Company

M&T Bank Corporation Announces First Quarter Results

M&T Bank Corporation (“M&T”)(NYSE: MTB) today reported its results of operations for the quarter ended March 31, 2017.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the initial quarter of 2017 were $2.12, up 23% from $1.73 in the year-earlier quarter and 7% higher than $1.98 in the final quarter of 2016.  GAAP-basis net income in the recent quarter was $349 million, 17% higher than $299 million in the first quarter of 2016 and 6% above the $331 million recorded in the final 2016 quarter.  Net income for the initial 2017 quarter expressed as an annualized rate of return on average assets and average common shareholders’ equity was 1.15% and 8.89%, respectively, compared with .97% and 7.44%, respectively, in the similar 2016 period and 1.05% and 8.13%, respectively, in the fourth quarter of 2016.

During the first quarter of 2017, M&T adopted new accounting guidance for share-based transactions.  That guidance requires that all excess tax benefits and tax deficiencies associated with share-based compensation be recognized as income tax expense or benefit in the income statement.  Previously, tax effects resulting from changes in M&T’s share price subsequent to the grant date were recorded through shareholders’ equity at the time of vesting or exercise.  The adoption of the amended accounting guidance resulted in an $18 million reduction of income tax expense in the initial 2017 quarter, or $.12 of diluted earnings per common share.

Commenting on M&T’s first quarter results, Darren J. King, Executive Vice President and Chief Financial Officer, noted, “M&T’s financial performance for the first quarter was strong, led by a 26 basis point widening of the net interest margin that resulted in growth in taxable-equivalent net interest income of four percent as compared with the preceding quarter.  Expenses continued to be well-controlled, recognizing the seasonally higher costs traditionally seen in the first quarter for stock-based compensation and employee benefits, and credit quality factors remained stable.  In accordance with our capital plan, M&T repurchased $532 million of its common stock and increased the common stock dividend from $.70 to $.75 during the quarter.”

Earnings Highlights

Change 1Q 2017 vs.

($ in millions, except per share data)

1Q17

1Q16

4Q16

1Q16

4Q16

Net income

$

349

$

299

$

331

17

%

6

%

Net income available to common shareholders – diluted

$

329

$

276

$

308

19

%

7

%

Diluted earnings per common share

$

2.12

$

1.73

$

1.98

23

%

7

%

Annualized return on average assets

1.15

%

.97

%

1.05

%

Annualized return on average common equity

8.89

%

7.44

%

8.13

%

 

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 $2.15 in the first quarter of 2017, up 15% from $1.87 in the corresponding 2016 period.  Net operating income for the first three months of 2017 rose 11% to $354 million from $320 million in the year-earlier quarter.  Diluted net operating earnings per common share and net operating income in the fourth quarter of 2016 were $2.01 and $336 million, respectively.

Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity, net operating income was 1.21% and 13.05%, respectively, in the initial 2017 quarter, compared with 1.09% and 11.62%, respectively, in the year-earlier quarter and 1.10% and 11.93%, respectively, in the fourth quarter of 2016.

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income totaled $922 million in the first quarter of 2017, up 5% from $878 million in the first three months of 2016.  That growth resulted predominantly from a widening of the net interest margin to 3.34% in the recent quarter from 3.18% in the initial 2016 quarter.  Taxable-equivalent net interest income in the fourth quarter of 2016 was $883 million. The $39 million improvement in the recent quarter’s taxable-equivalent net interest income as compared with the final 2016 quarter was largely due to a 26 basis point widening of the net interest margin from 3.08%.

 

Taxable-equivalent Net Interest Income

Change 1Q 2017 vs.

($ in millions)

1Q17

1Q16

4Q16

1Q16

4Q16

Average earning assets

$

112,008

$

111,211

$

114,254

1

%

-2

%

Net interest income – taxable equivalent

$

922

$

878

$

883

5

%

4

%

Net interest margin

3.34

%

3.18

%

3.08

%

 

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $55 million in the first quarter of 2017, compared with $49 million in the year-earlier quarter and $62 million in the final 2016 quarter.  Net charge-offs of loans during the recent quarter aggregated $43 million, compared with $42 million and $49 million in the first and fourth quarters of 2016, respectively.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .19% during each of the first quarters of 2017 and 2016, compared with .22% in the fourth quarter of 2016.

