Filed by M&T Bank Corporation
Pursuant to Rule 425 under the Securities Act of 1933 and
Deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Pursuant to Rule 425 under the Securities Act of 1933 and
Deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Partners Trust Financial Group, Inc.
Commission File No. 001-31277
Commission File No. 001-31277
On October 11, 2007, M&T Bank Corporation issued the following press release announcing its
results of operations for the quarter ended September 30, 2007:
INVESTOR CONTACT:
|
Donald J. MacLeod (716) 842-5138 |
FOR IMMEDIATE RELEASE: October 11, 2007 |
||
MEDIA CONTACT:
|
C. Michael Zabel (716) 842-5385 |
M&T BANK CORPORATION ANNOUNCES THIRD QUARTER RESULTS
BUFFALO, NEW YORK — M&T Bank Corporation (“M&T”)(NYSE: MTB) today reported its results of
operations for the quarter ended September 30, 2007.
GAAP Results of Operations. Diluted earnings per share measured in accordance with
generally accepted accounting principles (“GAAP”) for the
third quarter of 2007 were $1.83,
compared with $1.85 in the similar period of 2006. On the same basis, net income in the recent
quarter totaled $199 million, compared with $210 million in the third quarter of 2006. GAAP-basis
net income for the third quarter of 2007 expressed as an annualized rate of return on average
assets and average common stockholders’ equity was 1.37% and
12.78%, respectively, compared with
1.49% and 13.72%, respectively, in the corresponding 2006 quarter.
The recent quarter’s results include an increase in the provision for credit losses
reflecting, in part, higher net charge-offs and nonperforming loans. In addition, M&T’s February
2007 investment in Bayview Lending Group, LLC (“BLG”) resulted in a reduction of net income of $9
million (after tax effect), or $.09 per diluted share, inclusive of interest expense to fund the
investment. BLG’s results were impacted by the timing of the recognition of gains from loan sales
and securitizations. René F. Jones, Executive Vice President and Chief Financial Officer of
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M&T, observed, “Higher credit costs, slow revenue growth and the impact of our investment in
BLG hindered M&T’s performance in the recent quarter. We were, however, encouraged with loan
growth of more than $1 billion experienced late in the quarter and our continued ability to
effectively manage operating expenses.”
For the nine-month period ended September 30, 2007, GAAP-basis diluted earnings per share
totaled $5.34, compared with $5.49 in the year-earlier period. On the same basis, net income for
the first three quarters of 2007 was $589 million. In the year earlier period net income was $626
million. GAAP-basis net income for the nine months ended September 30, 2007 expressed as an
annualized rate of return on average assets and average common stockholders’ equity was 1.37% and
12.69%, respectively, compared with 1.51% and 14.01%, respectively, in the corresponding nine-month
period of 2006.
Supplemental Reporting of Non-GAAP Results of Operations. M&T consistently provides
supplemental reporting of its results on a “net operating” or “tangible” basis, from which M&T
excludes the after-tax effect of amortization of core deposit and other intangible assets (and the
related goodwill, core deposit intangible and other intangible asset balances, net of applicable
deferred tax amounts) and expenses associated with merging acquired operations into M&T, since such
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 investors understand the effect of acquisition activity in reported results. Amortization of
core deposit and other intangible assets, after tax effect, totaled $10 million ($.09 per diluted
share) in the recent quarter, compared with $12 million ($.10 per diluted share) in the third
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quarter of 2006. Similar amortization charges, after tax effect, for the nine-month periods ended
September 30, 2007 and 2006 were $31 million or $.28 per diluted share and $27 million or $.23 per
diluted share, respectively. The after-tax effect of expenses related to the acquisition and
integration of branch offices acquired on June 30, 2006 were $1 million during the third quarter of
2006. Such expenses totaled $3 million, after tax effect, or $.03 of diluted earnings per share,
during the nine months ended September 30, 2006. There were no similar expenses in 2007.
