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mtb-8k_20180118.htm

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): January 18, 2018

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) 635-4000

(NOT APPLICABLE)

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

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

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

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

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

Item 2.02.

Results of Operations and Financial Condition.

On January 18, 2018, M&T Bank Corporation announced its results of operations for the fourth quarter and year ended December 31, 2017. The public announcement was made by means of a news release, the text of which is set forth in Exhibit 99.1 hereto.

The information in this Form 8-K, including Exhibit 99.1 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.

Exhibit Description

99.1

News Release dated January 18, 2018.

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 18, 2018	By:	/s/ Darren J. King
		Darren J. King
		Executive Vice President and Chief Financial Officer

mtb-ex991_9.htm

Exhibit 99.1

INVESTOR CONTACT:

Donald J. MacLeod

FOR IMMEDIATE RELEASE:

(716) 842-5138

January 18, 2018

MEDIA CONTACT:

C. Michael Zabel

(716) 842-5385

M&T BANK CORPORATION ANNOUNCES 2017 FOURTH QUARTER

AND FULL-YEAR RESULTS

BUFFALO, NEW YORK -- M&T Bank Corporation (“M&T”) (NYSE: MTB) today reported its results of operations for 2017.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the fourth quarter of 2017 were $2.01, up 2% from $1.98 in the similar 2016 quarter. GAAP-basis net income in the recent quarter aggregated $322 million, compared with $331 million in the final quarter of 2016. Diluted earnings per common share and GAAP-basis net income were $2.21 and $356 million, respectively, in the third quarter of 2017. GAAP-basis net income for the fourth quarter of 2017 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.06% and 8.03%, respectively, compared with 1.05% and 8.13%, respectively, in the year-earlier quarter and 1.18% and 8.89%, respectively, in the third quarter of 2017.

M&T’s financial results for the final quarter of 2017 reflected several notable items. The Tax Cuts and Jobs Act (“the Tax Act”) was enacted on December 22, 2017, reducing the corporate Federal income tax rate from 35% to 21% and making other changes to U.S. corporate income tax laws. GAAP requires that the impact of the provisions of the Tax Act be accounted for in the period of enactment. Accordingly, the estimated incremental income tax expense recorded by M&T in the fourth quarter of 2017 related to the Tax Act was $85 million, representing $.56 of diluted earnings per common share. The additional expense was largely attributable to the reduction in carrying value of net deferred tax assets reflecting lower future tax benefits resulting from the lower corporate tax rate. Also during the recent quarter, M&T realized investment securities gains of $14 million (after-tax effect), or $.09 of diluted earnings per common share, largely resulting from the sale of a portion of M&T’s Fannie Mae and Freddie Mac preferred stock holdings. Finally, M&T contributed an additional $44 million to The M&T Charitable Foundation in the final 2017 quarter, reducing net income by

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$27 million, or $.18 of diluted earnings per common share. In the aggregate, these items lowered net income by $98 million, or $.65 per diluted common share.

Earnings Highlights

										Change 4Q17 vs.
($ in millions, except per share data)	4Q17			4Q16			3Q17			4Q16			3Q17

Net income	$	322		$	331		$	356			-2	%		-9	%
Net income available to common shareholders - diluted	$	302		$	308		$	336			-2	%		-10	%
Diluted earnings per common share	$	2.01		$	1.98		$	2.21			2	%		-9	%
Annualized return on average assets		1.06	%		1.05	%		1.18	%
Annualized return on average common equity		8.03	%		8.13	%		8.89	%

For the year ended December 31, 2017, diluted earnings per common share were $8.70, up 12% from $7.78 in 2016. GAAP-basis net income for 2017 aggregated $1.41 billion, 7% higher than $1.32 billion in 2016. Expressed as a rate of return on average assets and average common shareholders’ equity, GAAP-basis net income for 2017 was 1.17% and 8.87%, respectively, compared with 1.06% and 8.16%, respectively, in 2016.

Darren J. King, Executive Vice President and Chief Financial Officer, commented on M&T’s financial performance, “Financial results in 2017 highlight what was a successful year for M&T. Strong growth in net interest income, credit costs that were significantly below our historical norms, and well controlled expenses led to a 12% rise in earnings per common share for the year. Fourth quarter results were negatively impacted by the newly enacted tax legislation, but a lower corporate tax rate in the future should provide many benefits to M&T. We are proud to carry on the legacy of our long-time Chairman and Chief Executive Officer, Bob Wilmers, through investing in the communities we serve by contributing $50 million during 2017 to The M&T Charitable Foundation, the highest annual amount in our history.”

Supplemental Reporting of Non-GAAP Results of Operations. M&T consistently provides supplemental reporting of its results on a “net operating” or “tangible” basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T, since such items are considered by management to be “nonoperating” in nature. The amounts of such “nonoperating” expenses are presented in the tables that accompany this release. 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.

