M&T Bank Corporation Announces Third Quarter Profits
BUFFALO, N.Y., Oct 20, 2010 /PRNewswire via COMTEX News Network/ -- M&T Bank Corporation ("M&T")(NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2010.
GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the third quarter of 2010 rose 53% to $1.48 from $.97 in the year-earlier quarter and were 1% above the $1.46 earned in the second quarter of 2010. GAAP-basis net income in the recent quarter aggregated $192 million, up from $128 million and $189 million in the third quarter of 2009 and the second 2010 quarter, respectively. GAAP-basis net income for the third quarter of 2010 expressed as an annualized rate of return on average assets and average common stockholders' equity was 1.12% and 9.56%, respectively, compared with .73% and 6.72%, respectively, in the year-earlier quarter and 1.11% and 9.67%, respectively, in the second quarter of 2010.
Commenting on M&T's financial results in the recent quarter, Rene F. Jones, Executive Vice President and Chief Financial Officer, noted, "Revenues and net income held up nicely this quarter and were each improved from a year-earlier, despite lower fee income from deposit service charges resulting from the recently adopted changes in regulation. Once again, credit costs remained well-controlled. Customer loan balances charged off during the recent quarter declined by $49 million, or 34%, from last year's third quarter. This represents a welcome sign of the improvement in economic conditions relative to a year ago."
The recent quarter's earnings as compared with the third quarter of 2009 reflect higher net interest income, resulting from a widening of the net interest margin, and a lower provision for credit losses. Also contributing to the improved performance as compared with the year-earlier quarter were lower other-than-temporary impairment charges on certain available-for-sale investment securities, which after applicable tax effect totaled $6 million and $29 million during the quarters ended September 30, 2010 and 2009, respectively. Reflected in the results for the third quarter of 2009 were net merger-related gains of $9 million (after-tax), or $.08 of diluted earnings per common share, related to 2009 acquisitions. As compared with the second quarter of 2010, a recent quarter rise in mortgage banking revenues and lower other-than-temporary impairment charges on available-for-sale investment securities were partially offset by a decline in service charges on deposit accounts.
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 and gains associated with merging acquired operations into M&T, since such amounts are considered by management to be "nonoperating" in nature. 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. Reconciliations of GAAP to non-GAAP measures are provided in the financial tables included herein.
Diluted net operating earnings per common share, which exclude the impact of amortization of core deposit and other intangible assets and merger-related gains and expenses, rose for the sixth consecutive quarter, totaling $1.55 in the recent quarter, improved from $.98 in the third quarter of 2009 and $1.53 in the second quarter of 2010. Net operating income during the third quarter of 2010 was $200 million, up from $129 million and $198 million in the third quarter of 2009 and the second quarter of 2010, respectively. Expressed as an annualized rate of return on average tangible assets and average tangible common stockholders' equity, net operating income was 1.24% and 19.58%, respectively, in the recent quarter, compared with .78% and 14.87% in the year-earlier quarter and 1.23% and 20.36% in the second quarter of 2010.
Taxable-equivalent Net Interest Income. Taxable-equivalent net interest income totaled $576 million in the third quarter of 2010, up from $553 million in the year-earlier period and $573 million in the second quarter of 2010. The improvement in such income from the third quarter of 2009 reflects a 26 basis point widening of the net interest margin, which rose to 3.87% from 3.61%. As compared with the second quarter of 2010, a 3 basis point improvement in the recent quarter's net interest margin was partly offset by a 1% decline in average earning assets.
Provision for Credit Losses/Asset Quality. The provision for credit losses was $93 million in the recent quarter, compared with $154 million in the third quarter of 2009 and $85 million in 2010's second quarter. Net charge-offs of loans totaled $93 million during the third quarter of 2010, compared with $141 million and $82 million in the quarters ended September 30, 2009 and June 30, 2010, respectively. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .73% and 1.07% in the third quarter of 2010 and 2009, respectively, and .64% in the second quarter of 2010.
Loans classified as nonaccrual totaled $1.10 billion, or 2.16% of total loans at September 30, 2010, compared with $1.23 billion or 2.35% a year earlier and $1.09 billion or 2.13% at June 30, 2010. Assets taken in foreclosure of defaulted loans were $193 million at each of June 30 and September 30, 2010, up from $85 million at September 30, 2009. The higher level of such assets at the two most recent quarter-ends resulted from the second quarter 2010 transfer of $98 million of collateral related to a single commercial real estate loan. The ratio of nonperforming assets to total loans plus real estate and other foreclosed assets was 2.53% at September 30, 2010, compared with 2.51% and 2.50% at September 30, 2009 and June 30, 2010, respectively.
Loans past due 90 days or more and accruing interest totaled $215 million at the end of the recent quarter, including loans guaranteed by government-related entities of $194 million. Such past due loans were $183 million and $203 million at September 30, 2009 and June 30, 2010, respectively, including $173 million and $188 million of government guaranteed loans at those respective dates.
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. Reflecting those analyses, the allowance for credit losses was $895 million at each of June 30 and September 30, 2010, compared with $868 million at September 30, 2009. That allowance expressed as a percentage of outstanding loans was 1.76% at the recent quarter-end, compared with 1.66% at September 30, 2009 and 1.75% at June 30, 2010. Beginning in 2009, GAAP requires that expected credit losses associated with loans obtained in an acquisition be reflected in the estimation of loan fair value as of each respective acquisition date and prohibits any carry-over of the acquired entity's allowance for credit losses. Excluding amounts related to loans obtained in 2009 acquisition transactions, the allowance-to-legacy loan ratio was 1.86% at the two most recent quarter-ends, compared with 1.81% at September 30, 2009.
