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mtb-8k_20180717.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): July 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)

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))

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. ☐

Item 2.02.Results of Operations and Financial Condition.

On July 18, 2018, M&T Bank Corporation announced its results of operations for the quarter ended June 30, 2018. 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 July 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: July 18, 2018	By:	/s/ Darren J. King
		Darren J. King
		Executive Vice President and Chief Financial Officer

mtb-ex991_6.htm

Exhibit 99.1

INVESTOR CONTACT:

Donald J. MacLeod

FOR IMMEDIATE RELEASE:

(716) 842-5138

July 18, 2018

MEDIA CONTACT:

C. Michael Zabel

(716) 842-5385

M&T BANK CORPORATION ANNOUNCES SECOND QUARTER RESULTS

BUFFALO, NEW YORK -- M&T Bank Corporation (“M&T”) (NYSE: MTB) today reported its results of operations for quarter ended June 30, 2018.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the second quarter of 2018 were $3.26, up 39% from $2.35 in the corresponding 2017 quarter and 46% higher than $2.23 in the first quarter of 2018. GAAP-basis net income in the recent quarter was $493 million, up from $381 million in the second quarter of 2017 and $353 million in the initial 2018 quarter. GAAP-basis net income for the second quarter of 2018 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.70% and 13.32%, respectively, improved from 1.27% and 9.67%, respectively, in the year-earlier quarter and 1.22% and 9.15%, respectively, in the first quarter of 2018. During the initial 2018 quarter, M&T increased its reserve for litigation matters by $135 million in anticipation of the settlement of a Wilmington Trust Corporation civil litigation matter that was preliminarily approved by the court in July 2018. That increase, on an after-tax basis, reduced net income in that quarter by $102 million, or $.68 of diluted earnings per common share. As compared with 2017, income tax expense in 2018 reflects the reduction of the corporate Federal income tax rate from 35% to 21%.

Commenting on M&T’s results for the second quarter, Darren J. King, Executive Vice President and Chief Financial Officer, noted, “M&T’s financial performance in the second quarter was strong, led by a 12 basis point expansion of the net interest margin and higher trust income. Credit quality continued to be very good with the net charge-off ratio well below our long-term average. Expenses were in line with our expectations as we continued with our plan to invest savings realized from lower income tax rates in our employees, communities and customer service delivery capabilities. Furthermore, the Federal Reserve did not object to our revised 2018 Capital Plan that includes the repurchase of up to $1.8 billion of common shares and a 25% increase in M&T’s quarterly common stock dividend.”

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M&T BANK CORPORATION

Earnings Highlights

										Change 2Q18 vs.
($ in millions, except per share data)	2Q18			2Q17			1Q18			2Q17			1Q18

Net income	$	493		$	381		$	353			29	%		40	%
Net income available to common shareholders - diluted	$	473		$	361		$	333			31	%		42	%
Diluted earnings per common share	$	3.26		$	2.35		$	2.23			39	%		46	%
Annualized return on average assets		1.70	%		1.27	%		1.22	%
Annualized return on average common equity		13.32	%		9.67	%		9.15	%

For the six-month period ended June 30, 2018, diluted earnings per common share were $5.48, up 23% from $4.47 in the year-earlier period. GAAP-basis net income for the first six months of 2018 totaled $846 million, 16% higher than $730 million in the corresponding 2017 period. Expressed as an annualized rate of return on average assets and average common shareholders’ equity, GAAP-basis net income in the six-month period ended June 30, 2018 was 1.46% and 11.21%, respectively, improved from 1.21% and 9.28%, respectively, in the similar 2017 period.

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.

Diluted net operating earnings per common share were $3.29 in the recent quarter, up from $2.38 in the second quarter of 2017 and $2.26 in the initial 2018 quarter. Net operating income for the second quarter of 2018 was $498 million, compared with $386 million in the year-earlier period and $357 million in the first quarter of 2018. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.79% and 19.91%, respectively, in the recent quarter, improved from 1.33% and 14.18%, respectively, in the second quarter of 2017 and 1.28% and 13.51%, respectively, in the first quarter of 2018.

Diluted net operating earnings per common share in the first six months of 2018 increased 22% to $5.54 from $4.53 in the first half of 2017. Net operating income during the six-month period ended June 30, 2018 was $855 million, up 16% from $740 million in the year-earlier period. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity was 1.53% and 16.65%, respectively, in the first half of 2018, compared with 1.27% and 13.61%, respectively, in the first six months of 2017.

