M&T Bank Corporation (NYSE:MTB) announces third quarter 2023 results

October 18, 2023 at 6:20 AM EDT

BUFFALO, N.Y., Oct. 18, 2023 /PRNewswire/ -- M&T Bank Corporation ("M&T" or "the Company") reports net income of $690 million or $3.98 of diluted earnings per common share.

(Dollars in millions, except per share data)

 

3Q23

 

2Q23

 

3Q22

 Earnings Highlights

                       

Net interest income 

 

$

1,775

   

$

1,799

   

$

1,679

 

Taxable-equivalent adjustment

   

15

     

14

     

12

 

Net interest income - taxable-equivalent

   

1,790

     

1,813

     

1,691

 

Provision for credit losses 

   

150

     

150

     

115

 

Noninterest income 

   

560

     

803

     

563

 

Noninterest expense 

   

1,278

     

1,293

     

1,279

 

Net income 

   

690

     

867

     

647

 

Net income available to common shareholders - diluted 

   

664

     

841

     

621

 

Diluted earnings per common share

   

3.98

     

5.05

     

3.53

 

Return on average assets - annualized

   

1.33

%

   

1.70

%

   

1.28

%

Return on average common shareholders' equity - annualized

   

10.99

%

   

14.27

%

   

10.43

%

 Average Balance Sheet

                       

Total assets

 

$

205,791

   

$

204,376

   

$

201,131

 

Interest-bearing deposits at banks

   

26,657

     

23,617

     

30,752

 

Investment securities

   

27,993

     

28,623

     

23,945

 

Loans and leases, net of unearned discount

   

132,617

     

133,545

     

127,525

 

Deposits

   

162,688

     

159,399

     

167,271

 

Borrowings

   

12,585

     

15,055

     

4,194

 

 Selected Ratios
(Amounts expressed as a percent, except per share data)

                       

Net interest margin

   

3.79

%

   

3.91

%

   

3.68

%

Efficiency ratio

   

53.7

     

48.9

     

53.6

 

Net charge-offs to average total loans - annualized

   

.29

     

.38

     

.20

 

Allowance for credit losses to total loans

   

1.55

     

1.50

     

1.46

 

Nonaccrual loans to total loans

   

1.77

     

1.83

     

1.89

 

Common equity Tier 1 ("CET1") capital ratio (1)

   

10.94

     

10.59

     

10.75

 

Common shareholders' equity per share

 

$

145.72

   

$

143.41

   

$

134.45

 
         

(1)

September 30, 2023 CET1 capital ratio is estimated.

Financial Highlights

  • Capital position remains strong with the CET1 capital ratio increasing 35 basis points to an estimated 10.94% at September 30, 2023, compared with 10.59% at June 30, 2023.
  • Net interest margin of 3.79% in the recent quarter narrowed from 3.91% in the second quarter of 2023 as increases to the rates paid on interest-bearing deposits outpaced the rise in yields on interest-earning assets.
  • Average loans and leases in the third quarter of 2023 decreased 1% from the previous 2023 quarter reflecting a $714 million decline in average commercial real estate loan balances.
  • The level of nonaccrual loans improved to 1.77% of loans outstanding at September 30, 2023, compared with 1.83% at June 30, 2023.
  • Recent quarter net charge-offs of $96 million, or 29 basis points, were below the Company's long-term average net charge-off rate.
  • Average deposits increased 2% from the second quarter of 2023 reflecting a higher demand for interest-bearing products.

Chief Financial Officer Commentary

"The third quarter results reflect the stability of M&T's diverse banking franchise and the ability to consistently generate capital for our shareholders while continuing to invest in the systems and resources needed to best serve our customers. Our customer deposit balances increased in the recent quarter as we continue to build upon our strong liquidity position. Our credit metrics reflect a decline in nonaccrual loans and net charge-offs that remain below M&T's long-term average. The comparative strength of our financial position in the industry will continue to enable us to improve the communities in which we serve and the lives of our customers. Thank you to our employees for their commitment to delivering for our customers each and every day."

- Daryl N. Bible, M&T's Chief Financial Officer

Contact:

   

Investor Relations:

Brian Klock

716.842.5138

Media Relations:

Frank Lentini

929.651.0447

 

 Non-GAAP Measures (1)

 
                               
               

Change
3Q23 vs.

