Form 8-K

 

 

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): April 16, 2012

 

 

M&T BANK CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

New York   1-9861   16-0968385

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

One M&T Plaza, Buffalo, New York   14203
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (716) 842-5445

(NOT APPLICABLE)

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On April 16, 2012, M&T Bank Corporation announced its results of operations for the quarter ended March 31, 2012. The public announcement was made by means of a news release, the text of which is set forth in Exhibit 99 hereto.

The information in this Form 8-K, including Exhibit 99 attached hereto, is being furnished under Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall it be deemed incorporated by reference in any filing of M&T Bank Corporation under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

 

  (d) Exhibits.

 

    Exhibit No.     
  99   

NewsRelease dated April 16, 2012.

 

 

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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: April 16, 2012     By:   René F. Jones
     

René F. Jones

Executive Vice President

and Chief Financial Officer

 

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EXHIBIT INDEX

 

Exhibit No.

    
99    News Release dated April 16, 2012. Filed herewith.

 

 

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EX-99

Exhibit 99

 

INVESTOR CONTACT:

 

Donald J. MacLeod

(716) 842-5138

    

FOR IMMEDIATE RELEASE:

April 16, 2012

MEDIA CONTACT:

 

C. Michael Zabel

(716) 842-5385

    

M&T BANK CORPORATION ANNOUNCES FIRST QUARTER PROFITS

BUFFALO, NEW YORK — M&T Bank Corporation (“M&T”) (NYSE: MTB) today reported its results of operations for the quarter ended March 31, 2012.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the first quarter of 2012 were $1.50, compared with $1.59 in the year-earlier quarter. GAAP-basis net income in each of the initial quarters of 2012 and 2011 was $206 million. GAAP-basis net income for the first three months of 2012 expressed as an annualized rate of return on average assets and average common shareholders’ equity was 1.06% and 9.04%, respectively, compared with 1.23% and 10.16%, respectively, in the similar 2011 period.

The recent quarter’s earnings as compared with the first quarter of 2011 reflect higher net interest income, lower credit costs, and higher trust income and residential mortgage banking revenues. While not significant in the recent quarter, last year’s earnings were lifted by $39 million of realized gains from the sale of investment securities ($24 million after-tax effect, or $.20 of diluted earnings per common share), as M&T repositioned its balance sheet in anticipation of the acquisition of Wilmington Trust Corporation (“Wilmington Trust”).

 

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M&T BANK CORPORATION

 

Commenting on the recent quarter’s performance, René F. Jones, Executive Vice President and Chief Financial Officer, said, “M&T’s first quarter results reflect our continued progress with the integration of Wilmington Trust, lower credit costs and improvement in several revenue categories, including net interest income, mortgage banking revenues, trust income and fees for providing deposit services. Additionally, average loans grew an impressive 10% on an annualized basis as compared with the fourth quarter of 2011. The Tier 1 common ratio increased 18 basis points from the 2011 year-end to 7.04% at the end of the first quarter. Our strong first quarter positions us well for 2012.”

Diluted earnings per common share and GAAP-basis net income in last year’s fourth quarter were $1.04 and $148 million, respectively. GAAP-basis net income in that quarter expressed as an annualized rate of return on average assets and average common shareholders’ equity was .75% and 6.12%, respectively. Results for the final 2011 quarter reflected several noteworthy items, including: a $79 million (pre-tax effect) other-than-temporary impairment charge related to M&T’s 20% investment in Bayview Lending Group LLC (“BLG”); $55 million of income in full settlement of a lawsuit arising from a 2007 investment in collateralized debt obligations; and a $30 million tax-deductible cash contribution to The M&T Charitable Foundation. The after-tax impact of those three items reduced net income in the fourth quarter of 2011 by $33 million, or $.26 of diluted earnings per common share.

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

 

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M&T BANK CORPORATION

 

intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and gains and expenses associated with merging acquired operations into M&T, since such items 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, were $1.59 in the recent quarter, compared with $1.67 and $1.20 in the first and fourth quarters of 2011, respectively. Net operating income for the first three months of 2012 totaled $218 million, compared with $216 million and $168 million in the quarters ended March 31, 2011 and December 31, 2011, respectively. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity, net operating income was 1.18% and 16.79%, respectively, in the first quarter of 2012, compared with 1.36% and 20.16% in the year-earlier quarter and .89% and 12.36% in the final 2011 quarter.

