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M&T Bank Corporation Announces Third Quarter Profits

Oct 19, 2011

BUFFALO, N.Y., Oct. 19, 2011— M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2011.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the third quarter of 2011 were $1.32, compared with $1.48 in the year-earlier quarter.  GAAP-basis net income in the recent quarter aggregated $183 million, compared with $192 million in the third quarter of 2010.  GAAP-basis net income for the third quarter of 2011 expressed as an annualized rate of return on average assets and average common shareholders' equity was .94% and 7.84%, respectively, compared with 1.12% and 9.56%, respectively, in the year-earlier quarter.

As compared with the third quarter of 2010, the recent quarter's performance reflected higher net interest income, a lower provision for credit losses and significantly higher trust income.  Those positive factors were muted by higher noninterest expenses and lower residential mortgage banking revenues.  The increased net interest income, trust income and noninterest expenses were each predominantly related to the acquisition of Wilmington Trust Corporation ("Wilmington Trust") on May 16, 2011.  Included in noninterest expenses in the recent quarter were merger-related expenses associated with the Wilmington Trust acquisition of $16 million, after applicable tax effect, or $.13 of diluted earnings per common share.  Such expenses were related to systems conversions and other costs of integrating operations and introducing Wilmington Trust's former customers to M&T's products and services.  There were no merger-related expenses in the year-earlier quarter.  

Supplemental Reporting of Non-GAAP Results of Operations.  M&T consistently provides supplemental reporting of its results on a "net operating" or "tangible" basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and expenses and gains associated with merging acquired operations into M&T, since such amounts are considered by management to be "nonoperating" in nature.  Although "net operating income" as defined by M&T is not a GAAP measure, M&T's management believes that this information helps investors understand the effect of acquisition activity in reported results.  Reconciliations of GAAP to non-GAAP measures are provided in the financial tables included herein.

Diluted net operating earnings per common share, which exclude the impact of amortization of core deposit and other intangible assets and merger-related gains and expenses, were $1.53 in the recent quarter, down 1% from $1.55 in the third quarter of 2010.  Net operating income during the third quarter of 2011 was $210 million, up 5% from $200 million in the year-earlier quarter.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.14% and 16.26%, respectively, in the recent quarter, compared with 1.24% and 19.58% in the third quarter of 2010.

Commenting on M&T's financial results in the third quarter of 2011, Rene F. Jones, Executive Vice President and Chief Financial Officer, said, "The recent quarter's results reflect the impact of M&T's acquisition of Wilmington Trust.  Notably, in late-August the major loan and deposit systems of Wilmington Trust were successfully converted to those of M&T, culminating a significant resource commitment.  Now that the conversions are behind us, we are well positioned to turn our attention towards achieving the economic benefits from combining the organizations."  

Further commenting on recent quarter highlights, Mr. Jones noted, "Despite the continued challenging economic environment and turbulent markets, which dampened our fee income relative to the second quarter, we experienced a number of positive trends.  We were pleased with the credit performance for the period.  Specifically, net charge-offs declined for the fourth consecutive quarter.  We also continued to experience solid growth in customer deposits."

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income totaled $623 million in the third quarter of 2011, up from $576 million in the year-earlier period and $593 million in the second quarter of 2011.  The improvement in such income from the prior periods resulted from higher average earning assets, partially offset by a narrowing of the net interest margin.  The net interest margin was 3.68% in the recent quarter, compared with 3.87% in the third quarter of 2010 and 3.75 percent in the second quarter of 2011.  The higher levels of average earning assets in the two most recent quarters as compared with the third quarter of 2010 were predominantly due to the impact of the Wilmington Trust acquisition, which added approximately $9.6 billion of earning assets on the May 16, 2011 acquisition date.  The narrowing of the net interest margin in the recent quarter as compared with the year-earlier quarter and the second 2011 quarter also reflected the impact of the Wilmington Trust transaction, including significantly higher earning balances on deposit with the Federal Reserve.  