Loans classified as nonaccrual totaled $927 million, or 1.04% of total loans outstanding at March 31, 2017, compared with $877 million or 1.00% a year earlier and $920 million or 1.01% at December 31, 2016.  The higher level of nonaccrual loans at the two most recent quarter-ends as compared with March 31, 2016 reflect the expected migration of previously performing loans obtained in the acquisition of Hudson City Bancorp, Inc. (“Hudson City”) that became past due over 90 days after March 31, 2016.  Nonaccrual Hudson City-related residential real estate loans aggregated $207 million, $79 million and $190 million at March 31, 2017, March 31, 2016 and December 31, 2016, respectively.  Assets taken in foreclosure of defaulted loans totaled $119 million at March 31, 2017, compared with $188 million a year earlier and $139 million at December 31, 2016.

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 $1.00 billion at March 31, 2017, compared with $963 million at a year earlier and $989 million at December 31, 2016.  The allowance expressed as a percentage of outstanding loans was 1.12% at March 31, 2017, compared with 1.10% at March 31, 2016 and 1.09% at December 31, 2016.

 

Asset Quality Metrics

Change 1Q 2017 vs.

($ in millions)

1Q17

1Q16

4Q16

1Q16

4Q16

At end of quarter

Nonaccrual loans

$

927

$

877

$

920

6

%

1

%

Real estate and other foreclosed assets

$

119

$

188

$

139

-37

%

-14

%

Total nonperforming assets

$

1,046

$

1,065

$

1,059

-2

%

-1

%

Accruing loans past due 90 days or more (1)

$

280

$

336

$

301

-17

%

-7

%

Nonaccrual loans as % of loans outstanding

1.04

%

1.00

%

1.01

%

Allowance for credit losses

$

1,001

$

963

$

989

4

%

1

%

Allowance for credit losses as % of loans outstanding

1.12

%

1.10

%

1.09

%

For the period

Provision for credit losses

$

55

$

49

$

62

12

%

-11

%

Net charge-offs

$

43

$

42

$

49

1

%

-13

%

Net charge-offs as % of average loans (annualized)

.19

%

.19

%

.22

%

 

(1)

Excludes loans acquired at a discount.  Predominantly residential real estate loans.

 

Noninterest Income and Expense.  Noninterest income aggregated $447 million in the initial 2017 quarter, up 6% from $421 million in the year-earlier quarter.  Contributing to that improvement were higher trust income and credit-related fees. Noninterest income was $465 million in the final three months of 2016.  The decline in such income in the recent quarter as compared with the fourth quarter of 2016 was largely due to lower commercial and residential mortgage banking revenues.

 

Noninterest Income

Change 1Q 2017 vs.

($ in millions)

1Q17

1Q16

4Q16

1Q16

4Q16

Mortgage banking revenues

$

85

$

82

$

98

3

%

-14

%

Service charges on deposit accounts

104

102

105

2

%

-1

%

Trust income

120

111

122

8

%

-2

%

Brokerage services income

17

16

15

9

%

14

%

Trading account and foreign exchange gains

10

8

7

30

%

26

%

Gain on bank investment securities

2

Other revenues from operations

111

102

116

9

%

-4

%

Total other income

$

447

$

421

$

465

6

%

-4

%

 

Noninterest expense in the first quarter of 2017 totaled $788 million, compared with $776 million and $769 million in the first and fourth quarters of 2016, respectively.  Included in such amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets and merger-related expenses.  Exclusive of those expenses, noninterest operating expenses were $779 million in the first three months of 2017, $741 million in the year-earlier period and $760 million in the final 2016 quarter.  The higher level of operating expenses in the recent quarter as compared with the initial 2016 quarter was largely the result of increased salaries and employee benefits costs, reflecting merit increases and higher incentive-based compensation.  As compared with the final three months of 2016, the higher level of operating expenses in the recent quarter was predominately due to seasonally higher stock-based compensation and employee benefits expenses offset, in part, by the effect of a $30 million contribution to The M&T Charitable Foundation in the final 2016 quarter.

 

Noninterest Expense

Change 1Q 2017 vs.