         

Change
3Q23 vs.

 

($ in millions, except per share data)

 

3Q23

   

2Q23

   

2Q23

   

3Q22

   

3Q22

 
                               

Net operating income

 

$

702

   

$

879

     

-20

%

 

$

700

     

 

Diluted net operating earnings per common share

 

$

4.05

   

$

5.12

     

-21

%

 

$

3.83

     

6

%

Annualized return on average tangible assets

   

1.41

%

   

1.80

%

         

1.44

%

     

Annualized return on average tangible common equity

   

17.41

%

   

22.73

%

         

17.89

%

     

Efficiency ratio

   

53.7

%

   

48.9

%

         

53.6

%

     

Tangible equity per common share

 

$

93.99

   

$

91.58

     

3

%

 

$

84.28

     

12

%

           

(1)

A reconciliation of non-GAAP measures is included in the tables that accompany this release.

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.

Merger-related expenses associated with the People's United Financial, Inc. ("People's United") acquisition in 2022 generally consisted of:

  • Professional services, temporary help fees and other costs associated with actual or planned conversions of systems and/or integration of operations and the introduction of M&T to its new customers.
  • Costs related to terminations of existing contractual arrangements to purchase various services, severance and travel costs.
  • An initial provision for credit losses of $242 million in the second quarter of 2022 on loans not deemed to be purchased credit deteriorated ("PCD") on the April 1, 2022 acquisition date of People's United.

The amounts of merger-related expenses in 2022 are presented in the tables that accompany this release. No merger-related expenses were incurred in the nine months ended September 30, 2023.

 Taxable-equivalent Net Interest Income

 
                               
               

Change
3Q23 vs.

         

Change
3Q23 vs.

 

($ in millions)

 

3Q23

   

2Q23

   

2Q23

   

3Q22

   

3Q22

 
                               

Average earning assets

 

$

187,403

   

$

185,936

     

1

%

 

$

182,382

     

3

%

Average interest-bearing liabilities

 

$

121,388

   

$

118,274

     

3

%

 

$

98,604

     

23

%

Net interest income - taxable-equivalent

 

$

1,790

   

$

1,813

     

-1

%

 

$

1,691

     

6

%

Yield on average earning assets

   

5.62

%

   

5.46

%

         

3.90

%

     

Cost of interest-bearing liabilities

   

2.83

%

   

2.43

%

         

0.41

%

     

Net interest spread

   

2.79

%

   

3.03

%

         

3.49

%

     

Net interest margin

   

3.79

%

   

3.91

%

         

3.68

%

     

Taxable-equivalent net interest income decreased $23 million, or 1%, from the second quarter of 2023.

  • Average interest-bearing deposits increased $5.6 billion and the rates paid on such deposits rose 52 basis points.
  • Average short-term borrowings declined $2.2 billion.
  • The yield on average outstanding loans and leases increased 17 basis points.
  • Average interest-bearing deposits at banks increased $3.0 billion.

Taxable-equivalent net interest income increased $99 million, or 6%, compared with the year-earlier quarter.

  • Yields earned on average loans and leases and interest-bearing deposits at banks increased 164 basis points and 317 basis points, respectively.
  • Average loans and leases increased $5.1 billion.
  • Rates paid on interest-bearing deposits increased 225 basis points.
  • Average borrowings increased $8.4 billion.

 

Provision for Credit Losses/Asset Quality

 
                               
               

Change
3Q23 vs.

         

Change
3Q23 vs.

 

($ in millions)

 

3Q23

   

2Q23

   

2Q23

   

3Q22

   

3Q22

 
                               

At end of quarter

                             

Nonaccrual loans

 

$

2,342

   

$

2,435

     

-4

%

 

$

2,429

     

-4

%

Real estate and other foreclosed assets

   

37

     

43

     

-13

%

   

37

     

 

Total nonperforming assets

 

$

2,379

   

$

2,478

     

-4

%

 

$

2,466

     

-4

%

Accruing loans past due 90 days or more (1)

 

$

354

   

$

380

     

-7

%

 

$

477

     

-26

%

Nonaccrual loans as % of loans outstanding

   

1.77

%

   

1.83

%

         

1.89

%

     
                               

Allowance for credit losses

 

$

2,052

   

$

1,998

     

3

%

 

$

1,876

     

9

%

Allowance for credit losses as % of loans outstanding

   

1.55

%

   

1.50

%

         

1.46

%

     
                               

For the period

                             

Provision for credit losses

 

$

150

   

$

150

     

   

$

115

     

30

%

Net charge-offs

 

$

96

   

$

127

     

-24

%

 

$

63

     

52

%

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

   

.29

%

   

.38

%

         

.20

%

     
         

(1)

Predominantly government-guaranteed residential real estate loans.