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M&T BANK CORPORATION

Taxable-equivalent Net Interest Income. Net interest income expressed on a taxable-equivalent basis aggregated $1.01 billion in 2018’s second quarter, 7% higher than $947 million in the similar 2017 quarter and 3% higher than $980 million in 2018’s initial quarter. That growth resulted from a widening of the net interest margin to 3.83% in the recent quarter from 3.45% in the second quarter of 2017 and 3.71% in the first quarter of 2018. In each quarterly comparison, the impact of the improved margin was partially offset by lower average balances of loans and investment securities.


Taxable-equivalent Net Interest Income

										Change 2Q18 vs.
($ in millions)	2Q18			2Q17			1Q18			2Q17			1Q18

Average earning assets	$	106,210		$	109,987		$	107,231			-3	%		-1	%
Net interest income ̶ taxable-equivalent	$	1,014		$	947		$	980			7	%		3	%
Net interest margin		3.83	%		3.45	%		3.71	%

Provision for Credit Losses/Asset Quality. The provision for credit losses was $35 million in the second quarter of 2018, compared with $52 million in the year-earlier quarter and $43 million in 2018’s first quarter. Net charge-offs of loans were $35 million during the recent quarter, compared with $45 million in the second quarter of 2017 and $41 million in the first quarter of 2018. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .16% and .20% in the second quarters of 2018 and 2017, respectively, and .19% in the first quarter of 2018.

Loans classified as nonaccrual totaled $820 million or .93% of total loans outstanding at June 30, 2018, improved from $872 million or .98% a year earlier and $865 million or .99% at March 31, 2018. Assets taken in foreclosure of defaulted loans were $98 million at June 30, 2018, compared with $105 million at June 30, 2017 and $101 million at March 31, 2018.

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 or 1.16% of loans outstanding at each of June 30, 2018 and March 31, 2018, compared with $1.01 billion or 1.13% at June 30, 2017.

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M&T BANK CORPORATION

Asset Quality Metrics

										Change 2Q18 vs.
($ in millions)	2Q18			2Q17			1Q18			2Q17			1Q18

At end of quarter
Nonaccrual loans	$	820		$	872		$	865			-6	%		-5	%
Real estate and other foreclosed assets	$	98		$	105		$	101			-6	%		-3	%
Total nonperforming assets	$	918		$	977		$	966			-6	%		-5	%
Accruing loans past due 90 days or more (1)	$	223		$	265		$	235			-16	%		-5	%
Nonaccrual loans as % of loans outstanding		.93	%		.98	%		.99	%

Allowance for credit losses	$	1,019		$	1,008		$	1,020			1	%		—
Allowance for credit losses as % of loans outstanding		1.16	%		1.13	%		1.16	%

For the period
Provision for credit losses	$	35		$	52		$	43			-33	%		-19	%
Net charge-offs	$	35		$	45		$	41			-22	%		-13	%
Net charge-offs as % of average loans (annualized)		.16	%		.20	%		.19	%

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

Noninterest Income and Expense. Noninterest income totaled $457 million in the recent quarter, compared with $461 million in the second quarter of 2017 and $459 million in the first quarter of 2018. Improved trust income and mortgage banking revenues in the recent quarter were offset by the impact of higher credit-related fees and income from bank-owned life insurance and brokerage services in the year earlier quarter and $23 million of income in the initial 2018 quarter from M&T’s investment in Bayview Lending Group.

Noninterest Income

								Change 2Q18 vs.
($ in millions)	2Q18		2Q17		1Q18			2Q17			1Q18

Mortgage banking revenues	$	92	$	86	$	87			7	%		6	%
Service charges on deposit accounts		107		106		105			1	%		2	%
Trust income		138		127		131			9	%		5	%
Brokerage services income		13		17		13			-24	%		-6	%
Trading account and foreign exchange gains		5		8		5			-35	%		13	%
Gain (loss) on bank investment securities		2		—		(9	)		—			—
Other revenues from operations		100		117		127			-14	%		-21	%
Total other income	$	457	$	461	$	459			-1	%		—

Noninterest expense totaled $777 million in the second quarter of 2018, $751 million in the year-earlier quarter and $933 million in the first quarter of 2018. Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets, noninterest operating expenses were $770 million in the recent quarter, $743 million in the year-earlier period and $927 million in 2018’s first quarter. Higher costs for salaries and employee benefits were the most significant factor associated with the rise in noninterest operating expenses in the recent quarter as compared with the year-earlier quarter. The higher noninterest operating expenses in the first quarter of 2018 reflected a $135 million increase in the reserve for litigation matters and seasonally higher stock-based compensation and employee benefits expenses.