($ in millions)

1Q17

1Q16

4Q16

1Q16

4Q16

Salaries and employee benefits

$

450

$

432

$

393

4

%

14

%

Equipment and net occupancy

74

74

70

6

%

Outside data processing and software

44

43

44

3

%

1

%

FDIC assessments

29

25

29

14

%

-1

%

Advertising and marketing

16

22

21

-25

%

-24

%

Printing, postage and supplies

10

12

9

-19

%

12

%

Amortization of core deposit and other intangible assets

9

12

9

-32

%

-7

%

Other costs of operations

156

156

194

-19

%

Total other expense

$

788

$

776

$

769

2

%

2

%

Memo: Merger-related expenses included in above

$

$

23

$

 

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 56.9% in the first quarter of 2017, compared with 57.0% in the year-earlier quarter and 56.4% in the fourth quarter of 2016.

Balance Sheet.  M&T had total assets of $123.2 billion at March 31, 2017, compared with $124.6 billion a year earlier.  Investment securities at the recent quarter-end were $16.0 billion, up from $15.5 billion at March 31, 2016.  Loans and leases, net of unearned discount, rose $1.4 billion to $89.3 billion at March 31, 2017 from $87.9 billion a year earlier.  Total deposits were $97.0 billion at the recent quarter-end, up 3% from $94.2 billion at March 31, 2016.

Reflecting the impact of repurchases of M&T’s common stock, total shareholders’ equity was $16.2 billion at March 31, 2017, down from $16.4 billion at March 31, 2016, representing 13.16% and 13.12%, respectively, of total assets.  Common shareholders’ equity was $15.0 billion, or $97.40 per share, at March 31, 2017, compared with $15.1 billion, or $95.00 per share, a year-earlier.  Tangible equity per common share increased to $67.16 at March 31, 2017 from $65.65 a year-earlier.  Common shareholders’ equity per share and tangible equity per common share were $97.64 and $67.85, respectively, at December 31, 2016.  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 10.66% at March 31, 2017.

In accordance with its capital plan, M&T repurchased 3,233,196 shares of its common stock during the initial 2017 quarter at a total cost of $532 million.

Conference Call.  Investors will have an opportunity to listen to M&T’s conference call to discuss first quarter financial results today at 11:00 a.m. Eastern Time.  Those wishing to participate in the call may dial (877)780-2276.  International participants, using any applicable international calling codes, may dial (973)582-2700.  Callers should reference M&T Bank Corporation or the conference ID #1401624.  The conference call will be webcast live through M&T’s website at http://ir.mandtbank.com/events.cfm. A replay of the call will be available until Monday, April 24, 2017 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #1401624.  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, 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.

 

Financial Highlights

Three months ended

March 31

Amounts in thousands, except per share

2017

2016

Change

Performance

Net income

$

348,927

298,528

17

%

Net income available to common shareholders

328,567

275,748

19

%

Per common share:

Basic earnings

$

2.13

1.74

22

%

Diluted earnings

2.12

1.73

23

%

Cash dividends

$

.75

.70

7

%

Common shares outstanding:

Average – diluted (1)

154,949

159,181

-3

%

Period end (2)

153,781

159,156

-3

%

Return on (annualized):

Average total assets

1.15

%

.97

%

Average common shareholders’ equity

8.89

%

7.44

%

Taxable-equivalent net interest income

$

922,259

878,296

5

%

Yield on average earning assets

3.67

%

3.54

%

Cost of interest-bearing liabilities

.52

%

.53

%

Net interest spread

3.15

%

3.01

%

Contribution of interest-free funds

.19

%

.17

%

Net interest margin

3.34

%

3.18

%

Net charge-offs to average total net loans (annualized)

.19

%

.19

%

Net operating results (3)

Net operating income

$

354,035

320,064

11

%

Diluted net operating earnings per common share

2.15

1.87

15

%

Return on (annualized):

Average tangible assets

1.21

%

1.09

%

Average tangible common equity

13.05

%

11.62

%

Efficiency ratio

56.93

%

57.00

%

At March 31

Loan quality

2017

2016

Change

Nonaccrual loans

$

926,675

876,691

6

%

Real estate and other foreclosed assets

119,155

188,004

-37

%

Total nonperforming assets

$

1,045,830

1,064,695

-2

%

Accruing loans past due 90 days or more (4)

$

280,019

336,170

-17

%

Government guaranteed loans included in totals above:

Nonaccrual loans

$

39,610

49,688

-20

%

Accruing loans past due 90 days or more

252,552

279,340

-10

%

Renegotiated loans

$

191,343

200,771

-5

%

Accruing loans acquired at a discount past due 90 days or more (5)

$

63,732

61,767

3

%

Purchased impaired loans (6):

Outstanding customer balance

$

890,431

1,124,776

-21

%

Carrying amount

552,935

715,874

-23

%

Nonaccrual loans to total net loans

1.04

%

1.00

%

Allowance for credit losses to total loans

1.12

%

1.10

%

 

(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 herein.

