Table of Contents
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 10, 2003
M&T BANK CORPORATION
New York
| 1-9861 | 16-0968385 | |
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| (Commission File Number) | (I.R.S. Employer Identification No.) | |
| One M&T Plaza, Buffalo, New York | 14203 | |
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| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (716) 842-5445
(NOT APPLICABLE)
| Item 7. Financial Statements and Exhibits. | ||||||||
| SIGNATURES | ||||||||
| EXHIBIT INDEX | ||||||||
| EXHIBIT 99 NEWS RELEASE M & T BANK CORPORATION | ||||||||
Table of Contents
M&T Bank Corporation (“M&T”) hereby amends the following item of its Current Report on Form 8-K dated January 10, 2003. The purpose of this amendment is to include as an exhibit the definitive news release announcing M&T’s results of operations for the fiscal year ending December 31, 2002. The news release filed herewith supersedes and replaces the news release originally included as Exhibit 99 to M&T’s Current Report on Form 8-K dated January 10, 2003 and is identical to the news release issued by M&T on January 10, 2003.
Item 7. Financial Statements and Exhibits.
The following exhibit is filed as a part of this report and is hereby incorporated by reference :
| Exhibit No. | ||
| 99 | News Release. |
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: January 28, 2003 | By: | /s/ Michael P. Pinto | ||
| Michael P. Pinto | ||||
| Executive Vice President and Chief Financial Officer | ||||
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Table of Contents
EXHIBIT INDEX
| Exhibit No. | ||
| 99 | News Release. Filed herewith. |
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Exhibit 99
| CONTACT: | Michael S. Piemonte | FOR IMMEDIATE RELEASE: | ||
| (716) 842-5138 | January 10, 2003 |
M&T BANK CORPORATION ANNOUNCES 2002 RESULTS
BUFFALO, NEW YORK — M&T Bank Corporation (“M&T”)(NYSE:MTB) today reported that diluted cash earnings per share for 2002 rose 11% to $5.41 from $4.87 in 2001. Cash net income for 2002 was $518 million, up 7% from $482 million in 2001. Expressed as a rate of return on average tangible assets, cash net income was 1.68% in 2002, up from 1.63% in 2001. Cash return on average tangible common equity improved to 28.62% in 2002 from 28.50% in 2001. Cash earnings exclude the after-tax effect of nonrecurring merger-related expenses and amortization of intangible assets.
Diluted cash earnings per share for the fourth quarter of 2002 were $1.40, up 8% from $1.30 in the corresponding 2001 quarter. Cash net income for the recent quarter was $133 million, 5% higher than the $126 million earned in the year-earlier quarter. The annualized cash returns on average tangible assets and average tangible equity were 1.65% and 27.38%, respectively, in 2002’s fourth quarter, compared with 1.67% and 29.43%, respectively, in the final quarter of 2001.
M&T has provided supplemental reporting of its operating results on a “cash” or “tangible” basis (which excludes the after-tax effect of amortization of goodwill and core deposit and other intangible assets and the related asset balances resulting from acquisition transactions) since 1998. Management believes that such reporting represents a relevant measure of financial performance.
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In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” M&T ceased amortization of goodwill associated with corporate acquisitions, effective January 1, 2002. Amortization of such goodwill during the fourth quarter and twelve months of 2001, none of which was tax deductible, totaled $16 million ($.16 per diluted share) and $62 million ($.62 per diluted share), respectively. Charges for amortization of core deposit and other intangible assets totaled $12 million ($7 million after tax effect, or $.07 per diluted share) during the fourth quarter of 2002, compared with $14 million ($9 million after tax effect, or $.09 per diluted share) during the year-earlier quarter. Similar amortization charges for the year ended December 31, 2002 and 2001 were $51 million ($32 million after tax effect, or $.34 per diluted share) and $60 million ($38 million after tax effect, or $.38 per diluted share), respectively. M&T had recorded as assets at December 31, 2002 and 2001 goodwill of $1.1 billion, while core deposit and other intangible assets totaled $119 million and $170 million at those respective dates.