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M&T BANK CORPORATION

Noninterest Expense

							Change 2Q18 vs.
($ in millions)	2Q18		2Q17		1Q18		2Q17			1Q18

Salaries and employee benefits	$	419	$	398	$	463		5	%		-10	%
Equipment and net occupancy		73		74		75		-1	%		-2	%
Outside data processing and software		49		45		49		12	%		3	%
FDIC assessments		20		25		20		-23	%		-4	%
Advertising and marketing		22		16		16		33	%		34	%
Printing, postage and supplies		9		9		9		-3	%		-6	%
Amortization of core deposit and other intangible assets		6		8		7		-21	%		-4	%
Other costs of operations		179		176		294		2	%		-39	%
Total other expense	$	777	$	751	$	933		3	%		-17	%

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 52.4% in the second quarter of 2018, 52.7% in the year-earlier quarter and 64.0% in the first quarter of 2018.

Balance Sheet. M&T had total assets of $118.4 billion at June 30, 2018, compared with $120.9 billion at June 30, 2017 and $118.6 billion at March 31, 2018. Loans and leases, net of unearned discount, were $87.8 billion at June 30, 2018 and $89.1 billion at June 30, 2017. The decline from June 30, 2017 reflects acquired residential mortgage loan repayments, partially offset by growth in commercial real estate and consumer loans. Total deposits were $89.3 billion at the recent quarter-end, compared with $93.5 billion at June 30, 2017 and $90.9 billion at March 31, 2018. Those declines reflect maturities of time deposits and lower commercial escrow deposits.

Total shareholders' equity was $15.6 billion at June 30, 2018 and $16.3 billion a year earlier, representing 13.15% and 13.47%, respectively, of total assets. Total shareholders’ equity was $15.7 billion, or 13.24% of total assets at March 31, 2018. Common shareholders' equity was $14.3 billion, or $99.43 per share, at June 30, 2018, compared with $15.1 billion, or $98.66 per share, a year-earlier and $14.5 billion, or $98.60 per share, at March 31, 2018. Tangible equity per common share was $67.29 at June 30, 2018, compared with $68.20 at June 30, 2017 and $66.99 at March 31, 2018. 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 10.52% at June 30, 2018.

In accordance with its 2017 capital plan, M&T repurchased 2,608,376 shares of its common stock during the recent quarter at an average cost per share of $182.14, for a total cost of $475 million. In the aggregate, during the first six months of 2018, M&T repurchased 6,391,658 shares of common stock under that plan at a total cost of $1.2 billion.

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M&T BANK CORPORATION

Conference Call. Investors will have an opportunity to listen to M&T's conference call to discuss second quarter financial results today at 10:00 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 #3553997. The conference call will be webcast live through M&T's website at http://ir.mtb.com/events.cfm. A replay of the call will be available until Sunday, July 29, by calling (800) 585-8367, or (404) 537-3406 for international participants, and by making reference to ID #3553997. The event will also be archived and available by 7:00 p.m. today on M&T's website at http://ir.mtb.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, 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

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M&T BANK CORPORATION

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									Six months ended
	June 30									June 30
Amounts in thousands, except per share	2018			2017			Change			2018			2017			Change
Performance
Net income	$	493,160			381,053			29	%	$	845,770			729,980			16	%
Net income available to common shareholders		472,600			360,662			31	%		805,342			689,217			17	%
Per common share:
Basic earnings	$	3.26			2.36			38	%	$	5.49			4.49			22	%
Diluted earnings		3.26			2.35			39	%		5.48			4.47			23	%
Cash dividends	$	.80			.75			7	%	$	1.55			1.50			3	%
Common shares outstanding:
Average - diluted (1)		144,998			153,276			-5	%		146,941			154,108			-5	%
Period end (2)		144,261			152,539			-5	%		144,261			152,539			-5	%
Return on (annualized):
Average total assets		1.70	%		1.27	%					1.46	%		1.21	%
Average common shareholders' equity		13.32	%		9.67	%					11.21	%		9.28	%
Taxable-equivalent net interest income	$	1,014,184			946,936			7	%	$	1,994,510			1,869,195			7	%
Yield on average earning assets		4.28	%		3.79	%					4.20	%		3.73	%
Cost of interest-bearing liabilities		.71	%		.52	%					.68	%		.52	%
Net interest spread		3.57	%		3.27	%					3.52	%		3.21	%
Contribution of interest-free funds		.26	%		.18	%					.25	%		.19	%
Net interest margin		3.83	%		3.45	%					3.77	%		3.40	%
Net charge-offs to average total net loans (annualized)		.16	%		.20	%					.17	%		.20	%
Net operating results (3)
Net operating income	$	497,869			385,974			29	%	$	855,367			740,009			16	%
Diluted net operating earnings per common share		3.29			2.38			38	%		5.54			4.53			22	%
Return on (annualized):
Average tangible assets		1.79	%		1.33	%					1.53	%		1.27	%
Average tangible common equity		19.91	%		14.18	%					16.65	%		13.61	%
Efficiency ratio		52.42	%		52.74	%					58.16	%		54.81	%