Taxable-equivalent Net Interest Income. Taxable-equivalent net interest income increased an annualized 2% to $627 million in the recent quarter from $625 million in the fourth quarter of 2011. That improvement reflects a nine basis point (hundredths of one percent) widening of the net interest margin to 3.69% from 3.60% in the immediately preceding quarter. The wider net interest margin reflects the impact of a $1.41 billion increase in average loans outstanding in 2012’s initial quarter, which largely offset a

 

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M&T BANK CORPORATION

 

decline in lower yielding balances held at the Federal Reserve Bank of New York. Taxable-equivalent net interest income increased 9% in the first quarter of 2012 from $575 million in the year-earlier quarter. The improvement in such income resulted from an $8.96 billion increase in average earning assets, partially offset by a 23 basis point narrowing of the net interest margin, both of which were attributable to the impact of the Wilmington Trust acquisition on May 16, 2011.

Provision for Credit Losses/Asset Quality. The provision for credit losses was $49 million in the first quarter of 2012, improved from $75 million and $74 million in the first and fourth quarters of 2011, respectively. Net charge-offs of loans during the recent quarter were $48 million, down from $74 million in each of the first and fourth quarters of 2011. Net charge-offs expressed as an annualized percentage of average loans outstanding improved significantly to .32% in the first three months of 2012 from .58% and .50% in the first and fourth quarters of 2011, respectively.

Loans classified as nonaccrual totaled $1.07 billion, or 1.75% of total loans outstanding at March 31, 2012, from $1.08 billion or 2.08% a year earlier and $1.10 billion or 1.83% at December 31, 2011.

Assets taken in foreclosure of defaulted loans were $140 million at March 31, 2012, down from $218 million and $157 million at March 31, 2011 and December 31, 2011, respectively. The decline in such assets at the two most recent quarter-ends as compared with March 31, 2011 resulted predominantly from the sale during the second quarter of 2011 of a commercial real estate property in New York City with a carrying value of $99 million. Reflected in assets taken in foreclosure of defaulted loans at March 31, 2012 and

 

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M&T BANK CORPORATION

 

December 31, 2011 were $40 million and $48 million, respectively, of assets related to the Wilmington Trust acquisition.

Allowance for Credit Losses. M&T regularly performs detailed analyses of individual borrowers and portfolios for purposes of determining the allowance for credit losses. As a result of those analyses, the allowance totaled $909 million at March 31, 2012, compared with $904 million at March 31, 2011 and $908 million at December 31, 2011. The allowance expressed as a percentage of outstanding loans was 1.49% at March 31, 2012, compared with 1.73% and 1.51% at March 31, 2011 and December 31, 2011, respectively.

Noninterest Income and Expense. Noninterest income totaled $377 million in the first quarter of 2012, compared with $314 million and $398 million in the first and fourth quarters of 2011, respectively. Reflected in those amounts were net losses on investment securities of $11 million in the initial 2012 quarter, compared with net gains of $23 million in the first quarter of 2011 and net losses of $25 million in the fourth quarter of 2011. The net losses on investment securities during the recent quarter and the fourth quarter of 2011 were predominantly due to other-than-temporary impairment charges related to certain of M&T’s privately issued collateralized mortgage obligations. Partially offsetting the previously noted realized securities gains in the initial 2011 quarter, which totaled $39 million, were $16 million of other-than-temporary impairment charges related to certain of M&T’s holdings of privately issued collateralized mortgage obligations.

Excluding gains and losses from investment securities in all periods and the $55 million of income resulting from the litigation settlement in 2011’s final quarter, noninterest income

 

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M&T BANK CORPORATION

 

totaled $388 million in the recently completed quarter, up from $291 million in the first quarter of 2011 and $368 million in the final 2011 quarter. Contributing to the rise from the year-earlier quarter were higher trust income, predominantly related to the Wilmington Trust acquisition, and mortgage banking revenues. The improvement in such noninterest income as compared with the final 2011 quarter was largely due to higher residential mortgage banking revenues. Contributing to those improved revenues were higher gains on residential real estate loans and commitments to originate loans to be sold. M&T continued its program of retaining residential real estate loans on its balance sheet, effectively reducing mortgage banking revenues by approximately $21 million that would have been recognized had the loans been held for sale. That compares with approximately $11 million of similar impact in last year’s final quarter.

