Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): | October 10, 2003 | |
M&T BANK CORPORATION
New York
| 1-9861
(Commission File Number) |
16-0968385
(I.R.S. Employer Identification No.) |
|
| One M&T Plaza, Buffalo, New York
(Address of principal executive offices) |
14203
(Zip Code) |
Registrant’s telephone number, including area code: (716) 842-5445
(NOT APPLICABLE)
| Item 7. Financial Statements and Exhibits. | ||||||||
| Item 9. Regulation FD Disclosure (Information Furnished in this Item 9 is Furnished under Item 12). | ||||||||
| SIGNATURES | ||||||||
| EXHIBIT INDEX | ||||||||
| EX-99 News Release | ||||||||
Table of Contents
Item 7. Financial Statements and Exhibits.
The following exhibit is filed as a part of this report:
| Exhibit No. | ||
| 99 | News Release. |
Item 9. Regulation FD Disclosure (Information Furnished in this Item 9 is Furnished under Item 12).
On October 10, 2003, M&T Bank Corporation announced its results of operations for the fiscal quarter ending September 30, 2003. The public announcement was made by means of a news release, the text of which is set forth in Exhibit 99 hereto.
M&T Bank Corporation is furnishing the information required by Item 12 of Form 8-K, “Results of Operations and Financial Condition,” under Item 9 of Form 8-K in accordance with SEC Release No. 33-8216.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| M&T BANK CORPORATION |
| Date: October 10, 2003 | By: /s/ Michael P. Pinto
Michael P. Pinto Executive Vice President and Chief Financial Officer |
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Table of Contents
EXHIBIT INDEX
| Exhibit No. | ||||
| 99 | News Release | Filed herewith. |
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EXHIBIT 99
| CONTACT: | Michael S. Piemonte | FOR IMMEDIATE RELEASE: | ||
| (716) 842-5138 | October 10, 2003 |
M&T BANK CORPORATION ANNOUNCES THIRD QUARTER EARNINGS
BUFFALO, NEW YORK — M&T Bank Corporation (“M&T”) (NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2003.
GAAP Results of Operations. Diluted earnings per share measured in accordance with generally accepted accounting principles (“GAAP”) for the third quarter of 2003 were $1.28, up 10% from $1.16 in the year-earlier period. On the same basis, net income for the quarter ended September 30, 2003 totaled $156 million, 42% higher than the $110 million recorded in the third quarter of 2002.
M&T’s financial results for 2003 reflect the impact of operations obtained in the April 1, 2003 acquisition of Allfirst Financial Inc. (“Allfirst”) and the related issuance by M&T of 26.7 million common shares on that date. Merger-related expenses were $12 million, after applicable tax effect, or $.10 per diluted share, in the recently completed quarter. Such expenses represent costs for professional services, travel, and other expenses associated with the acquisition, the related integration of data processing and other operating systems and functions with those of M&T, and the commencement of M&T operations in market areas formerly served by Allfirst. There were no similar expenses in the third quarter of 2002.
GAAP-basis net income for the third quarter of 2003 expressed as an annualized rate of return on average assets and average common stockholders’ equity was 1.24% and 11.37%,
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respectively, compared with 1.37% and 14.42%, respectively, in last year’s third quarter.
For the nine-month periods ended September 30, 2003 and 2002, GAAP-basis diluted earnings per share were $3.59 and $3.53, respectively. On the same basis, net income for the first three quarters of 2003 totaled $407 million, up 20% from $338 million in the corresponding period in 2002. During the first nine months of 2003, M&T incurred merger-related expenses associated with the Allfirst acquisition totaling $38 million, after applicable tax effect, or $.33 per diluted share. Although M&T will incur additional merger-related expenses during the remainder of 2003 as Allfirst’s operations are fully integrated into M&T, such charges are not expected to be material. There were no similar merger-related expenses in 2002. GAAP-basis net income for the first nine months of 2003 expressed as an annualized rate of return on average assets and average common stockholders’ equity was 1.23% and 11.55%, respectively, compared with 1.43% and 15.12%, respectively, in the corresponding 2002 period.