Diluted net operating earnings per share, which exclude amortization of core deposit and other
intangible assets and merger-related expenses, were $1.92 in the third quarter of 2007, compared
with $1.96 in the year-earlier quarter. Net operating income totaled
$209 million and $223 million
in the third quarter of 2007 and 2006, respectively. Expressed as an annualized rate of return on
average tangible assets and average tangible stockholders’
equity, net operating income was 1.51%
and 26.80%, respectively, in 2007’s third quarter, compared with 1.67% and 30.22% in the
year-earlier quarter.
Diluted net operating earnings per share for the nine-month period ended September 30, 2007
aggregated $5.62, compared with $5.75 in the corresponding period of 2006. Net operating income
totaled $620 million for the first nine months of 2007 and $656 million in the similar 2006 period.
Expressed as an annualized rate of return on average tangible assets and average tangible equity,
net operating income for the first three quarters of 2007 was 1.52%
and 26.74%, respectively,
compared with 1.67% and 29.86% in the first nine months of 2006.
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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 | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (in thousands, except per share) | ||||||||||||||||
Diluted earnings per share |
$ | 1.83 | 1.85 | 5.34 | 5.49 | |||||||||||
Amortization of core deposit
and other intangible assets (1) |
.09 | .10 | .28 | .23 | ||||||||||||
Merger-related expenses (1) |
— | .01 | — | .03 | ||||||||||||
Diluted net operating earnings
per share |
$ | 1.92 | 1.96 | 5.62 | 5.75 | |||||||||||
Net income |
$ | 199,187 | 210,370 | 589,329 | 625,860 | |||||||||||
Amortization of core deposit
and other intangible assets (1) |
9,562 | 12,154 | 30,772 | 27,014 | ||||||||||||
Merger-related expenses (1) |
— | 704 | — | 3,048 | ||||||||||||
Net operating income |
$ | 208,749 | 223,228 | 620,101 | 655,922 | |||||||||||
(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 | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (in millions) | ||||||||||||||||
Average assets |
$ | 57,862 | 56,158 | 57,533 | 55,591 | |||||||||||
Goodwill |
(2,909 | ) | (2,909 | ) | (2,909 | ) | (2,908 | ) | ||||||||
Core deposit and other
intangible assets |
(208 | ) | (281 | ) | (224 | ) | (167 | ) | ||||||||
Deferred taxes |
21 | 36 | 24 | 39 | ||||||||||||
Average tangible assets |
$ | 54,766 | 53,004 | 54,424 | 52,555 | |||||||||||
Average equity |
$ | 6,186 | 6,085 | 6,209 | 5,973 | |||||||||||
Goodwill |
(2,909 | ) | (2,909 | ) | (2,909 | ) | (2,908 | ) | ||||||||
Core deposit and other
intangible assets |
(208 | ) | (281 | ) | (224 | ) | (167 | ) | ||||||||
Deferred taxes |
21 | 36 | 24 | 39 | ||||||||||||
Average tangible equity |
$ | 3,090 | 2,931 | 3,100 | 2,937 | |||||||||||
Taxable-equivalent Net Interest Income. Taxable-equivalent net interest income
was $473 million in the third quarter of 2007, up 2% from $462 million in the year-earlier quarter.
Growth in average loans and leases, which increased 5% to $43.8 billion in 2007’s third quarter
from $41.7 billion in the third quarter of 2006, was the largest contributor to the rise. Such
growth was largely attributable to increases in average outstanding balances of $803 million or 7%
in commercial loans and $862 million or 17% in residential real estate loans. The positive impact
of that growth on taxable-equivalent net interest income was offset by a year-over-year decline in
the net interest margin, or taxable-equivalent net interest income expressed as an annualized
percentage of average earning assets, of 3 basis points (hundredths of one percent). The net
interest margin was 3.65% in
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2007’s third quarter and 3.68% in the corresponding period of 2006. The net interest margin was
3.67% in the second quarter of 2007.
Provision for Credit Losses/Asset Quality. Reflecting current credit conditions that
have contributed to higher net charge-offs, delinquencies and nonperforming loans at M&T and
throughout the banking industry, M&T’s provision for credit losses increased to $34 million in the
recent quarter from $17 million in the third quarter of 2006.