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $58 million in the recent quarter, improved from $93 million in the third quarter of 2010 and $63 million in 2011's second quarter.  Net charge-offs of loans totaled $57 million during the third quarter of 2011, compared with $93 million and $59 million in the quarters ended September 30, 2010 and June 30, 2011, respectively.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .39% and .73% in the third quarter of 2011 and 2010, respectively, and .43% in the second quarter of 2011.

Effective September 30, 2011, M&T has begun to separately report "other acquired impaired loans."  M&T defines other acquired impaired loans as loans that ceased performing in accordance with their contractual terms and became impaired subsequent to the acquisition date.  Nevertheless, in accordance with GAAP, such loans are included in accounting pools which continue to accrue interest.  Other acquired impaired loans, which had previously been aggregated with nonaccrual loans, totaled $218 million or .37% of total loans at September 30, 2011, compared with $141 million or .24% at June 30, 2011 and $98 million or .19% at September 30, 2010.  The increase in such loans from June 30, 2011 was due to loans obtained in the acquisition of Wilmington Trust.

Nonaccrual loans, which exclude other acquired impaired loans, were little changed from June 30, 2011.  Such loans totaled $1.11 billion and $1.12 billion at September 30 and June 30, 2011, respectively, or 1.91% of total loans at each of those dates, compared with $1.00 billion or 1.97% at September 30, 2010.  

Assets taken in foreclosure of defaulted loans were $150 million at September 30, 2011, down from $193 million at September 30, 2010 and $159 million at June 30, 2011.  The decrease in such assets at the two most recent quarter-ends as compared with September 30, 2010 resulted from the sale during 2011's second quarter of a commercial real estate property in New York City with a carrying value of $99 million.  Reflected in assets taken in foreclosure of defaulted loans at September 30 and June 30, 2011 were $51 million and $57 million, respectively, of assets related to the Wilmington Trust acquisition.  

Loans past due 90 days or more and accruing interest totaled $310 million at September 30, 2011, down from $373 million at June 30, 2011.  Included in such past due but accruing loans at the two most recent quarter-ends were $64 million and $130 million, respectively, of loans obtained in the Wilmington Trust acquisition.  At September 30, 2010, loans past due 90 days or more and accruing interest were $215 million.  Included in this category were $212 million, $207 million and $194 million of loans guaranteed by government-related entities at September 30, 2011, June 30, 2011 and September 30, 2010, respectively.

Allowance for Credit Losses.  M&T regularly performs detailed analyses of individual borrowers and portfolios for purposes of assessing the adequacy of the allowance for credit losses.  As a result of those analyses, the allowance for credit losses was $909 million at September 30, 2011, compared with $895 million at September 30, 2010 and $908 million at June 30, 2011.  Beginning in 2009, GAAP requires that expected credit losses associated with loans obtained in an acquisition be reflected in the estimation of loan fair value as of each respective acquisition date and prohibits any carry-over of the acquired entity's allowance for credit losses.  Excluding amounts related to loans obtained in acquisition transactions subsequent to 2008, the allowance-to-legacy loan ratio was 1.79% at September 30, 2011, compared with 1.86% at September 30, 2010 and 1.80% at June 30, 2011.

Noninterest Income and Expense.  Noninterest income totaled $368 million in the recent quarter, compared with $290 million and $502 million in the third quarter of 2010 and the second quarter of 2011, respectively.  Reflected in such income were net pre-tax losses from investment securities of $10 million and $8 million in the recent quarter and the third quarter of 2010, respectively, and net pre-tax gains from investment securities of $84 million in the second quarter of 2011.  

Excluding gains and losses from investment securities in all periods and the non-taxable gain of $65 million recorded in the second quarter of 2011 related to the Wilmington Trust acquisition, noninterest income in the third quarter of 2011 aggregated $378 million, up from $298 million in the third quarter of 2010 and $353 million in 2011's second quarter.  Contributing to those increases were significantly higher trust income, predominantly due to the Wilmington Trust transaction, partially offset by a decline in residential mortgage banking revenues.  That decline reflected M&T's decision to retain the majority of residential mortgage loan originations in the recent quarter rather than selling them.  