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Diluted net operating earnings per common share were $2.04 in the fourth quarter of 2017, compared with $2.01 in the year-earlier quarter and $2.24 in the third quarter of 2017. Net operating income during the recent quarter was $327 million, compared with $336 million in the final quarter of 2016 and $361 million in 2017’s third quarter. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.12% and 11.77%, respectively, in the recent quarter, compared with 1.10% and 11.93%, respectively, in the fourth quarter of 2016 and 1.25% and 13.03%, respectively, in the third quarter of 2017.

For the year ended December 31, 2017, diluted net operating earnings per common share were $8.82, up 9% from $8.08 in 2016. Net operating income in 2017 increased 5% to $1.43 billion from $1.36 billion in 2016. Expressed as a rate of return on average tangible assets and average tangible common shareholders’ equity, net operating income was 1.23% and 13.00%, respectively, in 2017 and 1.14% and 12.25%, respectively, in 2016.

Taxable-equivalent Net Interest Income. Net interest income expressed on a taxable-equivalent basis aggregated $980 million in the fourth quarter of 2017, up 11% from $883 million in the year-earlier quarter. That growth resulted predominantly from a widening of the net interest margin to 3.56% in the recent quarter from 3.08% in the final 2016 quarter. Taxable-equivalent net interest income in the recent quarter was 2% higher than $966 million in the third quarter of 2017. Contributing to that improvement were a 3 basis point widening of the net interest margin and an increase in average earning assets in the recent quarter as compared with the third quarter of 2017. Taxable-equivalent net interest income for the year ended December 31, 2017 aggregated $3.82 billion, up 9% from $3.50 billion in 2016. That improvement was predominantly the result of a widening of the net interest margin from 3.11% in 2016 to 3.47% in 2017.


Taxable-equivalent Net Interest Income

										Change 4Q17 vs.
($ in millions)	4Q17			4Q16			3Q17			4Q16			3Q17

Average earning assets	$	109,412		$	114,254		$	108,642			-4	%		1	%
Net interest income - taxable-equivalent	$	980		$	883		$	966			11	%		2	%
Net interest margin		3.56	%		3.08	%		3.53	%

Provision for Credit Losses/Asset Quality. The provision for credit losses was $31 million in the fourth quarter of 2017, compared with $62 million in the year-earlier quarter and $30 million in 2017’s third quarter. Net charge-offs of loans were $27 million during the recent quarter, compared with $49 million and $25 million in the fourth quarter of 2016 and the third quarter of 2017, respectively. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .12% and .22% in the final quarters of 2017 and 2016, respectively, and .11% in the third quarter of 2017. The provision for credit losses was $168 million for the year ended December 31, 2017, compared with $190 million in 2016. Net loan charge-offs during 2017 and

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2016 totaled $140 million and $157 million, respectively, or .16% and .18%, respectively, of average loans outstanding.

Loans classified as nonaccrual totaled $883 million or 1.00% of total loans outstanding at December 31, 2017, compared with $920 million or 1.01% at December 31, 2016 and $869 million or .99% at September 30, 2017. Nonaccrual Hudson City-related residential real estate loans aggregated $215 million at December 31, 2017, compared with $190 million and $211 million at December 31, 2016 and September 30, 2017, respectively. Assets taken in foreclosure of defaulted loans totaled $112 million at December 31, 2017, compared with $139 million a year earlier and $111 million at September 30, 2017.

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 for credit losses totaled $1.02 billion at December 31, 2017, compared with $989 million at December 31, 2016 and $1.01 billion at September 30, 2017. The allowance expressed as a percentage of outstanding loans was 1.16% at December 31, 2017, compared with 1.09% at December 31, 2016 and 1.15% at September 30, 2017.

Asset Quality Metrics

										Change 4Q17 vs.
($ in millions)	4Q17			4Q16			3Q17			4Q16			3Q17

At end of quarter
Nonaccrual loans	$	883		$	920		$	869			-4	%		2	%
Real estate and other foreclosed assets	$	112		$	139		$	111			-20	%		1	%
Total nonperforming assets	$	995		$	1,059		$	980			-6	%		1	%
Accruing loans past due 90 days or more (1)	$	244		$	301		$	261			-19	%		-6	%
Nonaccrual loans as % of loans outstanding		1.00	%		1.01	%		.99	%

Allowance for credit losses	$	1,017		$	989		$	1,013			3	%		—
Allowance for credit losses as % of loans outstanding		1.16	%		1.09	%		1.15	%

For the period
Provision for credit losses	$	31		$	62		$	30			-50	%		3	%
Net charge-offs	$	27		$	49		$	25			-45	%		9	%
Net charge-offs as % of average loans (annualized)		.12	%		.22	%		.11	%

(1)	Excludes loans acquired at a discount. Predominantly residential real estate loans.

Noninterest Income and Expense. Noninterest income totaled $484 million in the recent quarter, compared with $465 million in the fourth quarter of 2016 and $459 million in the third quarter of 2017. The recent quarter’s improvement as compared with the final 2016 quarter and 2017’s third quarter resulted largely from higher gains on investment securities and increased trust income.