Noninterest expense in the first quarter of 2012 totaled $640 million, compared with $500 million and $740 million in the first and fourth quarters of 2011, respectively. 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 those expenses, noninterest operating expenses were $620 million in the recently completed quarter, $483 million in the first quarter of 2011 and $706 million in the final 2011 quarter. The most significant factor for the higher level of operating expenses in the recent quarter as compared with the year-earlier quarter was the impact of the operations obtained in the Wilmington Trust acquisition. The decrease in expenses from the fourth quarter of 2011 was largely the result of the previously noted fourth quarter charges related to the other-than-temporary impairment of M&T’s investment in BLG and the $30 million charitable contribution, partially offset by recent quarter seasonally higher costs for

 

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stock-based compensation, unemployment insurance, and payroll-related taxes and employer contributions for retirement savings plan benefits related to incentive compensation payments.

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 gains), measures the relationship of operating expenses to revenues. M&T’s efficiency ratio was 61.1% in the first quarter of 2012, compared with 55.8% in the year-earlier quarter and 67.4% in the fourth quarter of 2011.

Balance Sheet. M&T had total assets of $79.2 billion at March 31, 2012, up 17% from $67.9 billion a year earlier. Loans and leases, net of unearned discount, increased $8.8 billion or 17% to $60.9 billion at the recent quarter-end from $52.1 billion at March 31, 2011, and were $826 million higher than $60.1 billion at December 31, 2011. Total deposits rose 21% to $60.9 billion at March 31, 2012 from $50.5 billion a year earlier.

Total shareholders’ equity increased 11% to $9.4 billion at March 31, 2012 from $8.5 billion at March 31, 2011, representing 11.91% and 12.53%, respectively, of total assets. Common shareholders’ equity was $8.6 billion, or $67.64 per share at March 31, 2012, up from $7.8 billion, or $64.43 per share, a year earlier. Tangible equity per common share rose 13% to $38.89 at March 31, 2012 from $34.38 a year earlier. Common shareholders’ equity per share and tangible equity per common share were $66.82 and $37.79, respectively, at December 31, 2011. In the calculation of tangible equity per common share, common shareholders’ equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances. M&T’s tangible common equity to tangible assets ratio was 6.51% at

 

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M&T BANK CORPORATION

 

March 31, 2012, improved from 6.44% and 6.40% at March 31, 2011 and December 31, 2011, respectively. M&T’s estimated Tier 1 common ratio was 7.04% at March 31, 2012 compared with 6.78% and 6.86% at March 31, 2011 and December 31, 2011, respectively.

Conference Call. Investors will have an opportunity to listen to M&T’s conference call to discuss first 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 #70075727. The conference call will be webcast live through M&T’s website at http://ir.mandtbank.com/events.cfm. A replay of the call will be available until Wednesday, April 18, 2012 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to the ID #70075727. The event will also be archived and available by 7:00 p.m. today on M&T’s website at http://ir.mandtbank.com/events.cfm.

M&T is a financial holding company headquartered in Buffalo, New York. M&T’s principal banking subsidiary, M&T Bank, operates banking offices in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware and the District of Columbia. Trust-related services are provided by M&T’s Wilmington Trust-affiliated companies and by M&T Bank.

Forward-Looking Statements. This news release contains forward-looking statements that are based on current expectations, estimates and projections about M&T’s business, management’s beliefs and assumptions made by management. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”) which are

 

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difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

Future Factors include changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation; regulatory supervision and oversight, including monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or 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

 

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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.

 

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M&T BANK CORPORATION

Financial Highlights

 

     Three months ended
March 31
       

Amounts in thousands,

except per share

   2012     2011     Change  

Performance

      

Net income

   $ 206,463        206,273        —  

Net income available to common shareholders

     188,241        190,121        -1

Per common share:

      

Basic earnings

   $ 1.50        1.59        -6

Diluted earnings

     1.50        1.59        -6

Cash dividends

   $ .70        .70        —  

Common shares outstanding:

      

Average - diluted (1)

     125,616        119,852        5

Period end (2)

     126,534        120,410        5

Return on (annualized):

      

Average total assets

     1.06     1.23  

Average common shareholders’ equity

     9.04     10.16  

Taxable-equivalent net interest income

   $ 627,094        575,131        9

Yield on average earning assets

     4.24     4.60  

Cost of interest-bearing liabilities

     .80     .91  

Net interest spread

     3.44     3.69  

Contribution of interest-free funds

     .25     .23  

Net interest margin

     3.69     3.92  

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

     .32     .58  

Net operating results (3)

      

