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): July 17, 2012

 

 

M&T BANK CORPORATION

(Exact name of registrant as specified in its charter)

 

 

New York

(State or other jurisdiction

of incorporation)

 

1-9861		16-0968385
(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))

 

 

 

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Item 2.02.

Results of Operations and Financial Condition.

On July 17, 2012, M&T Bank Corporation announced its results of operations for the quarter ended June 30, 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		News Release dated July 17, 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: July 17, 2012		By:		/s/ 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 July 17, 2012. Filed herewith.

 

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Exhibit 99

 

INVESTOR CONTACT:		Donald J. MacLeod (716) 842-5138		FOR IMMEDIATE RELEASE: July 17, 2012
MEDIA CONTACT:		C. Michael Zabel (716) 842-5385

M&T BANK CORPORATION ANNOUNCES SECOND QUARTER PROFITS

BUFFALO, NEW YORK — M&T Bank Corporation (“M&T”) (NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2012.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the second quarter of 2012 were $1.71, up 14% from $1.50 in the initial 2012 quarter. GAAP-basis net income in the recent quarter totaled $233 million, 13% higher than $206 million in the first quarter of 2012. GAAP-basis net income for the second quarter of 2012 expressed as an annualized rate of return on average assets and average common shareholders’ equity was 1.17% and 10.12%, respectively, improved from 1.06% and 9.04%, respectively, in the immediately preceding quarter.

The recent quarter’s results as compared with the first quarter of 2012 reflect a 24% rise in mortgage banking revenues and solid increases in net interest income and trust income, as well as reduced costs for salaries and benefits. The higher mortgage banking revenues reflect significant improvements in both residential and commercial mortgage banking activities.

Reflecting on the recent quarter’s performance, René F. Jones, Executive Vice President and Chief Financial Officer, commented, “M&T continues to perform well for both our customers and our shareholders. During the second quarter we saw significant

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M&T BANK CORPORATION

growth in our revenues in the areas of net interest income, mortgage banking and trust services. Our credit experience, specifically net charge-offs as a percentage of loans, continued to favorably outpace the rest of the banking industry and the level of our nonaccrual loans declined $97 million or 9% from March 31. Furthermore, our operating expenses were once again well controlled as reflected in our efficiency ratio, which improved to 56.9% from 61.1%. We view this as a very solid quarter of performance.”

Diluted earnings per common share and GAAP-basis net income in the second quarter of 2011 were $2.42 and $322 million, respectively. The recent quarter’s results as compared with the second quarter of 2011 reflect increased net interest income, trust income and mortgage banking revenues. Earnings for last year’s second quarter were supplemented by realized gains from the sale of investment securities, which totaled $67 million after-tax effect, or $.54 of diluted earnings per common share, as M&T repositioned its balance sheet in conjunction with the May 16, 2011 acquisition of Wilmington Trust Corporation (“Wilmington Trust”). Also adding to earnings in the second quarter of 2011 was a net after-tax gain of $42 million, or $.33 of diluted earnings per common share, related to the Wilmington Trust acquisition. GAAP-basis net income in that quarter expressed as an annualized rate of return on average assets and average common shareholders’ equity was 1.78% and 14.94%, respectively.

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

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M&T BANK CORPORATION

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, but include the effect of securities gains and losses, were $1.82 in the recent quarter, compared with $2.16 and $1.59 in the second quarter of 2011 and the first quarter of 2012, respectively. Net operating income during the second quarter of 2012 was $247 million, compared with $289 million in the second quarter of 2011 and $218 million in the initial 2012 quarter. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity, net operating income in the recently completed quarter was 1.30% and 18.54%, respectively, compared with 1.69% and 24.24% in the year-earlier quarter and 1.18% and 16.79% in the first quarter of 2012.

Taxable-equivalent Net Interest Income. Taxable-equivalent net interest income totaled $655 million in the second quarter of 2012, up an annualized 18% from $627 million in the first quarter of 2012. That improvement was predominantly due to a $2.1 billion increase in average earning assets, including a $1.3 billion increase in average loans outstanding, and a 5 basis point (hundredths of one percent) widening of the net interest margin. The higher net interest margin reflects an additional $14 million of interest income which resulted from an improvement in estimated

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M&T BANK CORPORATION

cash flows expected to be collected on acquired loans. Stabilizing economic conditions and better than expected repayments resulted in an approximate 1% increase in projected cash flows, which will be recognized as interest income over the remaining terms of the acquired loans. Taxable-equivalent net interest income in the recent quarter was up 10% from $593 million in the second quarter of 2011. That improvement resulted from a $7.1 billion increase in average earning assets.