	At June 30
Loan quality	2018			2017			Change
Nonaccrual loans	$	819,984			872,374			-6	%
Real estate and other foreclosed assets		98,062			104,424			-6	%
Total nonperforming assets	$	918,046			976,798			-6	%
Accruing loans past due 90 days or more (4)	$	223,026			265,461			-16	%
Government guaranteed loans included in totals above:
Nonaccrual loans	$	34,870			39,296			-11	%
Accruing loans past due 90 days or more		202,394			235,227			-14	%
Renegotiated loans	$	242,528			221,892			9	%
Accruing loans acquired at a discount past due 90 days or more (5)	$	47,405			57,498			-18	%
Purchased impaired loans (6):
Outstanding customer balance	$	606,683			838,476			-28	%
Carrying amount		352,465			512,393			-31	%
Nonaccrual loans to total net loans		.93	%		.98	%
Allowance for credit losses to total loans		1.16	%		1.13	%

(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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M&T BANK CORPORATION

Financial Highlights, Five Quarter Trend

	Three months ended
	June 30,			March 31,			December 31,			September 30,			June 30,
Amounts in thousands, except per share	2018			2018			2017			2017			2017
Performance
Net income	$	493,160			352,610			322,403			355,923			381,053
Net income available to common shareholders		472,600			332,749			302,486			335,804			360,662
Per common share:
Basic earnings	$	3.26			2.24			2.01			2.22			2.36
Diluted earnings		3.26			2.23			2.01			2.21			2.35
Cash dividends	$	.80			.75			.75			.75			.75
Common shares outstanding:
Average - diluted (1)		144,998			148,905			150,348			151,691			153,276
Period end (2)		144,261			146,799			150,112			151,291			152,539
Return on (annualized):
Average total assets		1.70	%		1.22	%		1.06	%		1.18	%		1.27	%
Average common shareholders' equity		13.32	%		9.15	%		8.03	%		8.89	%		9.67	%
Taxable-equivalent net interest income	$	1,014,184			980,326			980,457			965,962			946,936
Yield on average earning assets		4.28	%		4.11	%		3.93	%		3.89	%		3.79	%
Cost of interest-bearing liabilities		.71	%		.64	%		.59	%		.57	%		.52	%
Net interest spread		3.57	%		3.47	%		3.34	%		3.32	%		3.27	%
Contribution of interest-free funds		.26	%		.24	%		.22	%		.21	%		.18	%
Net interest margin		3.83	%		3.71	%		3.56	%		3.53	%		3.45	%
Net charge-offs to average total net loans (annualized)		.16	%		.19	%		.12	%		.11	%		.20	%
Net operating results (3)
Net operating income	$	497,869			357,498			326,664			360,658			385,974
Diluted net operating earnings per common share		3.29			2.26			2.04			2.24			2.38
Return on (annualized):
Average tangible assets		1.79	%		1.28	%		1.12	%		1.25	%		1.33	%
Average tangible common equity		19.91	%		13.51	%		11.77	%		13.03	%		14.18	%
Efficiency ratio		52.42	%		63.98	%		54.65	%		56.00	%		52.74	%

	June 30,			March 31,			December 31,			September 30,			June 30,
Loan quality	2018			2018			2017			2017			2017
Nonaccrual loans	$	819,984			864,671			882,598			869,362			872,374
Real estate and other foreclosed assets		98,062			101,514			111,910			110,515			104,424
Total nonperforming assets	$	918,046			966,185			994,508			979,877			976,798
Accruing loans past due 90 days or more (4)	$	223,026			235,325			244,405			261,288			265,461
Government guaranteed loans included in totals above:
Nonaccrual loans	$	34,870			36,618			35,677			34,687			39,296
Accruing loans past due 90 days or more		202,394			223,611			235,489			252,072			235,227
Renegotiated loans	$	242,528			226,829			221,513			226,672			221,892
Accruing loans acquired at a discount past due 90 days or more (5)	$	47,405			49,349			47,418			56,225			57,498
Purchased impaired loans (6):
Outstanding customer balance	$	606,683			643,124			688,091			779,340			838,476
Carrying amount		352,465			378,000			410,015			466,943			512,393
Nonaccrual loans to total net loans		.93	%		.99	%		1.00	%		.99	%		.98	%
Allowance for credit losses to total loans		1.16	%		1.16	%		1.16	%		1.15	%		1.13	%