Net income measured in accordance with generally accepted accounting principles (“GAAP”) includes the impact of non-cash charges for amortization of intangible assets, as well as nonrecurring merger-related expenses. GAAP-basis diluted earnings per share for 2002 rose 33% to $5.07 from $3.82 in 2001. On the same basis, net income for 2002 increased 28% to $485 million from $378 million in the prior year. Pro forma GAAP-basis diluted earnings per share and net income for 2001, computed as if SFAS No. 142 had been effective on January 1, 2001, were $4.44 and $440 million, respectively. GAAP-basis net income for 2002 expressed as a rate of return on average assets and average common stockholders’ equity was 1.52% and 16.15%, respectively, up from 1.23% and 12.78%,
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respectively, for 2001. Pro forma GAAP-basis returns on average assets and average common stockholders’ equity for 2001 were 1.43% and 14.87%, respectively, after excluding the impact of goodwill amortization. The after-tax impact of merger-related expenses incurred in 2001 was $5 million ($.05 per diluted share). There were no significant merger-related expenses in 2002.
For 2002’s fourth quarter, GAAP-basis diluted earnings per share and net income were $1.33 and $126 million, respectively, improved from $1.05 and $102 million, respectively, in the final quarter of 2001. As already noted, the after-tax impact of amortization of goodwill in the fourth quarter of 2001 was $16 million, or $.16 per diluted share, resulting in pro forma GAAP-basis diluted earnings per share and net income for last year’s fourth quarter, calculated as if SFAS No. 142 had been in effect during 2001, of $1.21 and $117 million, respectively. The annualized returns on average assets and average common equity for the fourth quarter of 2002 were 1.51% and 16.05%, respectively, compared with 1.29% and 13.70%, respectively, in the year-earlier quarter. Pro forma GAAP-basis annualized returns on average assets and average common stockholders’ equity for the final 2001 quarter were 1.49% and 15.79%, respectively, after excluding the impact of goodwill amortization. There were no significant merger-related expenses during the fourth quarters of 2002 or 2001.
Michael P. Pinto, Executive Vice President and Chief Financial Officer of M&T, commented “Continued weakness in general economic conditions resulted in an extremely challenging year for M&T. However, certain positive factors allowed us to report an increase in cash net income for 2002. Particularly encouraging were the growth experienced in our consumer loan portfolio, predominantly home equity lines of credit and automobile loans, and a strong net interest margin.”
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A summary of net income and diluted earnings per share, pro forma net income and pro forma diluted earnings per share (computed as if SFAS No. 142 had been effective in 2001) and cash net income and diluted cash earnings per share follows:
| Three months ended | Year ended | |||||||||||||||
| December 31 | December 31 | |||||||||||||||
| 2002 | 2001 | 2002 | 2001 | |||||||||||||
| (in thousands, except per share) | ||||||||||||||||
Net income |
$ | 125,819 | 101,734 | 485,092 | 378,075 | |||||||||||
Amortization of goodwill |
— | 15,558 | — | 61,820 | ||||||||||||
Pro forma net income |
125,819 | 117,292 | 485,092 | 439,895 | ||||||||||||
Amortization of core deposit
and other intangible assets(1) |
7,209 | 9,159 | 32,491 | 37,525 | ||||||||||||
Nonrecurring merger-related
expenses(1) |
— | — | — | 4,844 | ||||||||||||
Cash net income |
$ | 133,028 | 126,451 | 517,583 | 482,264 | |||||||||||
Diluted earnings per share |
$ | 1.33 | 1.05 | 5.07 | 3.82 | |||||||||||
Amortization of goodwill |
— | .16 | — | .62 | ||||||||||||
Pro forma diluted earnings per
share |
1.33 | 1.21 | 5.07 | 4.44 | ||||||||||||
Amortization of core deposit
and other intangible assets(1) |
.07 | .09 | .34 | .38 | ||||||||||||
Nonrecurring merger-related
expenses(1) |
— | — | — | .05 | ||||||||||||
Diluted cash earnings per share |
$ | 1.40 | 1.30 | 5.41 | 4.87 | |||||||||||
| (1) | After any related tax effect |
Taxable-equivalent net interest income rose 7% to $1.26 billion in 2002 from $1.18 billion in 2001. A widening of M&T’s net interest margin, or taxable-equivalent net interest income expressed as a percentage of average earning assets, and higher average loans outstanding were the leading factors in the improvement. Net interest margin improved by 13 basis points (hundredths of one percent) to 4.36% in 2002 from 4.23% in 2001. Average loans outstanding in 2002 were $25.5 billion, up 4% from $24.4 billion a year earlier. Growth in consumer loans of $1.2
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billion, or 21%, was partially offset by lower levels of residential real estate and commercial loans. Average loans outstanding totaled $25.9 billion in 2002’s fourth quarter when the annualized net interest margin was 4.28%, compared with $25.0 billion of average loans outstanding and a 4.34% annualized net interest margin in the year-earlier quarter. During November 2002, approximately $1.1 billion of residential real estate loans were securitized. Eighty-eight percent of these mortgage-backed securities were retained in M&T’s investment securities portfolio. A $5 million gain was realized from the sale of the twelve percent portion and has been included in other noninterest income.