Noninterest expense in the third quarter of 2011 aggregated $662 million, compared with $480 million in the year-earlier quarter and $577 million in the second quarter of 2011.  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 $619 million in the recent quarter, compared with $467 million in the third quarter of 2010 and $525 million in 2011's second quarter.  The most significant factor for the higher levels of operating expenses in the two most recent quarters as compared with the third quarter of 2010 was the impact of the operations obtained in the Wilmington Trust acquisition mid-way through 2011's second quarter.  

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 and merger-related gains), measures the relationship of operating expenses to revenues.  M&T's efficiency ratio was 61.8% in the recent quarter, compared with 53.4% and 55.6% in the year-earlier quarter and the second quarter of 2011, respectively.  The higher ratio in the recent quarter reflects expenses associated with the operations obtained in the Wilmington Trust acquisition.  M&T should begin to realize certain cost savings related to that acquisition transaction during the final quarter of 2011, but expects that the full realization of operating efficiencies will not happen until 2012.

Balance Sheet.  M&T had total assets of $77.9 billion at September 30, 2011, compared with $68.2 billion at September 30, 2010.  Loans and leases, net of unearned discount, were $58.4 billion at September 30, 2011, compared with $50.8 billion a year earlier.  Total deposits aggregated $59.5 billion at the recent quarter-end, up 22% from $48.7 billion at September 30, 2010.  

Total shareholders' equity rose 14% to $9.4 billion at September 30, 2011 from $8.2 billion a year earlier, representing 12.04% and 12.06%, respectively, of total assets.  Common shareholders' equity was $8.5 billion, or $67.70 per share, at September 30, 2011, compared with $7.5 billion, or $62.69 per share, at September 30, 2010.  Tangible equity per common share rose 18% to $38.11 at September 30, 2011 from $32.23 at September 30, 2010.  Common shareholders' equity per share and tangible equity per common share were $66.71 and $37.00, respectively, at June 30, 2011.  In the calculation of tangible equity per common share, common shareholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances.  M&T's tangible common equity to tangible assets ratio was 6.46% at September 30, 2011, compared with 5.96% and 6.28% at September 30, 2010 and June 30, 2011, respectively.  M&T's estimated Tier 1 common ratio rose to 6.89% at September 30, 2011, improved from 6.42% and 6.67% at September 30, 2010 and June 30, 2011, respectively.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss third quarter financial results today at 11:00 a.m. Eastern Time.  Those wishing to participate in the call may dial (877)780-2276.  International participants, using any applicable international calling codes, may dial (973)582-2700.  Callers should reference M&T Bank Corporation or the conference ID #18665770.  The conference call will be webcast live on M&T's website at http://ir.mandtbank.com/events.cfm.  A replay of the call will be available until Friday, October 21, 2011 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #18665770.  The event will also be archived and available by 5:00 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 retail and commercial bank branches in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Jersey, the District of Columbia and Ontario, Canada. 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 other 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.

INVESTOR CONTACT:

Donald J. MacLeod

(716) 842-5138

MEDIA CONTACT:

C. Michael Zabel

(716) 842-5385

M&T BANK CORPORATION

Financial Highlights

Three months ended

Nine months ended

Amounts in thousands,

September 30

September 30

except per share

2011

2010

Change

2011

2010

Change

Performance

Net income

$

183,108

192,015

-5

%

$

711,739

531,719

34

%

Net income available to common shareholders

164,671

176,789

-7

651,966

486,831

34

Per common share:

 Basic earnings

$

1.32

1.49

-11

%

$

5.34

4.12

30

%

 Diluted earnings

1.32

1.48

-11

5.32

4.10

30

 Cash dividends

$

.70

.70

-

$

2.10

2.10

-

Common shares outstanding:

 Average - diluted (1)

124,860

119,155

5

%

122,521

118,766

3

%

 Period end (2)

125,678

119,435

5

125,678

119,435

5

Return on (annualized):