Net charge-offs of loans during the third quarter of 2007 and 2006 were $22 million and $17
million, respectively. Expressed as an annualized percentage of average loans outstanding, net
charge-offs were .20% in the recently completed quarter, compared with .16% in the corresponding
2006 period. Loans classified as nonperforming totaled $371 million, or .83% of total loans at the
recent quarter-end, up from $180 million or .43% at September 30, 2006, $224 million or .52% at
December 31, 2006 and $296 million or .68% of total loans at June 30, 2007. The increase from June
30, 2007 reflects additional loans to residential home builders and developers of approximately
$42 million and a $26 million increase in residential real estate loans classified as
nonperforming. The higher level of nonperforming residential real estate loans
substantially resulted from delinquencies in the portfolio of alternative (“Alt-A”) residential
mortgage loans transferred to M&T’s held-for-investment loan portfolio in March 2007. Loans past
due 90 days or more and accruing interest totaled $140 million at September 30, 2007, compared with
$112 million a year earlier. Included in these past due but accruing amounts were loans guaranteed
by government-related entities of $70 million and $76 million, respectively. Assets taken in
foreclosure of defaulted loans were $22 million at September 30, 2007, up from $14 million a year
earlier.
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Allowance
for Credit Losses. The allowance for credit losses totaled $680 million, or
1.52% of total loans, at September 30, 2007, compared with $646 million, or 1.54%, a year earlier
and $650 million or 1.51% at December 31, 2006. The ratio of M&T’s allowance for credit losses to
nonperforming loans was 183%, 360% and 290% at September 30, 2007, September 30, 2006 and December
31, 2006, respectively.
Noninterest Income and Expense. Noninterest income in the third quarter of 2007
aggregated $253 million, down 8% from $274 million in the year-earlier quarter. The recent
quarter’s total includes M&T’s pro-rata portion of the operating loss of BLG of $11 million while
last year’s third quarter reflects the impact of a $13 million gain from the accelerated
recognition of a purchase accounting premium related to the call of an FHLB borrowing assumed in an
acquisition. If the BLG operating results and the prior year gain are
excluded, noninterest income increased to $264 million in the third quarter of 2007 from $261 million in the
year-earlier period, despite a $5 million decrease in revenues from mortgage banking activities.
As already noted, M&T’s investment in BLG reduced M&T’s net income in the third quarter of
2007 by approximately $9 million (after tax effect), or $.09 per diluted share. The BLG investment
added $8 million to noninterest income and approximately $2 million (after tax effect), or $.02 per
diluted share, to M&T’s net income in the second quarter of 2007. Results from M&T’s investment in
BLG fluctuate from quarter to quarter depending on the timing of loan sales/securitizations
conducted by BLG. Through September 30, 2007, M&T’s pro-rata portion of the operating results of
BLG reduced noninterest income by $6 million and, including expenses associated with the
investment, reduced net income by approximately $10 million, or $.09 per diluted share.
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Noninterest expense in the third quarter of 2007 totaled $391 million, compared with $409
million in the third quarter of 2006. Included in such amounts are expenses considered to be
nonoperating in nature consisting of amortization of core deposit and other intangible assets of
$16 million in 2007 and $20 million in 2006 and acquisition-related expenses of $1 million in 2006
related to M&T’s June 30, 2006 transaction to acquire 21 banking offices in Western New York.
Exclusive of those nonoperating expenses, noninterest operating expenses were $375 million in the
recent quarter, compared with $388 million in the third quarter of 2006. Operating expenses in the
third quarter of 2006 reflected an $18 million charitable contribution made by M&T Bank, M&T’s
principal banking subsidiary, to The M&T Charitable Foundation, a tax exempt private charitable
foundation, and a $5 million addition to the valuation allowance for the impairment of capitalized
mortgage servicing rights. There were no similar expenses in the third quarter of 2007.
The efficiency ratio, or noninterest operating expenses divided by the sum of
taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from
bank investment securities), measures the relationship of operating expenses to revenues. M&T’s
efficiency ratio was 51.6% in the third quarter of 2007, compared with 52.8% in the year-earlier
period.
