, net of undeclared cumulative preferred
dividends



14,201




14,343




14,475




15,016




15,083


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(52)




(59)




(65)




(72)




(79)


Deferred taxes



14




16




17




19




31


Total tangible common equity


$

9,570




9,707




9,834




10,370




10,442


__________________________

(1)       After any related tax effect.

 

M&T Bank Corporation

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/mt-bank-corporation-announces-third-quarter-results-300732651.html

SOURCE M&T Bank Corporation

INVESTOR CONTACT: Donald J. MacLeod, (716) 842-5138; MEDIA CONTACT: C. Michael Zabel, (716) 842-5385