(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.

 

Financial Highlights, Five Quarter Trend

Three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

Amounts in thousands, except per share

2017

2016

2016

2016

2016

Performance

Net income

$

348,927

330,571

349,984

336,031

298,528

Net income available to common shareholders

328,567

307,797

326,998

312,974

275,748

Per common share:

Basic earnings

$

2.13

1.98

2.10

1.98

1.74

Diluted earnings

2.12

1.98

2.10

1.98

1.73

Cash dividends

$

.75

.70

.70

.70

.70

Common shares outstanding:

Average – diluted (1)

154,949

155,700

156,026

158,341

159,181

Period end (2)

153,781

156,213

154,987

157,917

159,156

Return on (annualized):

Average total assets

1.15

%

1.05

%

1.12

%

1.09

%

.97

%

Average common shareholders’ equity

8.89

%

8.13

%

8.68

%

8.38

%

7.44

%

Taxable-equivalent net interest income

$

922,259

883,147

865,065

870,341

878,296

Yield on average earning assets

3.67

%

3.45

%

3.44

%

3.51

%

3.54

%

Cost of interest-bearing liabilities

.52

%

.57

%

.59

%

.56

%

.53

%

Net interest spread

3.15

%

2.88

%

2.85

%

2.95

%

3.01

%

Contribution of interest-free funds

.19

%

.20

%

.20

%

.18

%

.17

%

Net interest margin

3.34

%

3.08

%

3.05

%

3.13

%

3.18

%

Net charge-offs to average total net loans (annualized)

.19

%

.22

%

.19

%

.11

%

.19

%

Net operating results (3)

Net operating income

$

354,035

336,095

355,929

350,604

320,064

Diluted net operating earnings per common share

2.15

2.01

2.13

2.07

1.87

Return on (annualized):

Average tangible assets

1.21

%

1.10

%

1.18

%

1.18

%

1.09

%

Average tangible common equity

13.05

%

11.93

%

12.77

%

12.68

%

11.62

%

Efficiency ratio

56.93

%

56.42

%

55.92

%

55.06

%

57.00

%

March 31,

December 31,

September 30,

June 30,

March 31,

Loan quality

2017

2016

2016

2016

2016

Nonaccrual loans

$

926,675

920,015

837,362

848,855

876,691

Real estate and other foreclosed assets

119,155

139,206

159,881

172,473

188,004

Total nonperforming assets

$

1,045,830

1,059,221

997,243

1,021,328

1,064,695

Accruing loans past due 90 days or more (4)

$

280,019

300,659

317,282

298,449

336,170

Government guaranteed loans included in totals above:

Nonaccrual loans

$

39,610

40,610

47,130

52,486

49,688

Accruing loans past due 90 days or more

252,552

282,659

282,077

269,962

279,340

Renegotiated loans

$

191,343

190,374

217,559

211,159

200,771

Accruing loans acquired at a discount past due 90 days or more (5)

$

63,732

61,144

65,182

68,591

61,767

Purchased impaired loans (6):

Outstanding customer balance

$

890,431

927,446

981,105

1,040,678

1,124,776

Carrying amount

552,935

578,032

616,991

662,059

715,874

Nonaccrual loans to total net loans

1.04

%

1.01

%

.93

%

.96

%

1.00

%

Allowance for credit losses to total loans

1.12

%

1.09

%

1.09

%

1.10

%

1.10

%

 

(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 herein.

(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. 