Net operating income

   $ 218,360        216,360        1

Diluted net operating earnings per common share

     1.59        1.67        -5

Return on (annualized):

      

Average tangible assets

     1.18     1.36  

Average tangible common equity

     16.79     20.16  

Efficiency ratio

     61.09     55.75  
     At March 31        
Loan quality    2012     2011     Change  

Nonaccrual loans

   $ 1,065,229        1,081,920        -2

Real estate and other foreclosed assets

     140,297        218,203        -36
  

 

 

   

 

 

   

Total nonperforming assets

   $ 1,205,526        1,300,123        -7
  

 

 

   

 

 

   

Accruing loans past due 90 days or more (4)

   $ 273,081        243,990        12

Government guaranteed loans included in totals above:

      

Nonaccrual loans

   $ 44,717        36,300        23

Accruing loans past due 90 days or more

     252,622        209,787        20

Renegotiated loans

   $ 213,024        241,190        -12

Acquired accruing loans past due 90 days or more (5)

   $ 165,163        115,554        43

Purchased impaired loans (6):

      

Outstanding customer balance

   $ 1,158,829        206,253     

Carrying amount

     604,779        88,589     

Nonaccrual loans to total net loans

     1.75     2.08  

Allowance for credit losses to total loans

     1.49     1.73  

 

(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 on page 18.

 

(4) Excludes acquired loans.

 

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

 

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

 

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M&T BANK CORPORATION

Financial Highlights, Five Quarter Trend

 

     Three months ended  

Amounts in thousands,

except per share

   March 31,
2012
    December  31,
2011
    September  30,
2011
    June 30,
2011
    March 31,
2011
 
          

Performance

          

Net income

   $ 206,463        147,740        183,108        322,358        206,273   

Net income available to common shareholders

     188,241        129,804        164,671        297,179        190,121   

Per common share:

          

Basic earnings

   $ 1.50        1.04        1.32        2.43        1.59   

Diluted earnings

     1.50        1.04        1.32        2.42        1.59   

Cash dividends

   $ .70        .70        .70        .70        .70   

Common shares outstanding:

          

Average - diluted (1)

     125,616        124,736        124,860        122,796        119,852   

Period end (2)

     126,534        125,752        125,678        125,622        120,410   

Return on (annualized):

          

Average total assets

     1.06     .75     .94     1.78     1.23

Average common shareholders’ equity

     9.04     6.12     7.84     14.94     10.16

Taxable-equivalent net interest income

   $ 627,094        624,566        623,265        592,670        575,131   

Yield on average earning assets

     4.24     4.17     4.29     4.40     4.60

Cost of interest-bearing liabilities

     .80     .82     .86     .89     .91

Net interest spread

     3.44     3.35     3.43     3.51     3.69

Contribution of interest-free funds

     .25     .25     .25     .24     .23

Net interest margin

     3.69     3.60     3.68     3.75     3.92

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

     .32     .50     .39     .43     .58

Net operating results (3)

          

Net operating income

   $ 218,360        168,410        209,996        289,487        216,360   

Diluted net operating earnings per common share

     1.59        1.20        1.53        2.16        1.67   

Return on (annualized):

          

Average tangible assets

     1.18     .89     1.14     1.69     1.36

Average tangible common equity

     16.79     12.36     16.07     24.24     20.16

Efficiency ratio

     61.09     67.38     61.79     55.56     55.75

Loan quality

   March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 
          

Nonaccrual loans

   $ 1,065,229        1,097,581        1,113,788        1,117,584        1,081,920   

Real estate and other foreclosed assets

     140,297        156,592        149,868        158,873        218,203   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming assets

   $ 1,205,526        1,254,173        1,263,656        1,276,457        1,300,123   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accruing loans past due 90 days or more (4)

   $ 273,081        287,876        239,970        239,527        243,990   

Government guaranteed loans included in totals above:

          

Nonaccrual loans

   $ 44,717        40,529        32,937        42,337        36,300   

Accruing loans past due 90 days or more

     252,622        252,503        210,407        205,644        209,787   

Renegotiated loans

   $ 213,024        214,379        223,233        234,726        241,190   

Acquired accruing loans past due 90 days or more (5)

   $ 165,163        163,738        211,958        228,304        115,554   

Purchased impaired loans (6):

          

Outstanding customer balance

   $  1,158,829        1,267,762        1,393,777        1,473,237        206,253   

Carrying amount

     604,779        653,362        703,632        752,978        88,589   

Nonaccrual loans to total net loans

     1.75     1.83     1.91     1.91     2.08

Allowance for credit losses to total loans

     1.49     1.51     1.56     1.55     1.73

 

(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 on page 18.