Noninterest Income and Expense. Noninterest income totaled $290 million in the recent quarter, compared with $278 million and $274 million in the third quarter of 2009 and the second quarter of 2010, respectively. Reflected in those amounts were net losses from investment securities of $8 million, $47 million and $22 million, each predominantly due to other-than-temporary impairment charges. During each of those quarters, such charges reflected write-downs of certain of M&T's holdings of privately issued collateralized mortgage obligations and collateralized debt obligations backed by pooled trust preferred securities. In addition, during 2010's second quarter, other-than-temporary impairment charges included a $12 million write-down of American Depositary Shares of Allied Irish Banks, p.l.c., which were obtained in M&T's acquisition of Allfirst Financial Inc. in 2003. Excluding gains and losses from investment securities and a pre-tax merger-related gain of $29 million in the third quarter of 2009, noninterest income in the third quarter of 2010 aggregated $298 million, up from $296 million in each of the third quarter of 2009 and the second 2010 quarter. The higher level of noninterest income in the recent quarter resulted largely from higher mortgage banking revenues that were largely offset by declines in service charges on deposit accounts. The lower level of deposit service charge revenues was attributable to new regulations that went into effect July 1, 2010 for new customers and August 15, 2010 for pre-existing customers. Such regulations require depositors to elect to be subject to fees for certain deposit account services.
Noninterest expense in the third quarter of 2010 aggregated $480 million, compared with $500 million in the year-earlier quarter and $476 million in the second quarter of 2010. Included in such amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets and merger-related expenses. Exclusive of these expenses, noninterest operating expenses were $467 million in the recent quarter, compared with $469 million in the third quarter of 2009 and $461 million in 2010's second quarter.
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 and merger-related expenses and gains), measures the relationship of operating expenses to revenues. M&T's efficiency ratio was 53.4% in the recent quarter, compared with 55.2% and 53.1% in the year-earlier quarter and the second quarter of 2010, respectively.
Balance Sheet. M&T had total assets of $68.2 billion at September 30, 2010, compared with $69.0 billion at September 30, 2009. Loans and leases, net of unearned discount, were $50.8 billion at September 30, 2010, down 3% from $52.2 billion a year earlier. Total deposits aggregated $48.7 billion at the recent quarter-end, up 4% from $46.9 billion at September 30, 2009. Reflecting a $1.9 billion or 15% increase in noninterest-bearing deposits, deposits at domestic offices rose $2.5 billion, or 5%, to $48.0 billion at the recent quarter-end from $45.5 billion at September 30, 2009.
Total stockholders' equity rose 8% to $8.2 billion at September 30, 2010 from $7.6 billion a year earlier, representing 12.06% and 11.03%, respectively, of total assets. Common stockholders' equity was $7.5 billion, or $62.69 per share, at September 30, 2010, compared with $6.9 billion, or $58.22 per share, at September 30, 2009. Tangible equity per common share rose to $32.23 at September 30, 2010 from $27.03 at September 30, 2009. In the calculation of tangible equity per common share, common stockholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances. M&T's tangible common equity to tangible assets ratio was 5.96% at September 30, 2010, compared with 4.89% and 5.75% at September 30, 2009 and June 30, 2010, respectively.
Allied Irish Banks, p.l.c. initiated steps in early October to divest its holdings of M&T common shares. In a public offering, 26.7 million of Contingent Mandatorily Exchangeable Notes, each note exchangeable for one share of M&T common stock, were sold in a single day. The notes were distributed directly to one hundred twenty-three institutional investors as well as through retail delivery channels.
Conference Call. Investors will have an opportunity to listen to M&T's conference call to discuss third quarter financial results today at 10:30 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 #17941643. The conference call will be webcast live on M&T's website at http://ir.mandtbank.com/conference.cfm. A replay of the call will be available until Friday, October 22, 2010 by calling (800)642-1687, or (706)645-9291 for international participants, and by making reference to ID #17941643. The event will also be archived and available by 6:00 p.m. today on M&T's website at http://ir.mandtbank.com/conference.cfm.
M&T is a bank holding company headquartered in Buffalo, New York. M&T's banking subsidiaries, M&T Bank and M&T Bank, National Association, operate retail and commercial bank branches in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Jersey, the District of Columbia and Ontario, Canada.
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; 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 other 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.