M&T recorded a provision for credit losses of $150 million in each of the third and second quarters of 2023 compared with $115 million in the third quarter of 2022. The comparatively higher provisions for credit losses in the most recent two quarters compared with the third quarter of 2022 reflect a softening of commercial real estate values. Net charge-offs totaled $96 million in 2023's third quarter, compared with $127 million in 2023's second quarter and $63 million in the year-earlier quarter reflective of variability in the timing and amount of commercial real estate charge-offs.

Nonaccrual loans were $2.34 billion at September 30, 2023, $94 million lower than June 30, 2023 and $87 million lower than September 30, 2022. Those declines are reflective of lower levels of hospitality-related commercial real estate nonaccrual loans.

 Noninterest Income

 
                               
               

Change
3Q23 vs.

         

Change
3Q23 vs.

 

($ in millions)

 

3Q23

   

2Q23

   

2Q23

   

3Q22

   

3Q22

 

Mortgage banking revenues

 

$

105

   

$

107

     

-2

%

 

$

83

     

26

%

Service charges on deposit accounts

   

121

     

119

     

2

%

   

115

     

5

%

Trust income

   

155

     

172

     

-10

%

   

187

     

-17

%

Brokerage services income

   

27

     

25

     

7

%

   

21

     

28

%

Trading account and non-hedging derivative gains

   

9

     

17

     

-44

%

   

5

     

85

%

Gain (loss) on bank investment securities

   

     

1

     

     

(1)

     

 

Other revenues from operations

   

143

     

362

     

-61

%

   

153

     

-7

%

Total

 

$

560

   

$

803

     

-30

%

 

$

563

     

-1

%

Noninterest income in the third quarter of 2023 decreased $244 million, or 30%, as compared with 2023's second quarter.

  • Other revenues from operations decreased $219 million reflecting a $225 million gain on sale of the Company's Collective Investment Trust ("CIT") business in the second quarter of 2023.
  • Trust income declined $17 million, predominantly reflective of one month of revenues associated with the CIT business recognized prior to its sale in the second quarter of 2023.
  • Trading account and non-hedging derivative gains decreased $7 million from the second quarter due to a decline in customer interest rate swap revenues and market conditions.

Noninterest income decreased $3 million, or less than 1%, as compared with the year-earlier third quarter.

  • Trust income decreased $31 million reflecting lower revenues associated with the CIT business as a result of its sale in April 2023.
  • Other revenues from operations declined $11 million due to lower insurance income reflecting the sale of M&T Insurance Agency in December 2022.
  • Mortgage banking revenues increased $21 million due to higher servicing income related to the bulk purchase of residential mortgage loan servicing rights in the first quarter of 2023 and higher gains on sales of residential mortgage loans. The Company returned to originating for sale the majority of its newly originated residential mortgage loans in the first quarter of 2023.

 

 Noninterest Expense

 
                               
               

Change
3Q23 vs.

         

Change
3Q23 vs.

 

($ in millions)

 

3Q23

   

2Q23

   

2Q23

   

3Q22

   

3Q22

 

Salaries and employee benefits

 

$

727

   

$

738

     

-1

%

 

$

736

     

-1

%

Equipment and net occupancy

   

131

     

129

     

2

%

   

127

     

3

%

Outside data processing and software

   

111

     

106

     

4

%

   

95

     

16

%

FDIC assessments

   

29

     

28

     

5

%

   

28

     

4

%

Advertising and marketing

   

23

     

28

     

-19

%

   

21

     

7

%

Printing, postage and supplies

   

14

     

14

     

-2

%

   

15

     

-5

%

Amortization of core deposit and other intangible assets

   

15

     

15

     

     

18

     

-19

%

Other costs of operations

   

228

     

235

     

-3

%

   

239

     

-4

%

Total

 

$

1,278

   

$

1,293

     

-1

%

 

$

1,279

     

 

Noninterest expense aggregated $1.28 billion in the recent quarter, down from $1.29 billion in the second quarter of 2023. Excluding the amortization of core deposit and other intangible assets considered to be nonoperating in nature, noninterest operating expenses decreased $15 million, or 1%, to $1.26 billion in the recent quarter from $1.28 billion in the immediately preceding quarter.