Supplemental Reporting of Non-GAAP Results of Operations. Since 1998, M&T has consistently provided 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 expenses 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
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investors understand the effect of acquisition activity in reported results. Amortization of core deposit and other intangible assets, after tax effect, totaled $14 million ($.11 per diluted share) in the third quarter of 2003, compared with $8 million ($.08 per diluted share) in the year-earlier quarter. Similar amortization charges, after tax effect, for the nine months ended September 30, 2003 and 2002 were $35 million ($.31 per diluted share) and $25 million ($.27 per diluted share), respectively.
Diluted net operating earnings per share, which exclude the impact of amortization of core deposit and other intangible assets and the previously noted merger-related expenses, were $1.49 for the recently completed quarter, up 20% from $1.24 in the third quarter of 2002. Net operating income for 2003’s third quarter was $183 million, 55% above $118 million for the three months ended September 30, 2002. Expressed as an annualized rate of return on average tangible assets and average tangible stockholders’ equity, net operating income was 1.55% and 30.67%, respectively, in 2003’s third quarter, compared with 1.52% and 25.46% in the corresponding 2002 quarter.
For the first three quarters of 2003, diluted net operating earnings per share were $4.23, up 11% from $3.80 in the comparable 2002 period. Net operating income for the first nine months of 2003 rose to $479 million, 32% higher than $363 million in the corresponding 2002 period. For the nine-month period ended September 30, 2003, net operating income expressed as an annualized rate of return on average tangible assets and average tangible equity was 1.54% and 28.55%, respectively, compared with 1.60% and 27.14% in the similar 2002 period.
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Reconciliation of GAAP and Non-GAAP Results of Operations. A reconciliation of diluted earnings per share and net income with diluted net operating earnings per share and net operating income follows:
| Three months ended | Nine months ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||
| (in thousands, except per share) | ||||||||||||||||
Diluted earnings per share |
$ | 1.28 | 1.16 | 3.59 | 3.53 | |||||||||||
Amortization of core deposit
and other intangible assets(1) |
.11 | .08 | .31 | .27 | ||||||||||||
Merger-related expenses(1) |
.10 | — | .33 | — | ||||||||||||
Diluted net operating earnings
per share |
$ | 1.49 | 1.24 | 4.23 | 3.80 | |||||||||||
Net income |
$ | 156,463 | 110,117 | 407,041 | 338,201 | |||||||||||
Amortization of core deposit
and other intangible assets(1) |
13,790 | 7,956 | 34,767 | 25,282 | ||||||||||||
Merger-related expenses(1) |
12,417 | — | 37,529 | — | ||||||||||||
Net operating income |
$ | 182,670 | 118,073 | 479,337 | 363,483 | |||||||||||
| (1) | After any related tax effect |
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Reconciliation of Total Assets and Equity to Tangible Assets and Equity. A reconciliation of average assets and equity with average tangible assets and average tangible equity follows:
| Three months ended | Nine months ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||
| (in millions) | ||||||||||||||||
Average assets |
$ | 50,024 | 31,908 | 44,077 | 31,518 | |||||||||||
Goodwill |
(2,904 | ) | (1,098 | ) | (2,305 | ) | (1,098 | ) | ||||||||
Core deposit and other
intangible assets |
(272 | ) | (137 | ) | (227 | ) | (150 | ) | ||||||||
Deferred taxes |
— | 45 | — | 48 | ||||||||||||
Average tangible assets |
$ | 46,848 | 30,718 | 41,545 | 30,318 | |||||||||||
Average equity |
$ | 5,461 | 3,030 | 4,710 | 2,990 | |||||||||||
Goodwill |
(2,904 | ) | (1,098 | ) | (2,305 | ) | (1,098 | ) | ||||||||
Core deposit and other
intangible assets |
(272 | ) | (137 | ) | (227 | ) | (150 | ) | ||||||||
Deferred taxes |
78 | 45 | 67 | 48 | ||||||||||||
Average tangible equity |
$ | 2,363 | 1,840 | 2,245 | 1,790 | |||||||||||
Accounting for Stock-Based Compensation. Effective January 1, 2003, M&T began expensing stock-based compensation in accordance with the fair value method of accounting described in Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” as amended. As a result, salaries and employee benefits expense in 2003 included $11 million of stock-based compensation in the recent quarter and $10 million in each of the first two quarters. After tax effect, stock-based compensation lowered 2003’s net income by $9 million ($.07 per diluted share) in the third quarter, $7 million ($.06 per diluted share) in the second quarter, and $7 million ($.08 per diluted share) in the first quarter. Using the retroactive restatement method described in SFAS No. 148, which amended SFAS No. 123, salaries and employee benefits expense for the first three quarters of 2002 were each restated to include $10 million of stock-based compensation, resulting in a reduction of previously
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reported net income of $7 million, or $.07 per diluted share, in each of the 2002 quarters. These expenses are included in both the GAAP and supplemental non-GAAP results of operations discussed herein.