 

(4) Excludes acquired loans.

 

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

 

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

 

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M&T BANK CORPORATION

Condensed Consolidated Statement of Income

 

     Three months ended
March 31
       
Dollars in thousands    2012     2011     Change  

Interest income

   $ 714,095        667,483        7

Interest expense

     93,706        98,679        -5   
  

 

 

   

 

 

   

Net interest income

     620,389        568,804        9   

Provision for credit losses

     49,000        75,000        -35   
  

 

 

   

 

 

   

Net interest income after provision for credit losses

     571,389        493,804        16   

Other income

      

Mortgage banking revenues

     56,192        45,156        24   

Service charges on deposit accounts

     108,889        109,731        -1   

Trust income

     116,953        29,321        299   

Brokerage services income

     13,901        14,296        -3   

Trading account and foreign exchange gains

     10,571        8,279        28   

Gain on bank investment securities

     45        39,353        —     

Other-than-temporary impairment losses recognized in earnings

     (11,486     (16,041     —     

Equity in earnings of Bayview Lending Group LLC

     (4,752     (6,678     —     

Other revenues from operations

     86,410        91,003        -5   
  

 

 

   

 

 

   

Total other income

     376,723        314,420        20   

Other expense

      

Salaries and employee benefits

     346,098        266,090        30   

Equipment and net occupancy

     65,043        56,663        15   

Printing, postage and supplies

     11,872        9,202        29   

Amortization of core deposit and other intangible assets

     16,774        12,314        36   

FDIC assessments

     28,949        19,094        52   

Other costs of operations

     170,959        136,208        26   
  

 

 

   

 

 

   

Total other expense

     639,695        499,571        28   

Income before income taxes

     308,417        308,653        —     

Applicable income taxes

     101,954        102,380        —     
  

 

 

   

 

 

   

Net income

   $ 206,463        206,273        —  
  

 

 

   

 

 

   

 

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14-14-14-14-14

 

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend

 

     Three months ended  
Dollars in thousands    March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Interest income

   $ 714,095        716,000        720,351        688,253        667,483   

Interest expense

     93,706        97,969        103,632        102,051        98,679   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     620,389        618,031        616,719        586,202        568,804   

Provision for credit losses

     49,000        74,000        58,000        63,000        75,000   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after
provision for credit losses

     571,389        544,031        558,719        523,202        493,804   

Other income

          

Mortgage banking revenues

     56,192        40,573        38,141        42,151        45,156   

Service charges on deposit accounts

     108,889        104,071        121,577        119,716        109,731   

Trust income

     116,953        113,820        113,652        75,592        29,321   

Brokerage services income

     13,901        13,341        13,907        14,926        14,296   

Trading account and foreign exchange gains

     10,571        7,971        4,176        6,798        8,279   

Gain on bank investment securities

     45        1        89        110,744        39,353   

Other-than-temporary impairment losses recognized in earnings

     (11,486     (24,822     (9,642     (26,530     (16,041

Equity in earnings of Bayview Lending Group LLC

     (4,752     (5,419     (6,911     (5,223     (6,678

Other revenues from operations

     86,410        148,918        93,393        163,482        91,003   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     376,723        398,454        368,382        501,656        314,420   

Other expense

          

Salaries and employee benefits

     346,098        312,528        325,197        300,178        266,090   

Equipment and net occupancy

     65,043        65,080        68,101        59,670        56,663   

Printing, postage and supplies

     11,872        11,399        10,593        9,723        9,202   

Amortization of core deposit and other
intangible assets

     16,774        17,162        17,401        14,740        12,314   

FDIC assessments

     28,949        27,826        26,701        26,609        19,094   

Other costs of operations

     170,959        305,588        214,026        165,975        136,208   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other expense

     639,695        739,583        662,019        576,895        499,571   

Income before income taxes

     308,417        202,902        265,082        447,963        308,653   

Applicable income taxes

     101,954        55,162        81,974        125,605        102,380   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 206,463        147,740        183,108        322,358        206,273   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

-more-


 

15-15-15-15-15

 

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet

 

     March 31         
Dollars in thousands    2012      2011      Change  

ASSETS

        