(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								Six months ended
	June 30								June 30
Dollars in thousands	2018		2017			Change			2018			2017			Change
Interest income	$	1,128,905		1,030,413			10	%	$	2,211,055			2,036,446			9	%
Interest expense		120,118		92,213			30			226,751			183,986			23
Net interest income		1,008,787		938,200			8			1,984,304			1,852,460			7
Provision for credit losses		35,000		52,000			-33			78,000			107,000			-27
Net interest income after provision for credit losses		973,787		886,200			10			1,906,304			1,745,460			9
Other income
Mortgage banking revenues		92,499		86,163			7			179,805			170,855			5
Service charges on deposit accounts		106,784		106,057			1			211,899			210,233			1
Trust income		137,641		126,797			9			269,016			246,812			9
Brokerage services income		12,629		16,617			-24			26,021			34,001			-23
Trading account and foreign exchange gains		5,255		8,084			-35			9,892			17,775			-44
Gain (loss) on bank investment securities		2,326		(17	)		—			(7,105	)		(17	)		—
Other revenues from operations		100,280		117,115			-14			226,582			228,002			-1
Total other income		457,414		460,816			-1			916,110			907,661			1
Other expense
Salaries and employee benefits		418,537		398,054			5			881,965			847,795			4
Equipment and net occupancy		73,031		73,797			-1			147,828			148,163			—
Outside data processing and software		49,712		44,575			12			98,141			88,876			10
FDIC assessments		19,560		25,353			-23			39,840			54,180			-26
Advertising and marketing		21,768		16,324			33			38,016			32,434			17
Printing, postage and supplies		8,719		8,957			-3			18,038			18,665			-3
Amortization of core deposit and other intangible assets		6,388		8,113			-21			13,020			16,533			-21
Other costs of operations		178,862		175,462			2			473,073			331,841			43
Total other expense		776,577		750,635			3			1,709,921			1,538,487			11
Income before income taxes		654,624		596,381			10			1,112,493			1,114,634			—
Applicable income taxes		161,464		215,328			-25			266,723			384,654			-31
Net income	$	493,160		381,053			29	%	$	845,770			729,980			16	%

11-11-11-11-11

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend

	Three months ended
	June 30,		March 31,			December 31,		September 30,		June 30,
Dollars in thousands	2018		2018			2017		2017		2017
Interest income	$	1,128,905		1,082,150			1,074,139		1,057,210		1,030,413
Interest expense		120,118		106,633			102,689		100,076		92,213
Net interest income		1,008,787		975,517			971,450		957,134		938,200
Provision for credit losses		35,000		43,000			31,000		30,000		52,000
Net interest income after provision for credit losses		973,787		932,517			940,450		927,134		886,200
Other income
Mortgage banking revenues		92,499		87,306			96,235		96,737		86,163
Service charges on deposit accounts		106,784		105,115			107,783		109,356		106,057
Trust income		137,641		131,375			129,669		124,900		126,797
Brokerage services income		12,629		13,392			12,768		14,676		16,617
Trading account and foreign exchange gains		5,255		4,637			10,468		7,058		8,084
Gain (loss) on bank investment securities		2,326		(9,431	)		21,296		—		(17	)
Other revenues from operations		100,280		126,302			105,834		106,702		117,115
Total other income		457,414		458,696			484,053		459,429		460,816
Other expense
Salaries and employee benefits		418,537		463,428			402,394		398,605		398,054
Equipment and net occupancy		73,031		74,797			71,363		75,558		73,797
Outside data processing and software		49,712		48,429			50,033		45,761		44,575
FDIC assessments		19,560		20,280			23,722		23,969		25,353
Advertising and marketing		21,768		16,248			19,366		17,403		16,324
Printing, postage and supplies		8,719		9,319			8,563		8,732		8,957
Amortization of core deposit and other intangible assets		6,388		6,632			7,025		7,808		8,113
Other costs of operations		178,862		294,211			213,347		228,189		175,462
Total other expense		776,577		933,344			795,813		806,025		750,635
Income before income taxes		654,624		457,869			628,690		580,538		596,381
Applicable income taxes		161,464		105,259			306,287		224,615		215,328
Net income	$	493,160		352,610			322,403		355,923		381,053

