UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 17, 2014

 

 

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 October 17, 2014, M&T Bank Corporation announced its results of operations for the quarter ended September 30, 2014. 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 October 17, 2014.

 

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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: October 17, 2014				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 October 17, 2014. Filed herewith.

 

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Exhibit 99

 

INVESTOR CONTACT:		Donald J. MacLeod		FOR IMMEDIATE RELEASE:
		(716) 842-5138		October 17, 2014
MEDIA CONTACT:		C. Michael Zabel
		(716) 842-5385

M&T BANK CORPORATION ANNOUNCES THIRD QUARTER RESULTS

BUFFALO, NEW YORK — M&T Bank Corporation (“M&T”) (NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2014.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the third quarter of 2014 were $1.91, compared with $2.11 in the year-earlier quarter and $1.98 in the second quarter of 2014. GAAP-basis net income in the recently completed quarter aggregated $275 million, compared with $294 million and $284 million in the third quarter of 2013 and the second quarter of 2014, respectively. GAAP-basis net income for the third quarter of 2014 expressed as an annualized rate of return on average assets and average common shareholders’ equity was 1.17% and 9.18%, respectively, compared with 1.39% and 11.06%, respectively, in the year-earlier quarter and 1.27% and 9.79%, respectively, in 2014’s second quarter. Reflected in last year’s third quarter profits were after-tax gains of $34 million from loan securitization transactions that added $.26 of diluted earnings per common share to that quarter’s results.

Commenting on M&T’s financial performance for the recent quarter, René F. Jones, Vice Chairman and Chief Financial Officer, noted, “Revenue levels were largely unchanged in comparison with the linked quarter. Average loans grew modestly and fee income

 

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M&T BANK CORPORATION

 

declined slightly from the strong second quarter performance. Most important was the substantial progress we have made on our key initiatives related to strengthening M&T’s BSA/AML, compliance and risk management infrastructure. That progress led to the continuation of an elevated level of operating expenses, but we firmly believe that our decision to invest in these initiatives is money well-spent. Significantly, credit quality remained quite strong, as reflected in lower levels of nonperforming loans and net charge-offs when compared with the previous quarter.”

Supplemental Reporting of Non-GAAP Results of Operations. M&T consistently provides supplemental reporting of its results on a “net operating” or “tangible” basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and 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.

Diluted net operating earnings per common share were $1.94 in the third quarter of 2014, compared with $2.16 and $2.02 in the year-earlier quarter and the second quarter of 2014, respectively. Net operating income during the recent quarter was $280 million, compared with $301 million in the third quarter of 2013 and $290 million in 2014’s second quarter. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity, net operating income was 1.24% and 13.80%,

 

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M&T BANK CORPORATION

 

respectively, in the recent quarter, compared with 1.48% and 17.64%, respectively, in the third quarter of 2013 and 1.35% and 14.92%, respectively, in the second quarter of 2014.

Taxable-equivalent Net Interest Income. Net interest income expressed on a taxable-equivalent basis totaled $675 million in each of the second and third quarters of 2014. A 17 basis point decline in the net interest margin to 3.23% in the recent quarter was offset by a $3.2 billion increase in average earning assets, including a $1.8 billion rise in average investment securities. Taxable-equivalent net interest income in the recent quarter was down $4 million from $679 million in the year-earlier period reflecting a 38 basis point decline of the net interest margin from 3.61% in the third quarter of 2013 that was substantially offset by an $8.1 billion rise in average earning assets, including $5.8 billion of investment securities. In each quarterly comparison, the decline in the net interest margin was attributable to increased lower-yielding balances of investment securities and deposits held at the Federal Reserve Bank of New York combined with continuing downward pressure on yields earned on loans. The growth in investment securities resulted from progress made in response to new regulatory liquidity requirements that were recently finalized and will become effective for M&T in January 2016.

Provision for Credit Losses/Asset Quality. The provision for credit losses was $29 million in the recent quarter, compared with $48 million in the third quarter of 2013 and $30 million in 2014’s second quarter. Net charge-offs of loans were $28 million during 2014’s third quarter, compared with $48 million and $29 million in the third quarter of 2013 and second quarter of 2014, respectively. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .17% and .29% in the

 

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M&T BANK CORPORATION

 

third quarter of 2014 and 2013, respectively, and .18% in the second quarter of 2014.