The provision for credit losses increased to $122 million in 2002 from $104 million in 2001. Net charge-offs of loans during the recent year totaled $108 million or .42% of average loans outstanding, compared with $75 million or ..31% of average loans in 2001. Net charge-offs were $31 million during the fourth quarter of 2002, or an annualized .48% of average loans outstanding, compared with $21 million or .33% during the final quarter of 2001. Nonperforming loans were $215 million at December 31, 2002, or .84% of total loans, compared with $190 million or .76% a year earlier. Loans past due 90 days or more and accruing interest totaled $154 million at the recent year-end, compared with $147 million at December 31, 2001. Included in these loans at December 31, 2002 and 2001 were $123 million and $108 million, respectively, of one-to-four family residential mortgage loans serviced by M&T and repurchased from the Government National Mortgage Association. The outstanding principal balances of these loans, which were repurchased to reduce loan servicing costs, are fully guaranteed by government agencies. In general, the remaining portion of accruing loans past due 90 days or more are either also guaranteed by government agencies or well-secured by collateral.
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M&T’s allowance for credit losses totaled $436 million, representing 1.70% of total loans, at December 31, 2002, compared with $425 million or 1.69% a year earlier. The ratio of the allowance for credit losses to nonperforming loans was 203% at the recent year-end, compared with 223% a year earlier. Assets taken in foreclosure of defaulted loans were $17 million and $16 million at December 31, 2002 and 2001, respectively.
Noninterest income rose 7% to $512 million for the year ended December 31, 2002 from $477 million in 2001. Similarly, noninterest income of $138 million during the fourth quarter of 2002 was up 8% from $128 million during the corresponding 2001 quarter. Higher revenues from providing deposit account and mortgage banking services significantly contributed to both increases. Noninterest operating expenses, which exclude amortization of intangible assets and nonrecurring merger-related expenses, were $870 million in 2002, compared with $819 million in 2001. A provision for the impairment of capitalized residential mortgage servicing rights of $32 million and higher costs for salaries, including commissions and incentive compensation, largely contributed to the higher level of operating expenses. The impairment charge reflects the impact on customer refinancings that the current low interest rate environment is expected to have on residential mortgage prepayment speeds. There was no similar impairment charge in 2001. Noninterest operating expenses totaled $229 million during 2002’s final quarter, up 7% from $215 million in the year-earlier period. Reflecting the lowest residential mortgage interest rates in over 40 years, M&T recognized a $13 million impairment in the carrying value of capitalized residential mortgage servicing rights during the recently completed quarter.
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The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income, measures the relationship of operating expenses to revenues. M&T’s efficiency ratio, calculated using the operating expense totals noted above and excluding gains (losses) from sales of bank investment securities from noninterest income, was 49.0% in 2002, improved from 49.6% in 2001.