12-12-12-12-12

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet

	June 30
Dollars in thousands	2018		2017		Change
ASSETS
Cash and due from banks	$	1,367,594		1,344,478		2	%
Interest-bearing deposits at banks		6,669,985		5,023,829		33
Federal funds sold		1,500		1,000		50
Trading account		148,303		174,646		-15
Investment securities		13,283,002		15,816,060		-16
Loans and leases:
Commercial, financial, etc.		21,894,857		22,191,051		-1
Real estate - commercial		34,137,937		33,348,991		2
Real estate - consumer		18,310,712		20,960,171		-13
Consumer		13,453,944		12,580,342		7
Total loans and leases, net of unearned discount		87,797,450		89,080,555		-1
Less: allowance for credit losses		1,019,248		1,008,225		1
Net loans and leases		86,778,202		88,072,330		-1
Goodwill		4,593,112		4,593,112		—
Core deposit and other intangible assets		58,569		86,422		-32
Other assets		5,525,786		5,784,690		-4
Total assets	$	118,426,053		120,896,567		-2	%

LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	32,086,191		32,366,426		-1	%
Interest-bearing deposits		56,924,970		60,978,895		-7
Deposits at Cayman Islands office		261,427		195,617		34
Total deposits		89,272,588		93,540,938		-5
Short-term borrowings		3,239,416		1,695,453		91
Accrued interest and other liabilities		1,953,848		1,727,059		13
Long-term borrowings		8,382,316		7,649,580		10
Total liabilities		102,848,168		104,613,030		-2
Shareholders' equity:
Preferred		1,231,500		1,231,500		—
Common		14,346,385		15,052,037		-5
Total shareholders' equity		15,577,885		16,283,537		-4
Total liabilities and shareholders' equity	$	118,426,053		120,896,567		-2	%

13-13-13-13-13

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend


	June 30,		March 31,		December 31,		September 30,		June 30,
Dollars in thousands	2018		2018		2017		2017		2017
ASSETS
Cash and due from banks	$	1,367,594		1,291,664		1,420,888		1,368,252		1,344,478
Interest-bearing deposits at banks		6,669,985		6,135,434		5,078,903		6,306,484		5,023,829
Federal funds sold		1,500		1,000		—		—		1,000
Trading account		148,303		141,134		132,909		170,516		174,646
Investment securities		13,283,002		14,066,564		14,664,525		15,073,926		15,816,060
Loans and leases:
Commercial, financial, etc.		21,894,857		21,697,522		21,742,651		21,743,251		22,191,051
Real estate - commercial		34,137,937		33,753,506		33,366,373		32,914,288		33,348,991
Real estate - consumer		18,310,712		18,960,946		19,613,344		20,265,162		20,960,171
Consumer		13,453,944		13,298,775		13,266,615		13,002,433		12,580,342
Total loans and leases, net of unearned discount		87,797,450		87,710,749		87,988,983		87,925,134		89,080,555
Less: allowance for credit losses		1,019,248		1,019,671		1,017,198		1,013,326		1,008,225
Net loans and leases		86,778,202		86,691,078		86,971,785		86,911,808		88,072,330
Goodwill		4,593,112		4,593,112		4,593,112		4,593,112		4,593,112
Core deposit and other intangible assets		58,569		64,957		71,589		78,614		86,422
Other assets		5,525,786		5,637,881		5,659,776		5,899,092		5,784,690
Total assets	$	118,426,053		118,622,824		118,593,487		120,401,804		120,896,567

LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	32,086,191		31,817,516		33,975,180		33,111,246		32,366,426
Interest-bearing deposits		56,924,970		58,851,050		58,278,970		60,170,133		60,978,895
Deposits at Cayman Islands office		261,427		278,064		177,996		232,014		195,617
Total deposits		89,272,588		90,946,630		92,432,146		93,513,393		93,540,938
Short-term borrowings		3,239,416		1,626,129		175,099		200,768		1,695,453
Accrued interest and other liabilities		1,953,848		1,749,320		1,593,993		1,791,946		1,727,059
Long-term borrowings		8,382,316		8,591,051		8,141,430		8,577,645		7,649,580
Total liabilities		102,848,168		102,913,130		102,342,668		104,083,752		104,613,030
Shareholders' equity:
Preferred		1,231,500		1,231,500		1,231,500		1,231,500		1,231,500
Common		14,346,385		14,478,194		15,019,319		15,086,552		15,052,037
Total shareholders' equity		15,577,885		15,709,694		16,250,819		16,318,052		16,283,537
Total liabilities and shareholders' equity	$	118,426,053		118,622,824		118,593,487		120,401,804		120,896,567