  • Salaries and employee benefits expense decreased $11 million reflecting lower average headcount and lower expenses for contracted resources and overtime.
  • Other costs of operations decreased $6 million reflecting lower sub-advisory fees as a result of the sale of the CIT business in April 2023 and a decline in legal-related expenses, partially offset by losses associated with certain retail banking activities.

Noninterest expense decreased $2 million from the third quarter of 2022. Noninterest operating expenses aggregated $1.21 billion in the third quarter of 2022 after excluding $53 million of merger-related expenses associated with the People's United acquisition and $18 million of amortization of core deposit and other intangible assets. Noninterest operating expenses increased $55 million, or 5%, from the prior year third quarter inclusive of the following:

  • Other costs of operations increased $23 million resulting from the amortization of the bulk purchase of residential mortgage loan servicing rights purchased in March 2023 and losses associated with certain retail banking activities, partially offset by lower professional and other outside services expenses reflecting lower sub-advisory fees as a result of the sale of the CIT business.
  • Outside data processing and software costs increased $18 million, or 19%, primarily due to higher software maintenance costs, offshore processing and data processing fees.

 

 Average Earning Assets

 
                               
               

Change
3Q23 vs.

         

Change
3Q23 vs.

 

($ in millions)

 

3Q23

   

2Q23

   

2Q23

   

3Q22

   

3Q22

 

Interest-bearing deposits at banks

 

$

26,657

   

$

23,617

     

13

%

 

$

30,752

     

-13

%

Federal funds sold and agreements to resell securities

   

     

     

     

29

     

-100

%

Trading account

   

136

     

151

     

-9

%

   

131

     

4

%

Investment securities

   

27,993

     

28,623

     

-2

%

   

23,945

     

17

%

Loans and leases, net of unearned discount

                             

Commercial, financial, etc.

   

44,625

     

44,531

     

     

38,321

     

16

%

Real estate - commercial

   

44,230

     

44,944

     

-2

%

   

46,282

     

-4

%

Real estate - consumer

   

23,573

     

23,781

     

-1

%

   

22,962

     

3

%

Consumer

   

20,189

     

20,289

     

     

19,960

     

1

%

Total loans and leases, net

   

132,617

     

133,545

     

-1

%

   

127,525

     

4

%

Total earning assets

 

$

187,403

   

$

185,936

     

1

%

 

$

182,382

     

3

%

Average earning assets increased $1.5 billion, or 1%, from the second quarter of 2023.

  • Average interest-bearing deposits at banks increased $3.0 billion due to increased liquidity from a rise in average deposits and a decline in average loan and investment securities balances.
  • Average loans and leases decreased $928 million primarily reflective of a $714 million decline in average balances of commercial real estate loans.
  • Average investment securities declined $630 million primarily due to pay downs of fixed rate mortgage-backed securities.

Average earning assets increased $5.0 billion, or 3%, from the year-earlier third quarter.

  • Average loans and leases increased $5.1 billion predominantly due to higher average outstanding balances of commercial and industrial loans and leases reflecting lending activities to financial and insurance industry customers and motor vehicle and recreational finance dealers, partially offset by a $2.1 billion decline in average commercial real estate loans.
  • Average investment securities increased $4.0 billion due to the purchases of additional investment securities in the fourth quarter of 2022 and the first quarter of 2023.
  • Average interest-bearing deposits at banks decreased $4.1 billion reflecting lower deposits, incremental loan balances and purchases of investment securities, partially offset by higher borrowings.

 

 Average Interest-bearing Liabilities

 
                               
               

Change
3Q23 vs.

         

Change
3Q23 vs.