Provision for Credit Losses/Asset Quality. The provision for credit losses was $60 million in the second quarter of 2012, compared with $63 million in the year-earlier quarter and $49 million in the first quarter of 2012. Net charge-offs of loans were $52 million during the recent quarter, compared with $59 million and $48 million in the second quarter of 2011 and the first quarter of 2012, respectively. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .34% and .43% in the second quarter of 2012 and 2011, respectively, and .32% in the first quarter of 2012.

Loans classified as nonaccrual declined to $968 million, or 1.54% of total loans outstanding at June 30, 2012, improved from $1.12 billion or 1.91% a year earlier and $1.07 billion or 1.75% at March 31, 2012.

Assets taken in foreclosure of defaulted loans were $116 million at June 30, 2012, improved from $159 million at June 30, 2011 and $140 million at March 31, 2012.

Allowance for Credit Losses. M&T regularly performs detailed analyses of individual borrowers and portfolios for purposes of assessing the adequacy of the allowance for credit losses.

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M&T BANK CORPORATION

Reflecting those analyses, the allowance totaled $917 million at June 30, 2012, compared with $908 million and $909 million at June 30, 2011 and March 31, 2012, respectively. The allowance expressed as a percentage of outstanding loans was 1.46% at June 30, 2012, compared with 1.55% at June 30, 2011 and 1.49% at March 31, 2012.

Noninterest Income and Expense. Noninterest income totaled $392 million in the second quarter of 2012, compared with $502 million and $377 million in the second quarter of 2011 and the first quarter of 2012, respectively. Reflected in those amounts were net pre-tax losses on investment securities of $17 million and $11 million in the recent quarter and the first quarter of 2012, respectively, and net pre-tax gains from investment securities of $84 million in the second quarter of 2011. The net securities losses in the recent quarter and the initial 2012 quarter were predominantly due to other-than-temporary impairment charges related to certain of M&T’s holdings of privately issued collateralized mortgage obligations. The net securities gains in the second quarter of 2011 resulted from $111 million of gains realized on the sale of investment securities available for sale, predominantly residential mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac, collateralized debt obligations and capital preferred securities, having an amortized cost of approximately $1.21 billion. Partially offsetting those securities gains were $27 million of other-than-temporary impairment charges related to certain of M&T’s holdings of privately issued collateralized mortgage obligations. In connection with the Wilmington Trust acquisition, M&T sold investment securities in last year’s second quarter in order to manage its balance sheet size and composition and the resultant capital ratios.

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M&T BANK CORPORATION

Excluding gains and losses from investment securities in all periods and the $65 million gain recorded in 2011’s second quarter related to the Wilmington Trust acquisition, noninterest income in the second quarter of 2012 aggregated $408 million, compared with $353 million in the year-earlier quarter and $388 million in the initial quarter of 2012. The recent quarter’s improvement in noninterest income as compared with the earlier quarters resulted predominantly from higher mortgage banking revenues and trust income.

Noninterest expense in the second quarter of 2012 totaled $627 million, compared with $577 million in the year-earlier quarter and $640 million in the first quarter of 2012. 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 $604 million in the recent quarter, compared with $525 million in the second quarter of 2011 and $620 million in 2012’s initial 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. As compared with the first quarter of 2012, the recent quarter’s lower level of operating expenses was due, in large part, to a decline in salaries and employee benefits, including stock-based compensation.

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 56.9% in the second quarter of 2012, compared with 55.6% in the year-earlier period and 61.1% in the first quarter of 2012.

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M&T BANK CORPORATION

Balance Sheet. M&T had total assets of $80.8 billion at June 30, 2012, compared with $77.7 billion at June 30, 2011. Loans and leases, net of unearned discount, increased $4.3 billion or 7% to $62.9 billion at the recent quarter-end, from $58.5 billion a year earlier. Total deposits rose 6% to $62.5 billion at June 30, 2012 from $59.2 billion at June 30, 2011.

Total shareholders’ equity increased 4% to $9.6 billion at June 30, 2012 from $9.2 billion a year earlier, representing 11.92% and 11.89%, respectively, of total assets. Common shareholders’ equity was $8.8 billion, or $69.15 per share, at June 30, 2012, compared with $8.4 billion, or $66.71 per share, at June 30, 2011. Tangible equity per common share rose 8% to $40.52 at the recent quarter-end from $37.45 a year earlier. Common shareholders’ equity per share and tangible equity per common share were $67.64 and $38.89, respectively, at March 31, 2012. 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 6.65% at June 30, 2012, up from 6.35% and 6.51% at June 30, 2011 and March 31, 2012, respectively. M&T’s estimated Tier 1 common ratio, a regulatory capital measure, was 7.15% at June 30, 2012, improved from 6.67% and 7.04% at June 30, 2011 and March 31, 2012, respectively.