 Average total assets  

.94

%

1.12

%

1.31

%

1.04

%

 Average common shareholders' equity  

7.84

%

9.56

%

10.94

%

9.05

%

Taxable-equivalent net interest income

$

623,265

575,733

8

%

$

1,791,066

1,711,322

5

%

Yield on average earning assets

4.29

%

4.65

%

4.42

%

4.62

%

Cost of interest-bearing liabilities

.86

%

1.03

%

.89

%

1.04

%

Net interest spread

3.43

%

3.62

%

3.53

%

3.58

%

Contribution of interest-free funds

.25

%

.25

%

.25

%

.25

%

Net interest margin

3.68

%

3.87

%

3.78

%

3.83

%

Net charge-offs to average total

 net loans (annualized)

.39

%

.73

%

.46

%

.70

%

Net operating results (3)

Net operating income  

$

209,996

200,225

5

%

$

715,843

558,930

28

%

Diluted net operating earnings per common
 share

1.53

1.55

-1

5.36

4.33

24

Return on (annualized):

 Average tangible assets

1.14

%

1.24

%

1.39

%

1.16

%

 Average tangible common equity

16.26

%

19.58

%

20.16

%

19.13

%

Efficiency ratio

61.79

%

53.40

%

57.84

%

54.10

%


At September 30

Loan quality

2011

2010

Change

Nonaccrual loans

$

1,113,788

1,001,454

11  

%

Real estate and other foreclosed assets

149,868

192,600

-22  

%

 Total nonperforming assets

$

1,263,656

1,194,054

6  

%

Other acquired impaired loans (4)

$

217,759

98,106

122  

%

Accruing loans past due 90 days or more (6)

$

309,966

214,769

44  

%

Renegotiated loans

$

223,233

233,671

-4  

%

Government guaranteed loans included in totals

 above:

 Nonaccrual loans

$

32,937

37,218

-12  

%

 Other acquired impaired loans

40,961

1,014

-  

 Accruing loans past due 90 days or more

211,808

194,223

9  

%

Purchased impaired loans (5):

 Outstanding customer balance

$

1,393,777

113,964

-  

 Carrying amount

703,632

52,728

-  

Nonaccrual loans to total net loans

1.91

%

1.97

%

Allowance for credit losses to:

 Legacy loans

1.79

%

1.86

%

 Total loans

1.56

%

1.76

%

(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 gains and 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)  Acquired loans that ceased performing in accordance with their contractual terms and became impaired subsequent to the acquisition date, but are included in accounting pools that continue to accrue interest.

(5)  Accruing loans that were impaired at acquisition date and recorded at fair value.

(6)  Excludes purchased impaired and other acquired impaired loans.

M&T BANK CORPORATION

Financial Highlights, Five Quarter Trend

Three months ended

Amounts in thousands,

September 30,

June 30,

March 31,

December 31,

September 30,

except per share

2011

2011

2011

2010

2010

Performance

Net income

$

183,108

322,358

206,273

204,442

192,015

Net income available to common shareholders

164,671

297,179

190,121

189,678

176,789

Per common share:

 Basic earnings

$

1.32

2.43

1.59

1.59

1.49

 Diluted earnings

1.32

2.42

1.59

1.59

1.48

 Cash dividends

$

.70

.70

.70

.70

.70

Common shares outstanding:

 Average - diluted (1)

124,860

122,796

119,852

119,503

119,155

 Period end (2)

125,678

125,622

120,410

119,774

119,435

Return on (annualized):

 Average total assets  

.94

%

1.78

%

1.23

%

1.18

%

1.12

%

 Average common shareholders'
   equity

7.84

%

14.94

%

10.16

%

10.03

%

9.56

%

Taxable-equivalent net interest
 income

$

623,265

592,670

575,131

580,227

575,733

Yield on average earning assets

4.29

%

4.40

%

4.60

%

4.58

%

4.65

%

Cost of interest-bearing liabilities

.86

%

.89

%

.91

%

.97

%

1.03

%

Net interest spread

3.43

%

3.51

%

3.69

%

3.61

%

3.62

%

Contribution of interest-free
 funds

.25

%

.24

%

.23

%

.24

%

.25

%

Net interest margin  

3.68

%

3.75

%

3.92

%

3.85

%

3.87

%

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

.39

%

.43

%

.58

%

.60

%

.73

%

Net operating results (3)