M&T BANK CORPORATION Financial Highlights
Three months ended Amounts in thousands, September 30 ------------ except per share 2010 2009 Change -- -- ------ Performance ----------- Net income $192,015 127,664 50% Net income available to common equity 179,306 115,143 56 Per common share: Basic earnings $1.49 .97 54% Diluted earnings 1.48 .97 53 Cash dividends $.70 .70 - Common shares outstanding: Average - diluted (1) 119,155 117,547 1% Period end (2) 119,435 118,156 1 Return on (annualized): Average total assets 1.12% .73% Average common stockholders' equity 9.56% 6.72% Taxable-equivalent net interest income $575,733 553,450 4% Yield on average earning assets 4.65% 4.60% Cost of interest-bearing liabilities 1.03% 1.26% Net interest spread 3.62% 3.34% Contribution of interest-free funds .25% .27% Net interest margin 3.87% 3.61% Net charge-offs to average total net loans (annualized) .73% 1.07% Net operating results (3) ------------------------- Net operating income $200,225 128,761 56% Diluted net operating earnings per common share 1.55 .98 58 Return on (annualized): Average tangible assets 1.24% .78% Average tangible common equity 19.58% 14.87% Efficiency ratio 53.40% 55.21%
Nine months ended Amounts in thousands, September 30 ------------ except per share 2010 2009 Change -- -- ------ Performance ----------- Net income $531,719 243,073 119% Net income available to common equity 493,735 211,429 134 Per common share: Basic earnings $4.12 1.84 124% Diluted earnings 4.10 1.84 123 Cash dividends $2.10 2.10 Common shares outstanding: Average - diluted (1) 118,766 113,800 4% Period end (2) 119,435 118,156 1 Return on (annualized): Average total assets 1.04% .49% Average common stockholders' equity 9.05% 4.35% Taxable-equivalent net interest income $1,711,322 1,512,971 13% Yield on average earning assets 4.62% 4.62% Cost of interest-bearing liabilities 1.04% 1.49% Net interest spread 3.58% 3.13% Contribution of interest-free funds .25% .28% Net interest margin 3.83% 3.41% Net charge-offs to average total net loans (annualized) .70% 1.00% Net operating results (3) ------------------------- Net operating income $558,930 304,600 83% Diluted net operating earnings per common share 4.33 2.37 83 Return on (annualized): Average tangible assets 1.16% .64% Average tangible common equity 19.13% 12.19% Efficiency ratio 54.10% 57.90%
At September 30 --------------- Loan quality 2010 2009 Change ------------ -- -- ------ Nonaccrual loans $1,099,560 1,228,341 -10% Real estate and other foreclosed assets 192,600 84,676 127% Total nonperforming assets $1,292,160 1,313,017 -2% ========== ========= Accruing loans past due 90 days or more $214,769 182,750 18% Renegotiated loans $233,671 190,917 22% Government guaranteed loans included in totals above: Nonaccrual loans $38,232 38,590 -1% Accruing loans past due 90 days or more 194,223 172,701 12% Purchased impaired loans (4): Outstanding customer balance $113,964 209,138 -46% Carrying amount 52,728 108,058 -51% Nonaccrual loans to total net loans 2.16% 2.35% Allowance for credit losses to: Legacy loans 1.86% 1.81% Total loans 1.76% 1.66%
(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 gains and 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) Accruing loans that were impaired at acquisition date and recorded at fair value.
M&T BANK CORPORATION Financial Highlights, Five Quarter Trend
Three months ended ------------------ September Amounts in thousands, 30, June 30, March 31, except per share 2010 2010 2010 ---- ---- Performance ----------- Net income $192,015 188,749 150,955 Net income available to common equity 179,306 176,088 138,341 Per common share: Basic earnings $1.49 1.47 1.16 Diluted earnings 1.48 1.46 1.15 Cash dividends $.70 .70 .70 Common shares outstanding: Average -diluted (1) 119,155 118,878 118,256 Period end (2) 119,435 119,161 118,823 Return on (annualized): Average total assets 1.12% 1.11% .89% Average common stockholders' equity 9.56% 9.67% 7.86% Taxable-equivalent net interest income $575,733 573,332 562,257 Yield on average earning assets 4.65% 4.63% 4.59% Cost of interest- bearing liabilities 1.03% 1.04% 1.04% Net interest spread 3.62% 3.59% 3.55% Contribution of interest-free funds .25% .25% .23% Net interest margin 3.87% 3.84% 3.78% Net charge-offs to average total net loans (annualized) .73% .64% .74% Net operating results (3) --------------------- Net operating income $200,225 197,752 160,953 Diluted net operating earnings per common share 1.55 1.53 1.23 Return on (annualized): Average tangible assets 1.24% 1.23% 1.00% Average tangible common equity 19.58% 20.36% 17.34% Efficiency ratio 53.40% 53.06% 55.88% September 30, June 30, March 31, Loan quality 2010 2010 2010 ------------ ---- ---- Nonaccrual loans $1,099,560 1,090,135 1,339,992 Real estate and other foreclosed assets 192,600 192,631 95,362 ------- Total nonperforming assets $1,292,160 1,282,766 1,435,354 ========== ========= ========= Accruing loans past due 90 days or more $214,769 203,081 203,443 Renegotiated loans $233,671 228,847 220,885 Government guaranteed loans included in totals above: Nonaccrual loans $38,232 40,271 37,048 Accruing loans past due 90 days or more 194,223 187,682 194,523 Purchased impaired loans (4): Outstanding customer balance $113,964 130,808 148,686 Carrying amount 52,728 61,524 73,890 Nonaccrual loans to total net loans 2.16% 2.13% 2.60% Allowance for credit losses to: Legacy loans 1.86% 1.86% 1.86% Total loans 1.76% 1.75% 1.73%
Three months ended ------------------ December September Amounts in thousands, 31, 30, except per share 2009 2009 ---- ---- Performance ----------- Net income 136,818 127,664 Net income available to common equity 124,251 115,143 Per common share: Basic earnings 1.05 .97 Diluted earnings 1.04 .97 Cash dividends .70 .70 Common shares outstanding: Average - diluted (1) 117,672 117,547 Period end (2) 118,298 118,156 Return on (annualized): Average total assets .79% .73% Average common stockholders' equity 7.09% 6.72% Taxable-equivalent net interest income 564,606 553,450 Yield on average earning assets 4.58% 4.60% Cost of interest-bearing liabilities 1.13% 1.26% Net interest spread 3.45% 3.34% Contribution of interest-free funds .26% .27% Net interest margin 3.71% 3.61% Net charge-offs to average total net loans (annualized) 1.03% 1.07% Net operating results (3) ------------------------- Net operating income 150,776 128,761 Diluted net operating earnings per common share 1.16 .98 Return on (annualized): Average tangible assets .92% .78% Average tangible common equity 16.73% 14.87% Efficiency ratio 52.69% 55.21% December September 31, 30, Loan quality 2009 2009 ------------ ---- ---- Nonaccrual loans 1,331,702 1,228,341 Real estate and other foreclosed assets 94,604 84,676 Total nonperforming assets 1,426,306 1,313,017 ========= ========= Accruing loans past due 90 days or more 208,080 182,750 Renegotiated loans 212,548 190,917 Government guaranteed loans included in totals above: Nonaccrual loans 38,579 38,590 Accruing loans past due 90 days or more 193,495 172,701 Purchased impaired loans (4): Outstanding customer balance 172,772 209,138 Carrying amount 88,170 108,058 Nonaccrual loans to total net loans 2.56% 2.35% Allowance for credit losses to: Legacy loans 1.83% 1.81% Total loans 1.69% 1.66%
(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 gains and 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) Accruing loans that were impaired at acquisition date and recorded at fair value.