Balance Sheet. M&T had total assets of $60.0 billion at September 30, 2007, up from
$56.4 billion at September 30, 2006. Loans and leases, net of unearned discount, rose 6% to $44.8
billion at September 30, 2007 from $42.1 billion a year earlier. Deposits aggregated $38.5 billion
at the recent quarter-end, compared with $39.1 billion at September 30, 2006. Total stockholders’
equity was $6.2 billion at each of September 30, 2007 and 2006, representing 10.40% and 10.91%,
respectively, of total assets.
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Common
stockholders’ equity per share was $58.40 and $55.58 at September 30, 2007 and 2006,
respectively. Tangible equity per common share was $29.48 at September 30, 2007, compared with
$27.15 at September 30, 2006. 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 at each
of September 30, 2007 and 2006.
During the recent quarter, M&T repurchased 675,000 shares of common stock at an average cost
per share of $105.28 under a plan authorized in February 2007 by M&T’s Board of Directors allowing
for the purchase of up to 5,000,000 shares of common stock. During the nine months ended September
30, 2007 M&T repurchased 4,389,800 shares of its common stock pursuant to authorized repurchase
plans at an average cost of $113.00 per share.
As previously announced, M&T has entered into a definitive agreement with Partners Trust
Financial Group, Inc. (“Partners Trust”), Utica, New York, providing for a merger between the two
companies. As of June 30, 2007, Partners Trust had approximately $3.7 billion of assets, including
$2.3 billion of loans, and $3.2 billion of liabilities, including $2.3 billion of deposits. The
merger is subject to a number of conditions, including the approval of various state and Federal
regulators and Partners Trust’s stockholders, and is expected to be completed in the fourth quarter
of 2007. In addition, in September 2007 M&T Bank announced that it had entered into a definitive
agreement with First Horizon National Corp. (“First Horizon”) to acquire First Horizon’s 13-branch
Mid-Atlantic franchise. Ten of the branches are located in the Greater Washington region and three
are in the Greater Baltimore area. M&T Bank will acquire approximately $226 million in loans, $201
million in deposits and $136 million in
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trust and investment assets under management. The transaction is subject to various regulatory
approvals and is expected to close in either the fourth quarter of 2007 or the first quarter of
2008.
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 Daylight Saving 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 conference ID #9287947. The conference call will also 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 12, 2007 by calling 877-519-4471, or 973-341-3080 for international
participants, and by making reference to ID #9287947. The event will also be archived and
available by 3:00 p.m. today on M&T’s website at http://ir.mandtbank.com/conference.cfm.
M&T is a bank holding company whose banking subsidiaries, M&T Bank and M&T Bank, National
Association, operate branch offices in New York, Pennsylvania, Maryland, Virginia, West Virginia,
Delaware, New Jersey and the District of Columbia.
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
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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 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 required capital levels;
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; 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.
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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.
Additional
Information about the M&T/Partners Trust Transaction:
In connection with the proposed merger, M&T has filed with the SEC a Registration Statement on
Form S-4 that includes a preliminary version of a Proxy Statement of Partners Trust and a
preliminary Prospectus of M&T, as well as other relevant documents concerning the proposed
transaction. The S-4 has not yet become effective. Following the S-4 being declared effective by
the SEC, Partners Trust intends to mail the final Proxy Statement to its shareholders. Such final
documents, however, are not currently available. Stockholders are urged to read the Registration
Statement and the final Proxy Statement/Prospectus regarding the merger when it becomes available
and any other relevant documents filed with the SEC or incorporated by reference in the final Proxy
Statement/Prospectus, if and when they become available, because they will contain important
information. You will be able to obtain a free copy of the final Proxy Statement/Prospectus, as
well as other filings containing information about M&T and Partners Trust at the SEC’s
Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of
charge, at http://www.mandtbank.com under the tab “About Us” and then under the heading
“Investor Relations” and then under “SEC Filings.” Copies of the final Proxy
Statement/Prospectus and the SEC filings that will be
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incorporated by reference in the final Proxy
Statement/Prospectus can also be obtained, free of charge, by directing a request to Investor
Relations, One M&T Plaza, Buffalo, New York 14203, (716) 842-5138.