Loans classified as nonaccrual declined to $848 million, or 1.29% of total loans outstanding at September 30, 2014, improved from $916 million or 1.44% at September 30, 2013 and $880 million or 1.36% at June 30, 2014. Assets taken in foreclosure of defaulted loans totaled $68 million at September 30, 2014, compared with $89 million and $60 million at September 30, 2013 and June 30, 2014, respectively.

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. As a result of those analyses, the allowance totaled $919 million or 1.40% of loans outstanding at September 30, 2014, compared with $916 million or 1.44% at September 30, 2013 and $918 million or 1.42% at June 30, 2014.

Noninterest Income and Expense. Noninterest income totaled $451 million in the recent quarter, little changed from $456 million in the second quarter of 2014, but down from $477 million in the third quarter of 2013 when $56 million of pre-tax gains from loan securitization transactions were realized. Excluding those gains, noninterest income in the year-earlier quarter aggregated $421 million. The improvement in the recent quarter as compared with 2013’s third quarter, exclusive of the gains from securitizations, resulted predominantly from higher residential mortgage banking revenues associated with loan servicing activities.

Noninterest expenses in the third quarter of 2014 totaled $679 million, compared with $659 million in the year-earlier quarter and $681 million in the second quarter of 2014. Included in such

 

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M&T BANK CORPORATION

 

amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets. Exclusive of those expenses, noninterest operating expenses were $672 million in each of the two most recent quarters and $648 million in the third quarter of 2013. The higher level of operating expenses in the recent quarter as compared with the year-earlier period was predominantly attributable to increased costs for professional services and salaries associated with BSA/AML activities, compliance, capital planning and stress testing, and risk management initiatives.

The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities), measures the relationship of operating expenses to revenues. M&T’s efficiency ratio was 59.7% in the recent quarter, 59.4% in the second quarter of 2014 and 56.0% in 2013’s third quarter.

Balance Sheet. M&T had total assets of $97.2 billion at September 30, 2014, up 15% from $84.4 billion a year earlier. Investment securities were $13.3 billion at the recent quarter-end, up $5.0 billion or 61% from September 30, 2013. M&T added investment securities during 2013 and 2014 through purchase and loan securitization transactions in order to enhance its liquidity position in response to new regulatory requirements. Loans and leases, net of unearned discount, totaled $65.6 billion at September 30, 2014, $1.9 billion or 3% above $63.7 billion a year earlier. Total deposits rose 12% to $74.3 billion at the recent quarter-end from $66.6 billion at September 30, 2013.

Total shareholders’ equity also rose 12% to $12.3 billion at September 30, 2014 from $11.0 billion a year earlier, representing

 

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M&T BANK CORPORATION

 

12.68% and 13.05%, respectively, of total assets. Common shareholders’ equity was $11.1 billion, or $83.99 per share, at September 30, 2014, compared with $10.1 billion, or $77.81 per share, at September 30, 2013. Tangible equity per common share rose 13% to $57.10 at September 30, 2014 from $50.32 at September 30, 2013. Common shareholders’ equity per share and tangible equity per common share were $82.86 and $55.89, respectively, at June 30, 2014. 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 estimated Tier 1 common ratio, a regulatory capital measure, continued to increase and was 9.77% at September 30, 2014, compared with 9.08% and 9.63% at September 30, 2013 and June 30, 2014, respectively. M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under the capital rules approved in July 2013 on a fully phased-in basis was approximately 9.52% as of September 30, 2014.

Conference Call. Investors will have an opportunity to listen to M&T’s conference call to discuss third quarter financial results today at 11:00 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 #15231149. 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 October 20, 2014 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #15231149. 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.

 

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M&T BANK CORPORATION

 

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; 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 regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and

 

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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

 