Cash and due from banks

   $ 1,344,092         972,005         38

Interest-bearing deposits at banks

     1,282,040         100,101         1,181   

Federal funds sold and agreements to resell securities

     —           10,300         -100   

Trading account assets

     517,620         413,737         25   

Investment securities

     7,195,296         6,507,165         11   

Loans and leases:

        

Commercial, financial, etc

     15,938,672         13,826,299         15   

Real estate - commercial

     24,486,555         20,891,615         17   

Real estate - consumer

     8,696,594         6,154,960         41   

Consumer

     11,799,929         11,245,807         5   
  

 

 

    

 

 

    

Total loans and leases, net of unearned discount

     60,921,750         52,118,681         17   

Less: allowance for credit losses

     909,006         903,703         1   
  

 

 

    

 

 

    

Net loans and leases

     60,012,744         51,214,978         17   

Goodwill

     3,524,625         3,524,625         —     

Core deposit and other intangible assets

     159,619         113,603         41   

Other assets

     5,150,851         5,024,694         3   
  

 

 

    

 

 

    

Total assets

   $ 79,186,887         67,881,208         17
  

 

 

    

 

 

    

LIABILITIES AND SHAREHOLDERS’ EQUITY

        

Noninterest-bearing deposits

   $ 20,648,970         15,219,562         36

Interest-bearing deposits

     39,868,782         34,264,867         16   

Deposits at Cayman Islands office

     395,191         1,063,670         -63   
  

 

 

    

 

 

    

Total deposits

     60,912,943         50,548,099         21   

Short-term borrowings

     511,981         504,676         1   

Accrued interest and other liabilities

     1,856,749         1,015,495         83   

Long-term borrowings

     6,476,526         7,305,420         -11   
  

 

 

    

 

 

    

Total liabilities

     69,758,199         59,373,690         17   

Shareholders’ equity:

        

Preferred

     866,489         743,385         17   

Common (1)

     8,562,199         7,764,133         10   
  

 

 

    

 

 

    

Total shareholders’ equity

     9,428,688         8,507,518         11   
  

 

 

    

 

 

    

Total liabilities and shareholders’ equity

   $ 79,186,887         67,881,208         17
  

 

 

    

 

 

    

 

(1) Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $331.3 million at March 31, 2012 and $197.5 million at March 31, 2011.

 

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16-16-16-16-16

 

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend

 

Dollars in thousands

   March 31,
2012
     December  31,
2011
     September  30,
2011
     June 30,
2011
     March 31,
2011
 
              

ASSETS

              

Cash and due from banks

   $ 1,344,092         1,449,547         1,349,057         1,297,335         972,005   

Interest-bearing deposits at banks

     1,282,040         154,960         2,226,779         2,275,450         100,101   

Federal funds sold and agreements to resell securities

     —           2,850         5,000         415,580         10,300   

Trading account assets

     517,620         561,834         605,557         502,986         413,737   

Investment securities

     7,195,296         7,673,154         7,173,797         6,492,265         6,507,165   

Loans and leases:

              

Commercial, financial, etc

     15,938,672         15,734,436         15,218,502         15,040,892         13,826,299   

Real estate - commercial

     24,486,555         24,411,114         23,961,306         24,263,726         20,891,615   

Real estate - consumer

     8,696,594         7,923,165         7,065,451         6,970,921         6,154,960   

Consumer

     11,799,929         12,027,290         12,156,005         12,265,690         11,245,807   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total loans and leases, net of unearned discount

     60,921,750         60,096,005         58,401,264         58,541,229         52,118,681   

Less: allowance for credit losses

     909,006         908,290         908,525         907,589         903,703   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net loans and leases

     60,012,744         59,187,715         57,492,739         57,633,640         51,214,978   

Goodwill

     3,524,625         3,524,625         3,524,625         3,524,625         3,524,625   

Core deposit and other intangible assets

     159,619         176,394         193,556         210,957         113,603   

Other assets

     5,150,851         5,193,208         5,292,781         5,374,316         5,024,694   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ 79,186,887         77,924,287         77,863,891         77,727,154         67,881,208   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

              

Noninterest-bearing deposits

   $ 20,648,970         20,017,883         19,637,491         18,598,828         15,219,562   

Interest-bearing deposits

     39,868,782         39,020,839         39,330,027         40,078,834         34,264,867   

Deposits at Cayman Islands office

     395,191         355,927         514,871         551,553         1,063,670   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total deposits

     60,912,943         59,394,649         59,482,389         59,229,215         50,548,099   