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						Six months ended
	June 30,					June 30,					March 31,					June 30, 2018 from						June 30,										Change
Dollars in millions	2018					2017					2018					June 30,			March 31,			2018					2017					in
	Balance		Rate			Balance		Rate			Balance		Rate			2017			2018			Balance		Rate			Balance		Rate			balance
ASSETS
Interest-bearing deposits at banks	$	4,890		1.79	%		4,741		1.03	%		4,941		1.53	%		3	%		-1	%	$	4,916		1.66	%		5,443		.90	%		-10	%
Federal funds sold		1		2.23			1		1.44			3		1.85			—			—			2		1.91			—		—			—
Trading account		57		2.92			64		1.50			54		3.00			-11			6			55		2.96			62		1.84			-10
Investment securities		13,856		2.38			15,913		2.36			14,467		2.33			-13			-4			14,164		2.35			15,956		2.40			-11
Loans and leases, net of unearned discount
Commercial, financial, etc.		21,709		4.49			22,350		3.84			21,547		4.28			-3			1			21,628		4.39			22,320		3.75			-3
Real estate - commercial		33,687		4.95			33,214		4.30			33,652		4.73			1			—			33,670		4.84			33,195		4.24			1
Real estate - consumer		18,644		4.15			21,318		3.94			19,274		4.06			-13			-3			18,957		4.11			21,746		3.93			-13
Consumer		13,366		5.14			12,386		4.78			13,293		5.00			8			1			13,330		5.07			12,270		4.73			9
Total loans and leases, net		87,406		4.73			89,268		4.19			87,766		4.55			-2			—			87,585		4.64			89,531		4.14			-2
Total earning assets		106,210		4.28			109,987		3.79			107,231		4.11			-3			-1			106,722		4.20			110,992		3.73			-4
Goodwill		4,593					4,593					4,593					—			—			4,593					4,593					—
Core deposit and other intangible assets		62					90					68					-32			-10			65					94					-31
Other assets		5,548					6,095					5,792					-9			-4			5,641					6,186					-9
Total assets	$	116,413					120,765					117,684					-4	%		-1	%	$	117,021					121,865					-4	%

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Savings and interest-checking deposits	$	52,547		.37			53,611		.23			52,504		.31			-2	%		—	%	$	52,526		.34			53,437		.21			-2	%
Time deposits		5,997		.76			8,559		.76			6,320		.70			-30			-5			6,158		.73			9,057		.79			-32
Deposits at Cayman Islands office		225		.97			163		.69			248		.62			38			-9			236		.79			177		.62			33
Total interest-bearing deposits		58,769		.41			62,333		.30			59,072		.36			-6			-1			58,920		.38			62,671		.30			-6
Short-term borrowings		353		1.57			212		.71			280		1.28			66			26			317		1.44			199		.60			60
Long-term borrowings		8,480		2.75			8,292		2.16			8,606		2.54			2			-1			8,543		2.64			8,357		2.20			2
Total interest-bearing liabilities		67,602		.71			70,837		.52			67,958		.64			-5			-1			67,780		.68			71,227		.52			-5
Noninterest-bearing deposits		31,426					31,868					32,047					-1			-2			31,734					32,574					-3
Other liabilities		1,852					1,775					1,620					4			14			1,713					1,760					-3
Total liabilities		100,880					104,480					101,625					-3			-1			101,227					105,561					-4
Shareholders' equity		15,533					16,285					16,059					-5			-3			15,794					16,304					-3
Total liabilities and shareholders' equity	$	116,413					120,765					117,684					-4	%		-1	%	$	117,021					121,865					-4	%

Net interest spread				3.57					3.27					3.47											3.52					3.21
Contribution of interest-free funds				.26					.18					.24											.25					.19
Net interest margin				3.83	%				3.45	%				3.71	%										3.77	%				3.40	%

15-15-15-15-15

M&T BANK CORPORATION

Reconciliation of GAAP to Non-GAAP Measures

	Three months ended						Six months ended
	June 30						June 30
	2018			2017			2018			2017
Income statement data
In thousands, except per share
Net income
Net income	$	493,160			381,053			845,770			729,980
Amortization of core deposit and other intangible assets (1)		4,709			4,921			9,597			10,029
Net operating income	$	497,869			385,974			855,367			740,009

Earnings per common share
Diluted earnings per common share	$	3.26			2.35			5.48			4.47
Amortization of core deposit and other intangible assets (1)		.03			.03			.06			.06
Diluted net operating earnings per common share	$	3.29			2.38			5.54			4.53