		Three months ended												Nine months ended
Amounts in thousands,		September 30												September 30
except per share		2014				2013				Change				2014				2013				Change
Performance
Net income		$	275,344				294,479				-6	%		$	788,697				917,058				-14	%
Net income available to common shareholders			251,917				275,356				-9	%			724,344				859,000				-16	%
Per common share:
Basic earnings		$	1.92				2.13				-10	%		$	5.54				6.69				-17	%
Diluted earnings			1.91				2.11				-9	%			5.50				6.64				-17	%
Cash dividends		$	.70				.70				—			$	2.10				2.10				—
Common shares outstanding:
Average - diluted (1)			132,128				130,265				1	%			131,698				129,312				2	%
Period end (2)			132,142				130,241				1	%			132,142				130,241				1	%
Return on (annualized):
Average total assets			1.17	%			1.39	%							1.17	%			1.48	%
Average common shareholders’ equity			9.18	%			11.06	%							9.07	%			11.98	%
Taxable-equivalent net interest income		$	674,900				679,213				-1	%		$	2,012,241				2,025,517				-1	%
Yield on average earning assets			3.59	%			3.98	%							3.72	%			4.07	%
Cost of interest-bearing liabilities			.54	%			.58	%							.53	%			.61	%
Net interest spread			3.05	%			3.40	%							3.19	%			3.46	%
Contribution of interest-free funds			.18	%			.21	%							.19	%			.22	%
Net interest margin			3.23	%			3.61	%							3.38	%			3.68	%
Net charge-offs to average total net loans (annualized)			.17	%			.29	%							.19	%			.29	%
Net operating results (3)
Net operating income		$	279,838				300,968				-7	%		$	804,974				946,838				-15	%
Diluted net operating earnings per common share			1.94				2.16				-10	%			5.62				6.87				-18	%
Return on (annualized):
Average tangible assets			1.24	%			1.48	%							1.25	%			1.59	%
Average tangible common equity			13.80	%			17.64	%							13.84	%			19.66	%
Efficiency ratio			59.67	%			56.03	%							60.96	%			54.27	%
		At September 30
		2014				2013				Change
Loan quality
Nonaccrual loans		$	847,784				915,871				-7	%
Real estate and other foreclosed assets			67,629				89,203				-24	%
Total nonperforming assets		$	915,413				1,005,074				-9	%
Accruing loans past due 90 days or more (4)		$	312,990				339,792				-8	%
Government guaranteed loans included in totals above:
Nonaccrual loans		$	68,586				68,519				—	%
Accruing loans past due 90 days or more			265,333				320,732				-17	%
Renegotiated loans		$	209,099				259,301				-19	%
Acquired accruing loans past due 90 days or more (5)		$	132,147				153,585				-14	%
Purchased impaired loans (6):
Outstanding customer balance		$	429,915				648,118				-34	%
Carrying amount			236,662				357,337				-34	%
Nonaccrual loans to total net loans			1.29	%			1.44	%
Allowance for credit losses to total loans			1.40	%			1.44	%

 

(1)	Includes common stock equivalents.

(2)	Includes common stock issuable under deferred compensation plans.

(3)

Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. Reconciliations of net income with net operating income appear on page 16.

(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		September 30, 2014				June 30, 2014				March 31, 2014				December 31, 2013				September 30, 2013
Performance
Net income		$	275,344				284,336				229,017				221,422				294,479
Net income available to common shareholders			251,917				260,695				211,731				203,451				275,356
Per common share:
Basic earnings		$	1.92				1.99				1.63				1.57				2.13
Diluted earnings			1.91				1.98				1.61				1.56				2.11
Cash dividends		$	.70				.70				.70				.70				.70
Common shares outstanding:
Average - diluted (1)			132,128				131,828				131,126				130,464				130,265
Period end (2)			132,142				131,953				131,431				130,564				130,241
Return on (annualized):
Average total assets			1.17	%			1.27	%			1.07	%			1.03	%			1.39	%
Average common shareholders’ equity			9.18	%			9.79	%			8.22	%			7.99	%			11.06	%
Taxable-equivalent net interest income		$	674,900				674,963				662,378				672,683				679,213
Yield on average earning assets			3.59	%			3.73	%			3.87	%			3.92	%			3.98	%
Cost of interest-bearing liabilities			.54	%			.51	%			.55	%			.56	%			.58	%
Net interest spread			3.05	%			3.22	%			3.32	%			3.36	%			3.40	%
Contribution of interest-free funds			.18	%			.18	%			.20	%			.20	%			.21	%
Net interest margin			3.23	%			3.40	%			3.52	%			3.56	%			3.61	%
Net charge-offs to average total net loans (annualized)			.17	%			.18	%			.20	%			.26	%			.29	%
Net operating results (3)
Net operating income		$	279,838				289,974				235,162				227,797				300,968
Diluted net operating earnings per common share			1.94				2.02				1.66				1.61				2.16
Return on (annualized):
Average tangible assets			1.24	%			1.35	%			1.15	%			1.11	%			1.48	%
Average tangible common equity			13.80	%			14.92	%			12.76	%			12.67	%			17.64	%
Efficiency ratio			59.67	%			59.39	%			63.95	%			65.48	%			56.03	%
		September 30, 2014				June 30, 2014				March 31, 2014				December 31, 2013				September 30, 2013
Loan quality
Nonaccrual loans		$	847,784				880,134				890,893				874,156				915,871
Real estate and other foreclosed assets			67,629				59,793				59,407				66,875				89,203
Total nonperforming assets		$	915,413				939,927				950,300				941,031				1,005,074
Accruing loans past due 90 days or more (4)		$	312,990				289,016				307,017				368,510				339,792
Government guaranteed loans included in totals above:
Nonaccrual loans		$	68,586				81,817				75,959				63,647				68,519
Accruing loans past due 90 days or more			265,333				275,846				291,418				297,918				320,732
Renegotiated loans		$	209,099				270,223				257,889				257,092				259,301
Acquired accruing loans past due 90 days or more (5)		$	132,147				134,580				120,996				130,162				153,585
Purchased impaired loans (6):
Outstanding customer balance		$	429,915				504,584				534,331				579,975				648,118
Carrying amount			236,662				282,517				303,388				330,792				357,337
Nonaccrual loans to total net loans			1.29	%			1.36	%			1.39	%			1.36	%			1.44	%
Allowance for credit losses to total loans			1.40	%			1.42	%			1.43	%			1.43	%			1.44	%