Short-term borrowings

     511,981         782,082         694,398         567,144         504,676   

Accrued interest and other liabilities

     1,856,749         1,790,121         1,563,121         1,557,685         1,015,495   

Long-term borrowings

     6,476,526         6,686,226         6,748,857         7,128,916         7,305,420   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

     69,758,199         68,653,078         68,488,765         68,482,960         59,373,690   

Shareholders’ equity:

              

Preferred

     866,489         864,585         862,717         860,901         743,385   

Common (1)

     8,562,199         8,406,624         8,512,409         8,383,293         7,764,133   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total shareholders’ equity

     9,428,688         9,271,209         9,375,126         9,244,194         8,507,518   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 79,186,887         77,924,287         77,863,891         77,727,154         67,881,208   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $331.3 million at March 31, 2012, $356.4 million at December 31, 2011, $192.5 million at September 30, 2011, $228.8 million at June 30, 2011 and $197.5 million at March 31, 2011.

 

-more-


 

17-17-17-17-17

 

M&T BANK CORPORATION

Condensed Consolidated Average Balance Sheet

and Annualized Taxable-equivalent Rates

 

     Three months ended     Change in balance
March 31, 2012 from
 
Dollars in millions    March 31,
2012
    March 31,
2011
    December 31,
2011
    March  31,
2011
    December  31,
2011
 
     Balance      Rate     Balance      Rate     Balance      Rate      

ASSETS

                   

Interest-bearing deposits at banks

   $ 301         .28     115         .13      1,973         .25      161     -85 

Federal funds sold and agreements to resell securities

     3         .50        15         .53        6         .38        -83        -60   

Trading account assets

     93         1.57        110         1.61        82         1.30        -15        14   

Investment securities

     7,507         3.54        7,219         4.17        7,633         3.48        4        -2   

Loans and leases, net of unearned discount

                   

Commercial, financial, etc

     15,732         3.71        13,573         3.93        15,392         3.78        16        2   

Real estate - commercial

     24,559         4.42        21,003         4.71        24,108         4.47        17        2   

Real estate - consumer

     8,286         4.60        6,054         5.06        7,480         4.77        37        11   

Consumer

     11,907         4.80        11,342         5.13        12,097         4.87        5        -2   
  

 

 

      

 

 

      

 

 

        

Total loans and leases, net

     60,484         4.35        51,972         4.67        59,077         4.39        16        2   
  

 

 

      

 

 

      

 

 

        

Total earning assets

     68,388         4.24        59,431         4.60        68,771         4.17        15        -1   

Goodwill

     3,525           3,525           3,525           —          —     

Core deposit and other intangible assets

     168           119           185           40        -9   

Other assets

     5,945           4,970           5,912           20        1   
  

 

 

      

 

 

      

 

 

        

Total assets

   $ 78,026           68,045           78,393           15     —  
  

 

 

      

 

 

      

 

 

        

LIABILITIES AND SHAREHOLDERS’ EQUITY

                   

Interest-bearing deposits

                   

NOW accounts

   $ 827         .14        628         .13        826         .15        32     —  

Savings deposits

     32,410         .23        27,669         .28        32,179         .27        17        1   

Time deposits

     5,960         .91        5,700         1.36        6,379         .93        5        -7   

Deposits at Cayman Islands office

     496         .17        1,182         .14        512         .15        -58        -3   
  

 

 

      

 

 

      

 

 

        

Total interest-bearing deposits

     39,693         .33        35,179         .45        39,896         .37        13        -1   
  

 

 

      

 

 

      

 

 

        

Short-term borrowings

     828         .15        1,344         .15        674         .10        -38        23   

Long-term borrowings

     6,507         3.78        7,368         3.26        6,574         3.66        -12        -1   
  

 

 

      

 

 

      

 

 

        

Total interest-bearing liabilities

     47,028         .80        43,891         .91        47,144         .82        7        —     

Noninterest-bearing deposits

     19,598           14,501           20,103           35        -3   

Other liabilities

     2,024           1,202           1,733           68        17   
  

 

 

      

 

 

      

 

 

        

Total liabilities

     68,650           59,594           68,980           15        —     

Shareholders’ equity

     9,376           8,451           9,413           11        —     
  

 

 

      

 

 

      

 

 

        

Total liabilities and shareholders’ equity

   $ 78,026           68,045           78,393           15     —  
  

 

 

      

 

 

      

 

 

        

Net interest spread

        3.44           3.69           3.35       

Contribution of interest-free funds

        .25           .23           .25       

Net interest margin

        3.69        3.92        3.60    

 