M&T BANK CORPORATION Condensed Consolidated Statement of Income
Three months ended September 30 ------------ Dollars in thousands 2010 2009 Change -- -- ------ Interest income $685,900 700,593 -2% Interest expense 116,032 152,938 -24 ------- ------- Net interest income 569,868 547,655 4 Provision for credit losses 93,000 154,000 -40 ------ ------- Net interest income after provision for credit losses 476,868 393,655 21 Other income Mortgage banking revenues 61,052 48,169 27 Service charges on deposit accounts 117,733 128,502 -8 Trust income 30,485 31,586 -3 Brokerage services income 12,127 14,329 -15 Trading account and foreign exchange gains 6,035 7,478 -19 Gain (loss) on bank investment securities 1,440 (56) - Other-than-temporary impairment losses recognized in earnings (9,532) (47,033) - Equity in earnings of Bayview Lending Group LLC (6,460) (10,912) - Other revenues from operations 77,019 106,163 -27 ------ ------- Total other income 289,899 278,226 4 Other expense Salaries and employee benefits 246,389 255,449 -4 Equipment and net occupancy 54,353 58,195 -7 Printing, postage and supplies 7,820 8,229 -5 Amortization of core deposit and other intangible assets 13,526 16,924 -20 FDIC assessments 18,039 21,124 -15 Other costs of operations 140,006 140,135 - ------- ------- Total other expense 480,133 500,056 -4 Income before income taxes 286,634 171,825 67 Applicable income taxes 94,619 44,161 114 ------ ------ Net income $192,015 127,664 50% ======== =======
Nine months ended September 30 ------------ Dollars in thousands 2010 2009 Change -- -- ------ Interest income $2,047,070 2,032,528 1% Interest expense 353,641 535,499 -34 ------- ------- Net interest income 1,693,429 1,497,029 13 Provision for credit losses 283,000 459,000 -38 ------- ------- Net interest income after provision for credit losses 1,410,429 1,038,029 36 Other income Mortgage banking revenues 149,612 157,385 -5 Service charges on deposit accounts 367,004 342,010 7 Trust income 91,582 98,908 -7 Brokerage services income 38,021 43,215 -12 Trading account and foreign exchange gains 14,531 16,456 -12 Gain (loss) on bank investment securities 1,909 811 - Other-than-temporary impairment losses recognized in earnings (58,714) (104,001) - Equity in earnings of Bayview Lending Group LLC (18,353) (15,263) - Other revenues from operations 235,570 242,695 -3 ------- ------- Total other income 821,162 782,216 5 Other expense Salaries and employee benefits 756,296 754,793 - Equipment and net occupancy 165,185 157,688 5 Printing, postage and supplies 25,412 28,878 -12 Amortization of core deposit and other intangible assets 44,834 47,525 -6 FDIC assessments 60,995 76,617 -20 Other costs of operations 392,841 436,611 -10 ------- ------- Total other expense 1,445,563 1,502,112 -4 Income before income taxes 786,028 318,133 147 Applicable income taxes 254,309 75,060 239 ------- ------ Net income $531,719 243,073 119% ======== =======
M&T BANK CORPORATION Condensed Consolidated Statement of Income, Five Quarter Trend
Three months ended ------------------ September 30, June 30, March 31, Dollars in thousands 2010 2010 2010 -- ---- ---- Interest income $685,900 684,784 676,386 Interest expense 116,032 117,557 120,052 ------- ------- ------- Net interest income 569,868 567,227 556,334 Provision for credit losses 93,000 85,000 105,000 ------ ------ ------- Net interest income after provision for credit losses 476,868 482,227 451,334 Other income Mortgage banking revenues 61,052 47,084 41,476 Service charges on deposit accounts 117,733 128,976 120,295 Trust income 30,485 30,169 30,928 Brokerage services income 12,127 12,788 13,106 Trading account and foreign exchange gains 6,035 3,797 4,699 Gain (loss) on bank investment securities 1,440 10 459 Other-than-temporary impairment losses recognized in earnings (9,532) (22,380) (26,802) Equity in earnings of Bayview Lending Group LLC (6,460) (6,179) (5,714) Other revenues from operations 77,019 79,292 79,259 ------ ------ ------ Total other income 289,899 273,557 257,706 Other expense Salaries and employee benefits 246,389 245,861 264,046 Equipment and net occupancy 54,353 55,431 55,401 Printing, postage and supplies 7,820 8,549 9,043 Amortization of core deposit and other intangible assets 13,526 14,833 16,475 FDIC assessments 18,039 21,608 21,348 Other costs of operations 140,006 129,786 123,049 ------- ------- ------- Total other expense 480,133 476,068 489,362 Income before income taxes 286,634 279,716 219,678 Applicable income taxes 94,619 90,967 68,723 ------ ------ ------ Net income $192,015 188,749 150,955 ======== ======= =======
Three months ended ------------------ December September 31, 30, Dollars in thousands 2009 2009 ---- ---- Interest income 692,669 700,593 Interest expense 133,950 152,938 ------- ------- Net interest income 558,719 547,655 Provision for credit losses 145,000 154,000 ------- ------- Net interest income after provision for credit losses 413,719 393,655 Other income Mortgage banking revenues 50,176 48,169 Service charges on deposit accounts 127,185 128,502 Trust income 29,660 31,586 Brokerage services income 14,396 14,329 Trading account and foreign exchange gains 6,669 7,478 Gain (loss) on bank investment securities 354 (56) Other-than-temporary impairment losses recognized in earnings (34,296) (47,033) Equity in earnings of Bayview Lending Group LLC (10,635) (10,912) Other revenues from operations 82,381 106,163 ------ ------- Total other income 265,890 278,226 Other expense Salaries and employee benefits 247,080 255,449 Equipment and net occupancy 53,703 58,195 Printing, postage and supplies 9,338 8,229 Amortization of core deposit and other intangible assets 16,730 16,924 FDIC assessments 19,902 21,124 Other costs of operations 131,698 140,135 ------- ------- Total other expense 478,451 500,056 Income before income taxes 201,158 171,825 Applicable income taxes 64,340 44,161 ------ ------ Net income 136,818 127,664 ======= =======