At December 31, 2002, M&T had total assets of $33.2 billion, up from $31.5 billion a year earlier. Loans and leases, net of unearned discount, increased 2% to $25.7 billion at the 2002 year-end from $25.2 billion at December 31, 2001. Year-over-year growth of the loan portfolio was muted by the previously mentioned $1.1 billion residential real estate loan securitization in November 2002. Deposits were $21.7 billion and $21.6 billion at December 31, 2002 and 2001, respectively. Total stockholders’ equity was $3.2 billion at December 31, 2002, representing 9.59% of total assets, compared with $2.9 billion or 9.35% a year earlier. Common stockholders’ equity per share was $34.53 and $31.33 at December 31, 2002 and 2001, respectively. Tangible equity per common share was $21.75 at the recent year-end and $18.34 at December 31, 2001.
In September 2002, M&T announced that it entered into a definitive agreement with Allied Irish Banks, p.l.c. (“AIB”), Dublin, Ireland, to acquire Allfirst Financial Inc. (“Allfirst”), Baltimore, Maryland, and to merge it into M&T. The merger has been approved by the shareholders of AIB and M&T, but still must be approved by various regulatory agencies. Assuming the timely receipt of such approvals, the merger is expected to be completed in the first quarter of 2003.
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In September 2002, M&T announced that it will begin expensing the fair value of stock-based compensation effective January 1, 2003. As allowed under GAAP, M&T has historically not recognized compensation expense for employee stock options, although the impact on net income and diluted earnings per share of expensing the fair value of stock options has been disclosed for all years since 1995. Beginning in 2003, M&T will recognize stock-based compensation expense in accordance with the fair value-based method of accounting described in SFAS No. 123, “Accounting for Stock-Based Compensation,” as amended. M&T expects to implement the fair value based method of accounting for stock-based employee compensation using the retroactive restatement method described in SFAS No. 148, which is an amendment to SFAS No. 123 adopted by the Financial Accounting Standards Board in December 2002. Assuming the number of stock options issued in 2003 will be similar to those issued in 2002, M&T estimates that stock-based compensation expense for 2003 will be $33 million (after tax effect). Similar expense that will be recognized for 2002 using the retroactive restatement method is $28 million (after tax effect).
In November 2001, M&T announced that it had been authorized by its Board of Directors to repurchase up to 5,000,000 shares of its common stock. Through September 2002, M&T had repurchased 3,632,098 shares of common stock pursuant to such plan at an average cost of $78.49 per share. M&T has discontinued purchases of its common stock, instead using the Company’s internal generation of capital to support the pending acquisition of Allfirst.
With a view toward 2003, Mr. Pinto noted, “We look forward to meeting 2003’s challenges, including the successful merger and integration of Allfirst into M&T. We estimate that, excluding
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the effect of the Allfirst transaction, GAAP-basis diluted earnings per share in 2003 will be in the $5.25 to $5.35 range, after absorbing the estimated impact of expensing stock-based compensation. However, given the uncertain economic outlook that we presently face, this estimate remains subject to the impact of actual events and circumstances that may occur during the year.”
Investors will have an opportunity to listen to M&T’s conference call to discuss fourth quarter and full year financial results at 10:00 a.m. Eastern Standard Time (“EST”) today, January 10, 2003. Those wishing to participate in the call may dial 877-780-2276. International participants may dial 973-582-2700. The conference call will be webcast live at http://ir.mandtbank.com/conference.cfm. A replay of the call will be available until January 11, 2003 by calling 877-519-4471, code 3670378 and 973-341-3080 for international participants. The event will also be archived and available by 1:00 p.m. (EST), January 10, 2003 on M&T’s website at http://ir.mandtbank.com/conference.cfm.
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. M&T undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
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Future Factors include changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; credit losses; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock options to be issued in future periods; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively; regulatory supervision and oversight, including required capital levels; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes, including environmental regulations; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries’ future businesses; and material differences in the actual financial results of merger and acquisition activities compared to 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 conditions, including interest rate and currency exchange rate fluctuations, and other Future Factors.