Taxable-equivalent Net Interest Income. Growth in average loans outstanding resulted in a jump in taxable-equivalent net interest income of 36% to $435 million in the third quarter of 2003 from $319 million in the year-earlier quarter. Including the impact of the $10.3 billion of loans obtained in the April 1, 2003 acquisition of Allfirst, average loans outstanding increased 43% to $37.0 billion in 2003’s third quarter from $25.8 billion in the corresponding 2002 period. Net interest margin, or taxable-equivalent net interest income expressed as an annualized percentage of average earning assets, declined to 4.02% in the recent quarter from 4.38% in the year-earlier period. The decrease in net interest margin was largely the result of the yields on earning assets and rates paid on interest-bearing liabilities obtained in the Allfirst acquisition.
Provision for Credit Losses/Asset Quality. The provision for credit losses totaled $34 million in the recent quarter, compared with $37 million a year earlier. Net charge-offs of loans during the third quarter of 2003 were $16 million, down from $36 million in the year-earlier period. During 2002’s third quarter, M&T charged off the entire $17 million carrying value of two commercial leases with a major airline company that filed for bankruptcy protection. Net charge-offs of loans acquired from Allfirst during the recent quarter were not significant. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .17% in 2003’s third quarter, improved from .55% in the corresponding 2002 period. Loans classified as nonperforming totaled $285 million, or .77% of
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total loans at the recent quarter-end, compared with $227 million or .86% at September 30, 2002. Loans past due 90 days or more and accruing interest were $174 million at September 30, 2003, up from $148 million a year earlier. Included in these loans at September 30, 2003 and 2002 were $117 million and $109 million, respectively, of one-to-four family residential mortgage loans serviced by M&T and repurchased from the Government National Mortgage Association. The outstanding principal balances of these loans, which were repurchased to reduce servicing costs, are fully guaranteed by government agencies. In general, the remaining portion of accruing loans past due 90 days or more are either also guaranteed by government agencies or well-secured by collateral. Included in the September 30, 2003 totals of nonperforming loans and loans past due 90 days or more and accruing interest were loans obtained in the Allfirst acquisition of $82 million and $29 million, respectively. Assets taken in foreclosure of defaulted loans were $20 million at September 30, 2003 and 2002.
Allowance for Credit Losses. The allowance for credit losses totaled $621 million, or 1.67% of total loans, at September 30, 2003, compared with $437 million, or 1.66%, a year earlier. On the April 1, 2003 acquisition date, Allfirst had an allowance for credit losses of $146 million, or 1.43% of Allfirst’s loans then outstanding. Immediately following the April 1 merger, the combined balance sheet of M&T and Allfirst included an allowance for credit losses of $591 million that was equal to 1.62% of the $36.5 billion of outstanding loans. The ratio of M&T’s allowance for credit losses to nonperforming loans was 218% at September 30, 2003 and 193% a year earlier.
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Noninterest Income and Expense. Noninterest income in the third quarter of 2003 grew to $232 million, 80% higher than $128 million in the three-month period ended September 30, 2002. Approximately $90 million of the increase was attributable to revenues related to operations in market areas associated with the former Allfirst franchise. Higher mortgage banking revenues and service charges on deposit accounts also contributed to the improvement.