 

(1)	Includes common stock equivalents.

(2)	Includes common stock issuable under deferred compensation plans.

(3)

Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. 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

Condensed Consolidated Statement of Income

 

		Three months ended												Nine months ended
		September 30												September 30
Dollars in thousands		2014				2013				Change				2014				2013				Change
Interest income		$	743,023				742,686				—	%		$	2,200,265				2,222,868				-1	%
Interest expense			73,964				69,578				6				205,659				216,123				-5
Net interest income			669,059				673,108				-1				1,994,606				2,006,745				-1
Provision for credit losses			29,000				48,000				-40				91,000				143,000				-36
Net interest income after provision for credit losses			640,059				625,108				2				1,903,606				1,863,745				2
Other income
Mortgage banking revenues			93,532				64,731				44				269,237				249,096				8
Service charges on deposit accounts			110,071				113,839				-3				321,637				336,505				-4
Trust income			128,671				123,801				4				379,816				370,132				3
Brokerage services income			17,416				16,871				3				51,403				49,840				3
Trading account and foreign exchange gains			6,988				8,987				-22				21,477				27,138				-21
Gain on bank investment securities			—				—				—				—				56,457				—
Other-than-temporary impairment losses recognized in earnings			—				—				—				—				(9,800	)			—
Equity in earnings of Bayview Lending Group LLC			(4,114	)			(3,881	)			—				(12,623	)			(9,990	)			—
Other revenues from operations			98,547				153,040				-36				296,683				349,581				-15
Total other income			451,111				477,388				-6				1,327,630				1,418,959				-6
Other expense
Salaries and employee benefits			348,776				339,332				3				1,059,815				1,019,019				4
Equipment and net occupancy			67,713				66,220				2				206,964				195,657				6
Printing, postage and supplies			9,184				9,752				-6				29,320				30,749				-5
Amortization of core deposit and other intangible assets			7,358				10,628				-31				26,654				36,473				-27
FDIC assessments			13,193				14,877				-11				43,836				52,010				-16
Other costs of operations			233,060				217,817				7				696,160				558,905				25
Total other expense			679,284				658,626				3				2,062,749				1,892,813				9
Income before income taxes			411,886				443,870				-7				1,168,487				1,389,891				-16
Applicable income taxes			136,542				149,391				-9				379,790				472,833				-20
Net income		$	275,344				294,479				-6	%		$	788,697				917,058				-14	%

 

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12–12–12–12–12

 

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend

 