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M&T BANK CORPORATION

Noninterest Income

							Change 4Q17 vs.
($ in millions)	4Q17		4Q16		3Q17		4Q16			3Q17

Mortgage banking revenues	$	96	$	98	$	97		-2	%		-1	%
Service charges on deposit accounts		108		105		109		3	%		-1	%
Trust income		130		122		125		6	%		4	%
Brokerage services income		13		15		15		-16	%		-13	%
Trading account and foreign exchange gains		10		7		7		36	%		48	%
Gain on bank investment securities		21		2		—		—			—
Other revenues from operations		106		116		106		-8	%		-1	%
Total other income	$	484	$	465	$	459		4	%		5	%

Noninterest income aggregated $1.85 billion in 2017, up from $1.83 billion in 2016. Higher trust income, service charges on deposit accounts and credit-related fees in 2017 were the drivers of that increase.

Noninterest expense totaled $796 million in the fourth quarter of 2017, $769 million in the year-earlier quarter and $806 million in the third quarter of 2017. Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets and merger-related expenses, noninterest operating expenses were $789 million in the recent quarter, $760 million in the fourth quarter of 2016 and $798 million in 2017’s third quarter. The most significant factors for the rise in noninterest operating expenses in the recent quarter as compared with the final quarter of 2016 were increased contributions to The M&T Charitable Foundation and higher salaries and employee benefits expenses. The decline in noninterest operating expenses from the third quarter of 2017 resulted largely from the $50 million increase in the reserve for legal matters during the third quarter of 2017, largely offset by a $44 million increase in contributions to The M&T Charitable Foundation in 2017’s fourth quarter.

Noninterest Expense

							Change 4Q17 vs.
($ in millions)	4Q17		4Q16		3Q17		4Q16			3Q17

Salaries and employee benefits	$	403	$	393	$	399		2	%		1	%
Equipment and net occupancy		71		70		75		2	%		-6	%
Outside data processing and software		50		44		46		14	%		9	%
FDIC assessments		24		29		24		-18	%		-1	%
Advertising and marketing		19		21		17		-8	%		11	%
Printing, postage and supplies		9		9		9		-1	%		-2	%
Amortization of core deposit and other intangible assets		7		9		8		-23	%		-10	%
Other costs of operations		213		194		228		10	%		-7	%
Total other expense	$	796	$	769	$	806		3	%		-1	%

For the year ended December 31, 2017, noninterest expense aggregated $3.14 billion, compared with $3.05 billion in 2016. Noninterest operating expenses were $3.11 billion and $2.97 billion in 2017 and 2016, respectively. The higher level of such expenses in 2017 resulted largely from increased costs for salaries and employee benefits, higher charitable contributions and increases to the reserve for legal matters.

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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 54.7% in the recent quarter, 56.4% in the year-earlier quarter and 56.0% in the third quarter of 2017. The efficiency ratio for the full year 2017 was 55.1%, improved from 56.1% in 2016.

Balance Sheet. M&T had total assets of $118.6 billion at December 31, 2017, compared with $123.4 billion at December 31, 2016. Loans and leases, net of unearned discount, aggregated $88.0 billion at the recent year-end, $2.9 billion or 3% below $90.9 billion a year earlier. Investment securities were $14.7 billion at the end of 2017, compared with $16.3 billion at December 31, 2016. Total deposits were $92.4 billion at the recent year-end and $95.5 billion at December 31, 2016.

Total shareholders' equity was $16.3 billion at December 31, 2017 and $16.5 billion a year earlier, representing 13.70% and 13.35%, respectively, of total assets. Common shareholders' equity was $15.0 billion, or $100.03 per share, at December 31, 2017, compared with $15.3 billion, or $97.64 per share, at December 31, 2016. Tangible equity per common share of $69.08 at December 31, 2017 was up 2% from $67.85 at December 31, 2016. Common shareholders’ equity per share and tangible equity per common share were $99.70 and $69.02, respectively, at September 30, 2017. 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 estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under regulatory capital rules was approximately 10.93% at December 31, 2017.

In accordance with its 2017 capital plan, M&T repurchased 1,343,356 shares of its common stock during the recent quarter at an average cost per share of $166.91, for a total cost of $224 million. During 2017, M&T repurchased a total of 7,369,105 shares of its common stock under the 2017 and 2016 capital plans at a total cost of $1.21 billion.

Conference Call. Investors will have an opportunity to listen to M&T's conference call to discuss fourth quarter and full-year 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 #4178049. 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 through Thursday, February 1, 2018 by calling (800) 585-8367, or (404) 537-3406 for international participants, and by making reference to ID #4178049. 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, Maryland, New Jersey, Pennsylvania, Delaware,

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Connecticut, Virginia, West Virginia 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 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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Financial Highlights