-more-


 

18-18-18-18-18

 

M&T BANK CORPORATION

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

 

     Three months ended  
      March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Income statement data

          

In thousands, except per share

          

Net income

          

Net income

   $ 206,463        147,740        183,108        322,358        206,273   

Amortization of core deposit and other intangible assets (1)

     10,240        10,476        10,622        8,974        7,478   

Merger-related gain (1)

     —          —          —          (64,930     —     

Merger-related expenses (1)

     1,657        10,194        16,266        23,085        2,609   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net operating income

   $ 218,360        168,410        209,996        289,487        216,360   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share

          

Diluted earnings per common share

   $ 1.50        1.04        1.32        2.42        1.59   

Amortization of core deposit and other intangible assets (1)

     .08        .08        .08        .07        .06   

Merger-related gain (1)

     —          —          —          (.52     —     

Merger-related expenses (1)

     .01        .08        .13        .19        .02   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net operating earnings per common share

   $ 1.59        1.20        1.53        2.16        1.67   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other expense

          

Other expense

   $ 639,695        739,583        662,019        576,895        499,571   

Amortization of core deposit and other intangible assets

     (16,774     (17,162     (17,401     (14,740     (12,314

Merger-related expenses

     (2,728     (16,393     (26,003     (36,996     (4,295
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noninterest operating expense

   $ 620,193        706,028        618,615        525,159        482,962   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Merger-related expenses

          

Salaries and employee benefits

   $ 1,973        534        285        15,305        7   

Equipment and net occupancy

     15        189        119        25        79   

Printing, postage and supplies

     —          1,475        723        318        147   

Other costs of operations

     740        14,195        24,876        21,348        4,062   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 2,728        16,393        26,003        36,996        4,295   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Efficiency ratio

          

Noninterest operating expense (numerator)

   $ 620,193        706,028        618,615        525,159        482,962   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Taxable-equivalent net interest income

     627,094        624,566        623,265        592,670        575,131   

Other income

     376,723        398,454        368,382        501,656        314,420   

Less: Gain on bank investment securities

     45        1        89        110,744        39,353   

Net OTTI losses recognized in earnings

     (11,486     (24,822     (9,642     (26,530     (16,041

Merger-related gain

     —          —          —          64,930        —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Denominator

   $ 1,015,258        1,047,841        1,001,200        945,182        866,239   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Efficiency ratio

     61.09     67.38     61.79     55.56     55.75
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance sheet data

          

In millions

          

Average assets

          

Average assets

   $ 78,026        78,393        76,908        72,454        68,045   

Goodwill

     (3,525     (3,525     (3,525     (3,525     (3,525

Core deposit and other intangible assets

     (168     (185     (202 )       (165 )       (119

Deferred taxes

     48        54        58        42        22   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average tangible assets

   $ 74,381        74,737        73,239        68,806        64,423   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average common equity

          

Average total equity

   $ 9,376        9,413        9,324        8,812        8,451   

Preferred stock

     (866     (864     (862     (716     (743
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average common equity

     8,510        8,549        8,462        8,096        7,708   

Goodwill

     (3,525     (3,525     (3,525     (3,525     (3,525

Core deposit and other intangible assets

     (168     (185     (202     (165     (119

Deferred taxes

     48        54        58        42        22   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average tangible common equity

   $ 4,865        4,893        4,793        4,448        4,086   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At end of quarter

          

Total assets

          

Total assets

   $ 79,187        77,924        77,864        77,727        67,881   

Goodwill

     (3,525     (3,525     (3,525     (3,525     (3,525

Core deposit and other intangible assets

     (160     (176     (193     (210     (113

Deferred taxes

     46        51        55        60        20   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total tangible assets

   $ 75,548        74,274        74,201        74,052        64,263   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total common equity

          

Total equity

   $ 9,429        9,271        9,375        9,244        8,508   

Preferred stock

     (867     (865     (863     (861     (743

Undeclared dividends - cumulative preferred stock

     (3     (3     (3     (3     (7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Common equity, net of undeclared cumulative preferred dividends

     8,559        8,403        8,509        8,380        7,758   

Goodwill

     (3,525     (3,525     (3,525     (3,525     (3,525

Core deposit and other intangible assets

     (160     (176     (193     (210     (113

Deferred taxes

     46        51        55        60        20   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total tangible common equity

   $ 4,920        4,753        4,846        4,705        4,140   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) After any related tax effect.

 

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