Noninterest expense in 2003’s third quarter totaled $396 million, up 62% from $244 million in the year-earlier quarter. Included in such amounts are expenses considered to be “nonoperating” in nature consisting of the previously noted amortization of core deposit and other intangible assets of $23 million in 2003 and $13 million in 2002, and merger-related expenses of $19 million in 2003. There were no merger-related expenses in 2002. Exclusive of these nonoperating expenses, noninterest operating expenses were $355 million in the recent quarter, compared with $231 million in the third quarter of 2002. The increase in operating expenses was largely related to operations formerly associated with Allfirst and to higher incentive compensation costs. Partially offsetting these higher expenses was a $12 million reversal of a valuation allowance for possible impairment of capitalized residential mortgage servicing rights during the recently completed quarter. The partial reduction of the valuation allowance reflects the increase in value of capitalized mortgage servicing rights resulting from higher residential mortgage loan interest rates as compared with June 30, 2003. The higher interest rates have resulted in significant decreases in the expected rate of residential mortgage loan prepayments used in calculating the estimated fair value of capitalized servicing rights. M&T had recognized an $18 million provision for impairment of capitalized mortgage
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servicing rights in the second quarter of 2003, reflecting the impact of declining interest rates during that quarter on the value of such rights. In 2002, provisions for impairment of capitalized servicing rights during the three and nine-month periods ended September 30 were $16 million and $19 million, respectively. Capitalized residential mortgage servicing rights, net of valuation allowance, are included in “other assets” in M&T’s consolidated balance sheet and totaled $106 million and $109 million at September 30, 2003 and 2002, respectively. Residential mortgage loans serviced for others totaled approximately $12 billion at September 30, 2003 and 2002.
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 sales of bank investment securities), measures the relationship of operating expenses to revenues. M&T’s efficiency ratio was 53.2% in the third quarter of 2003, compared with 51.6% in the year-earlier period. The higher ratio in 2003 reflects the impact of the acquired Allfirst operations being integrated with those of M&T.
Commenting on M&T’s third quarter results, Michael P. Pinto, Executive Vice President and Chief Financial Officer, stated, “We are pleased with the progress being made in integrating Allfirst’s operations into those of M&T. In particular, the transfer of information from Allfirst’s major data processing systems over the July 4th weekend went extremely well. The success of this significant event resulted from the hard work of many dedicated employees and is reflected in M&T’s financial results for the third quarter. We remain confident at this time that M&T’s full-year results for 2003, after excluding Allfirst merger expenses, will be in line with current analysts’ estimates.”
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Balance Sheet. M&T had total assets of $50.3 billion at September 30, 2003, up from $34.2 billion a year earlier. Loans and leases, net of unearned discount, rose 41% to $37.2 billion at the recent quarter-end from $26.3 billion at September 30, 2002. Deposits totaled $32.4 billion at September 30, 2003, up from $22.5 billion at the end of 2002’s third quarter. Total assets, loans and deposits obtained in the Allfirst transaction were $16 billion, $10 billion and $11 billion, respectively. Total stockholders’ equity was $5.6 billion at September 30, 2003, representing 11.09% of total assets, compared with $3.1 billion or 9.02% a year earlier. Common stockholders’ equity per share was $46.49 and $33.52 at September 30, 2003 and 2002, respectively. Tangible equity per common share was $20.71 at September 30, 2003, compared with $20.63 at September 30, 2002. In the calculation of tangible equity per common share, stockholders’ equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances, which aggregated $3.1 billion and $1.2 billion at September 30, 2003 and 2002, respectively.
Conference Call. Investors will have an opportunity to listen to M&T’s conference call to discuss third quarter financial results at 10:00 a.m. Eastern Time today, October 10, 2003. 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. 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 October 11, 2003 by calling 877-519-4471, code 4020789 and 973-341-3080 for international participants. The event will also be archived and available by 1:00 p.m. today on M&T’s website at http://ir.mandtbank.com/conference.cfm.
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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; credit losses; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock options to be issued in future periods; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively; regulatory supervision and oversight, including required capital levels; 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, including environmental regulations; 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; 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 and acquisition activities compared with M&T’s initial expectations, including the full
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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, including interest rate and currency exchange rate fluctuations, and other Future Factors.