M&T and Partners Trust and their respective directors and executive officers may be deemed to
be participants in the solicitation of proxies from the stockholders of Partners Trust in
connection with the proposed merger. Information about the directors and executive officers of M&T
is set forth in the proxy statement for M&T’s
2007 annual meeting of stockholders, as filed with the SEC on a
Schedule 14A on March 5, 2007. Information about the directors and executive officers of
Partners Trust is set forth in the proxy statement for Partners Trust’s 2007 annual meeting
of stockholders, as filed with the SEC on a Schedule 14A on March 23, 2007. Additional
information regarding the interests of those participants and other persons who may be deemed
participants in the transaction may be obtained by reading the final Proxy Statement/Prospectus
regarding the proposed merger when it becomes available. You may obtain free copies of this
document as described in the preceding paragraph.
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Financial Highlights
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Financial Highlights
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||||||
| Amounts in thousands, except per share | 2007 | 2006 | Change | 2007 | 2006 | Change | ||||||||||||||||||
Performance |
||||||||||||||||||||||||
Net income |
$ | 199,187 | 210,370 | -5 | % | $ | 589,329 | 625,860 | -6 | % | ||||||||||||||
Per common share: |
||||||||||||||||||||||||
Basic earnings |
$ | 1.86 | 1.89 | -2 | % | $ | 5.45 | 5.62 | -3 | % | ||||||||||||||
Diluted earnings |
1.83 | 1.85 | -1 | 5.34 | 5.49 | -3 | ||||||||||||||||||
Cash dividends |
$ | .70 | .60 | 17 | $ | 1.90 | 1.65 | 15 | ||||||||||||||||
Common shares outstanding: |
||||||||||||||||||||||||
Average — diluted (1) |
108,957 | 113,897 | -4 | % | 110,342 | 114,069 | -3 | % | ||||||||||||||||
Period end (2) |
106,807 | 110,678 | -3 | 106,807 | 110,678 | -3 | ||||||||||||||||||
Return on (annualized): |
||||||||||||||||||||||||
Average total assets |
1.37 | % | 1.49 | % | 1.37 | % | 1.51 | % | ||||||||||||||||
Average common stockholders’ equity |
12.78 | % | 13.72 | % | 12.69 | % | 14.01 | % | ||||||||||||||||
Taxable-equivalent net interest income |
$ | 472,800 | 462,356 | 2 | % | $ | 1,395,234 | 1,365,367 | 2 | % | ||||||||||||||
Yield on average earning assets |
6.94 | % | 6.83 | % | 6.94 | % | 6.64 | % | ||||||||||||||||
Cost of interest-bearing liabilities |
3.88 | % | 3.77 | % | 3.88 | % | 3.54 | % | ||||||||||||||||
Net interest spread |
3.06 | % | 3.06 | % | 3.06 | % | 3.10 | % | ||||||||||||||||
Contribution of interest-free funds |
.59 | % | .62 | % | .60 | % | .59 | % | ||||||||||||||||
Net interest margin |
3.65 | % | 3.68 | % | 3.66 | % | 3.69 | % | ||||||||||||||||
Net charge-offs to average total
net loans (annualized) |
.20 | % | .16 | % | .19 | % | .14 | % | ||||||||||||||||
Net operating results (3) |
||||||||||||||||||||||||
Net operating income |
$ | 208,749 | 223,228 | -6 | % | $ | 620,101 | 655,922 | -5 | % | ||||||||||||||
Diluted net operating earnings per common share |
1.92 | 1.96 | -2 | 5.62 | 5.75 | -2 | ||||||||||||||||||
Return on (annualized): |
||||||||||||||||||||||||
Average tangible assets |
1.51 | % | 1.67 | % | 1.52 | % | 1.67 | % | ||||||||||||||||