	Three months ended									Year ended
	December 31									December 31
Amounts in thousands, except per share	2017			2016			Change			2017			2016			Change
Performance
Net income	$	322,403			330,571			-2	%	$	1,408,306			1,315,114			7	%
Net income available to common shareholders		302,486			307,797			-2	%		1,327,517			1,223,481			9	%
Per common share:
Basic earnings	$	2.01			1.98			2	%	$	8.72			7.80			12	%
Diluted earnings		2.01			1.98			2	%		8.70			7.78			12	%
Cash dividends	$	.75			.70			7	%	$	3.00			2.80			7	%
Common shares outstanding:
Average - diluted (1)		150,348			155,700			-3	%		152,551			157,304			-3	%
Period end (2)		150,112			156,213			-4	%		150,112			156,213			-4	%
Return on (annualized):
Average total assets		1.06	%		1.05	%					1.17	%		1.06	%
Average common shareholders' equity		8.03	%		8.13	%					8.87	%		8.16	%
Taxable-equivalent net interest income	$	980,457			883,147			11	%	$	3,815,614			3,496,849			9	%
Yield on average earning assets		3.93	%		3.45	%					3.82	%		3.49	%
Cost of interest-bearing liabilities		.59	%		.57	%					.55	%		.56	%
Net interest spread		3.34	%		2.88	%					3.27	%		2.93	%
Contribution of interest-free funds		.22	%		.20	%					.20	%		.18	%
Net interest margin		3.56	%		3.08	%					3.47	%		3.11	%
Net charge-offs to average total net loans (annualized)		.12	%		.22	%					.16	%		.18	%
Net operating results (3)
Net operating income	$	326,664			336,095			-3	%	$	1,427,331			1,362,692			5	%
Diluted net operating earnings per common share		2.04			2.01			1	%		8.82			8.08			9	%
Return on (annualized):
Average tangible assets		1.12	%		1.10	%					1.23	%		1.14	%
Average tangible common equity		11.77	%		11.93	%					13.00	%		12.25	%
Efficiency ratio		54.65	%		56.42	%					55.07	%		56.10	%

	At December 31
Loan quality	2017			2016			Change
Nonaccrual loans	$	882,598			920,015			-4	%
Real estate and other foreclosed assets		111,910			139,206			-20	%
Total nonperforming assets	$	994,508			1,059,221			-6	%
		0			-
Accruing loans past due 90 days or more (4)	$	244,405			300,659			-19	%

Government guaranteed loans included in totals above:
Nonaccrual loans	$	35,677			40,610			-12	%
Accruing loans past due 90 days or more		235,489			282,659			-17	%
		-			-			0	%
Renegotiated loans	$	221,513			190,374			16	%
		0			-
Accruing loans acquired at a discount past due 90 days or more (5)	$	47,418			61,144			-22	%

Purchased impaired loans (6):
Outstanding customer balance	$	688,091			927,446			-26	%
Carrying amount		410,015			578,032			-29	%
		0			0			-
Nonaccrual loans to total net loans		1.00	%		1.01	%

Allowance for credit losses to total loans		1.16	%		1.09	%

(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 15.

(4)	Excludes loans acquired at a discount. Predominantly residential real estate loans.

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

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

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Financial Highlights, Five Quarter Trend

	Three months ended
	December 31,			September 30,			June 30,			March 31,			December 31,
Amounts in thousands, except per share	2017			2017			2017			2017			2016
Performance
Net income	$	322,403			355,923			381,053			348,927			330,571
Net income available to common shareholders		302,486			335,804			360,662			328,567			307,797
Per common share:
Basic earnings	$	2.01			2.22			2.36			2.13			1.98
Diluted earnings		2.01			2.21			2.35			2.12			1.98
Cash dividends	$	.75			.75			.75			.75			.70
Common shares outstanding:
Average - diluted (1)		150,348			151,691			153,276			154,949			155,700
Period end (2)		150,112			151,291			152,539			153,781			156,213
Return on (annualized):
Average total assets		1.06	%		1.18	%		1.27	%		1.15	%		1.05	%
Average common shareholders' equity		8.03	%		8.89	%		9.67	%		8.89	%		8.13	%
Taxable-equivalent net interest income	$	980,457			965,962			946,936			922,259			883,147
Yield on average earning assets		3.93	%		3.89	%		3.79	%		3.67	%		3.45	%
Cost of interest-bearing liabilities		.59	%		.57	%		.52	%		.52	%		.57	%
Net interest spread		3.34	%		3.32	%		3.27	%		3.15	%		2.88	%
Contribution of interest-free funds		.22	%		.21	%		.18	%		.19	%		.20	%
Net interest margin		3.56	%		3.53	%		3.45	%		3.34	%		3.08	%
Net charge-offs to average total net loans (annualized)		.12	%		.11	%		.20	%		.19	%		.22	%
Net operating results (3)
Net operating income	$	326,664			360,658			385,974			354,035			336,095
Diluted net operating earnings per common share		2.04			2.24			2.38			2.15			2.01
Return on (annualized):
Average tangible assets		1.12	%		1.25	%		1.33	%		1.21	%		1.10	%
Average tangible common equity		11.77	%		13.03	%		14.18	%		13.05	%		11.93	%
Efficiency ratio		54.65	%		56.00	%		52.74	%		56.93	%		56.42	%