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Financial Highlights
| Three months ended | Nine months ended | ||||||||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||||||||
| Amounts in thousands, | |||||||||||||||||||||||||
| except per share | 2003 | 2002 | Change | 2003 | 2002 | Change | |||||||||||||||||||
Performance |
|||||||||||||||||||||||||
Net income |
$ | 156,463 | 110,117 | 42 | % | $ | 407,041 | 338,201 | 20 | % | |||||||||||||||
Per common share: |
|||||||||||||||||||||||||
Basic earnings |
$ | 1.31 | 1.20 | 9 | % | $ | 3.68 | 3.65 | 1 | % | |||||||||||||||
Diluted earnings |
1.28 | 1.16 | 10 | 3.59 | 3.53 | 2 | |||||||||||||||||||
Cash dividends |
$ | .30 | .25 | 20 | $ | .90 | .75 | 20 | |||||||||||||||||
Common shares outstanding: |
|||||||||||||||||||||||||
Average — diluted (1) |
122,593 | 94,942 | 29 | % | 113,441 | 95,714 | 19 | % | |||||||||||||||||
Period end (2) |
119,857 | 91,992 | 30 | 119,857 | 91,992 | 30 | |||||||||||||||||||
Return on (annualized): |
|||||||||||||||||||||||||
Average total assets |
1.24 | % | 1.37 | % | 1.23 | % | 1.43 | % | |||||||||||||||||
Average common stockholders’ equity |
11.37 | % | 14.42 | % | 11.55 | % | 15.12 | % | |||||||||||||||||
Taxable-equivalent net interest income |
$ | 434,780 | 318,721 | 36 | % | $ | 1,189,568 | 936,477 | 27 | % | |||||||||||||||
Yield on average earning assets |
5.26 | % | 6.38 | % | 5.52 | % | 6.54 | % | |||||||||||||||||
Cost of interest-bearing liabilities |
1.51 | % | 2.34 | % | 1.66 | % | 2.49 | % | |||||||||||||||||
Net interest spread |
3.75 | % | 4.04 | % | 3.86 | % | 4.05 | % | |||||||||||||||||
Contribution of interest-free funds |
.27 | % | .34 | % | .27 | % | .34 | % | |||||||||||||||||
Net interest margin |
4.02 | % | 4.38 | % | 4.13 | % | 4.39 | % | |||||||||||||||||
Net charge-offs to average total
net loans (annualized) |
.17 | % | .55 | % | .26 | % | .40 | % | |||||||||||||||||
Net operating results (3) |
|||||||||||||||||||||||||
Net operating income |
$ | 182,670 | 118,073 | 55 | % | $ | 479,337 | 363,483 | 32 | % | |||||||||||||||
Diluted net operating earnings
per common share |
1.49 | 1.24 | 20 | 4.23 | 3.80 | 11 | |||||||||||||||||||
Return on (annualized): |
|||||||||||||||||||||||||
Average tangible assets |
1.55 | % | 1.52 | % | 1.54 | % | 1.60 | % | |||||||||||||||||
Average tangible common equity |
30.67 | % | 25.46 | % | 28.55 | % | 27.14 | % | |||||||||||||||||
Efficiency ratio |
53.22 | % | 51.59 | % | 53.47 | % | 51.17 | % | |||||||||||||||||
| At September 30 | |||||||||||||||||||||||||
| Loan quality | 2003 | 2002 | Change | ||||||||||||||||||||||
Nonaccrual loans |
$ | 278,300 | 218,617 | 27 | % | ||||||||||||||||||||
Renegotiated loans |
6,888 | 8,402 | -18 | ||||||||||||||||||||||
Total nonperforming loans |
$ | 285,188 | 227,019 | 26 | % | ||||||||||||||||||||
Accruing loans past due 90 days or more |
$ | 174,224 | 147,867 | 18 | % | ||||||||||||||||||||
Nonperforming loans to total net loans |
.77 | % | .86 | % | |||||||||||||||||||||
Allowance for credit losses
to total net loans |
1.67 | % | 1.66 | % | |||||||||||||||||||||
| (1) | Includes common stock equivalents. | |