M&T BANK CORPORATION Condensed Consolidated Balance Sheet
September 30 ------------ Dollars in thousands 2010 2009 Change -- -- ------ ASSETS Cash and due from banks $1,070,625 1,356,508 -21% Interest-bearing deposits at banks 401,624 54,443 638 Federal funds sold and agreements to resell securities 443,700 17,206 - Trading account assets 536,702 497,064 8 Investment securities 7,662,715 7,634,262 - Loans and leases: Commercial, financial, etc 12,788,136 13,517,538 -5 Real estate - commercial 20,580,450 21,007,376 -2 Real estate - consumer 5,754,432 5,427,260 6 Consumer 11,668,540 12,251,598 -5 ---------- ---------- Total loans and leases, net of unearned discount 50,791,558 52,203,772 -3 Less: allowance for credit losses 894,720 867,874 3 ------- ------- Net loans and leases 49,896,838 51,335,898 -3 Goodwill 3,524,625 3,524,625 - Core deposit and other intangible assets 139,186 199,148 -30 Other assets 4,570,822 4,378,296 4 --------- --------- Total assets $68,246,837 68,997,450 -1% =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing deposits at U.S. offices $14,665,603 12,730,083 15% Other deposits at U.S. offices 33,335,104 32,813,698 2 Deposits at foreign office 653,916 1,318,070 -50 ------- --------- Total deposits 48,654,623 46,861,851 4 Short-term borrowings 1,211,683 2,927,268 -59 Accrued interest and other liabilities 1,157,250 1,241,576 -7 Long-term borrowings 8,991,508 10,354,392 -13 --------- ---------- Total liabilities 60,015,064 61,385,087 -2 Stockholders' equity: Preferred 737,979 727,748 1 Common (1) 7,493,794 6,884,615 9 --------- --------- Total stockholders' equity 8,231,773 7,612,363 8 --------- --------- Total liabilities and stockholders' equity $68,246,837 68,997,450 -1% =========== ==========
(1) Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $192.6 million at September 30, 2010 and $419.3 million at September 30, 2009.
M&T BANK CORPORATION Condensed Consolidated Balance Sheet, Five Quarter Trend
September 30, June 30, March 31, Dollars in thousands 2010 2010 2010 -- ---- ---- ASSETS Cash and due from banks $1,070,625 1,045,886 1,033,269 Interest-bearing deposits at banks 401,624 117,826 121,305 Federal funds sold and agreements to resell securities 443,700 10,000 10,400 Trading account assets 536,702 487,692 403,476 Investment securities 7,662,715 8,097,572 8,104,646 Loans and leases: Commercial, financial, etc 12,788,136 13,017,598 13,220,181 Real estate - commercial 20,580,450 20,612,905 20,724,118 Real estate - consumer 5,754,432 5,729,126 5,664,159 Consumer 11,668,540 11,701,657 11,835,583 ---------- ---------- ---------- Total loans and leases, net of unearned discount 50,791,558 51,061,286 51,444,041 Less: allowance for credit losses 894,720 894,667 891,265 ------- ------- ------- Net loans and leases 49,896,838 50,166,619 50,552,776 Goodwill 3,524,625 3,524,625 3,524,625 Core deposit and other intangible assets 139,186 152,712 167,545 Other assets 4,570,822 4,550,684 4,521,180 --------- --------- --------- Total assets $68,246,837 68,153,616 68,439,222 =========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing deposits at U.S. offices $14,665,603 13,960,723 13,622,819 Other deposits at U.S. offices 33,335,104 33,010,520 33,125,761 Deposits at foreign office 653,916 551,428 789,825 ------- ------- ------- Total deposits 48,654,623 47,522,671 47,538,405 Short-term borrowings 1,211,683 2,158,957 1,870,763 Accrued interest and other liabilities 1,157,250 1,114,615 1,048,473 Long-term borrowings 8,991,508 9,255,529 10,065,894 --------- --------- ---------- Total liabilities 60,015,064 60,051,772 60,523,535 Stockholders' equity: Preferred 737,979 735,350 732,769 Common (1) 7,493,794 7,366,494 7,182,918 --------- --------- --------- Total stockholders' equity 8,231,773 8,101,844 7,915,687 --------- --------- --------- Total liabilities and stockholders' equity $68,246,837 68,153,616 68,439,222 =========== ========== ==========
December September 31, 30, Dollars in thousands 2009 2009 ---- ---- ASSETS Cash and due from banks 1,226,223 1,356,508 Interest-bearing deposits at banks 133,335 54,443 Federal funds sold and agreements to resell securities 20,119 17,206 Trading account assets 386,984 497,064 Investment securities 7,780,609 7,634,262 Loans and leases: Commercial, financial, etc 13,479,447 13,517,538 Real estate - commercial 20,949,931 21,007,376 Real estate - consumer 5,463,463 5,427,260 Consumer 12,043,845 12,251,598 ---------- ---------- Total loans and leases, net of unearned discount 51,936,686 52,203,772 Less: allowance for credit losses 878,022 867,874 Net loans and leases 51,058,664 51,335,898 Goodwill 3,524,625 3,524,625 Core deposit and other intangible assets 182,418 199,148 Other assets 4,567,422 4,378,296 --------- --------- Total assets 68,880,399 68,997,450 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing deposits at U.S. offices 13,794,636 12,730,083 Other deposits at U.S. offices 32,604,764 32,813,698 Deposits at foreign office 1,050,438 1,318,070 --------- --------- Total deposits 47,449,838 46,861,851 Short-term borrowings 2,442,582 2,927,268 Accrued interest and other liabilities 995,056 1,241,576 Long-term borrowings 10,240,016 10,354,392 ---------- ---------- Total liabilities 61,127,492 61,385,087 Stockholders' equity: Preferred 730,235 727,748 Common (1) 7,022,672 6,884,615 --------- --------- Total stockholders' equity 7,752,907 7,612,363 --------- --------- Total liabilities and stockholders' equity 68,880,399 68,997,450 ========== ==========
(1) Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $192.6 million at September 30, 2010, $197.2 million at June 30, 2010, $255.2 million at March 31, 2010, $336.0 million at December 31, 2009 and $419.3 million at September 30, 2009.