	December 31,			September 30,			June 30,			March 31,			December 31,
Loan quality	2017			2017			2017			2017			2016
Nonaccrual loans	$	882,598			869,362			872,374			926,675			920,015
Real estate and other foreclosed assets		111,910			110,515			104,424			119,155			139,206
Total nonperforming assets	$	994,508			979,877			976,798			1,045,830			1,059,221
Accruing loans past due 90 days or more (4)	$	244,405			261,288			265,461			280,019			300,659
Government guaranteed loans included in totals above:
Nonaccrual loans	$	35,677			34,687			39,296			39,610			40,610
Accruing loans past due 90 days or more		235,489			252,072			235,227			252,552			282,659
Renegotiated loans	$	221,513			226,672			221,892			191,343			190,374
Accruing loans acquired at a discount past due 90 days or more (5)	$	47,418			56,225			57,498			63,732			61,144
Purchased impaired loans (6):
Outstanding customer balance	$	688,091			779,340			838,476			890,431			927,446
Carrying amount		410,015			466,943			512,393			552,935			578,032
Nonaccrual loans to total net loans		1.00	%		.99	%		.98	%		1.04	%		1.01	%
Allowance for credit losses to total loans		1.16	%		1.15	%		1.13	%		1.12	%		1.09	%

(1)	Includes common stock equivalents.

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

(3)

(4)	Excludes loans acquired at a discount. Predominantly residential real estate loans.

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

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

10-10-10-10-10

M&T BANK CORPORATION

Condensed Consolidated Statement of Income

	Three months ended							Year ended
	December 31							December 31
Dollars in thousands	2017		2016		Change			2017		2016		Change
Interest income	$	1,074,139		982,901		9	%	$	4,167,795		3,895,871		7	%
Interest expense		102,689		107,137		-4			386,751		425,984		-9
Net interest income		971,450		875,764		11			3,781,044		3,469,887		9
Provision for credit losses		31,000		62,000		-50			168,000		190,000		-12
Net interest income after provision for credit losses		940,450		813,764		16			3,613,044		3,279,887		10
Other income
Mortgage banking revenues		96,235		98,504		-2			363,827		373,697		-3
Service charges on deposit accounts		107,783		104,890		3			427,372		419,102		2
Trust income		129,669		122,003		6			501,381		472,184		6
Brokerage services income		12,768		15,233		-16			61,445		63,423		-3
Trading account and foreign exchange gains		10,468		7,692		36			35,301		41,126		-14
Gain on bank investment securities		21,296		1,566		—			21,279		30,314		-30
Other revenues from operations		105,834		115,571		-8			440,538		426,150		3
Total other income		484,053		465,459		4			1,851,143		1,825,996		1
Other expense
Salaries and employee benefits		402,878		393,354		2			1,650,729		1,623,600		2
Equipment and net occupancy		71,363		69,976		2			295,084		295,141		—
Outside data processing and software		50,033		43,987		14			184,670		172,389		7
FDIC assessments		23,722		28,991		-18			101,871		105,045		-3
Advertising and marketing		19,366		21,074		-8			69,203		87,137		-21
Printing, postage and supplies		8,563		8,681		-1			35,960		39,546		-9
Amortization of core deposit and other intangible assets		7,025		9,089		-23			31,366		42,613		-26
Other costs of operations		212,863		193,951		10			771,442		682,014		13
Total other expense		795,813		769,103		3			3,140,325		3,047,485		3
Income before income taxes		628,690		510,120		23			2,323,862		2,058,398		13
Applicable income taxes		306,287		179,549		71			915,556		743,284		23
Net income	$	322,403		330,571		-2	%	$	1,408,306		1,315,114		7	%

11-11-11-11-11

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend

	Three months ended
	December 31,		September 30,		June 30,			March 31,		December 31,
Dollars in thousands	2017		2017		2017			2017		2016
Interest income	$	1,074,139		1,057,210		1,030,413			1,006,033		982,901
Interest expense		102,689		100,076		92,213			91,773		107,137
Net interest income		971,450		957,134		938,200			914,260		875,764
Provision for credit losses		31,000		30,000		52,000			55,000		62,000
Net interest income after provision for credit losses		940,450		927,134		886,200			859,260		813,764
Other income
Mortgage banking revenues		96,235		96,737		86,163			84,692		98,504
Service charges on deposit accounts		107,783		109,356		106,057			104,176		104,890
Trust income		129,669		124,900		126,797			120,015		122,003
Brokerage services income		12,768		14,676		16,617			17,384		15,233
Trading account and foreign exchange gains		10,468		7,058		8,084			9,691		7,692
Gain (loss) on bank investment securities		21,296		—		(17	)		—		1,566
Other revenues from operations		105,834		106,702		117,115			110,887		115,571
Total other income		484,053		459,429		460,816			446,845		465,459
Other expense
Salaries and employee benefits		402,878		399,089		398,900			449,862		393,354
Equipment and net occupancy		71,363		75,558		73,797			74,366		69,976
Outside data processing and software		50,033		45,761		44,575			44,301		43,987
FDIC assessments		23,722		23,969		25,353			28,827		28,991
Advertising and marketing		19,366		17,403		16,324			16,110		21,074
Printing, postage and supplies		8,563		8,732		8,957			9,708		8,681
Amortization of core deposit and other intangible assets		7,025		7,808		8,113			8,420		9,089
Other costs of operations		212,863		227,705		174,616			156,258		193,951
Total other expense		795,813		806,025		750,635			787,852		769,103
Income before income taxes		628,690		580,538		596,381			518,253		510,120
Applicable income taxes		306,287		224,615		215,328			169,326		179,549
Net income	$	322,403		355,923		381,053			348,927		330,571