| (2) | Includes common stock issuable under deferred compensation plans. | |
| (3) | Excludes merger-related expenses and amortization and balances related to goodwill and core deposit and other intangible assets which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. A reconciliation of net income and net operating income appears on page 4. |
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Condensed Consolidated Statement of Income
| Three months ended | Nine months ended | ||||||||||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||||||||||
| Dollars in thousands | 2003 | 2002 | Change | 2003 | 2002 | Change | |||||||||||||||||||||
Interest income |
$ | 564,137 | 461,271 | 22 | % | $ | 1,576,092 | 1,383,883 | 14 | % | |||||||||||||||||
Interest expense |
133,539 | 146,080 | -9 | 398,637 | 458,156 | -13 | |||||||||||||||||||||
Net interest income |
430,598 | 315,191 | 37 | 1,177,455 | 925,727 | 27 | |||||||||||||||||||||
Provision for credit losses |
34,000 | 37,000 | -8 | 103,000 | 89,000 | 16 | |||||||||||||||||||||
Net interest income after
provision for credit losses |
396,598 | 278,191 | 43 | 1,074,455 | 836,727 | 28 | |||||||||||||||||||||
Other income |
|||||||||||||||||||||||||||
Mortgage banking revenues |
38,782 | 30,336 | 28 | 117,161 | 81,529 | 44 | |||||||||||||||||||||
Service charges on deposit accounts |
90,927 | 43,072 | 111 | 220,158 | 123,408 | 78 | |||||||||||||||||||||
Trust income |
32,314 | 14,432 | 124 | 80,153 | 45,555 | 76 | |||||||||||||||||||||
Brokerage services income |
13,320 | 11,055 | 20 | 37,729 | 34,052 | 11 | |||||||||||||||||||||
Trading account and foreign exchange gains |
4,666 | 287 | 1526 | 10,996 | 1,716 | 541 | |||||||||||||||||||||
Gain (loss) on sales of bank investment securities |
58 | (660 | ) | — | 541 | (659 | ) | — | |||||||||||||||||||
Other revenues from operations |
51,527 | 29,824 | 73 | 130,600 | 88,152 | 48 | |||||||||||||||||||||
Total other income |
231,594 | 128,346 | 80 | 597,338 | 373,753 | 60 | |||||||||||||||||||||
Other expense |
|||||||||||||||||||||||||||
Salaries and employee benefits |
214,118 | 123,388 | 74 | 543,673 | 372,543 | 46 | |||||||||||||||||||||
Equipment and net occupancy |
48,450 | 28,073 | 73 | 123,497 | 81,004 | 52 | |||||||||||||||||||||
Printing, postage and supplies |
9,092 | 6,988 | 30 | 27,031 | 18,892 | 43 | |||||||||||||||||||||
Amortization of core deposit and other
intangible assets |
22,538 | 13,011 | 73 | 56,807 | 39,696 | 43 | |||||||||||||||||||||
Other costs of operations |
102,202 | 72,511 | 41 | 318,817 | 198,387 | 61 | |||||||||||||||||||||
Total other expense |
396,400 | 243,971 | 62 | 1,069,825 | 710,522 | 51 | |||||||||||||||||||||
Income before income taxes |
231,792 | 162,566 | 43 | 601,968 | 499,958 | 20 | |||||||||||||||||||||
Applicable income taxes |
75,329 | 52,449 | 44 | 194,927 | 161,757 | 21 | |||||||||||||||||||||
Net income |
$ | 156,463 | 110,117 | 42 | % | $ | 407,041 | 338,201 | 20 | % | |||||||||||||||||
Summary of merger-related expenses included above: |
|||||||||||||||||||||||||||
Salaries and employee benefits |
$ | 4,278 | — | $ | 8,116 | — | |||||||||||||||||||||