 

 

Condensed Consolidated Statement of Income

Three months ended

March 31

Dollars in thousands

2017

2016

Change

Interest income

$

1,006,033

972,834

3

%

Interest expense

91,773

100,870

-9

Net interest income

914,260

871,964

5

Provision for credit losses

55,000

49,000

12

Net interest income after provision for credit losses

859,260

822,964

4

Other income

Mortgage banking revenues

84,692

82,063

3

Service charges on deposit accounts

104,176

102,405

2

Trust income

120,015

111,077

8

Brokerage services income

17,384

16,004

9

Trading account and foreign exchange gains

9,691

7,458

30

Gain on bank investment securities

4

Other revenues from operations

110,887

101,922

9

Total other income

446,845

420,933

6

Other expense

Salaries and employee benefits

449,862

431,785

4

Equipment and net occupancy

74,366

74,178

Outside data processing and software

44,301

43,015

3

FDIC assessments

28,827

25,225

14

Advertising and marketing

16,110

21,454

-25

Printing, postage and supplies

9,708

11,986

-19

Amortization of core deposit and other intangible assets

8,420

12,319

-32

Other costs of operations

156,258

156,133

Total other expense

787,852

776,095

2

Income before income taxes

518,253

467,802

11

Applicable income taxes

169,326

169,274

Net income

$

348,927

298,528

17

%

 

 

Condensed Consolidated Statement of Income, Five Quarter Trend

Three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

Dollars in thousands

2017

2016

2016

2016

2016

Interest income

$

1,006,033

982,901

969,515

970,621

972,834

Interest expense

91,773

107,137

111,175

106,802

100,870

Net interest income

914,260

875,764

858,340

863,819

871,964

Provision for credit losses

55,000

62,000

47,000

32,000

49,000

Net interest income after provision for credit losses

859,260

813,764

811,340

831,819

822,964

Other income

Mortgage banking revenues

84,692

98,504

103,747

89,383

82,063

Service charges on deposit accounts

104,176

104,890

107,935

103,872

102,405

Trust income

120,015

122,003

118,654

120,450

111,077

Brokerage services income

17,384

15,233

15,914

16,272

16,004

Trading account and foreign exchange gains

9,691

7,692

12,754

13,222

7,458

Gain on bank investment securities

1,566

28,480

264

4

Other revenues from operations

110,887

115,571

103,866

104,791

101,922

Total other income

446,845

465,459

491,350

448,254

420,933

Other expense

Salaries and employee benefits

449,862

393,354

399,786

398,675

431,785

Equipment and net occupancy

74,366

69,976

75,263

75,724

74,178

Outside data processing and software

44,301

43,987

42,878

42,509

43,015

FDIC assessments

28,827

28,991

28,459

22,370

25,225

Advertising and marketing

16,110

21,074

21,996

22,613

21,454

Printing, postage and supplies

9,708

8,681

8,972

9,907

11,986

Amortization of core deposit and other intangible assets

8,420

9,089

9,787

11,418

12,319

Other costs of operations

156,258

193,951

165,251

166,679

156,133

Total other expense

787,852

769,103

752,392

749,895

776,095

Income before income taxes

518,253

510,120

550,298

530,178

467,802

Applicable income taxes

169,326

179,549

200,314

194,147

169,274

Net income

$

348,927

330,571

349,984

336,031

298,528

 

 

Condensed Consolidated Balance Sheet

March 31

Dollars in thousands

2017

2016

Change

ASSETS

Cash and due from banks

$

1,286,962

1,178,175

9

%

Interest-bearing deposits at banks

6,945,149

9,545,181

-27

Trading account

174,854

467,987

-63

Investment securities

15,968,415

15,467,320

3

Loans and leases:

Commercial, financial, etc.

22,295,376

21,226,577

5

Real estate – commercial

33,071,654

29,713,293

11

Real estate – consumer

21,724,491

25,299,638

-14

Consumer

12,221,481

11,632,958

5

Total loans and leases, net of unearned discount

89,313,002

87,872,466

2

Less: allowance for credit losses

1,001,430

962,752

4

Net loans and leases

88,311,572

86,909,714

2

Goodwill

4,593,112

4,593,112

Core deposit and other intangible assets

94,535

127,949

-26

Other assets

5,848,652

6,336,194

-8

Total assets

$

123,223,251

124,625,632

-1

%

LIABILITIES AND SHAREHOLDERS’ EQUITY

Noninterest-bearing deposits

$

34,279,591

29,709,218

15

%

Interest-bearing deposits

62,570,167

64,338,571

-3

Deposits at Cayman Islands office

192,763

166,787

16

Total deposits

97,042,521

94,214,576

3

Short-term borrowings

185,102

1,766,826

-90

Accrued interest and other liabilities

1,694,905

1,948,142

-13

Long-term borrowings

8,087,619

10,341,035

-22

Total liabilities

107,010,147

108,270,579

-1

Shareholders’ equity:

Preferred

1,231,500

1,231,500

Common (1)

14,981,604

15,123,553

-1

Total shareholders’ equity

16,213,104

16,355,053

-1

Total liabilities and shareholders’ equity

$

123,223,251

124,625,632

-1

%

 

(1)

Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $291.6 million at March 31, 2017 and $150.2 million at March 31, 2016.

 

 

Condensed Consolidated Balance Sheet, Five Quarter Trend

March 31,

December 31,

September 30,

June 30,

March 31,

Dollars in thousands

2017

2016

2016

2016

2016

ASSETS

Cash and due from banks

$

1,286,962

1,320,549

1,332,202

1,284,442

1,178,175

Interest-bearing deposits at banks

6,945,149

5,000,638

10,777,636

8,474,839

9,545,181

Trading account

174,854

323,867

488,588

506,131

467,987

Investment securities

15,968,415

16,250,468

14,733,574

14,963,084

15,467,320

Loans and leases:

Commercial, financial, etc.

22,295,376

22,610,047

21,917,163

21,469,242

21,226,577

Real estate – commercial

33,071,654

33,506,394

32,078,762

30,711,230

29,713,293

Real estate – consumer

21,724,491

22,590,912

23,584,420

24,530,249

25,299,638

Consumer

12,221,481

12,146,063

12,066,147

11,811,277

11,632,958

Total loans and leases, net of unearned discount

89,313,002

90,853,416

89,646,492

88,521,998

87,872,466

Less: allowance for credit losses

1,001,430

988,997

976,121

970,496

962,752

Net loans and leases

88,311,572

89,864,419

88,670,371

87,551,502

86,909,714

Goodwill

4,593,112

4,593,112

4,593,112

4,593,112

4,593,112

Core deposit and other intangible assets

94,535

97,655

106,744

116,531

127,949

Other assets

5,848,652

5,998,498

6,138,801

6,330,943

6,336,194

Total assets

$

123,223,251

123,449,206

126,841,028

123,820,584

124,625,632

LIABILITIES AND SHAREHOLDERS’ EQUITY

Noninterest-bearing deposits

$

34,279,591

32,813,896

33,127,627

30,700,066

29,709,218

Interest-bearing deposits

62,570,167

62,478,053

64,786,035

63,756,514

64,338,571

Deposits at Cayman Islands office

192,763

201,927

223,183

193,523

166,787

Total deposits

97,042,521

95,493,876

98,136,845

94,650,103

94,214,576

Short-term borrowings

185,102

163,442

213,846

407,123

1,766,826

Accrued interest and other liabilities

1,694,905

1,811,431

1,938,201

1,963,093

1,948,142

Long-term borrowings

8,087,619

9,493,835

10,211,160

10,328,751

10,341,035

Total liabilities

107,010,147

106,962,584

110,500,052

107,349,070

108,270,579

Shareholders’ equity:

Preferred

1,231,500

1,231,500

1,231,500

1,231,500

1,231,500

Common (1)

14,981,604

15,255,122

15,109,476

15,240,014

15,123,553

Total shareholders’ equity

16,213,104

16,486,622

16,340,976

16,471,514

16,355,053

Total liabilities and shareholders’ equity

$

123,223,251

123,449,206

126,841,028

123,820,584

124,625,632

 

(1)

Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $291.6 million at March 31, 2017, $294.6 million at December 31, 2016, $114.6 million at September 30, 2016, $101.0 million at June 30, 2016 and $150.2 million at March 31, 2016.

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates

Three months ended

Change in balance

March 31,

March 31,

December 31,

March 31, 2017 from

Dollars in millions

2017

2016

2016

March 31,

December 31,

Balance

Rate

Balance

Rate

Balance

Rate

2016

2016

ASSETS

Interest-bearing deposits at banks

$

6,152

.80

%

8,193

.51

%

8,790

.54

%

-25

%

-30

%

Federal funds sold

1

.77

-100

Trading account

60

2.20

85

1.78

70

2.05

-30

-15

Investment securities

15,999

2.43

15,348

2.60

15,417

2.28

4

4

Loans and leases, net of unearned discount

Commercial, financial, etc.

