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mtb-10q_20200331.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-9861

M&T BANK CORPORATION

(Exact name of registrant as specified in its charter)

New York		16-0968385
(State or other jurisdiction of incorporation or organization)		(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

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbols	Name of Each Exchange on Which Registered
Common Stock, $.50 par value	MTB	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Number of shares of the registrant's Common Stock, $0.50 par value, outstanding as of the close of business on April 30, 2020: 128,272,673 shares.

M&T BANK CORPORATION

FORM 10-Q

For the Quarterly Period Ended March 31, 2020

Table of Contents of Information Required in Report		Page

Part I. FINANCIAL INFORMATION

Item 1.	Financial Statements.

	CONSOLIDATED BALANCE SHEET – March 31, 2020 and December 31, 2019	3

	CONSOLIDATED STATEMENT OF INCOME – Three months ended March 31, 2020 and 2019	4

	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME – Three months ended March 31, 2020 and 2019	5

	CONSOLIDATED STATEMENT OF CASH FLOWS – Three months ended March 31, 2020 and 2019	6

	CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY – Three months ended March 31, 2020 and 2019	7

	NOTES TO FINANCIAL STATEMENTS	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	46

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	81

Item 4.	Controls and Procedures.	81

Part II. OTHER INFORMATION

Item 1.	Legal Proceedings	81

Item 1A.	Risk Factors.	82

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	84

Item 3.	Defaults Upon Senior Securities.	84

Item 4.	Mine Safety Disclosures.	84

Item 5.	Other Information.	84

Item 6.	Exhibits.	85

SIGNATURES		85

- 2 -

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (Unaudited)

	March 31,			December 31,
(Dollars in thousands, except per share)	2020			2019
Assets
Cash and due from banks	$	1,298,192		$	1,432,805
Interest-bearing deposits at banks		8,896,307			7,190,154
Federal funds sold		—			3,500
Trading account		1,224,291			470,129
Investment securities (includes pledged securities that can be sold or repledged of $195,217 at March 31, 2020; $200,339 at December 31, 2019)
Available for sale (cost: $5,948,056 at March 31, 2020; $6,258,276 at December 31, 2019)		6,139,979			6,318,776
Held to maturity (fair value: $2,397,849 at March 31, 2020; $2,699,206 at December 31, 2019)		2,300,642			2,656,917
Equity and other securities (cost: $502,234 at March 31, 2020; $487,041 at December 31, 2019)		515,969			521,558
Total investment securities		8,956,590			9,497,251
Loans and leases		94,408,178			91,188,525
Unearned discount		(265,903	)		(265,656	)
Loans and leases, net of unearned discount		94,142,275			90,922,869
Allowance for credit losses		(1,384,366	)		(1,051,071	)
Loans and leases, net		92,757,909			89,871,798
Premises and equipment		1,154,558			1,140,924
Goodwill		4,593,112			4,593,112
Core deposit and other intangible assets		25,121			29,034
Accrued interest and other assets		5,671,753			5,644,050
Total assets	$	124,577,833		$	119,872,757
Liabilities
Noninterest-bearing deposits	$	35,554,715		$	32,396,407
Savings and interest-checking deposits		57,956,331			54,932,162
Time deposits		5,454,341			5,757,456
Deposits at Cayman Islands office		1,217,921			1,684,044
Total deposits		100,183,308			94,770,069
Short-term borrowings		59,180			62,363
Accrued interest and other liabilities		2,198,116			2,337,490
Long-term borrowings		6,321,435			6,986,186
Total liabilities		108,762,039			104,156,108
Shareholders' equity
Preferred stock, $1.00 par, 1,000,000 shares authorized; Issued and outstanding: Liquidation preference of $1,000 per share: 350,000 shares at March 31, 2020 and December 31, 2019; Liquidation preference of $10,000 per share: 90,000 shares at March 31, 2020 and December 31, 2019		1,250,000			1,250,000
Common stock, $.50 par, 250,000,000 shares authorized, 159,741,898 shares issued at March 31, 2020 and December 31, 2019		79,871			79,871
Common stock issuable, 17,641 shares at March 31, 2020; 21,534 shares at December 31, 2019		1,292			1,566
Additional paid-in capital		6,588,407			6,593,539
Retained earnings		12,837,390			12,820,916
Accumulated other comprehensive income (loss), net		209,833			(206,680	)
Treasury stock — common, at cost — 31,477,259 shares at March 31, 2020; 29,174,402 shares at December 31, 2019		(5,150,999	)		(4,822,563	)
Total shareholders’ equity		15,815,794			15,716,649
Total liabilities and shareholders’ equity	$	124,577,833		$	119,872,757

See accompanying notes to financial statements.

- 3 -

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME (Unaudited)

	Three Months Ended March 31
(In thousands, except per share)	2020			2019
Interest income
Loans and leases, including fees	$	1,046,821		$	1,117,913
Investment securities
Fully taxable		50,110			80,411
Exempt from federal taxes		75			95
Deposits at banks		18,966			27,407
Other		4,447			483
Total interest income		1,120,419			1,226,309
Interest expense
Savings and interest-checking deposits		78,002			76,138
Time deposits		21,872			21,081
Deposits at Cayman Islands office		3,419			4,738
Short-term borrowings		23			6,713
Long-term borrowings		40,298			67,579
Total interest expense		143,614			176,249
Net interest income		976,805			1,050,060
Provision for credit losses		250,000			22,000
Net interest income after provision for credit losses		726,805			1,028,060
Other income
Mortgage banking revenues		127,909			95,311
Service charges on deposit accounts		106,161			103,112
Trust income		148,751			132,786
Brokerage services income		13,129			12,476
Trading account and foreign exchange gains		21,016			10,802
Gain (loss) on bank investment securities		(20,782	)		11,841
Other revenues from operations		133,176			134,437
Total other income		529,360			500,765
Other expense
Salaries and employee benefits		536,843			499,200
Equipment and net occupancy		79,640			79,347
Outside data processing and software		64,410			52,417
FDIC assessments		12,271			9,426
Advertising and marketing		22,375			20,275
Printing, postage and supplies		10,852			9,855
Amortization of core deposit and other intangible assets		3,913			5,020
Other costs of operations		176,112			218,808
Total other expense		906,416			894,348
Income before taxes		349,749			634,477
Income taxes		80,927			151,735
Net income	$	268,822		$	482,742
Net income available to common shareholders
Basic	$	250,701		$	462,086
Diluted		250,701			462,086
Net income per common share
Basic	$	1.93		$	3.35
Diluted		1.93			3.35
Average common shares outstanding
Basic		129,696			137,889
Diluted		129,755			137,920

See accompanying notes to financial statements.

- 4 -

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

	Three Months Ended March 31
(In thousands)	2020			2019

Net income	$	268,822		$	482,742
Other comprehensive income (loss), net of tax and reclassification adjustments:
Net unrealized gains on investment securities		97,448			84,591
Cash flow hedges adjustments		312,720			44,921
Foreign currency translation adjustments		(2,943	)		275
Defined benefit plans liability adjustments		9,288			2,285
Total other comprehensive income (loss)		416,513