Equipment and net occupancy |
758 | — | 1,654 | — | |||||||||||||||||||||||
Printing, postage and supplies |
614 | — | 2,975 | — | |||||||||||||||||||||||
Other costs of operations |
13,601 | — | 45,109 | — | |||||||||||||||||||||||
Total merger-related expenses |
$ | 19,251 | — | $ | 57,854 | — | |||||||||||||||||||||
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15-15-15-15-15
M&T BANK CORPORATION
Condensed Consolidated Balance Sheet
| September 30 | |||||||||||||
| Dollars in thousands | 2003 | 2002 | Change | ||||||||||
ASSETS |
|||||||||||||
Cash and due from banks |
$ | 2,242,825 | 1,197,615 | 87 | % | ||||||||
Money-market assets |
306,560 | 295,413 | 4 | ||||||||||
Investment securities |
5,957,406 | 4,181,474 | 42 | ||||||||||
Loans and leases, net of unearned discount |
37,159,579 | 26,308,619 | 41 | ||||||||||
Less: allowance for credit losses |
621,417 | 437,340 | 42 | ||||||||||
Net loans and leases |
36,538,162 | 25,871,279 | 41 | ||||||||||
Goodwill |
2,904,081 | 1,097,553 | 165 | ||||||||||
Core deposit and other intangible assets |
261,548 | 130,577 | 100 | ||||||||||
Other assets |
2,048,257 | 1,399,313 | 46 | ||||||||||
Total assets |
$ | 50,258,839 | 34,173,224 | 47 | % | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||||||||
Noninterest-bearing deposits at U.S. offices |
$ | 8,120,990 | 4,000,097 | 103 | % | ||||||||
Other deposits at U.S. offices |
21,963,294 | 16,769,254 | 31 | ||||||||||
Deposits at foreign offices |
2,330,071 | 1,770,820 | 32 | ||||||||||
Total deposits |
32,414,355 | 22,540,171 | 44 | ||||||||||
Short-term borrowings |
4,903,249 | 3,810,741 | 29 | ||||||||||
Accrued interest and other liabilities |
1,169,951 | 424,667 | 175 | ||||||||||
Long-term borrowings |
6,199,392 | 4,314,359 | 44 | ||||||||||
Total liabilities |
44,686,947 | 31,089,938 | 44 | ||||||||||
Stockholders’ equity (1) |
5,571,892 | 3,083,286 | 81 | ||||||||||
Total liabilities and stockholders’ equity |
$ | 50,258,839 | 34,173,224 | 47 | % | ||||||||
| (1) | Reflects accumulated other comprehensive income, net of applicable income taxes, of $40.6 million at September 30, 2003 and $41.8 million at September 30, 2002. |
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16-16-16-16-16
M&T BANK CORPORATION
Condensed Consolidated Average Balance Sheet
and Annualized Taxable-equivalent Rates
| Three months ended | Nine months ended | ||||||||||||||||||||||||||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||||||||||||||||||||||||||
| Dollars in millions | 2003 | 2002 | Change | 2003 | 2002 | Change | |||||||||||||||||||||||||||||||||||||
| in | in | ||||||||||||||||||||||||||||||||||||||||||
| Balance | Rate | Balance | Rate | balance | Balance | Rate | Balance | Rate | balance | ||||||||||||||||||||||||||||||||||
ASSETS |
|||||||||||||||||||||||||||||||||||||||||||
Money-market assets |
$ | 95 | 1.25 | % | 121 | 1.74 | % | -22 | % | $ | 255 | 1.27 | % | 218 | 1.77 | % | 17 | % | |||||||||||||||||||||||||
Investment securities |
5,837 | 4.23 | 2,942 | 5.60 | 98 | 5,051 | 4.57 | 2,914 | 5.81 | 73 | |||||||||||||||||||||||||||||||||
Loans
and leases, net of unearned discount |
|||||||||||||||||||||||||||||||||||||||||||