12-12-12-12-12

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet

	December 31
Dollars in thousands	2017		2016		Change
ASSETS
Cash and due from banks	$	1,420,888		1,320,549		8	%
Interest-bearing deposits at banks		5,078,903		5,000,638		2
Trading account		132,909		323,867		-59
Investment securities		14,664,525		16,250,468		-10
Loans and leases:
Commercial, financial, etc.		21,742,651		22,610,047		-4
Real estate - commercial		33,366,373		33,506,394		—
Real estate - consumer		19,613,344		22,590,912		-13
Consumer		13,266,615		12,146,063		9
Total loans and leases, net of unearned discount		87,988,983		90,853,416		-3
Less: allowance for credit losses		1,017,198		988,997		3
Net loans and leases		86,971,785		89,864,419		-3
Goodwill		4,593,112		4,593,112		—
Core deposit and other intangible assets		71,589		97,655		-27
Other assets		5,659,776		5,998,498		-6
Total assets	$	118,593,487		123,449,206		-4	%

LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	33,975,180		32,813,896		4	%
Interest-bearing deposits		58,278,970		62,478,053		-7
Deposits at Cayman Islands office		177,996		201,927		-12
Total deposits		92,432,146		95,493,876		-3
Short-term borrowings		175,099		163,442		7
Accrued interest and other liabilities		1,593,993		1,811,431		-12
Long-term borrowings		8,141,430		9,493,835		-14
Total liabilities		102,342,668		106,962,584		-4
Shareholders' equity:
Preferred		1,231,500		1,231,500		—
Common		15,019,319		15,255,122		-2
Total shareholders' equity		16,250,819		16,486,622		-1
Total liabilities and shareholders' equity	$	118,593,487		123,449,206		-4	%

13-13-13-13-13

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend


	December 31,		September 30,		June 30,		March 31,		December 31,
Dollars in thousands	2017		2017		2017		2017		2016
ASSETS
Cash and due from banks	$	1,420,888		1,368,252		1,344,478		1,286,962		1,320,549
Interest-bearing deposits at banks		5,078,903		6,306,484		5,023,829		6,945,149		5,000,638
Federal funds sold		—		—		1,000		—		—
Trading account		132,909		170,516		174,646		174,854		323,867
Investment securities		14,664,525		15,073,926		15,816,060		15,968,415		16,250,468
Loans and leases:
Commercial, financial, etc.		21,742,651		21,743,251		22,191,051		22,295,376		22,610,047
Real estate - commercial		33,366,373		32,914,288		33,348,991		33,071,654		33,506,394
Real estate - consumer		19,613,344		20,265,162		20,960,171		21,724,491		22,590,912
Consumer		13,266,615		13,002,433		12,580,342		12,221,481		12,146,063
Total loans and leases, net of unearned discount		87,988,983		87,925,134		89,080,555		89,313,002		90,853,416
Less: allowance for credit losses		1,017,198		1,013,326		1,008,225		1,001,430		988,997
Net loans and leases		86,971,785		86,911,808		88,072,330		88,311,572		89,864,419
Goodwill		4,593,112		4,593,112		4,593,112		4,593,112		4,593,112
Core deposit and other intangible assets		71,589		78,614		86,422		94,535		97,655
Other assets		5,659,776		5,899,092		5,784,690		5,848,652		5,998,498
Total assets	$	118,593,487		120,401,804		120,896,567		123,223,251		123,449,206

LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	33,975,180		33,111,246		32,366,426		34,279,591		32,813,896
Interest-bearing deposits		58,278,970		60,170,133		60,978,895		62,570,167		62,478,053
Deposits at Cayman Islands office		177,996		232,014		195,617		192,763		201,927
Total deposits		92,432,146		93,513,393		93,540,938		97,042,521		95,493,876
Short-term borrowings		175,099		200,768		1,695,453		185,102		163,442
Accrued interest and other liabilities		1,593,993		1,791,946		1,727,059		1,694,905		1,811,431
Long-term borrowings		8,141,430		8,577,645		7,649,580		8,087,619		9,493,835
Total liabilities		102,342,668		104,083,752		104,613,030		107,010,147		106,962,584
Shareholders' equity:
Preferred		1,231,500		1,231,500		1,231,500		1,231,500		1,231,500
Common		15,019,319		15,086,552		15,052,037		14,981,604		15,255,122
Total shareholders' equity		16,250,819		16,318,052		16,283,537		16,213,104		16,486,622
Total liabilities and shareholders' equity	$	118,593,487		120,401,804		120,896,567		123,223,251		123,449,206