Net operating income

$

209,996

289,487

216,360

196,235

200,225

Diluted net operating earnings
 per common share

1.53

2.16

1.67

1.52

1.55

Return on (annualized):

 Average tangible assets

1.14

%

1.69

%

1.36

%

1.20

%

1.24

%

 Average tangible common
   equity

16.26

%

24.40

%

20.16

%

18.43

%

19.58

%

Efficiency ratio

61.79

%

55.56

%

55.75

%

52.55

%

53.40

%

September 30,

June 30,

March 31,

December 31,

September 30,

Loan quality

2011

2011

2011

2010

2010

Nonaccrual loans

$

1,113,788

1,117,584

1,081,920

1,139,740

1,001,454

Real estate and other foreclosed
 assets

149,868

158,873

218,203

220,049

192,600

 Total nonperforming assets

$

1,263,656

1,276,457

1,300,123

1,359,789

1,194,054

Other acquired impaired loans
 (4)

$

217,759

141,391

129,191

99,454

98,106

Accruing loans past due 90 days
 or more (6)

$

309,966

373,197

264,480

269,593

214,769

Renegotiated loans

$

223,233

234,726

241,190

233,342

233,671

Government guaranteed loans
 included in totals above:

 Nonaccrual loans

$

32,937

42,337

36,300

39,883

37,218

 Other acquired impaired loans

40,961

36,395

33,053

16,904

1,014

 Accruing loans past due 90
   days or more

211,808

207,135

214,505

214,111

194,223

Purchased impaired loans (5):

 Outstanding customer balance

$

1,393,777

1,473,237

206,253

219,477

113,964

 Carrying amount

703,632

752,978

88,589

97,019

52,728

Nonaccrual loans to total net
 loans

1.91

%

1.91

%

2.08

%

2.19

%

1.97

%

Allowance for credit losses to:

 Legacy loans

1.79

%

1.80

%

1.81

%

1.82

%

1.86

%

 Total loans

1.56

%

1.55

%

1.73

%

1.74

%

1.76

%

(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 gains and 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)  Acquired loans that ceased performing in accordance with their contractual terms and became impaired subsequent to the acquisition date, but are included in accounting pools that continue to accrue interest.

(5)  Accruing loans that were impaired at acquisition date and recorded at fair value.

(6)  Excludes purchased impaired and other acquired impaired loans.

M&T BANK CORPORATION 

Condensed Consolidated Statement of Income 

Three months ended

Nine months ended

September 30

September 30

Dollars in thousands

2011

2010

Change

2011

2010

Change

Interest income

$

720,351

685,900

5

%

$

2,076,087

2,047,070

1

%

Interest expense

103,632

116,032

-11

304,362

353,641

-14

Net interest income

616,719

569,868

8

1,771,725

1,693,429

5

Provision for credit losses

58,000

93,000

-38

196,000

283,000

-31

Net interest income after

  provision for credit losses

558,719

476,868

17

1,575,725

1,410,429

12

Other income

    Mortgage banking revenues

38,141

61,052

-38

125,448

149,612

-16

    Service charges on deposit accounts

121,577

117,733

3

351,024

367,004

-4

    Trust income

113,652

30,485

273

218,565

91,582

139

    Brokerage services income

13,907

12,127

15

43,129

38,021

13

    Trading account and foreign exchange gains

4,176

6,035

-31

19,253

14,531

32

    Gain on bank investment securities

89

1,440

-

150,186

1,909

-

    Other-than-temporary impairment losses

       recognized in earnings

(9,642)

(9,532)

-

(52,213)

(58,714)

-

    Equity in earnings of Bayview Lending Group LLC

(6,911)

(6,460)

-

(18,812)

(18,353)