22,290

3.66

20,717

3.39

21,936

3.47

8

2

Real estate – commercial

33,175

4.18

29,426

4.16

32,822

4.01

13

1

Real estate – consumer

22,179

3.92

25,859

3.93

23,096

3.88

-14

-4

Consumer

12,153

4.68

11,582

4.55

12,123

4.53

5

Total loans and leases, net

89,797

4.09

87,584

3.99

89,977

3.93

3

Total earning assets

112,008

3.67

111,211

3.54

114,254

3.45

1

-2

Goodwill

4,593

4,593

4,593

Core deposit and other intangible assets

98

134

102

-27

-3

Other assets

6,279

7,314

6,785

-14

-7

Total assets

$

122,978

123,252

125,734

%

-2

%

LIABILITIES AND SHAREHOLDERS’ EQUITY

Interest-bearing deposits

Savings and interest-checking deposits

$

53,260

.20

50,335

.13

54,055

.20

6

%

-1

%

Time deposits

9,561

.81

12,999

.75

10,936

.86

-26

-13

Deposits at Cayman Islands office

192

.56

187

.42

206

.42

2

-7

Total interest-bearing deposits

63,013

.29

63,521

.26

65,197

.31

-1

-3

Short-term borrowings

184

.48

2,082

.42

200

.30

-91

-8

Long-term borrowings

8,423

2.25

10,528

2.21

9,901

2.26

-20

-15

Total interest-bearing liabilities

71,620

.52

76,131

.53

75,298

.57

-6

-5

Noninterest-bearing deposits

33,287

28,870

31,717

15

5

Other liabilities

1,748

1,972

2,046

-11

-15

Total liabilities

106,655

106,973

109,061

-2

Shareholders’ equity

16,323

16,279

16,673

-2

Total liabilities and shareholders’ equity

$

122,978

123,252

125,734

%

-2

%

Net interest spread

3.15

3.01

2.88

Contribution of interest-free funds

.19

.17

.20

Net interest margin

3.34

%

3.18

%

3.08

%

 

 

Reconciliation of GAAP to Non-GAAP Measures

Three months ended

March 31

2017

2016

Income statement data

In thousands, except per share

Net income

Net income

$

348,927

298,528

Amortization of core deposit and other intangible assets (1)

5,108

7,488

Merger-related expenses (1)

14,048

Net operating income

$

354,035

320,064

Earnings per common share

Diluted earnings per common share

$

2.12

1.73

Amortization of core deposit and other intangible assets (1)

.03

.05

Merger-related expenses (1)

.09

Diluted net operating earnings per common share

$

2.15

1.87

Other expense

Other expense

$

787,852

776,095

Amortization of core deposit and other intangible assets

(8,420)

(12,319)

Merger-related expenses

(23,162)

Noninterest operating expense

$

779,432

740,614

Merger-related expenses

Salaries and employee benefits

$

5,274

Equipment and net occupancy

939

Outside data processing and software

715

Advertising and marketing

4,195

Printing, postage and supplies

937

Other costs of operations

11,102

Total

$

23,162

Efficiency ratio

Noninterest operating expense (numerator)

$

779,432

740,614

Taxable-equivalent net interest income

922,259

878,296

Other income

446,845

420,933

Less:  Gain on bank investment securities

4

Denominator

$

1,369,104

1,299,225

Efficiency ratio

56.93

%

57.00

%

Balance sheet data

In millions

Average assets

Average assets

$

122,978

123,252

Goodwill

(4,593)

(4,593)

Core deposit and other intangible assets

(98)

(134)

Deferred taxes

39

52

Average tangible assets

$

118,326

118,577

Average common equity

Average total equity

$

16,323

16,279

Preferred stock

(1,232)

(1,232)

Average common equity

15,091

15,047

Goodwill

(4,593)

(4,593)

Core deposit and other intangible assets

(98)

(134)

Deferred taxes

39

52

Average tangible common equity

$

10,439

10,372

At end of quarter

Total assets

Total assets

$

123,223

124,626

Goodwill

(4,593)

(4,593)

Core deposit and other intangible assets

(95)

(128)

Deferred taxes

38

50

Total tangible assets

$

118,573

119,955

Total common equity

Total equity

$

16,213

16,355

Preferred stock

(1,232)

(1,232)

Undeclared dividends – cumulative preferred stock

(3)

(3)

Common equity, net of undeclared cumulative preferred dividends

14,978

15,120

Goodwill

(4,593)

(4,593)

Core deposit and other intangible assets

(95)

(128)

Deferred taxes

38

50

Total tangible common equity

$

10,328

10,449

(1)

After any related tax effect.