Commercial, financial, etc. |
9,514 | 4.06 | 5,181 | 5.07 | 84 | 8,295 | 4.28 | 5,103 | 5.18 | 63 | |||||||||||||||||||||||||||||||||
Real estate — commercial |
12,165 | 5.95 | 9,536 | 6.90 | 28 | 11,313 | 6.19 | 9,447 | 7.03 | 20 | |||||||||||||||||||||||||||||||||
Real estate — consumer |
4,303 | 5.99 | 4,147 | 6.98 | 4 | 3,783 | 6.18 | 4,238 | 7.05 | -11 | |||||||||||||||||||||||||||||||||
Consumer |
10,971 | 5.90 | 6,964 | 6.83 | 58 | 9,775 | 6.11 | 6,598 | 6.99 | 48 | |||||||||||||||||||||||||||||||||
Total loans and leases, net |
36,953 | 5.43 | 25,828 | 6.49 | 43 | 33,166 | 5.70 | 25,386 | 6.66 | 31 | |||||||||||||||||||||||||||||||||
Total earning assets |
42,885 | 5.26 | 28,891 | 6.38 | 48 | 38,472 | 5.52 | 28,518 | 6.54 | 35 | |||||||||||||||||||||||||||||||||
Goodwill |
2,904 | 1,098 | 165 | 2,305 | 1,098 | 110 | |||||||||||||||||||||||||||||||||||||
Core deposit and other intangible assets |
272 | 137 | 99 | 227 | 150 | 52 | |||||||||||||||||||||||||||||||||||||
Other assets |
3,963 | 1,782 | 122 | 3,073 | 1,752 | 75 | |||||||||||||||||||||||||||||||||||||
Total assets |
$ | 50,024 | 31,908 | 57 | % | $ | 44,077 | 31,518 | 40 | % | |||||||||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
|||||||||||||||||||||||||||||||||||||||||||
NOW accounts |
$ | 1,227 | .34 | 753 | .54 | 63 | % | $ | 975 | .36 | 750 | .53 | 30 | % | |||||||||||||||||||||||||||||
Savings deposits |
14,320 | .70 | 8,950 | 1.23 | 60 | 12,808 | .80 | 8,745 | 1.25 | 46 | |||||||||||||||||||||||||||||||||
Time deposits |
6,739 | 2.33 | 7,154 | 3.00 | -6 | 6,704 | 2.44 | 7,642 | 3.34 | -12 | |||||||||||||||||||||||||||||||||
Deposits at foreign offices |
1,340 | .95 | 458 | 1.55 | 193 | 1,130 | 1.09 | 447 | 1.53 | 153 | |||||||||||||||||||||||||||||||||
Total interest-bearing deposits |
23,626 | 1.16 | 17,315 | 1.94 | 36 | 21,617 | 1.30 | 17,584 | 2.13 | 23 | |||||||||||||||||||||||||||||||||
Short-term borrowings |
4,870 | 1.03 | 3,199 | 1.76 | 52 | 4,388 | 1.17 | 2,947 | 1.76 | 49 | |||||||||||||||||||||||||||||||||
Long-term borrowings |
6,595 | 3.12 | 4,306 | 4.34 | 53 | 6,050 | 3.30 | 4,053 | 4.57 | 49 | |||||||||||||||||||||||||||||||||
Total interest-bearing liabilities |
35,091 | 1.51 | 24,820 | 2.34 | 41 | 32,055 | 1.66 | 24,584 | 2.49 | 30 | |||||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
8,328 | 3,676 | 127 | 6,496 | 3,573 | 82 | |||||||||||||||||||||||||||||||||||||
Other liabilities |
1,144 | 382 | 200 | 816 | 371 | 120 | |||||||||||||||||||||||||||||||||||||
Total liabilities |
44,563 | 28,878 | 54 | 39,367 | 28,528 | 38 | |||||||||||||||||||||||||||||||||||||
Stockholders’ equity |
5,461 | 3,030 | 80 | 4,710 | 2,990 | 58 | |||||||||||||||||||||||||||||||||||||
Total liabilities and
stockholders’ equity |
$ | 50,024 | 31,908 | 57 | % | $ | 44,077 | 31,518 | 40 | % | |||||||||||||||||||||||||||||||||
Net interest spread |
3.75 | 4.04 | 3.86 | 4.05 | |||||||||||||||||||||||||||||||||||||||
Contribution of interest-free funds |
.27 | .34 | .27 | .34 | |||||||||||||||||||||||||||||||||||||||
Net interest margin |
4.02 | % | 4.38 | % | 4.13 | % | 4.39 | % | |||||||||||||||||||||||||||||||||||
# # #