14-14-14-14-14

M&T BANK CORPORATION

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates

	Three months ended															Change in balance						Year ended
	December 31,					December 31,					September 30,					December 31, 2017 from						December 31										Change
Dollars in millions	2017					2016					2017					December 31,			September 30,			2017					2016					in
	Balance		Rate			Balance		Rate			Balance		Rate			2016			2017			Balance		Rate			Balance		Rate			balance
ASSETS
Interest-bearing deposits at banks	$	6,680		1.31	%		8,790		.54	%		4,740		1.25	%		-24	%		41	%	$	5,578		1.10	%		8,846		.51	%		-37	%
Trading account		87		1.31			70		2.05			73		1.92			23			18			71		1.70			85		1.71			-16
Investment securities		14,808		2.30			15,417		2.28			15,443		2.28			-4			-4			15,538		2.34			15,009		2.44			4
Loans and leases, net of unearned discount
Commercial, financial, etc.		21,562		4.06			21,936		3.47			21,734		3.98			-2			-1			21,981		3.88			21,397		3.44			3
Real estate - commercial		33,138		4.61			32,822		4.01			33,257		4.50			1			—			33,196		4.40			30,915		4.06			7
Real estate - consumer		19,974		4.03			23,096		3.88			20,609		3.96			-14			-3			21,013		3.96			24,463		3.92			-14
Consumer		13,163		4.91			12,123		4.53			12,786		4.89			9			3			12,625		4.82			11,841		4.54			7
Total loans and leases, net		87,837		4.40			89,977		3.93			88,386		4.32			-2			-1			88,815		4.25			88,616		3.96			—
Total earning assets		109,412		3.93			114,254		3.45			108,642		3.89			-4			1			110,002		3.82			112,556		3.49			-2
Goodwill		4,593					4,593					4,593					—			—			4,593					4,593					—
Core deposit and other intangible assets		75					102					82					-27			-9			86					117					-26
Other assets		6,146					6,785					6,198					-9			-1			6,179					7,074					-13
Total assets	$	120,226					125,734					119,515					-4	%		1	%	$	120,860					124,340					-3	%

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Savings and interest-checking deposits	$	53,436		.29			54,055		.20			53,287		.28			-1	%		—	%	$	53,399		.25			52,194		.17			2	%
Time deposits		6,888		.70			10,936		.86			7,673		.72			-37			-10			8,161		.75			12,253		.84			-33
Deposits at Cayman Islands office		215		.61			206		.42			169		.73			4			27			185		.64			199		.40			-7
Total interest-bearing deposits		60,539		.34			65,197		.31			61,129		.34			-7			-1			61,745		.32			64,646		.30			-4
Short-term borrowings		178		.81			200		.30			244		.90			-11			-27			205		.74			894		.41			-77
Long-term borrowings		8,464		2.37			9,901		2.26			8,033		2.35			-15			5			8,302		2.28			10,252		2.25			-19
Total interest-bearing liabilities		69,181		.59			75,298		.57			69,406		.57			-8			—			70,252		.55			75,792		.56			-7
Noninterest-bearing deposits		32,930					31,717					32,005					4			3			32,520					30,160					8
Other liabilities		1,844					2,046					1,803					-10			2			1,793					1,969					-9
Total liabilities		103,955					109,061					103,214					-5			1			104,565					107,921					-3
Shareholders' equity		16,271					16,673					16,301					-2			—			16,295					16,419					-1
Total liabilities and shareholders' equity	$	120,226					125,734					119,515					-4	%		1	%	$	120,860					124,340					-3	%

Net interest spread				3.34					2.88					3.32											3.27					2.93
Contribution of interest-free funds				.22					.20					.21											.20					.18
Net interest margin				3.56	%				3.08	%				3.53	%										3.47	%				3.11	%

15-15-15-15-15

M&T BANK CORPORATION

Reconciliation of GAAP to Non-GAAP Measures

	Three months ended						Year ended
	December 31						December 31
	2017			2016			2017			2016
Income statement data
In thousands, except per share
Net income
Net income	$	322,403			330,571			1,408,306			1,315,114
Amortization of core deposit and other intangible assets (1)		4,261			5,524			19,025			25,893
Merger-related expenses (1)		—			—			—			21,685
Net operating income	$	326,664			336,095			1,427,331			1,362,692

Earnings per common share
Diluted earnings per common share	$	2.01			1.98			8.70			7.78
Amortization of core deposit and other intangible assets (1)		.03			.03			.12			.16
Merger-related expenses (1)		—			—			—			.14
Diluted net operating earnings per common share	$	2.04			2.01			8.82			8.08

Other expense
Other expense	$	795,813			769,103			3,140,325			3,047,485
Amortization of core deposit and other intangible assets		(7,025	)		(9,089	)		(31,366	)		(42,613	)
Merger-related expenses		—			—			—			(35,755	)
Noninterest operating expense	$	788,788			760,014			3,108,959			2,969,117

Merger-related expenses
Salaries and employee benefits	$	—			—			—			5,334
Equipment and net occupancy		—			—			—			1,278
Outside data processing and software		—			—			—			1,067
Advertising and marketing		—			—			—			10,522
Printing, postage and supplies		—			—			—			1,482
Other costs of operations		—			—			—			16,072
Total	$	—			—			—			35,755