		Three months ended
		September 30,				June 30,				March 31,				December 31,				September 30,
Dollars in thousands		2014				2014				2014				2013				2013
Interest income		$	743,023				734,290				722,952				734,466				742,686
Interest expense			73,964				65,176				66,519				67,982				69,578
Net interest income			669,059				669,114				656,433				666,484				673,108
Provision for credit losses			29,000				30,000				32,000				42,000				48,000
Net interest income after provision for credit losses			640,059				639,114				624,433				624,484				625,108
Other income
Mortgage banking revenues			93,532				95,656				80,049				82,169				64,731
Service charges on deposit accounts			110,071				107,368				104,198				110,436				113,839
Trust income			128,671				129,893				121,252				125,876				123,801
Brokerage services income			17,416				17,487				16,500				15,807				16,871
Trading account and foreign exchange gains			6,988				8,042				6,447				13,690				8,987
Equity in earnings of Bayview Lending Group LLC			(4,114	)			(4,055	)			(4,454	)			(6,136	)			(3,881	)
Other revenues from operations			98,547				102,021				96,115				104,404				153,040
Total other income			451,111				456,412				420,107				446,246				477,388
Other expense
Salaries and employee benefits			348,776				339,713				371,326				336,159				339,332
Equipment and net occupancy			67,713				68,084				71,167				68,670				66,220
Printing, postage and supplies			9,184				9,180				10,956				8,808				9,752
Amortization of core deposit and other intangible assets			7,358				9,234				10,062				10,439				10,628
FDIC assessments			13,193				15,155				15,488				17,574				14,877
Other costs of operations			233,060				239,828				223,272				301,422				217,817
Total other expense			679,284				681,194				702,271				743,072				658,626
Income before income taxes			411,886				414,332				342,269				327,658				443,870
Applicable income taxes			136,542				129,996				113,252				106,236				149,391
Net income		$	275,344				284,336				229,017				221,422				294,479

 

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13–13–13–13–13

 

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet

		September 30
Dollars in thousands		2014				2013				Change
ASSETS
Cash and due from banks		$	1,445,877				1,941,944				-26	%
Interest-bearing deposits at banks			7,676,064				1,925,811				299
Federal funds sold and agreements to resell securities			77,766				117,809				-34
Trading account assets			296,913				371,370				-20
Investment securities			13,348,368				8,309,773				61
Loans and leases:
Commercial, financial, etc.			19,112,009				17,911,149				7
Real estate - commercial			26,942,847				26,345,267				2
Real estate - consumer			8,663,408				9,228,003				-6
Consumer			10,854,095				10,174,623				7
Total loans and leases, net of unearned discount			65,572,359				63,659,042				3
Less: allowance for credit losses			918,633				916,370				—
Net loans and leases			64,653,726				62,742,672				3
Goodwill			3,524,625				3,524,625				—
Core deposit and other intangible assets			42,197				79,290				-47
Other assets			6,162,806				5,414,191				14
Total assets		$	97,228,342				84,427,485				15	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits		$	27,440,524				24,150,771				14	%
Interest-bearing deposits			46,659,442				42,084,860				11
Deposits at Cayman Islands office			241,536				316,510				-24
Total deposits			74,341,502				66,552,141				12
Short-term borrowings			164,609				246,019				-33
Accrued interest and other liabilities			1,327,524				1,491,797				-11
Long-term borrowings			9,061,391				5,121,326				77
Total liabilities			84,895,026				73,411,283				16
Shareholders’ equity:
Preferred			1,231,500				879,010				40
Common (1)			11,101,816				10,137,192				10
Total shareholders’ equity			12,333,316				11,016,202				12
Total liabilities and shareholders’ equity		$	97,228,342				84,427,485				15	%

 

(1)	Reflects accumulated other comprehensive income, net of applicable income tax effect, of $12.5 million at September 30, 2014, and accumulated other comprehensive loss, net of applicable income tax effect, $198.1 million at September 30, 2013.

 

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14–14–14–14–14

 

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend

 