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Financial Highlights
| Three months ended | Year ended | ||||||||||||||||||||||||
| December 31 | December 31 | ||||||||||||||||||||||||
| Amounts in thousands, | |||||||||||||||||||||||||
| except per share | 2002 | 2001 | Change | 2002 | 2001 | Change | |||||||||||||||||||
Performance |
|||||||||||||||||||||||||
Net income |
$ | 125,819 | 101,734 | 24 | % | $ | 485,092 | 378,075 | 28 | % | |||||||||||||||
Per common share: |
|||||||||||||||||||||||||
Basic earnings |
$ | 1.37 | 1.08 | 27 | % | $ | 5.25 | 3.95 | 33 | % | |||||||||||||||
Diluted earnings |
1.33 | 1.05 | 27 | 5.07 | 3.82 | 33 | |||||||||||||||||||
Cash dividends |
$ | .30 | .25 | 20 | $ | 1.05 | 1.00 | 5 | |||||||||||||||||
Common shares outstanding: |
|||||||||||||||||||||||||
Average — diluted (1) |
94,953 | 97,179 | -2 | % | 95,663 | 99,024 | -3 | % | |||||||||||||||||
Period end (2) |
92,155 | 93,814 | -2 | 92,155 | 93,814 | -2 | |||||||||||||||||||
Return on (annualized): |
|||||||||||||||||||||||||
Average total assets |
1.51 | % | 1.29 | % | 1.52 | % | 1.23 | % | |||||||||||||||||
Average common stockholders’ equity |
16.05 | % | 13.70 | % | 16.15 | % | 12.78 | % | |||||||||||||||||
Taxable-equivalent net interest income |
$ | 325,157 | 308,934 | 5 | % | $ | 1,261,634 | 1,175,801 | 7 | % | |||||||||||||||
Yield on average earning assets |
6.08 | % | 6.97 | % | 6.42 | % | 7.62 | % | |||||||||||||||||
Cost of interest-bearing liabilities |
2.09 | % | 3.03 | % | 2.39 | % | 3.91 | % | |||||||||||||||||
Net interest spread |
3.99 | % | 3.94 | % | 4.03 | % | 3.71 | % | |||||||||||||||||
Contribution of interest-free funds |
.29 | % | .40 | % | .33 | % | .52 | % | |||||||||||||||||
Net interest margin |
4.28 | % | 4.34 | % | 4.36 | % | 4.23 | % | |||||||||||||||||
Net charge-offs to average total
net loans (annualized) |
.48 | % | .33 | % | .42 | % | .31 | % | |||||||||||||||||
Cash
operating results (3) |
|||||||||||||||||||||||||
Cash net income |
$ | 133,028 | 126,451 | 5 | % | $ | 517,583 | 477,420 | 8 | % | |||||||||||||||
Cash net income, excluding
acquisition-related expenses |
133,028 | 126,451 | 5 | 517,583 | 482,264 | 7 | |||||||||||||||||||
Diluted cash earnings per common share |
1.40 | 1.30 | 8 | 5.41 | 4.82 | 12 | |||||||||||||||||||
Diluted cash earnings per common share,
excluding acquisition-related expenses |
1.40 | 1.30 | 8 | 5.41 | 4.87 | 11 | |||||||||||||||||||
Return on (annualized): |
|||||||||||||||||||||||||
Average tangible assets |
1.65 | % | 1.67 | % | 1.68 | % | 1.62 | % | |||||||||||||||||
Average tangible assets, excluding
acquisition-related expenses |
1.65 | % | 1.67 | % | 1.68 | % | 1.63 | % | |||||||||||||||||
Average tangible common equity |
27.38 | % | 29.43 | % | 28.62 | % | 28.22 | % | |||||||||||||||||
Average tangible common equity,
excluding acquisition-related expenses |
27.38 | % | 29.43 | % | 28.62 | % | 28.50 | % | |||||||||||||||||
Efficiency ratio, excluding acquisition-related
expenses |
49.42 | % | 49.16 | % | 49.01 | % | 49.58 | % | |||||||||||||||||
| At December 31 | ||||||||||||||