Efficiency ratio
Noninterest operating expense (numerator)	$	788,788			760,014			3,108,959			2,969,117
Taxable-equivalent net interest income		980,457			883,147			3,815,614			3,496,849
Other income		484,053			465,459			1,851,143			1,825,996
Less: Gain on bank investment securities		21,296			1,566			21,279			30,314
Denominator	$	1,443,214			1,347,040			5,645,478			5,292,531
Efficiency ratio		54.65	%		56.42	%		55.07	%		56.10	%

Balance sheet data
In millions
Average assets
Average assets	$	120,226			125,734			120,860			124,340
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(75	)		(102	)		(86	)		(117	)
Deferred taxes		26			40			33			46
Average tangible assets	$	115,584			121,079			116,214			119,676
Average common equity
Average total equity	$	16,271			16,673			16,295			16,419
Preferred stock		(1,232	)		(1,492	)		(1,232	)		(1,297	)
Average common equity		15,039			15,181			15,063			15,122
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(75	)		(102	)		(86	)		(117	)
Deferred taxes		26			40			33			46
Average tangible common equity	$	10,397			10,526			10,417			10,458
								-			-
At end of quarter
Total assets
Total assets	$	118,593			123,449
Goodwill		(4,593	)		(4,593	)
Core deposit and other intangible assets		(72	)		(98	)
Deferred taxes		19			39
Total tangible assets	$	113,947			118,797
Total common equity
Total equity	$	16,251			16,487
Preferred stock		(1,232	)		(1,232	)
Undeclared dividends - cumulative preferred stock		(3	)		(3	)
Common equity, net of undeclared cumulative preferred dividends		15,016			15,252
Goodwill		(4,593	)		(4,593	)
Core deposit and other intangible assets		(72	)		(98	)
Deferred taxes		19			39
Total tangible common equity	$	10,370			10,600

(1)	After any related tax effect.

16-16-16-16-16

M&T BANK CORPORATION

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

	Three months ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2017			2017			2017			2017			2016
Income statement data
In thousands, except per share
Net income
Net income	$	322,403			355,923			381,053			348,927			330,571
Amortization of core deposit and other intangible assets (1)		4,261			4,735			4,921			5,108			5,524
Net operating income	$	326,664			360,658			385,974			354,035			336,095

Earnings per common share
Diluted earnings per common share	$	2.01			2.21			2.35			2.12			1.98
Amortization of core deposit and other intangible assets (1)		.03			.03			.03			.03			.03
Diluted net operating earnings per common share	$	2.04			2.24			2.38			2.15			2.01

Other expense
Other expense	$	795,813			806,025			750,635			787,852			769,103
Amortization of core deposit and other intangible assets		(7,025	)		(7,808	)		(8,113	)		(8,420	)		(9,089	)
Noninterest operating expense	$	788,788			798,217			742,522			779,432			760,014

Efficiency ratio
Noninterest operating expense (numerator)	$	788,788			798,217			742,522			779,432			760,014
Taxable-equivalent net interest income		980,457			965,962			946,936			922,259			883,147
Other income		484,053			459,429			460,816			446,845			465,459
Less: Gain (loss) on bank investment securities		21,296			—			(17	)		—			1,566
Denominator	$	1,443,214			1,425,391			1,407,769			1,369,104			1,347,040
Efficiency ratio		54.65	%		56.00	%		52.74	%		56.93	%		56.42	%

Balance sheet data
In millions
Average assets
Average assets	$	120,226			119,515			120,765			122,978			125,734
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(75	)		(82	)		(90	)		(98	)		(102	)
Deferred taxes		26			32			35			39			40
Average tangible assets	$	115,584			114,872			116,117			118,326			121,079

Average common equity
Average total equity	$	16,271			16,301			16,285			16,323			16,673
Preferred stock		(1,232	)		(1,232	)		(1,232	)		(1,232	)		(1,492	)
Average common equity		15,039			15,069			15,053			15,091			15,181
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(75	)		(82	)		(90	)		(98	)		(102	)
Deferred taxes		26			32			35			39			40
Average tangible common equity	$	10,397			10,426			10,405			10,439			10,526

At end of quarter
Total assets
Total assets	$	118,593			120,402			120,897			123,223			123,449
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(72	)		(79	)		(86	)		(95	)		(98	)
Deferred taxes		19			31			33			38			39
Total tangible assets	$	113,947			115,761			116,251			118,573			118,797

Total common equity
Total equity	$	16,251			16,318			16,284			16,213			16,487
Preferred stock		(1,232	)		(1,232	)		(1,232	)		(1,232	)		(1,232	)
Undeclared dividends - cumulative preferred stock		(3	)		(3	)		(3	)		(3	)		(3	)
Common equity, net of undeclared cumulative preferred dividends		15,016			15,083			15,049			14,978			15,252
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(72	)		(79	)		(86	)		(95	)		(98	)
Deferred taxes		19			31			33			38			39
Total tangible common equity	$	10,370			10,442			10,403			10,328			10,600

(1)	After any related tax effect.

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