Conference Call. Investors will have an opportunity to listen to M&T’s conference call to discuss second 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# 99533519. The conference call will be webcast

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M&T BANK CORPORATION

live through M&T’s website at http://ir.mandtbank.com/events.cfm. A replay of the call will be available until Thursday, July 19, 2012 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID# 99533519. 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 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;

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M&T BANK CORPORATION

legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation; regulatory supervision and oversight, including monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries’ future businesses; and material differences in the actual financial results of merger, acquisition and investment activities compared with M&T’s initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

These are representative of the Future Factors that could affect the outcome of the forward-looking statements. In addition, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other Future Factors.

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M&T BANK CORPORATION

Financial Highlights

 

Amounts in thousands,		Three months ended June 30												Six months ended June 30
except per share		2012				2011				Change				2012				2011				Change
Performance
Net income		$	233,380				322,358				-28	%		$	439,843				528,631				-17	%
Net income available to common shareholders			214,716				297,179				-28	%			402,958				487,308				-17	%
Per common share:
Basic earnings		$	1.71				2.43				-30	%		$	3.21				4.04				-21	%
Diluted earnings			1.71				2.42				-29	%			3.20				4.02				-20	%
Cash dividends		$	.70				.70				—			$	1.40				1.40				—
Common shares outstanding:
Average - diluted (1)			125,897				122,796				3	%			125,756				121,332				4	%
Period end (2)			126,645				125,622				1	%			126,645				125,622				1	%
Return on (annualized):
Average total assets			1.17	%			1.78	%							1.12	%			1.52	%
Average common shareholders’ equity			10.12	%			14.94	%							9.58	%			12.62	%
Taxable-equivalent net interest income		$	654,628				592,670				10	%		$	1,281,722				1,167,801				10	%
Yield on average earning assets			4.25	%			4.40	%							4.24	%			4.49	%
Cost of interest-bearing liabilities			.76	%			.89	%							.78	%			.90	%
Net interest spread			3.49	%			3.51	%							3.46	%			3.59	%
Contribution of interest-free funds			.25	%			.24	%							.25	%			.24	%
Net interest margin			3.74	%			3.75	%							3.71	%			3.83	%
Net charge-offs to average total net loans (annualized)			.34	%			.43	%							.33	%			.50	%
Net operating results (3)
Net operating income		$	247,433				289,487				-15	%		$	465,793				505,847				-8	%
Diluted net operating earnings per common share			1.82				2.16				-16	%			3.41				3.83				-11	%
Return on (annualized):
Average tangible assets			1.30	%			1.69	%							1.24	%			1.53	%
Average tangible common equity			18.54	%			24.24	%							17.68	%			22.30	%
Efficiency ratio			56.86	%			55.56	%							58.92	%			55.65	%
			At June 30
Loan quality		2012				2011				Change
Nonaccrual loans		$	968,328				1,117,584				-13	%
Real estate and other foreclosed assets			115,580				158,873				-27	%
Total nonperforming assets		$	1,083,908				1,276,457				-15	%
Accruing loans past due 90 days or more (4)		$	274,598				239,527				15	%
Government guaranteed loans included in totals above:
Nonaccrual loans		$	48,712				42,337				15	%
Accruing loans past due 90 days or more			255,495				205,644				24	%
Renegotiated loans		$	267,111				234,726				14	%
Acquired accruing loans past due 90 days or more (5)		$	162,487				228,304				-29	%
Purchased impaired loans (6):
Outstanding customer balance		$	1,037,458				1,473,237
Carrying amount			560,700				752,978
Nonaccrual loans to total net loans			1.54	%			1.91	%
Allowance for credit losses to total loans			1.46	%			1.55	%

 

(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 17.