| 2002 | 2001 | Change | ||||||||||||
Loan quality |
||||||||||||||
Nonaccrual loans |
$ | 207,038 | 180,344 | 15 | % | |||||||||
Renegotiated loans |
8,252 | 10,128 | -19 | |||||||||||
Total nonperforming loans |
$ | 215,290 | 190,472 | 13 | % | |||||||||
Accruing loans past due 90 days or more |
$ | 153,803 | 146,899 | 5 | % | |||||||||
Nonperforming loans to total net loans |
.84 | % | .76 | % | ||||||||||
Allowance for credit losses to total net loans |
1.70 | % | 1.69 | % | ||||||||||
| (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 which, except in the calculation of the efficiency ratio, are net of applicable income tax effects |
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Condensed Consolidated Statement of Income
| Three months ended | Year ended | |||||||||||||||||||||||||
| December 31 | December 31 | |||||||||||||||||||||||||
| Dollars in thousands | 2002 | 2001 | Change | 2002 | 2001 | Change | ||||||||||||||||||||
Interest income |
$ | 458,216 | 491,713 | -7 | % | $ | 1,842,099 | 2,101,885 | -12 | % | ||||||||||||||||
Interest expense |
136,358 | 186,849 | -27 | 594,514 | 943,597 | -37 | ||||||||||||||||||||
Net interest income |
321,858 | 304,864 | 6 | 1,247,585 | 1,158,288 | 8 | ||||||||||||||||||||
Provision for credit losses |
33,000 | 33,000 | — | 122,000 | 103,500 | 18 | ||||||||||||||||||||
Net interest income after
provision for credit losses |
288,858 | 271,864 | 6 | 1,125,585 | 1,054,788 | 7 | ||||||||||||||||||||
Other income |
||||||||||||||||||||||||||
Mortgage banking revenues |
34,879 | 27,221 | 28 | 116,408 | 102,699 | 13 | ||||||||||||||||||||
Service charges on deposit accounts |
44,123 | 38,455 | 15 | 167,531 | 144,302 | 16 | ||||||||||||||||||||
Trust income |
14,475 | 16,662 | -13 | 60,030 | 64,395 | -7 | ||||||||||||||||||||
Brokerage services income |
9,209 | 10,380 | -11 | 43,261 | 39,349 | 10 | ||||||||||||||||||||
Trading account and foreign exchange gains |
1,144 | 1,871 | -39 | 2,860 | 4,462 | -36 | ||||||||||||||||||||
Gain (loss) on sales of bank investment securities |
51 | — | — | (608 | ) | 1,873 | — | |||||||||||||||||||
Other revenues from operations |
34,297 | 33,107 | 4 | 122,449 | 120,346 | 2 | ||||||||||||||||||||
Total other income |
138,178 | 127,696 | 8 | 511,931 | 477,426 | 7 | ||||||||||||||||||||
Other expense |
||||||||||||||||||||||||||
Salaries and employee benefits |
114,115 | 110,345 | 3 | 456,411 | 434,937 | 5 | ||||||||||||||||||||
Equipment and net occupancy |
26,818 | 27,291 | -2 | 107,822 | 111,403 | -3 | ||||||||||||||||||||
Printing, postage and supplies |
6,486 | 6,370 | 2 | 25,378 | 25,512 | -1 | ||||||||||||||||||||
Amortization of goodwill |
— | 15,558 | -100 | — | 61,820 | -100 | ||||||||||||||||||||
Amortization of core deposit and other
intangible assets |
11,788 | 14,108 | -16 | 51,484 | 59,816 | -14 | ||||||||||||||||||||
Other costs of operations |
81,550 | 70,639 | 15 | 279,937 | 254,830 | 10 | ||||||||||||||||||||
Total other expense |
240,757 | 244,311 | -1 | 921,032 | 948,318 | -3 | ||||||||||||||||||||
Income before income taxes |