		September 30,				June 30,				March 31,				December 31,				September 30,
Dollars in thousands		2014				2014				2014				2013				2013
ASSETS
Cash and due from banks		$	1,445,877				1,827,197				1,671,052				1,573,361				1,941,944
Interest-bearing deposits at banks			7,676,064				3,032,530				3,299,185				1,651,138				1,925,811
Federal funds sold and agreements to resell securities			77,766				90,239				92,066				99,573				117,809
Trading account assets			296,913				313,325				314,807				376,131				371,370
Investment securities			13,348,368				12,120,195				10,364,249				8,796,497				8,309,773
Loans and leases:
Commercial, financial, etc.			19,112,009				19,105,892				18,896,070				18,705,216				17,911,149
Real estate - commercial			26,942,847				26,374,274				26,104,086				26,148,208				26,345,267
Real estate - consumer			8,663,408				8,656,766				8,774,095				8,928,221				9,228,003
Consumer			10,854,095				10,610,761				10,360,827				10,291,514				10,174,623
Total loans and leases, net of unearned discount			65,572,359				64,747,693				64,135,078				64,073,159				63,659,042
Less: allowance for credit losses			918,633				917,666				916,768				916,676				916,370
Net loans and leases			64,653,726				63,830,027				63,218,310				63,156,483				62,742,672
Goodwill			3,524,625				3,524,625				3,524,625				3,524,625				3,524,625
Core deposit and other intangible assets			42,197				49,555				58,789				68,851				79,290
Other assets			6,162,806				6,047,309				5,987,277				5,915,732				5,414,191
Total assets		$	97,228,342				90,835,002				88,530,360				85,162,391				84,427,485
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits		$	27,440,524				26,088,763				25,244,200				24,661,007				24,150,771
Interest-bearing deposits			46,659,442				43,502,602				43,207,286				42,134,859				42,084,860
Deposits at Cayman Islands office			241,536				237,890				247,880				322,746				316,510
Total deposits			74,341,502				69,829,255				68,699,366				67,118,612				66,552,141
Short-term borrowings			164,609				161,631				230,209				260,455				246,019
Accrued interest and other liabilities			1,327,524				1,283,430				1,462,725				1,368,922				1,491,797
Long-term borrowings			9,061,391				7,391,931				6,251,197				5,108,870				5,121,326
Total liabilities			84,895,026				78,666,247				76,643,497				73,856,859				73,411,283
Shareholders’ equity:
Preferred			1,231,500				1,231,500				1,231,500				881,500				879,010
Common (1)			11,101,816				10,937,255				10,655,363				10,424,032				10,137,192
Total shareholders’ equity			12,333,316				12,168,755				11,886,863				11,305,532				11,016,202
Total liabilities and shareholders’ equity		$	97,228,342				90,835,002				88,530,360				85,162,391				84,427,485

 

(1)

Reflects accumulated other comprehensive income, net of applicable income tax effect, of $12.5 million at September 30, 2014 and $40.3 million at June 30, 2014, and accumulated other comprehensive loss, net of applicable income tax effect, of $25.3 million at March 31, 2014, $64.2 million at December 31, 2013 and $198.1 million at September 30, 2013.

 

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15–15–15–15–15

 

M&T BANK CORPORATION

Condensed Consolidated Average Balance Sheet

and Annualized Taxable-equivalent Rates

 