Average tangible common equity |
26.80 | % | 30.22 | % | 26.74 | % | 29.86 | % | ||||||||||||||||
Efficiency ratio |
51.64 | % | 52.76 | % | 52.24 | % | 51.95 | % | ||||||||||||||||
| At September 30 | ||||||||||||||||||||||||
| 2007 | 2006 | Change | ||||||||||||||||||||||
Loan quality |
||||||||||||||||||||||||
Nonaccrual loans |
$ | 356,438 | 162,933 | 119 | % | |||||||||||||||||||
Renegotiated loans |
14,953 | 16,579 | -10 | |||||||||||||||||||||
Total nonperforming loans |
$ | 371,391 | 179,512 | 107 | % | |||||||||||||||||||
Accruing loans past due 90 days or more |
$ | 140,313 | 112,090 | 25 | % | |||||||||||||||||||
Nonperforming loans to total net loans |
.83 | % | .43 | % | ||||||||||||||||||||
Allowance for credit losses to total net loans |
1.52 | % | 1.54 | % | ||||||||||||||||||||
| (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. A reconciliation of net income and net operating income appears on page 4. |
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Condensed Consolidated Statement of Income
Condensed Consolidated Statement of Income
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||||||
| Dollars in thousands | 2007 | 2006 | Change | 2007 | 2006 | Change | ||||||||||||||||||
Interest income |
$ | 893,014 | 852,836 | 5 | % | $ | 2,632,239 | 2,443,019 | 8 | % | ||||||||||||||
Interest expense |
425,326 | 395,652 | 8 | 1,252,212 | 1,092,196 | 15 | ||||||||||||||||||
Net interest income |
467,688 | 457,184 | 2 | 1,380,027 | 1,350,823 | 2 | ||||||||||||||||||
Provision for credit losses |
34,000 | 17,000 | 100 | 91,000 | 52,000 | 75 | ||||||||||||||||||
Net interest income after
provision for credit losses |
433,688 | 440,184 | -1 | 1,289,027 | 1,298,823 | -1 | ||||||||||||||||||
Other income |
||||||||||||||||||||||||
Mortgage banking revenues |
31,643 | 36,806 | -14 | 81,062 | 112,882 | -28 | ||||||||||||||||||
Service charges on deposit accounts |
104,402 | 100,314 | 4 | 303,615 | 284,739 | 7 | ||||||||||||||||||
Trust income |
38,168 | 35,224 | 8 | 112,691 | 103,777 | 9 | ||||||||||||||||||
Brokerage services income |
14,978 | 14,794 | 1 | 46,844 | 43,999 | 6 | ||||||||||||||||||
Trading account and foreign exchange gains |
7,279 | 5,082 | 43 | 20,465 | 17,756 | 15 | ||||||||||||||||||
Gain (loss) on bank investment securities |
(138 | ) | 1,133 | — | 1,185 | 1,427 | — | |||||||||||||||||
Equity in earnings of Bayview Lending
Group, LLC |
(11,294 | ) | — | — | (5,594 | ) | — | — | ||||||||||||||||
Other revenues from operations |
67,861 | 80,549 | -16 | 212,231 | 224,855 | -6 | ||||||||||||||||||
Total other income |
252,899 | 273,902 | -8 | 772,499 | 789,435 | -2 | ||||||||||||||||||
Other expense |
||||||||||||||||||||||||
Salaries and employee benefits |
220,750 | 218,980 | 1 | 682,204 | 660,224 | 3 | ||||||||||||||||||
Equipment and net occupancy |
42,091 | 41,683 | 1 | 126,036 | 127,612 | -1 | ||||||||||||||||||
Printing, postage and supplies |
7,996 | 8,294 | -4 | 25,886 | 24,933 | 4 | ||||||||||||||||||
Amortization of core deposit and other
intangible assets |
15,702 | 19,936 | -21 | 50,515 | 44,321 | 14 | ||||||||||||||||||
Other costs of operations |
103,989 | 120,048 | -13 | 297,575 | 310,851 | -4 | ||||||||||||||||||
Total other expense |