186,279 | 155,249 | 20 | 716,484 | 583,896 | 23 | ||||||||||||||||||||
Applicable income taxes |
60,460 | 53,515 | 13 | 231,392 | 205,821 | 12 | ||||||||||||||||||||
Net income |
$ | 125,819 | 101,734 | 24 | % | $ | 485,092 | 378,075 | 28 | % | ||||||||||||||||
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Condensed Consolidated Balance Sheet
| December 31 | |||||||||||||
| Dollars in thousands | 2002 | 2001 | Change | ||||||||||
ASSETS |
|||||||||||||
Cash and due from banks |
$ | 963,772 | 965,664 | — | % | ||||||||
Money-market assets |
379,843 | 84,356 | 350 | ||||||||||
Investment securities |
3,955,150 | 3,024,137 | 31 | ||||||||||
Loans and leases, net of unearned discount |
25,727,784 | 25,187,760 | 2 | ||||||||||
Less: Allowance for credit losses |
436,472 | 425,008 | 3 | ||||||||||
Net loans and leases |
25,291,312 | 24,762,752 | 2 | ||||||||||
Goodwill |
1,097,553 | 1,097,553 | — | ||||||||||
Core deposit and other intangible assets |
118,790 | 170,273 | -30 | ||||||||||
Other assets |
1,368,105 | 1,345,461 | 2 | ||||||||||
Total assets |
$ | 33,174,525 | 31,450,196 | 5 | % | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||||||||
Noninterest-bearing deposits at U.S. offices |
$ | 4,072,085 | 3,704,004 | 10 | % | ||||||||
Other deposits at U.S. offices |
16,432,122 | 17,098,501 | -4 | ||||||||||
Deposits at foreign office |
1,160,716 | 777,895 | 49 | ||||||||||
Total deposits |
21,664,923 | 21,580,400 | — | ||||||||||
Short-term borrowings |
3,429,414 | 3,045,830 | 13 | ||||||||||
Accrued interest and other liabilities |
400,991 | 422,746 | -5 | ||||||||||
Long-term borrowings |
4,497,374 | 3,461,769 | 30 | ||||||||||
Total liabilities |
29,992,702 | 28,510,745 | 5 | ||||||||||
Stockholders’ equity (1) |
3,181,823 | 2,939,451 | 8 | ||||||||||
Total liabilities and stockholders’ equity |
$ | 33,174,525 | 31,450,196 | 5 | % | ||||||||
| (1) | Reflects accumulated other comprehensive income, net of applicable income taxes, of $54.8 million at December 31, 2002 and $22.8 million at December 31, 2001. |
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14-14-14-14-14
M&T BANK CORPORATION
Condensed Consolidated Average Balance Sheet
and Annualized Taxable-equivalent Rates
| Three months ended | Year ended | |||||||||||||||||||||||||||||||||||||||||
| December 31 | December 31 | |||||||||||||||||||||||||||||||||||||||||
| 2002 | 2001 | 2002 | 2001 | |||||||||||||||||||||||||||||||||||||||
| Change in | Change in | |||||||||||||||||||||||||||||||||||||||||
| Dollars in millions | Balance | Rate | Balance | Rate | balance | Balance | Rate | Balance | Rate | balance | ||||||||||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||||||||||||||||
Money-market assets |
$ | 509 | 1.47 | % | 179 | 2.28 | % | 186 | % | $ | 291 | 1.64 | % | 80 | 3.20 | % | 265 | % | ||||||||||||||||||||||||
Investment securities |
3,745 | 5.23 | 3,029 | 6.28 | 24 | 3,123 | 5.63 | 3,308 | 6.63 | -6 | ||||||||||||||||||||||||||||||||
Loans and leases, net of unearned discount |
||||||||||||||||||||||||||||||||||||||||||
Commercial, financial, etc. |