		Three months ended																								Change in balance								Nine months ended
		September 30,								September 30,								June 30,								September 30, 2014 from								September 30
Dollars in millions		2014								2013								2014								September 30,				June 30,				2014								2013								Change in
		Balance				Rate				Balance				Rate				Balance				Rate				2013				2014				Balance				Rate				Balance				Rate				balance
ASSETS
Interest-bearing deposits at banks		$	5,083				.25	%			2,646				.25	%			4,080				.25	%			92	%			25	%		$	4,091				.25	%			1,866				.24	%			119	%
Federal funds sold and agreements to resell securities			80				.07				117				.08				90				.07				-32				-12				90				.07				133				.09				-32
Trading account assets			70				1.65				67				1.27				84				1.25				4				-17				75				1.83				76				2.10				-2
Investment securities			12,780				2.89				6,979				3.31				10,959				3.19				83				17				11,015				3.11				6,030				3.33				83
Loans and leases, net of unearned discount
Commercial, financial, etc.			18,889				3.29				17,798				3.50				18,978				3.34				6				—				18,783				3.33				17,615				3.59				7
Real estate - commercial			26,487				4.19				26,129				4.51				26,140				4.22				1				1				26,258				4.27				26,033				4.55				1
Real estate - consumer			8,634				4.17				9,636				4.17				8,746				4.36				-10				-1				8,740				4.24				10,522				4.10				-17
Consumer			10,753				4.52				11,295				4.57				10,479				4.52				-5				3				10,512				4.54				11,389				4.61				-8
Total loans and leases, net			64,763				4.00				64,858				4.21				64,343				4.05				—				1				64,293				4.06				65,559				4.26				-2
Total earning assets			82,776				3.59				74,667				3.98				79,556				3.73				11				4				79,564				3.72				73,664				4.07				8
Goodwill			3,525								3,525								3,525								—				—				3,525								3,525								—
Core deposit and other intangible assets			45								84								53								-46				-15				54								96								-44
Other assets			6,899								5,735								6,739								20				2				6,809								5,815								17
Total assets		$	93,245								84,011								89,873								11	%			4	%		$	89,952								83,100								8	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits
NOW accounts		$	1,037				.15				924				.14				1,026				.13				12	%			1	%		$	1,017				.13				919				.14				11	%
Savings deposits			41,056				.11				36,990				.15				39,478				.11				11				4				39,640				.12				36,287				.15				9
Time deposits			3,227				.47				3,928				.62				3,350				.46				-18				-4				3,345				.46				4,190				.70				-20
Deposits at Cayman Islands office			325				.20				392				.22				339				.21				-17				-4				348				.21				524				.20				-34
Total interest-bearing deposits			45,645				.14				42,234				.19				44,193				.14				8				3				44,350				.14				41,920				.21				6
Short-term borrowings			181				.04				299				.08				220				.05				-39				-17				222				.05				425				.12				-48
Long-term borrowings			8,547				2.69				5,010				3.89				6,525				3.05				71				31				6,999				3.02				4,918				4.09				42
Total interest-bearing liabilities			54,373				.54				47,543				.58				50,938				.51				14				7				51,571				.53				47,263				.61				9
Noninterest-bearing deposits			25,127								23,998								25,466								5				-1				24,915								23,570								6
Other liabilities			1,498								1,589								1,430								-6				5				1,486								1,676								-11
Total liabilities			80,998								73,130								77,834								11				4				77,972								72,509								8
Shareholders’ equity			12,247								10,881								12,039								13				2				11,980								10,591								13
Total liabilities and shareholders’ equity		$	93,245								84,011								89,873								11	%			4	%		$	89,952								83,100								8	%
Net interest spread							3.05								3.40								3.22																3.19								3.46
Contribution of interest-free funds							.18								.21								.18																.19								.22
Net interest margin							3.23	%							3.61	%							3.40	%															3.38	%							3.68	%

 

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M&T BANK CORPORATION

Reconciliation of Quarterly GAAP to Non-GAAP Measures

 

		Three months ended								Nine months ended
		September 30								September 30
		2014				2013				2014				2013
Income statement data
In thousands, except per share
Net income
Net income		$	275,344				294,479			$	788,697				917,058
Amortization of core deposit and other intangible assets (1)			4,494				6,489				16,277				22,269
Merger-related expenses (1)			—				—				—				7,511
Net operating income		$	279,838				300,968			$	804,974				946,838
Earnings per common share
Diluted earnings per common share		$	1.91				2.11			$	5.50				6.64
Amortization of core deposit and other intangible assets (1)			.03				.05				.12				.17
Merger-related expenses (1)			—				—				—				.06
Diluted net operating earnings per common share		$	1.94				2.16			$	5.62				6.87
Other expense
Other expense		$	679,284				658,626			$	2,062,749				1,892,813
Amortization of core deposit and other intangible assets			(7,358	)			(10,628	)			(26,654	)			(36,473	)
Merger-related expenses			—				—				—				(12,364	)
Noninterest operating expense		$	671,926				647,998			$	2,036,095				1,843,976
Merger-related expenses
Salaries and employee benefits		$	—				—			$	—				836
Equipment and net occupancy			—				—				—				690
Printing, postage and supplies			—				—				—				1,825
Other costs of operations			—				—				—				9,013
Total		$	—				—			$	—				12,364
Efficiency ratio
Noninterest operating expense (numerator)		$	671,926				647,998			$	2,036,095				1,843,976
Taxable-equivalent net interest income			674,900				679,213				2,012,241				2,025,517
Other income			451,111				477,388				1,327,630				1,418,959
Less: Gain on bank investment securities			—				—				—				56,457
Net OTTI losses recognized in earnings			—				—				—				(9,800	)
Denominator		$	1,126,011				1,156,601			$	3,339,871				3,397,819
Efficiency ratio			59.67	%			56.03	%			60.96	%			54.27	%
Balance sheet data
In millions
Average assets
Average assets		$	93,245				84,011			$	89,952				83,100
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(45	)			(84	)			(54	)			(96	)
Deferred taxes			14				25				17				28
Average tangible assets		$	89,689				80,427			$	86,390				79,507
Average common equity
Average total equity		$	12,247				10,881			$	11,980				10,591
Preferred stock			(1,232	)			(878	)			(1,179	)			(876	)
Average common equity			11,015				10,003				10,801				9,715
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(45	)			(84	)			(54	)			(96	)
Deferred taxes			14				25				17				28
Average tangible common equity		$	7,459				6,419			$	7,239				6,122
At end of quarter
Total assets
Total assets		$	97,228				84,427
Goodwill			(3,525	)			(3,525	)
Core deposit and other intangible assets			(42	)			(79	)
Deferred taxes			13				24
Total tangible assets		$	93,674				80,847
Total common equity
Total equity		$	12,333				11,016
Preferred stock			(1,232	)			(879	)
Undeclared dividends - cumulative preferred stock			(2	)			(4	)
Common equity, net of undeclared cumulative preferred dividends			11,099				10,133
Goodwill			(3,525	)			(3,525	)
Core deposit and other intangible assets			(42	)			(79	)
Deferred taxes			13				24
Total tangible common equity		$	7,545				6,553