(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		June 30, 2012				March 31, 2012				December 31, 2011				September 30, 2011				June 30, 2011
Performance
Net income		$	233,380				206,463				147,740				183,108				322,358
Net income available to common shareholders			214,716				188,241				129,804				164,671				297,179
Per common share:
Basic earnings		$	1.71				1.50				1.04				1.32				2.43
Diluted earnings			1.71				1.50				1.04				1.32				2.42
Cash dividends		$	.70				.70				.70				.70				.70
Common shares outstanding:
Average - diluted (1)			125,897				125,616				124,736				124,860				122,796
Period end (2)			126,645				126,534				125,752				125,678				125,622
Return on (annualized):
Average total assets			1.17	%			1.06	%			.75	%			.94	%			1.78	%
Average common shareholders' equity			10.12	%			9.04	%			6.12	%			7.84	%			14.94	%
Taxable-equivalent net interest income		$	654,628				627,094				624,566				623,265				592,670
Yield on average earning assets			4.25	%			4.24	%			4.17	%			4.29	%			4.40	%
Cost of interest-bearing liabilities			.76	%			.80	%			.82	%			.86	%			.89	%
Net interest spread			3.49	%			3.44	%			3.35	%			3.43	%			3.51	%
Contribution of interest-free funds			.25	%			.25	%			.25	%			.25	%			.24	%
Net interest margin			3.74	%			3.69	%			3.60	%			3.68	%			3.75	%
Net charge-offs to average total net loans (annualized)			.34	%			.32	%			.50	%			.39	%			.43	%
Net operating results (3)
Net operating income		$	247,433				218,360				168,410				209,996				289,487
Diluted net operating earnings per common share			1.82				1.59				1.20				1.53				2.16
Return on (annualized):
Average tangible assets			1.30	%			1.18	%			.89	%			1.14	%			1.69	%
Average tangible common equity			18.54	%			16.79	%			12.36	%			16.07	%			24.24	%
Efficiency ratio			56.86	%			61.09	%			67.38	%			61.79	%			55.56	%
Loan quality		June 30, 2012				March 31, 2012				December 31, 2011				September 30, 2011				June 30, 2011
Nonaccrual loans		$	968,328				1,065,229				1,097,581				1,113,788				1,117,584
Real estate and other foreclosed assets			115,580				140,297				156,592				149,868				158,873
Total nonperforming assets		$	1,083,908				1,205,526				1,254,173				1,263,656				1,276,457
Accruing loans past due 90 days or more (4)		$	274,598				273,081				287,876				239,970				239,527
Government guaranteed loans included in totals above:
Nonaccrual loans		$	48,712				44,717				40,529				32,937				42,337
Accruing loans past due 90 days or more			255,495				252,622				252,503				210,407				205,644
Renegotiated loans		$	267,111				213,024				214,379				223,233				234,726
Acquired accruing loans past due 90 days or more (5)		$	162,487				165,163				163,738				211,958				228,304
Purchased impaired loans (6):
Outstanding customer balance		$	1,037,458				1,158,829				1,267,762				1,393,777				1,473,237
Carrying amount			560,700				604,779				653,362				703,632				752,978
Nonaccrual loans to total net loans			1.54	%			1.75	%			1.83	%			1.91	%			1.91	%
Allowance for credit losses to total loans			1.46	%			1.49	%			1.51	%			1.56	%			1.55	%

 

(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 inlcude 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 June 30												Six months ended June 30
Dollars in thousands		2012				2011				Change				2012				2011				Change
Interest income		$	737,386				688,253				7	%		$	1,451,481				1,355,736				7	%
Interest expense			89,403				102,051				-12				183,109				200,730				-9
Net interest income			647,983				586,202				11				1,268,372				1,155,006				10
Provision for credit losses			60,000				63,000				-5				109,000				138,000				-21
Net interest income after provision for credit losses			587,983				523,202				12				1,159,372				1,017,006				14
Other income
Mortgage banking revenues			69,514				42,151				65				125,706				87,307				44
Service charges on deposit accounts			110,982				119,716				-7				219,871				229,447				-4
Trust income			122,275				75,592				62				239,228				104,913				128
Brokerage services income			16,172				14,926				8				30,073				29,222				3
Trading account and foreign exchange gains			6,238				6,798				-8				16,809				15,077				11
Gain (loss) on bank investment securities			(408	)			110,744				—				(363	)			150,097				—
Other-than-temporary impairment losses recognized in earnings			(16,173	)			(26,530	)			—				(27,659	)			(42,571	)			—
Equity in earnings of Bayview Lending Group LLC			(6,635	)			(5,223	)			—				(11,387	)			(11,901	)			—
Other revenues from operations			89,685				163,482				-45				176,095				254,485				-31
Total other income			391,650				501,656				-22				768,373				816,076				-6
Other expense
Salaries and employee benefits			323,686				300,178				8				669,784				566,268				18
Equipment and net occupancy			65,376				59,670				10				130,419				116,333				12
Printing, postage and supplies			11,368				9,723				17				23,240				18,925				23
Amortization of core deposit and other intangible assets			15,907				14,740				8				32,681				27,054				21
FDIC assessments			24,962				26,609				-6				53,911				45,703				18
Other costs of operations			186,093				165,975				12				357,052				302,183				18
Total other expense			627,392				576,895				9				1,267,087				1,076,466				18
Income before income taxes			352,241				447,963				-21				660,658				756,616				-13
Applicable income taxes			118,861				125,605				-5				220,815				227,985				-3
Net income		$	233,380				322,358				-28	%		$	439,843				528,631				-17	%

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13-13-13-13-13

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend

 