5,273 | 4.83 | 5,181 | 5.67 | 2 | 5,146 | 5.09 | 5,271 | 7.06 | -2 | ||||||||||||||||||||||||||||||||
Real estate — commercial |
9,650 | 6.76 | 9,401 | 7.40 | 3 | 9,498 | 6.96 | 9,224 | 7.94 | 3 | ||||||||||||||||||||||||||||||||
Real estate — consumer |
3,638 | 6.70 | 4,475 | 7.35 | -19 | 4,087 | 6.98 | 4,354 | 7.55 | -6 | ||||||||||||||||||||||||||||||||
Consumer |
7,303 | 6.63 | 5,959 | 7.76 | 23 | 6,776 | 6.89 | 5,581 | 8.32 | 21 | ||||||||||||||||||||||||||||||||
Total loans and leases, net |
25,864 | 6.29 | 25,016 | 7.09 | 3 | 25,507 | 6.57 | 24,430 | 7.77 | 4 | ||||||||||||||||||||||||||||||||
Total earning assets |
30,118 | 6.08 | 28,224 | 6.97 | 7 | 28,921 | 6.42 | 27,818 | 7.62 | 4 | ||||||||||||||||||||||||||||||||
Goodwill |
1,098 | 1,116 | -2 | 1,098 | 1,126 | -3 | ||||||||||||||||||||||||||||||||||||
Core deposit and other intangible assets |
124 | 177 | -30 | 143 | 196 | -27 | ||||||||||||||||||||||||||||||||||||
Other assets |
1,808 | 1,759 | 3 | 1,750 | 1,686 | 4 | ||||||||||||||||||||||||||||||||||||
Total assets |
$ | 33,148 | 31,276 | 6 | % | $ | 31,912 | 30,826 | 4 | % | ||||||||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
||||||||||||||||||||||||||||||||||||||||||
NOW accounts |
$ | 794 | .45 | 753 | .66 | 6 | % | $ | 761 | .51 | 722 | 1.18 | 5 | % | ||||||||||||||||||||||||||||
Savings deposits |
9,355 | 1.08 | 8,009 | 1.45 | 17 | 8,899 | 1.21 | 7,378 | 1.82 | 21 | ||||||||||||||||||||||||||||||||
Time deposits |
6,673 | 2.75 | 8,307 | 4.21 | -20 | 7,398 | 3.20 | 8,906 | 5.10 | -17 | ||||||||||||||||||||||||||||||||
Deposits at foreign office |
934 | 1.43 | 363 | 1.89 | 157 | 569 | 1.49 | 327 | 3.44 | 74 | ||||||||||||||||||||||||||||||||
Total interest-bearing deposits |
17,756 | 1.70 | 17,432 | 2.74 | 2 | 17,627 | 2.02 | 17,333 | 3.51 | 2 | ||||||||||||||||||||||||||||||||
Short-term borrowings |
3,651 | 1.50 | 3,488 | 2.18 | 5 | 3,125 | 1.69 | 3,280 | 3.81 | -5 | ||||||||||||||||||||||||||||||||
Long-term borrowings |
4,486 | 4.11 | 3,533 | 5.32 | 27 | 4,162 | 4.45 | 3,538 | 5.95 | 18 | ||||||||||||||||||||||||||||||||
Total interest-bearing liabilities |
25,893 | 2.09 | 24,453 | 3.03 | 6 | 24,914 | 2.39 | 24,151 | 3.91 | 3 | ||||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
3,752 | 3,466 | 8 | 3,618 | 3,327 | 9 | ||||||||||||||||||||||||||||||||||||
Other liabilities |
394 | 410 | -4 | 377 | 390 | -3 | ||||||||||||||||||||||||||||||||||||
Total liabilities |
30,039 | 28,329 | 6 | 28,909 | 27,868 | 4 | ||||||||||||||||||||||||||||||||||||
Stockholders’ equity |
3,109 | 2,947 | 6 | 3,003 | 2,958 | 2 | ||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity |
$ | 33,148 | 31,276 | 6 | % | $ | 31,912 | 30,826 | 4 | % | ||||||||||||||||||||||||||||||||
Net interest spread |
3.99 | 3.94 | 4.03 | 3.71 | ||||||||||||||||||||||||||||||||||||||
Contribution of interest-free funds |
.29 | .40 | .33 | .52 | ||||||||||||||||||||||||||||||||||||||
Net interest margin |
4.28 | % | 4.34 | % | 4.36 | % | 4.23 | % | ||||||||||||||||||||||||||||||||||
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