Other expense
Other expense	$	776,577			750,635			1,709,921			1,538,487
Amortization of core deposit and other intangible assets		(6,388	)		(8,113	)		(13,020	)		(16,533	)
Noninterest operating expense	$	770,189			742,522			1,696,901			1,521,954
Efficiency ratio
Noninterest operating expense (numerator)	$	770,189			742,522			1,696,901			1,521,954
Taxable-equivalent net interest income		1,014,184			946,936			1,994,510			1,869,195
Other income		457,414			460,816			916,110			907,661
Less: Gain (loss) on bank investment securities		2,326			(17	)		(7,105	)		(17	)
Denominator	$	1,469,272			1,407,769			2,917,725			2,776,873
Efficiency ratio		52.42	%		52.74	%		58.16	%		54.81	%
Balance sheet data
In millions
Average assets
Average assets	$	116,413			120,765			117,021			121,865
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(62	)		(90	)		(65	)		(94	)
Deferred taxes		17			35			17			37
Average tangible assets	$	111,775			116,117			112,380			117,215
Average common equity
Average total equity	$	15,533			16,285			15,794			16,304
Preferred stock		(1,232	)		(1,232	)		(1,232	)		(1,232	)
Average common equity		14,301			15,053			14,562			15,072
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(62	)		(90	)		(65	)		(94	)
Deferred taxes		17			35			17			37
Average tangible common equity	$	9,663			10,405			9,921			10,442
At end of quarter
Total assets
Total assets	$	118,426			120,897
Goodwill		(4,593	)		(4,593	)
Core deposit and other intangible assets		(59	)		(86	)
Deferred taxes		16			33
Total tangible assets	$	113,790			116,251
Total common equity
Total equity	$	15,578			16,284
Preferred stock		(1,232	)		(1,232	)
Undeclared dividends - cumulative preferred stock		(3	)		(3	)
Common equity, net of undeclared cumulative preferred dividends		14,343			15,049
Goodwill		(4,593	)		(4,593	)
Core deposit and other intangible assets		(59	)		(86	)
Deferred taxes		16			33
Total tangible common equity	$	9,707			10,403

(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
	June 30,			March 31,			December 31,			September 30,			June 30,
	2018			2018			2017			2017			2017
Income statement data
In thousands, except per share
Net income
Net income	$	493,160			352,610			322,403			355,923			381,053
Amortization of core deposit and other intangible assets (1)		4,709			4,888			4,261			4,735			4,921
Net operating income	$	497,869			357,498			326,664			360,658			385,974

Earnings per common share
Diluted earnings per common share	$	3.26			2.23			2.01			2.21			2.35
Amortization of core deposit and other intangible assets (1)		.03			.03			.03			.03			.03
Diluted net operating earnings per common share	$	3.29			2.26			2.04			2.24			2.38

Other expense
Other expense	$	776,577			933,344			795,813			806,025			750,635
Amortization of core deposit and other intangible assets		(6,388	)		(6,632	)		(7,025	)		(7,808	)		(8,113	)
Noninterest operating expense	$	770,189			926,712			788,788			798,217			742,522
Efficiency ratio
Noninterest operating expense (numerator)	$	770,189			926,712			788,788			798,217			742,522
Taxable-equivalent net interest income		1,014,184			980,326			980,457			965,962			946,936
Other income		457,414			458,696			484,053			459,429			460,816
Less: Gain (loss) on bank investment securities		2,326			(9,431	)		21,296			—			(17	)
Denominator	$	1,469,272			1,448,453			1,443,214			1,425,391			1,407,769
Efficiency ratio		52.42	%		63.98	%		54.65	%		56.00	%		52.74	%
Balance sheet data
In millions
Average assets
Average assets	$	116,413			117,684			120,226			119,515			120,765
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(62	)		(68	)		(75	)		(82	)		(90	)
Deferred taxes		17			18			26			32			35
Average tangible assets	$	111,775			113,041			115,584			114,872			116,117
Average common equity
Average total equity	$	15,533			16,059			16,271			16,301			16,285
Preferred stock		(1,232	)		(1,232	)		(1,232	)		(1,232	)		(1,232	)
Average common equity		14,301			14,827			15,039			15,069			15,053
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(62	)		(68	)		(75	)		(82	)		(90	)
Deferred taxes		17			18			26			32			35
Average tangible common equity	$	9,663			10,184			10,397			10,426			10,405
At end of quarter
Total assets
Total assets	$	118,426			118,623			118,593			120,402			120,897
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(59	)		(65	)		(72	)		(79	)		(86	)
Deferred taxes		16			17			19			31			33
Total tangible assets	$	113,790			113,982			113,947			115,761			116,251
Total common equity
Total equity	$	15,578			15,710			16,251			16,318			16,284
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		14,343			14,475			15,016			15,083			15,049
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(59	)		(65	)		(72	)		(79	)		(86	)
Deferred taxes		16			17			19			31			33
Total tangible common equity	$	9,707			9,834			10,370			10,442			10,403

(1)	After any related tax effect.