		Three months ended
Dollars in thousands		June 30, 2012				March 31, 2012				December 31, 2011				September 30, 2011				June 30, 2011
Interest income		$	737,386				714,095				716,000				720,351				688,253
Interest expense			89,403				93,706				97,969				103,632				102,051
Net interest income			647,983				620,389				618,031				616,719				586,202
Provision for credit losses			60,000				49,000				74,000				58,000				63,000
Net interest income after provision for credit losses			587,983				571,389				544,031				558,719				523,202
Other income
Mortgage banking revenues			69,514				56,192				40,573				38,141				42,151
Service charges on deposit accounts			110,982				108,889				104,071				121,577				119,716
Trust income			122,275				116,953				113,820				113,652				75,592
Brokerage services income			16,172				13,901				13,341				13,907				14,926
Trading account and foreign exchange gains			6,238				10,571				7,971				4,176				6,798
Gain (loss) on bank investment securities			(408	)			45				1				89				110,744
Other-than-temporary impairment losses recognized in earnings			(16,173	)			(11,486	)			(24,822	)			(9,642	)			(26,530	)
Equity in earnings of Bayview Lending Group LLC			(6,635	)			(4,752	)			(5,419	)			(6,911	)			(5,223	)
Other revenues from operations			89,685				86,410				148,918				93,393				163,482
Total other income			391,650				376,723				398,454				368,382				501,656
Other expense
Salaries and employee benefits			323,686				346,098				312,528				325,197				300,178
Equipment and net occupancy			65,376				65,043				65,080				68,101				59,670
Printing, postage and supplies			11,368				11,872				11,399				10,593				9,723
Amortization of core deposit and other intangible assets			15,907				16,774				17,162				17,401				14,740
FDIC assessments			24,962				28,949				27,826				26,701				26,609
Other costs of operations			186,093				170,959				305,588				214,026				165,975
Total other expense			627,392				639,695				739,583				662,019				576,895
Income before income taxes			352,241				308,417				202,902				265,082				447,963
Applicable income taxes			118,861				101,954				55,162				81,974				125,605
Net income		$	233,380				206,463				147,740				183,108				322,358

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14-14-14-14-14

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet

 

		June 30
Dollars in thousands		2012				2011				Change
ASSETS
Cash and due from banks		$	1,421,831				1,297,335				10	%
Interest-bearing deposits at banks			1,069,717				2,275,450				-53
Federal funds sold and agreements to resell securities			1,000				415,580				-100
Trading account assets			544,938				502,986				8
Investment securities			7,057,300				6,492,265				9
Loans and leases:
Commercial, financial, etc.			16,395,587				15,040,892				9
Real estate - commercial			24,898,707				24,263,726				3
Real estate - consumer			9,811,525				6,970,921				41
Consumer			11,745,453				12,265,690				-4
Total loans and leases, net of unearned discount			62,851,272				58,541,229				7
Less: allowance for credit losses			917,028				907,589				1
Net loans and leases			61,934,244				57,633,640				7
Goodwill			3,524,625				3,524,625				—
Core deposit and other intangible assets			143,713				210,957				-32
Other assets			5,110,210				5,374,316				-5
Total assets		$	80,807,578				77,727,154				4	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits		$	22,854,794				18,598,828				23	%
Interest-bearing deposits			39,327,849				40,078,834				-2
Deposits at Cayman Islands office			366,164				551,553				-34
Total deposits			62,548,807				59,229,215				6
Short-term borrowings			975,575				567,144				72
Accrued interest and other liabilities			1,965,421				1,557,685				26
Long-term borrowings			5,687,868				7,128,916				-20
Total liabilities			71,177,671				68,482,960				4
Shareholders' equity:
Preferred			868,433				860,901				1
Common (1)			8,761,474				8,383,293				5
Total shareholders' equity			9,629,907				9,244,194				4
Total liabilities and shareholders' equity		$	80,807,578				77,727,154				4	%

 

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $277.8 million at June 30, 2012 and $228.8 million at June 30, 2011.

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15-15-15-15-15

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend

 