 

 

 

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

Three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

2017

2016

2016

2016

2016

Income statement data

In thousands, except per share

Net income

Net income

$

348,927

330,571

349,984

336,031

298,528

Amortization of core deposit and other intangible assets (1)

5,108

5,524

5,945

6,936

7,488

Merger-related expenses (1)

7,637

14,048

Net operating income

$

354,035

336,095

355,929

350,604

320,064

Earnings per common share

Diluted earnings per common share

$

2.12

1.98

2.10

1.98

1.73

Amortization of core deposit and other intangible assets (1)

.03

.03

.03

.04

.05

Merger-related expenses (1)

.05

.09

Diluted net operating earnings per common share

$

2.15

2.01

2.13

2.07

1.87

Other expense

Other expense

$

787,852

769,103

752,392

749,895

776,095

Amortization of core deposit and other intangible assets

(8,420)

(9,089)

(9,787)

(11,418)

(12,319)

Merger-related expenses

(12,593)

(23,162)

Noninterest operating expense

$

779,432

760,014

742,605

725,884

740,614

Merger-related expenses

Salaries and employee benefits

$

60

5,274

Equipment and net occupancy

339

939

Outside data processing and software

352

715

Advertising and marketing

6,327

4,195

Printing, postage and supplies

545

937

Other costs of operations

4,970

11,102

Total

$

12,593

23,162

Efficiency ratio

Noninterest operating expense (numerator)

$

779,432

760,014

742,605

725,884

740,614

Taxable-equivalent net interest income

922,259

883,147

865,065

870,341

878,296

Other income

446,845

465,459

491,350

448,254

420,933

Less:  Gain on bank investment securities

1,566

28,480

264

4

Denominator

$

1,369,104

1,347,040

1,327,935

1,318,331

1,299,225

Efficiency ratio

56.93

%

56.42

%

55.92

%

55.06

%

57.00

%

Balance sheet data

In millions

Average assets

Average assets

$

122,978

125,734

124,725

123,706

123,252

Goodwill

(4,593)

(4,593)

(4,593)

(4,593)

(4,593)

Core deposit and other intangible assets

(98)

(102)

(112)

(122)

(134)

Deferred taxes

39

40

44

48

52

Average tangible assets

$

118,326

121,079

120,064

119,039

118,577

Average common equity

Average total equity

$

16,323

16,673

16,347

16,377

16,279

Preferred stock

(1,232)

(1,492)

(1,232)

(1,232)

(1,232)

Average common equity

15,091

15,181

15,115

15,145

15,047

Goodwill

(4,593)

(4,593)

(4,593)

(4,593)

(4,593)

Core deposit and other intangible assets

(98)

(102)

(112)

(122)

(134)

Deferred taxes

39

40

44

48

52

Average tangible common equity

$

10,439

10,526

10,454

10,478

10,372

At end of quarter

Total assets

Total assets

$

123,223

123,449

126,841

123,821

124,626

Goodwill

(4,593)

(4,593)

(4,593)

(4,593)

(4,593)

Core deposit and other intangible assets

(95)

(98)

(107)

(117)

(128)

Deferred taxes

38

39

42

46

50

Total tangible assets

$

118,573

118,797

122,183

119,157

119,955

Total common equity

Total equity

$

16,213

16,487

16,341

16,472

16,355

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

14,978

15,252

15,106

15,237

15,120

Goodwill

(4,593)

(4,593)

(4,593)

(4,593)

(4,593)

Core deposit and other intangible assets

(95)

(98)

(107)

(117)

(128)

Deferred taxes

38

39

42

46

50

Total tangible common equity

$

10,328

10,600

10,448

10,573

10,449

 

(1)

After any related tax effect.

 

SOURCE M&T Bank Corporation

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