M&T BANK CORPORATION Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates
Three months ended ------------------ September September 30, 30, June 30, 2010 2009 2010 ---- ---- ---- Balance Rate Balance Rate Balance Rate ------- ---- ------- ---- ------- ---- ASSETS Interest-bearing deposits at banks $92 .15% 66 .04% 81 .02% Federal funds sold and agreements to resell securities 64 .26 11 .58 10 .41 Trading account assets 82 .65 83 .82 66 .96 Investment securities 7,993 4.16 8,420 4.81 8,376 4.27 Loans and leases, net of unearned discount Commercial, financial, etc 12,856 3.97 13,801 3.78 13,096 4.03 Real estate - commercial. 20,612 4.85 20,843 4.48 20,759 4.64 Real estate -consumer 5,680 5.30 5,429 5.43 5,653 5.35 Consumer 11,687 5.22 12,247 5.37 11,770 5.24 Total loans and leases, net 50,835 4.74 52,320 4.58 51,278 4.71 ------ ------ ------ Total earning assets 59,066 4.65 60,900 4.60 59,811 4.63 Goodwill 3,525 3,525 3,525 Core deposit and other intangible assets 146 208 160 Other assets 5,074 4,521 4,838 ----- ----- ----- Total assets $67,811 69,154 68,334 ======= ====== ====== LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing deposits NOW accounts $592 .15 541 .21 619 .14 Savings deposits 26,177 .33 23,367 .37 25,942 .33 Time deposits 6,312 1.46 9,246 2.17 6,789 1.55 Deposits at foreign office 802 .16 1,444 .13 972 .16 Total interest- bearing deposits 33,883 .53 34,598 .84 34,322 .56 ------ ------ ------ Short-term borrowings 1,858 .16 2,663 .26 1,763 .17 Long-term borrowings 8,948 3.10 11,008 2.80 9,454 2.91 ----- ------ ----- Total interest- bearing liabilities 44,689 1.03 48,269 1.26 45,539 1.04 Noninterest-bearing deposits 13,647 12,122 13,610 Other liabilities 1,294 1,242 1,149 ----- ----- ----- Total liabilities 59,630 61,633 60,298 Stockholders' equity 8,181 7,521 8,036 ----- ----- ----- Total liabilities and stockholders' equity $67,811 69,154 68,334 ======= ====== ====== Net interest spread 3.62 3.34 3.59 Contribution of interest-free funds .25 .27 .25 Net interest margin 3.87% 3.61% 3.84%
Change in balance September 30, 2010 from September June 30, 30, 2009 2010 ---- ---- ASSETS Interest-bearing deposits at banks 41% 14% Federal funds sold and agreements to resell securities 457 531 Trading account assets -1 23 Investment securities -5 -5 Loans and leases, net of unearned discount Commercial, financial, etc -7 -2 Real estate - commercial. -1 -1 Real estate - consumer 5 - Consumer -5 -1 Total loans and leases, net -3 -1 Total earning assets -3 -1 Goodwill - - Core deposit and other intangible assets -30 -9 Other assets 12 5 Total assets -2% -1% LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing deposits NOW accounts 9% -4% Savings deposits 12 1 Time deposits -32 -7 Deposits at foreign office -44 -18 Total interest-bearing deposits -2 -1 Short-term borrowings -30 5 Long-term borrowings -19 -5 Total interest-bearing liabilities -7 -2 Noninterest-bearing deposits 13 - Other liabilities 4 13 Total liabilities -3 -1 Stockholders' equity 9 2 Total liabilities and stockholders' equity -2% -1% Net interest spread Contribution of interest-free funds Net interest margin
Nine months ended September 30 ------------ 2010 2009 Balance Rate Balance Rate ------- ---- ------- ---- ASSETS Interest-bearing deposits at banks $100 .06% 43 .06% Federal funds sold and agreements to resell securities 33 .27 62 .25 Trading account assets 69 .79 92 .76 Investment securities 8,180 4.29 8,472 4.84 Loans and leases, net of unearned discount Commercial, financial, etc 13,118 3.96 13,965 3.76 Real estate - commercial. 20,745 4.66 19,793 4.45 Real estate - consumer 5,691 5.32 5,243 5.47 Consumer 11,795 5.24 11,578 5.47 ------ ------ Total loans and leases, net 51,349 4.69 50,579 4.60 ------ ------ Total earning assets 59,731 4.62 59,248 4.62 Goodwill 3,525 3,349 Core deposit and other intangible assets 160 191 Other assets 4,923 4,196 ----- ----- Total assets $68,339 66,984 ======= ====== LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing deposits NOW accounts $599 .14 531 .22 Savings deposits 25,733 .33 22,358 .54 Time deposits 6,767 1.56 8,943 2.49 Deposits at foreign office 1,002 .14 1,788 .15 ----- ----- Total interest-bearing deposits 34,101 .56 33,620 1.03 ------ ------ Short-term borrowings 1,994 .16 3,114 .26 Long-term borrowings 9,516 2.91 11,376 3.17 ----- ------ Total interest-bearing liabilities 45,611 1.04 48,110 1.49 Noninterest-bearing deposits 13,518 10,416 Other liabilities 1,180 1,313 ----- ----- Total liabilities 60,309 59,839 Stockholders' equity 8,030 7,145 ----- ----- Total liabilities and stockholders' equity $68,339 66,984 ======= ====== Net interest spread 3.58 3.13 Contribution of interest-free funds .25 .28 Net interest margin 3.83% 3.41%