Dollars in thousands		June 30, 2012				March 31, 2012				December 31, 2011				September 30, 2011				June 30, 2011
ASSETS
Cash and due from banks		$	1,421,831				1,344,092				1,449,547				1,349,057				1,297,335
Interest-bearing deposits at banks			1,069,717				1,282,040				154,960				2,226,779				2,275,450
Federal funds sold and agreements to resell securities			1,000				—				2,850				5,000				415,580
Trading account assets			544,938				517,620				561,834				605,557				502,986
Investment securities			7,057,300				7,195,296				7,673,154				7,173,797				6,492,265
Loans and leases:
Commercial, financial, etc.			16,395,587				15,938,672				15,734,436				15,218,502				15,040,892
Real estate - commercial			24,898,707				24,486,555				24,411,114				23,961,306				24,263,726
Real estate - consumer			9,811,525				8,696,594				7,923,165				7,065,451				6,970,921
Consumer			11,745,453				11,799,929				12,027,290				12,156,005				12,265,690
Total loans and leases, net of unearned discount			62,851,272				60,921,750				60,096,005				58,401,264				58,541,229
Less: allowance for credit losses			917,028				909,006				908,290				908,525				907,589
Net loans and leases			61,934,244				60,012,744				59,187,715				57,492,739				57,633,640
Goodwill			3,524,625				3,524,625				3,524,625				3,524,625				3,524,625
Core deposit and other intangible assets			143,713				159,619				176,394				193,556				210,957
Other assets			5,110,210				5,150,851				5,193,208				5,292,781				5,374,316
Total assets		$	80,807,578				79,186,887				77,924,287				77,863,891				77,727,154
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits		$	22,854,794				20,648,970				20,017,883				19,637,491				18,598,828
Interest-bearing deposits			39,327,849				39,868,782				39,020,839				39,330,027				40,078,834
Deposits at Cayman Islands office			366,164				395,191				355,927				514,871				551,553
Total deposits			62,548,807				60,912,943				59,394,649				59,482,389				59,229,215
Short-term borrowings			975,575				511,981				782,082				694,398				567,144
Accrued interest and other liabilities			1,965,421				1,856,749				1,790,121				1,563,121				1,557,685
Long-term borrowings			5,687,868				6,476,526				6,686,226				6,748,857				7,128,916
Total liabilities			71,177,671				69,758,199				68,653,078				68,488,765				68,482,960
Shareholders' equity:
Preferred			868,433				866,489				864,585				862,717				860,901
Common (1)			8,761,474				8,562,199				8,406,624				8,512,409				8,383,293
Total shareholders' equity			9,629,907				9,428,688				9,271,209				9,375,126				9,244,194
Total liabilities and shareholders' equity		$	80,807,578				79,186,887				77,924,287				77,863,891				77,727,154

 

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $277.8 million at June 30, 2012, $331.3 million at March 31, 2012, $356.4 million at December 31, 2011, $192.5 million at September 30, 2011 and $228.8 million at June 30, 2011.

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16-16-16-16-16

M&T BANK CORPORATION

Condensed Consolidated Average Balance Sheet

and Annualized Taxable-equivalent Rates

 

Dollars in millions		Three months ended																								Change in balance June 30,  2012 from								Six months ended June 30
		June 30, 2012								June 30, 2011								March 31, 2012								June 30,				March 31,				2012								2011								Change in balance
		Balance				Rate				Balance				Rate				Balance				Rate				2011				2012				Balance				Rate				Balance				Rate
ASSETS
Interest-bearing deposits at banks		$	1,247				.25	%			804				.24	%			301				.28	%			55	%			313	%		$	774				.25	%			462				.22	%			68	%
Federal funds sold and agreements to resell securities			6				.56				622				.09				3				.50				-99				127				4				.54				320				.10				-99
Trading account assets			100				1.64				101				1.32				93				1.57				—				7				97				1.61				105				1.47				-8
Investment securities			7,271				3.47				6,394				4.03				7,507				3.54				14				-3				7,389				3.51				6,805				4.11				9
Loans and leases, net of unearned discount
Commercial, financial, etc.			16,104				3.72				14,623				3.89				15,732				3.71				10				2				15,918				3.72				14,101				3.91				13
Real estate - commercial			24,737				4.65				22,471				4.59				24,559				4.42				10				1				24,648				4.54				21,741				4.65				13
Real estate - consumer			9,216				4.43				6,559				5.00				8,286				4.60				41				11				8,751				4.51				6,308				5.03				39
Consumer			11,769				4.82				11,808				5.03				11,907				4.80				—				-1				11,838				4.81				11,576				5.08				2
Total loans and leases, net			61,826				4.42				55,461				4.55				60,484				4.35				11				2				61,155				4.39				53,726				4.61				14
Total earning assets			70,450				4.25				63,382				4.40				68,388				4.24				11				3				69,419				4.24				61,418				4.49				13
Goodwill			3,525								3,525								3,525								—				—				3,525								3,525								—
Core deposit and other intangible assets			151								165								168								-9				-10				159								142								12
Other assets			5,961								5,382								5,945								11				—				5,953								5,177								15
Total assets		$	80,087								72,454								78,026								11	%			3	%		$	79,056								70,262								13	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
NOW accounts		$	841				.20				742				.15				827				.14				13	%			2	%		$	834				.17				685				.14				22	%
Savings deposits			33,286				.20				30,043				.28				32,410				.23				11				3				32,848				.22				28,863				.28				14
Time deposits			5,545				.90				6,657				1.16				5,960				.91				-17				-7				5,753				.90				6,181				1.25				-7
Deposits at Cayman Islands office			457				.20				820				.09				496				.17				-44				-8				476				.19				999				.12				-52
Total interest-bearing deposits			40,129				.30				38,262				.42				39,693				.33				5				1				39,911				.31				36,728				.44				9
Short-term borrowings			875				.16				707				.08				828				.15				24				6				852				.15				1,024				.13				-17
Long-term borrowings			6,102				3.90				7,076				3.48				6,507				3.78				-14				-6				6,304				3.84				7,222				3.37				-13
Total interest-bearing liabilities			47,106				.76				46,045				.89				47,028				.80				2				—				47,067				.78				44,974				.90				5
Noninterest-bearing deposits			21,401								16,195								19,598								32				9				20,499								15,353								34
Other liabilities			2,044								1,402								2,024								46				1				2,034								1,302								56
Total liabilities			70,551								63,642								68,650								11				3				69,600								61,629								13
Shareholders' equity			9,536								8,812								9,376								8				2				9,456								8,633								10
Total liabilities and shareholders' equity		$	80,087								72,454								78,026								11	%			3	%		$	79,056								70,262								13	%
Net interest spread							3.49								3.51								3.44																3.46								3.59
Contribution of interest-free funds							.25								.24								.25																.25								.24
Net interest margin							3.74	%							3.75	%							3.69	%															3.71	%							3.83	%