 

($ in millions)

 

3Q23

   

2Q23

   

2Q23

   

3Q22

   

3Q22

 

Interest-bearing deposits

                             

Savings and interest-checking deposits

 

$

89,274

   

$

87,210

     

2

%

 

$

89,360

     

 

Time deposits

   

19,528

     

16,009

     

22

%

   

5,050

     

287

%

Total interest-bearing deposits

   

108,802

     

103,219

     

5

%

   

94,410

     

15

%

Short-term borrowings

   

5,346

     

7,539

     

-29

%

   

913

     

485

%

Long-term borrowings

   

7,240

     

7,516

     

-4

%

   

3,281

     

121

%

Total interest-bearing liabilities

 

$

121,388

   

$

118,274

     

3

%

 

$

98,604

     

23

%

Average interest-bearing liabilities increased $3.1 billion, or 3%, from the second quarter of 2023.

  • Average interest-bearing deposits increased $5.6 billion, including a $3.3 billion increase in average non-brokered deposits.
  • Average borrowings decreased $2.5 billion predominantly due to lower levels of short-term borrowings from the Federal Home Loan Bank ("FHLB") of New York.

Average interest-bearing liabilities increased $22.8 billion, or 23%, from the third quarter of 2022.

  • Average interest-bearing deposits increased $14.4 billion, including a $5.3 billion increase in average non-brokered deposits.
  • Average borrowings increased $8.4 billion predominantly due to issuances of long-term senior notes totaling $3.5 billion in the first quarter of 2023 and increases in short-term borrowings from the FHLB of New York.

 

 Capital

 
                   
   

3Q23

   

2Q23

   

3Q22

 

CET1

   

10.94

%

(1)

 

10.59

%

   

10.75

%

Tier 1 capital

   

12.27

%

(1)

 

11.91

%

   

12.13

%

Total capital

   

13.99

%

(1)

 

13.71

%

   

13.96

%

Tangible capital – common

   

7.78

%

   

7.63

%

   

7.70

%

         

(1)

September 30, 2023 capital ratios are estimated.

M&T's capital ratios remained well above the minimum set forth by regulatory requirements. Cash dividends declared on M&T's common and preferred stock totaled $217 million and $25 million, respectively, for the quarter ended September 30, 2023. M&T did not repurchase any shares of its common stock in the third quarter of 2023.

The CET1 capital ratio for M&T was estimated at 10.94% as of September 30, 2023. M&T's total risk-weighted assets at September 30, 2023 are estimated to be $152 billion.

Capital regulations require buffers in addition to the minimum risk-based capital ratios noted above. M&T is subject to a stress capital buffer requirement that is determined through the Federal Reserve's supervisory stress tests and M&T's bank subsidiaries are subject to a 2.5% capital conservation buffer requirement. The buffer requirement must be composed entirely of CET1. In June 2023, the Federal Reserve released the results of its most recent supervisory stress tests. Based on those results, on October 1, 2023, M&T's stress capital buffer of 4.0% became effective.

M&T repurchased 3,282,449 shares of its common stock at an average cost per share of $182.79 resulting in a total cost of $600 million in 2022's third quarter. There were no share repurchases in the second or third quarters of 2023.

Conference Call

Investors will have an opportunity to listen to M&T's conference call to discuss third quarter financial results today at 10:00 a.m. Eastern Time. Those wishing to participate in the call may dial (800) 347-7315. International participants, using any applicable international calling codes, may dial (785) 424-1755. Callers should reference M&T Bank Corporation or the conference ID #MTBQ323. 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 25, 2023 by calling (800) 839-5631, or (402) 220-2558 for international participants. No conference ID or passcode 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 M&T and/or the financial industry as a whole, as well as national and global events generally, including economic conditions, on M&T'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 M&T's control.

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.

Examples of Future Factors include: the impact of M&T's acquisition of People's United (as described in the next paragraph); events and developments in the financial services industry, including legislation, regulations and other governmental actions as well as business conditions affecting the industry and/or M&T and its subsidiaries, individually or collectively; economic conditions, including inflation and market volatility; 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; regulatory supervision and oversight, including monetary policy and capital requirements; domestic or international political developments and other geopolitical events, including international conflicts; governmental and public policy changes, including tax policy; 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, divestment 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 possibility that the anticipated benefits of the transaction will not be realized when expected or at all; potential adverse reactions or changes to business, customer or employee relationships; M&T's success in executing its business plans and strategies and managing the risks involved in the foregoing; the results and costs of integration efforts; the business, economic and political conditions in the markets in which M&T and its subsidiaries operate; the outcome of any legal proceedings that may be instituted against M&T or its subsidiaries; and other factors related to the acquisition that may affect future results of M&T.