Change in balance ------- ASSETS Interest-bearing deposits at banks 134% Federal funds sold and agreements to resell securities -47 Trading account assets -24 Investment securities -3 Loans and leases, net of unearned discount Commercial, financial, etc -6 Real estate - commercial. 5 Real estate - consumer 9 Consumer 2 Total loans and leases, net 2 Total earning assets 1 Goodwill 5 Core deposit and other intangible assets -16 Other assets 17 Total assets 2% LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing deposits NOW accounts 13% Savings deposits 15 Time deposits -24 Deposits at foreign office -44 Total interest-bearing deposits 1 Short-term borrowings -36 Long-term borrowings -16 Total interest-bearing liabilities -5 Noninterest-bearing deposits 30 Other liabilities -10 Total liabilities 1 Stockholders' equity 12 Total liabilities and stockholders' equity 2% Net interest spread Contribution of interest-free funds Net interest margin
M&T BANK CORPORATION Reconciliation of Quarterly GAAP to Non-GAAP Measures
Three months ended September 30 ------------ 2010 2009 ---- ---- Income statement data --------------------- In thousands, except per share Net income Net income $192,015 127,664 Amortization of core deposit and other intangible assets (1) 8,210 10,270 Merger-related gain (1) - (17,684) Merger-related expenses (1) - 8,511 Net operating income $200,225 128,761 ======== ======= Earnings per common share Diluted earnings per common share $1.48 .97 Amortization of core deposit and other intangible assets (1) .07 .09 Merger-related gain (1) - (.15) Merger-related expenses (1) - .07 Diluted net operating earnings per common share $1.55 .98 ===== === Other expense Other expense $480,133 500,056 Amortization of core deposit and other intangible assets (13,526) (16,924) Merger-related expenses - (14,010) Noninterest operating expense $466,607 469,122 ======== ======= Merger-related expenses Salaries and employee benefits $ - 870 Equipment and net occupancy - 1,845 Printing, postage and supplies - 629 Other costs of operations - 10,666 Total $ - 14,010 === ====== Balance sheet data ------------------ In millions Average assets Average assets $67,811 69,154 Goodwill (3,525) (3,525) Core deposit and other intangible assets (146) (208) Deferred taxes 27 41 --- --- Average tangible assets $64,167 65,462 ======= ====== Average common equity Average total equity $8,181 7,521 Preferred stock (737) (727) Average common equity 7,444 6,794 Goodwill (3,525) (3,525) Core deposit and other intangible assets (146) (208) Deferred taxes 27 41 --- --- Average tangible common equity $3,800 3,102 ====== ===== At end of quarter Total assets Total assets $68,247 68,997 Goodwill (3,525) (3,525) Core deposit and other intangible assets (139) (199) Deferred taxes 26 39 Total tangible assets $64,609 65,312 ======= ====== Total common equity Total equity $8,232 7,612 Preferred stock (738) (728) Undeclared dividends -preferred stock (6) (5) Common equity, net of undeclared preferred dividends 7,488 6,879 Goodwill (3,525) (3,525) Core deposit and other intangible assets (139) (199) Deferred taxes 26 39 Total tangible common equity $3,850 3,194 ====== =====
Nine months ended September 30 ------------ 2010 2009 ---- ---- Income statement data --------------------- In thousands, except per share Net income Net income $531,719 243,073 Amortization of core deposit and other intangible assets (1) 27,211 28,854 Merger-related gain (1) (17,684) Merger-related expenses (1) - 50,357 Net operating income $558,930 304,600 ======== ======= Earnings per common share Diluted earnings per common share $4.10 1.84 Amortization of core deposit and other intangible assets (1) .23 .25 Merger-related gain (1) - (.15) Merger-related expenses (1) - .43 Diluted net operating earnings per common share $4.33 2.37 ===== ==== Other expense Other expense $1,445,563 1,502,112 Amortization of core deposit and other intangible assets (44,834) (47,525) Merger-related expenses - (82,893) Noninterest operating expense $1,400,729 1,371,694 ========== ========= Merger-related expenses Salaries and employee benefits $ - 9,649 Equipment and net occupancy - 2,430 Printing, postage and supplies - 3,444 Other costs of operations - 67,370 Total $ - 82,893 === ====== Balance sheet data ------------------ In millions Average assets Average assets $68,339 66,984 Goodwill (3,525) (3,349) Core deposit and other intangible assets (160) (191) Deferred taxes 30 31 --- --- Average tangible assets $64,684 63,475 ======= ====== Average common equity Average total equity $8,030 7,145 Preferred stock (735) (644) Average common equity 7,295 6,501 Goodwill (3,525) (3,349) Core deposit and other intangible assets (160) (191) Deferred taxes 30 31 --- --- Average tangible common equity $3,640 2,992 ====== ===== At end of quarter Total assets Total assets Goodwill Core deposit and other intangible assets Deferred taxes Total tangible assets Total common equity Total equity Preferred stock Undeclared dividends -preferred stock Common equity, net of undeclared preferred dividends Goodwill Core deposit and other intangible assets Deferred taxes Total tangible common equity
(1) After any related tax effect.