390,528 | 408,941 | -5 | 1,182,216 | 1,167,941 | 1 | ||||||||||||||||||
Income before income taxes |
296,059 | 305,145 | -3 | 879,310 | 920,317 | -4 | ||||||||||||||||||
Applicable income taxes |
96,872 | 94,775 | 2 | 289,981 | 294,457 | -2 | ||||||||||||||||||
Net income |
$ | 199,187 | 210,370 | -5 | % | $ | 589,329 | 625,860 | -6 | % | ||||||||||||||
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16-16-16-16-16
M&T BANK CORPORATION
Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet
| September 30 | ||||||||||||
| Dollars in thousands | 2007 | 2006 | Change | |||||||||
ASSETS |
||||||||||||
Cash and due from banks |
$ | 1,295,377 | 1,336,737 | -3 | % | |||||||
Interest-bearing deposits at banks |
8,503 | 10,425 | -18 | |||||||||
Federal funds sold and agreements
to resell securities |
399,997 | 123,245 | 225 | |||||||||
Trading account assets |
180,019 | 176,450 | 2 | |||||||||
Investment securities |
8,003,015 | 7,626,300 | 5 | |||||||||
Loans and leases, net of unearned discount |
44,778,472 | 42,098,271 | 6 | |||||||||
Less: allowance for credit losses |
680,498 | 646,319 | 5 | |||||||||
Net loans and leases |
44,097,974 | 41,451,952 | 6 | |||||||||
Goodwill |
2,908,849 | 2,908,849 | — | |||||||||
Core deposit and other intangible assets |
200,195 | 270,910 | -26 | |||||||||
Other assets |
2,914,194 | 2,468,608 | 18 | |||||||||
Total assets |
$ | 60,008,123 | 56,373,476 | 6 | % | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
Noninterest-bearing deposits at U.S. offices |
$ | 7,565,762 | 7,754,061 | -2 | % | |||||||
Other deposits at U.S. offices |
24,719,291 | 27,348,917 | -10 | |||||||||
Deposits at foreign office |
6,188,126 | 3,975,811 | 56 | |||||||||
Total deposits |
38,473,179 | 39,078,789 | -2 | |||||||||
Short-term borrowings |
4,920,901 | 4,418,356 | 11 | |||||||||
Accrued interest and other liabilities |
859,847 | 1,001,600 | -14 | |||||||||
Long-term borrowings |
9,516,192 | 5,723,488 | 66 | |||||||||
Total liabilities |
53,770,119 | 50,222,233 | 7 | |||||||||
Stockholders’ equity (1) |
6,238,004 | 6,151,243 | 1 | |||||||||
Total liabilities and stockholders’ equity |
$ | 60,008,123 | 56,373,476 | 6 | % | |||||||
| (1) | Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $86.7 million at September 30, 2007 and $86.9 million at September 30, 2006. |
-more-
17-17-17-17-17
M&T BANK CORPORATION
Condensed Consolidated Average Balance Sheet
and Annualized Taxable-equivalent Rates
Condensed Consolidated Average Balance Sheet
and Annualized Taxable-equivalent Rates
| Three months ended | Nine months ended | |||||||||||||||||||||||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||||||||||||||||||||||
| Dollars in millions | 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||||
| Change in | Change in | |||||||||||||||||||||||||||||||||||||||
| Balance | Rate | Balance | Rate | balance | Balance | Rate | Balance | Rate | balance | |||||||||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits at banks |
$ | 8 | 3.27 | % | 13 | 3.67 | % | -40 | % | $ | 8 | 3.31 | % | 13 | 3.17 | % | -38 | % | ||||||||||||||||||||||
Federal funds sold and agreements
to resell securities |
248 | 5.47 | 136 | 7.23 | 82 | 333 | 6.00 | 66 | 6.58 | 402 | ||||||||||||||||||||||||||||||
Trading account assets |