These are representative of the Future Factors that could affect the outcome of the forward-looking statements. In addition, as noted, 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, 2022, 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.

 

Financial Highlights

 
 

Three months ended

         

Nine months ended

       
 

September 30

         

September 30

       

Dollars in millions, except per share, shares in thousands

2023

   

2022

   

Change

   

2023

   

2022

   

Change

 

Performance

                                 

Net income

$

690

     

647

     

7

%

 

$

2,259

     

1,226

     

84

%

Net income available to common shareholders

 

664

     

621

     

7

%

   

2,180

     

1,152

     

89

%

Per common share:

                                 

Basic earnings

$

4.00

     

3.55

     

13

%

 

$

13.09

     

7.18

     

82

%

Diluted earnings

 

3.98

     

3.53

     

13

%

   

13.05

     

7.14

     

83

%

Cash dividends

 

1.30

     

1.20

     

8

%

   

3.90

     

3.60

     

8

%

Common shares outstanding:

                                 

Average - diluted (1)

 

166,570

     

175,682

     

-5

%

   

167,093

     

161,295

     

4

%

Period end (2)

 

165,970

     

172,900

     

-4

%

   

165,970

     

172,900

     

-4

%

Return on (annualized):

                                 

Average total assets

 

1.33

%

   

1.28

%

         

1.48

%

   

.87

%

     

Average common shareholders' equity

 

10.99

%

   

10.43

%

         

12.33

%

   

7.24

%

     

Taxable-equivalent net interest income

$

1,790

     

1,691

     

6

%

 

$

5,434

     

4,020

     

35

%

Yield on average earning assets

 

5.62

%

   

3.90

%

         

5.41

%

   

3.30

%

     

Cost of interest-bearing liabilities

 

2.83

%

   

.41

%

         

2.39

%

   

.27

%

     

Net interest spread

 

2.79

%

   

3.49

%

         

3.02

%

   

3.03

%

     

Contribution of interest-free funds

 

1.00

%

   

.19

%

         

.89

%

   

.12

%

     

Net interest margin

 

3.79

%

   

3.68

%

         

3.91

%

   

3.15

%

     

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

 

.29

%

   

.20

%

         

.30

%

   

.14

%

     

Net operating results (3)

                                 

Net operating income

$

702

     

700

     

   

$

2,295

     

1,654

     

39

%

Diluted net operating earnings per common share

 

4.05

     

3.83

     

6

%

   

13.26

     

9.78

     

36

%

Return on (annualized):

                                 

Average tangible assets

 

1.41

%

   

1.44

%

         

1.57

%

   

1.23

%

     

Average tangible common equity

 

17.41

%

   

17.89

%

         

19.70

%

   

15.13

%

     

Efficiency ratio

 

53.7

%

   

53.6

%

         

52.6

%

   

58.1

%

     
                                   
 

At September 30

                     

Loan quality

2023

   

2022

   

Change

                   

Nonaccrual loans

$

2,342

     

2,429

     

-4

%

                 

Real estate and other foreclosed assets

 

37

     

37

     

                   

Total nonperforming assets

$

2,379

     

2,466

     

-4

%

                 

Accruing loans past due 90 days or more (4)

$

354

     

477

     

-26

%

                 

Government guaranteed loans included in totals above:

                                 

Nonaccrual loans

$

40

     

45

     

-11

%

                 

Accruing loans past due 90 days or more

 

269

     

423

     

-37

%

                 

Nonaccrual loans to total net loans

 

1.77

%

   

1.89

%

                       

Allowance for credit losses to total loans

 

1.55

%

   

1.46

%

                       
                   

(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

 
 

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

 

Dollars in millions, except per share, shares in thousands

2023

   

2023

   

2023

   

2022

   

2022

 

Performance

                           

Net income

$

690

     

867

     

702

     

765

     

647

 

Net income available to common shareholders

 

664

     

841

     

676

     

739

     

621

 

Per common share:

                           

Basic earnings

$

4.00

     

5.07

     

4.03

     

4.32

     

3.55

 

Diluted earnings

 

3.98

     

5.05

     

4.01

     

4.29