M&T BANK CORPORATION Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
Three months ended ------------------ September June March 30, 30, 31, 2010 2010 2010 ---- ---- ---- Income statement data --------------------- In thousands, except per share Net income Net income $192,015 188,749 150,955 Amortization of core deposit and other intangible assets (1) 8,210 9,003 9,998 Merger-related gain (1) - - - Merger-related expenses (1) - - - Net operating income $200,225 197,752 160,953 ======== ======= ======= Earnings per common share Diluted earnings per common share $1.48 1.46 1.15 Amortization of core deposit and other intangible assets (1) .07 .07 .08 Merger-related gain (1) - - - Merger-related expenses (1) - - - Diluted net operating earnings per common share $1.55 1.53 1.23 ===== ==== ==== Other expense Other expense $480,133 476,068 489,362 Amortization of core deposit and other intangible assets (13,526) (14,833) (16,475) Merger-related expenses - - - Noninterest operating expense $466,607 461,235 472,887 ======== ======= ======= Merger-related expenses Salaries and employee benefits $ - - - Equipment and net occupancy - - - Printing, postage and supplies - - - Other costs of operations - - - Total $ - - - === === === Balance sheet data ------------------ In millions Average assets Average assets $67,811 68,334 68,883 Goodwill (3,525) (3,525) (3,525) Core deposit and other intangible assets (146) (160) (176) Deferred taxes 27 30 34 --- --- Average tangible assets $64,167 64,679 65,216 ======= ====== ====== Average common equity Average total equity $8,181 8,036 7,868 Preferred stock (737) (734) (732) Average common equity 7,444 7,302 7,136 Goodwill (3,525) (3,525) (3,525) Core deposit and other intangible assets (146) (160) (176) Deferred taxes 27 30 34 --- --- Average tangible common equity $3,800 3,647 3,469 ====== ===== ===== At end of quarter Total assets Total assets $68,247 68,154 68,439 Goodwill (3,525) (3,525) (3,525) Core deposit and other intangible assets (139) (152) (167) Deferred taxes 26 28 31 Total tangible assets $64,609 64,505 64,778 ======= ====== ====== Total common equity Total equity $8,232 8,102 7,916 Preferred stock (738) (735) (733) Undeclared dividends -preferred stock (6) (7) (6) --- --- --- Common equity, net of undeclared preferred dividends 7,488 7,360 7,177 Goodwill (3,525) (3,525) (3,525) Core deposit and other intangible assets (139) (152) (167) Deferred taxes 26 28 31 Total tangible common equity $3,850 3,711 3,516 ====== ===== =====
Three months ended ------------------ December September 31, 30, 2009 2009 ---- ---- Income statement data --------------------- In thousands, except per share Net income Net income 136,818 127,664 Amortization of core deposit and other intangible assets (1) 10,152 10,270 Merger-related gain (1) - (17,684) Merger-related expenses (1) 3,806 8,511 Net operating income 150,776 128,761 ======= ======= Earnings per common share Diluted earnings per common share 1.04 .97 Amortization of core deposit and other intangible assets (1) .09 .09 Merger-related gain (1) - (.15) Merger-related expenses (1) .03 .07 Diluted net operating earnings per common share 1.16 .98 ==== === Other expense Other expense 478,451 500,056 Amortization of core deposit and other intangible assets (16,730) (16,924) Merger-related expenses (6,264) (14,010) Noninterest operating expense 455,457 469,122 ======= ======= Merger-related expenses Salaries and employee benefits 381 870 Equipment and net occupancy 545 1,845 Printing, postage and supplies 233 629 Other costs of operations 5,105 10,666 Total 6,264 14,010 ===== ====== Balance sheet data ------------------ In millions Average assets Average assets 68,919 69,154 Goodwill (3,525) (3,525) Core deposit and other intangible assets (191) (208) Deferred taxes 37 41 --- --- Average tangible assets 65,240 65,462 ====== ====== Average common equity Average total equity 7,686 7,521 Preferred stock (729) (727) Average common equity 6,957 6,794 Goodwill (3,525) (3,525) Core deposit and other intangible assets (191) (208) Deferred taxes 37 41 --- --- Average tangible common equity 3,278 3,102 ===== ===== At end of quarter Total assets Total assets 68,880 68,997 Goodwill (3,525) (3,525) Core deposit and other intangible assets (182) (199) Deferred taxes 35 39 Total tangible assets 65,208 65,312 ====== ====== Total common equity Total equity 7,753 7,612 Preferred stock (730) (728) Undeclared dividends -preferred stock (6) (5) --- --- Common equity, net of undeclared preferred dividends 7,017 6,879 Goodwill (3,525) (3,525) Core deposit and other intangible assets (182) (199) Deferred taxes 35 39 Total tangible common equity 3,345 3,194 ===== =====
(1) After any related tax effect.
INVESTOR CONTACT: Donald J. MacLeod (716) 842-5138 MEDIA CONTACT: C. Michael Zabel (716) 842-5385
SOURCE M&T Bank Corporation
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