59 | .98 | 92 | 2.97 | -36 | 60 | 1.09 | 97 | 2.89 | -38 | ||||||||||||||||||||||||||||||
Investment securities |
7,260 | 5.04 | 7,898 | 4.82 | -8 | 7,120 | 5.03 | 8,197 | 4.78 | -13 | ||||||||||||||||||||||||||||||
Loans and leases, net of unearned discount |
||||||||||||||||||||||||||||||||||||||||
Commercial, financial, etc. |
12,239 | 7.25 | 11,436 | 7.31 | 7 | 12,051 | 7.25 | 11,250 | 7.01 | 7 | ||||||||||||||||||||||||||||||
Real estate — commercial |
15,474 | 7.54 | 15,256 | 7.43 | 1 | 15,509 | 7.43 | 14,962 | 7.24 | 4 | ||||||||||||||||||||||||||||||
Real estate — consumer |
5,915 | 6.47 | 5,053 | 6.48 | 17 | 5,909 | 6.48 | 4,839 | 6.32 | 22 | ||||||||||||||||||||||||||||||
Consumer |
10,122 | 7.51 | 9,965 | 7.29 | 2 | 10,012 | 7.47 | 10,031 | 7.02 | — | ||||||||||||||||||||||||||||||
Total loans and leases, net |
43,750 | 7.28 | 41,710 | 7.22 | 5 | 43,481 | 7.27 | 41,082 | 7.03 | 6 | ||||||||||||||||||||||||||||||
Total earning assets |
51,325 | 6.94 | 49,849 | 6.83 | 3 | 51,002 | 6.94 | 49,455 | 6.64 | 3 | ||||||||||||||||||||||||||||||
Goodwill |
2,909 | 2,909 | — | 2,909 | 2,908 | — | ||||||||||||||||||||||||||||||||||
Core deposit and other intangible assets |
208 | 281 | -26 | 224 | 167 | 34 | ||||||||||||||||||||||||||||||||||
Other assets |
3,420 | 3,119 | 10 | 3,398 | 3,061 | 11 | ||||||||||||||||||||||||||||||||||
Total assets |
$ | 57,862 | 56,158 | 3 | % | $ | 57,533 | 55,591 | 3 | % | ||||||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
||||||||||||||||||||||||||||||||||||||||
NOW accounts |
$ | 464 | .84 | 434 | .88 | 7 | % | $ | 452 | .94 | 427 | .75 | 6 | % | ||||||||||||||||||||||||||
Savings deposits |
14,908 | 1.67 | 14,463 | 1.42 | 3 | 14,890 | 1.66 | 14,351 | 1.33 | 4 | ||||||||||||||||||||||||||||||
Time deposits |
9,880 | 4.70 | 13,016 | 4.65 | -24 | 10,680 | 4.73 | 12,532 | 4.37 | -15 | ||||||||||||||||||||||||||||||
Deposits at foreign office |
4,324 | 5.11 | 3,674 | 5.21 | 18 | 3,918 | 5.16 | 3,553 | 4.85 | 10 | ||||||||||||||||||||||||||||||
Total interest-bearing deposits |
29,576 | 3.17 | 31,587 | 3.19 | -6 | 29,940 | 3.20 | 30,863 | 2.96 | -3 | ||||||||||||||||||||||||||||||
Short-term borrowings |
5,228 | 5.19 | 4,441 | 5.31 | 18 | 5,213 | 5.27 | 4,441 | 4.93 | 17 | ||||||||||||||||||||||||||||||
Long-term borrowings |
8,661 | 5.51 | 5,660 | 5.79 | 53 | 7,963 | 5.54 | 5,959 | 5.49 | 34 | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities. |
43,465 | 3.88 | 41,688 | 3.77 | 4 | 43,116 | 3.88 | 41,263 | 3.54 | 4 | ||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
7,360 | 7,571 | -3 | 7,373 | 7,530 | -2 | ||||||||||||||||||||||||||||||||||
Other liabilities. |
851 | 814 | 5 | 835 | 825 | 1 | ||||||||||||||||||||||||||||||||||
Total liabilities |
51,676 | 50,073 | 3 | 51,324 | 49,618 | 3 | ||||||||||||||||||||||||||||||||||
Stockholders’ equity |
6,186 | 6,085 | 2 | 6,209 | 5,973 | 4 | ||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity |
$ | 57,862 | 56,158 | 3 | % | $ | 57,533 | 55,591 | 3 | % | ||||||||||||||||||||||||||||||
Net interest spread |
3.06 | 3.06 | 3.06 | 3.10 | ||||||||||||||||||||||||||||||||||||
Contribution of interest-free funds |
.59 | .62 | .60 | .59 | ||||||||||||||||||||||||||||||||||||
Net interest margin |
3.65 | % | 3.68 | % | 3.66 | % | 3.69 | % | ||||||||||||||||||||||||||||||||
###