 

(1)	After any related tax effect.

 

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M&T BANK CORPORATION

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

 

		Three months ended
		September 30,				June 30,				March 31,				December 31,				September 30,
		2014				2014				2014				2013				2013
Income statement data
In thousands, except per share
Net income
Net income		$	275,344				284,336				229,017				221,422				294,479
Amortization of core deposit and other intangible assets (1)			4,494				5,638				6,145				6,375				6,489
Net operating income		$	279,838				289,974				235,162				227,797				300,968
Earnings per common share
Diluted earnings per common share		$	1.91				1.98				1.61				1.56				2.11
Amortization of core deposit and other intangible assets (1)			.03				.04				.05				.05				.05
Diluted net operating earnings per common share		$	1.94				2.02				1.66				1.61				2.16
Other expense
Other expense		$	679,284				681,194				702,271				743,072				658,626
Amortization of core deposit and other intangible assets			(7,358	)			(9,234	)			(10,062	)			(10,439	)			(10,628	)
Noninterest operating expense		$	671,926				671,960				692,209				732,633				647,998
Efficiency ratio
Noninterest operating expense (numerator)		$	671,926				671,960				692,209				732,633				647,998
Taxable-equivalent net interest income			674,900				674,963				662,378				672,683				679,213
Other income			451,111				456,412				420,107				446,246				477,388
Denominator		$	1,126,011				1,131,375				1,082,485				1,118,929				1,156,601
Efficiency ratio			59.67	%			59.39	%			63.95	%			65.48	%			56.03	%
Balance sheet data
In millions
Average assets
Average assets		$	93,245				89,873				86,665				85,330				84,011
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(45	)			(53	)			(64	)			(74	)			(84	)
Deferred taxes			14				16				20				23				25
Average tangible assets		$	89,689				86,311				83,096				81,754				80,427
Average common equity
Average total equity		$	12,247				12,039				11,648				11,109				10,881
Preferred stock			(1,232	)			(1,231	)			(1,072	)			(881	)			(878	)
Average common equity			11,015				10,808				10,576				10,228				10,003
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(45	)			(53	)			(64	)			(74	)			(84	)
Deferred taxes			14				16				20				23				25
Average tangible common equity		$	7,459				7,246				7,007				6,652				6,419
At end of quarter
Total assets
Total assets		$	97,228				90,835				88,530				85,162				84,427
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(42	)			(49	)			(59	)			(69	)			(79	)
Deferred taxes			13				15				19				21				24
Total tangible assets		$	93,674				87,276				84,965				81,589				80,847
Total common equity
Total equity		$	12,333				12,169				11,887				11,306				11,016
Preferred stock			(1,232	)			(1,232	)			(1,232	)			(882	)			(879	)
Undeclared dividends - cumulative preferred stock			(2	)			(3	)			(3	)			(3	)			(4	)
Common equity, net of undeclared cumulative preferred dividends			11,099				10,934				10,652				10,421				10,133
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(42	)			(49	)			(59	)			(69	)			(79	)
Deferred taxes			13				15				19				21				24
Total tangible common equity		$	7,545				7,375				7,087				6,848				6,553

 

(1)	After any related tax effect.

 

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