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17-17-17-17-17

M&T BANK CORPORATION

Reconciliation of Quarterly GAAP to Non-GAAP Measures

 

		Three months ended June 30								Six months ended June 30
		2012				2011				2012				2011
Income statement data
In thousands, except per share
Net income
Net income		$	233,380				322,358			$	439,843				528,631
Amortization of core deposit and other intangible assets (1)			9,709				8,974				19,949				16,452
Merger-related gain (1)			—				(64,930	)			—				(64,930	)
Merger-related expenses (1)			4,344				23,085				6,001				25,694
Net operating income		$	247,433				289,487			$	465,793				505,847
Earnings per common share
Diluted earnings per common share		$	1.71				2.42			$	3.20				4.02
Amortization of core deposit and other intangible assets (1)			.08				.07				.16				.13
Merger-related gain (1)			—				(.52	)			—				(.53	)
Merger-related expenses (1)			.03				.19				.05				.21
Diluted net operating earnings per common share		$	1.82				2.16			$	3.41				3.83
Other expense
Other expense		$	627,392				576,895			$	1,267,087				1,076,466
Amortization of core deposit and other intangible assets			(15,907	)			(14,740	)			(32,681	)			(27,054	)
Merger-related expenses			(7,151	)			(36,996	)			(9,879	)			(41,291	)
Noninterest operating expense		$	604,334				525,159			$	1,224,527				1,008,121
Merger-related expenses
Salaries and employee benefits		$	3,024				15,305			$	4,997				15,312
Equipment and net occupancy			—				25				15				104
Printing, postage and supplies			—				318				—				465
Other costs of operations			4,127				21,348				4,867				25,410
Total		$	7,151				36,996			$	9,879				41,291
Efficiency ratio
Noninterest operating expense (numerator)		$	604,334				525,159			$	1,224,527				1,008,121
Taxable-equivalent net interest income			654,628				592,670				1,281,722				1,167,801
Other income			391,650				501,656				768,373				816,076
Less: Gain (loss) on bank investment securities			(408	)			110,744				(363	)			150,097
Net OTTI losses recognized in earnings			(16,173	)			(26,530	)			(27,659	)			(42,571	)
Merger-related gain			—				64,930				—				64,930
Denominator		$	1,062,859				945,182			$	2,078,117				1,811,421
Efficiency ratio			56.86	%			55.56	%			58.92	%			55.65	%
Balance sheet data
In millions
Average assets
Average assets		$	80,087				72,454			$	79,056				70,262
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(151	)			(165	)			(159	)			(142	)
Deferred taxes			44				42				46				31
Average tangible assets		$	76,455				68,806			$	75,418				66,626
Average common equity
Average total equity		$	9,536				8,812			$	9,456				8,633
Preferred stock			(868	)			(716	)			(867	)			(730	)
Average common equity			8,668				8,096				8,589				7,903
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(151	)			(165	)			(159	)			(142	)
Deferred taxes			44				42				46				31
Average tangible common equity		$	5,036				4,448			$	4,951				4,267
At end of quarter
Total assets
Total assets		$	80,808				77,727
Goodwill			(3,525	)			(3,525	)
Core deposit and other intangible assets			(143	)			(210	)
Deferred taxes			41				60
Total tangible assets		$	77,181				74,052
Total common equity
Total equity		$	9,630				9,244
Preferred stock			(868	)			(861	)
Undeclared dividends - cumulative preferred stock			(4	)			(3	)
Common equity, net of undeclared cumulative preferred dividends			8,758				8,380
Goodwill			(3,525	)			(3,525	)
Core deposit and other intangible assets			(143	)			(210	)
Deferred taxes			41				60
Total tangible common equity		$	5,131				4,705

 

(1)	After any related tax effect.

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18-18-18-18-18

M&T BANK CORPORATION

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

 

		Three months ended
		June 30, 2012				March 31, 2012				December 31, 2011				September 30, 2011				June 30, 2011
Income statement data
In thousands, except per share
Net income
Net income		$	233,380				206,463				147,740				183,108				322,358
Amortization of core deposit and other intangible assets (1)			9,709				10,240				10,476				10,622				8,974
Merger-related gain (1)			—				—				—				—				(64,930	)
Merger-related expenses (1)			4,344				1,657				10,194				16,266				23,085
Net operating income		$	247,433				218,360				168,410				209,996				289,487
Earnings per common share
Diluted earnings per common share		$	1.71				1.50				1.04				1.32				2.42
Amortization of core deposit and other intangible assets (1)			.08				.08				.08				.08				.07
Merger-related gain (1)			—				—				—				—				(.52	)
Merger-related expenses (1)			.03				.01				.08				.13				.19
Diluted net operating earnings per common share		$	1.82				1.59				1.20				1.53				2.16
Other expense
Other expense		$	627,392				639,695				739,583				662,019				576,895
Amortization of core deposit and other intangible assets			(15,907	)			(16,774	)			(17,162	)			(17,401	)			(14,740	)
Merger-related expenses			(7,151	)			(2,728	)			(16,393	)			(26,003	)			(36,996	)
Noninterest operating expense		$	604,334				620,193				706,028				618,615				525,159
Merger-related expenses
Salaries and employee benefits		$	3,024				1,973				534				285				15,305
Equipment and net occupancy			—				15				189				119				25
Printing, postage and supplies			—				—				1,475				723				318
Other costs of operations			4,127				740				14,195				24,876				21,348
Total		$	7,151				2,728				16,393				26,003				36,996
Efficiency ratio
Noninterest operating expense (numerator)		$	604,334				620,193				706,028				618,615				525,159
Taxable-equivalent net interest income			654,628				627,094				624,566				623,265				592,670
Other income			391,650				376,723				398,454				368,382				501,656
Less: Gain (loss) on bank investment securities			(408	)			45				1				89				110,744
Net OTTI losses recognized in earnings			(16,173	)			(11,486	)			(24,822	)			(9,642	)			(26,530	)
Merger-related gain			—				—				—				—				64,930
Denominator		$	1,062,859				1,015,258				1,047,841				1,001,200				945,182
Efficiency ratio			56.86	%			61.09	%			67.38	%			61.79	%			55.56	%
Balance sheet data
In millions
Average assets
Average assets		$	80,087				78,026				78,393				76,908				72,454
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(151	)			(168	)			(185	)			(202	)			(165	)
Deferred taxes			44				48				54				58				42
Average tangible assets		$	76,455				74,381				74,737				73,239				68,806
Average common equity
Average total equity		$	9,536				9,376				9,413				9,324				8,812
Preferred stock			(868	)			(866	)			(864	)			(862	)			(716	)
Average common equity			8,668				8,510				8,549				8,462				8,096
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(151	)			(168	)			(185	)			(202	)			(165	)
Deferred taxes			44				48				54				58				42
Average tangible common equity		$	5,036				4,865				4,893				4,793				4,448
At end of quarter
Total assets
Total assets		$	80,808				79,187				77,924				77,864				77,727
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(143	)			(160	)			(176	)			(193	)			(210	)
Deferred taxes			41				46				51				55				60
Total tangible assets		$	77,181				75,548				74,274				74,201				74,052
Total common equity
Total equity		$	9,630				9,429				9,271				9,375				9,244
Preferred stock			(868	)			(867	)			(865	)			(863	)			(861	)
Undeclared dividends - cumulative preferred stock			(4	)			(3	)			(3	)			(3	)			(3	)
Common equity, net of undeclared cumulative preferred dividends			8,758				8,559				8,403				8,509				8,380
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(143	)			(160	)			(176	)			(193	)			(210	)
Deferred taxes			41				46				51				55				60
Total tangible common equity		$	5,131				4,920				4,753				4,846				4,705

 

(1)	After any related tax effect.

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