-

    Other revenues from operations

93,393

77,019

21

347,878

235,570

48

         Total other income

368,382

289,899

27

1,184,458

821,162

44

Other expense

    Salaries and employee benefits

325,197

246,389

32

891,465

756,296

18

    Equipment and net occupancy

68,101

54,353

25

184,434

165,185

12

    Printing, postage and supplies

10,593

7,820

35

29,518

25,412

16

    Amortization of core deposit and other

       intangible assets

17,401

13,526

29

44,455

44,834

-1

    FDIC assessments

26,701

18,039

48

72,404

60,995

19

    Other costs of operations

214,026

140,006

53

516,209

392,841

31

         Total other expense

662,019

480,133

38

1,738,485

1,445,563

20

Income before income taxes

265,082

286,634

-8

1,021,698

786,028

30

Applicable income taxes

81,974

94,619

-13

309,959

254,309

22

Net income

$

183,108

192,015

-5

%

$

711,739

531,719

34

%

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend 

Three months ended

September 30,

June 30,

March 31,

December 31,

September 30,

Dollars in thousands

2011

2011

2011

2010

2010

Interest income

$

720,351

688,253

667,483

682,725

685,900

Interest expense

103,632

102,051

98,679

108,628

116,032

Net interest income

616,719

586,202

568,804

574,097

569,868

Provision for credit losses

58,000

63,000

75,000

85,000

93,000

Net interest income after

  provision for credit losses

558,719

523,202

493,804

489,097

476,868

Other income

    Mortgage banking revenues

38,141

42,151

45,156

35,013

61,052

    Service charges on deposit accounts

121,577

119,716

109,731

111,129

117,733

    Trust income

113,652

75,592

29,321

31,031

30,485

    Brokerage services income

13,907

14,926

14,296

11,648

12,127

    Trading account and foreign exchange gains

4,176

6,798

8,279

12,755

6,035

    Gain on bank investment securities

89

110,744

39,353

861

1,440

    Other-than-temporary impairment losses

       recognized in earnings

(9,642)

(26,530)

(16,041)

(27,567)

(9,532)

    Equity in earnings of Bayview Lending Group LLC

(6,911)

(5,223)

(6,678)

(7,415)

(6,460)

    Other revenues from operations

93,393

163,482

91,003

119,483

77,019

         Total other income

368,382

501,656

314,420

286,938

289,899

Other expense

    Salaries and employee benefits

325,197

300,178

266,090

243,413

246,389

    Equipment and net occupancy

68,101

59,670

56,663

50,879

54,353

    Printing, postage and supplies

10,593

9,723

9,202

8,435

7,820

    Amortization of core deposit and other

       intangible assets

17,401

14,740

12,314

13,269

13,526

    FDIC assessments

26,701

26,609

19,094

18,329

18,039

    Other costs of operations

214,026

165,975

136,208

134,949

140,006

         Total other expense

662,019

576,895

499,571

469,274

480,133

Income before income taxes

265,082

447,963

308,653

306,761

286,634

Applicable income taxes

81,974

125,605

102,380

102,319

94,619

Net income

$

183,108

322,358

206,273

204,442

192,015

M&T BANK CORPORATION 

Condensed Consolidated Balance Sheet 

September 30

Dollars in thousands

2011

2010

Change

ASSETS

Cash and due from banks

$

1,349,057

1,070,625

26

%

Interest-bearing deposits at banks

2,226,779

401,624

454

Federal funds sold and agreements
 to resell securities

5,000

443,700

-99

Trading account assets

605,557

536,702

13

Investment securities

7,173,797

7,662,715

-6

Loans and leases:

  Commercial, financial, etc.

15,218,502

12,788,136

19

  Real estate - commercial

23,961,306

20,580,450

16

  Real estate - consumer

7,065,451

5,754,432

23

  Consumer

12,156,005

11,668,540

4

    Total loans and leases, net of unearned discount

58,401,264

50,791,558

15

       Less: allowance for credit losses

908,525

894,720

2

 Net loans and leases

57,492,739

49,896,838

15

Goodwill

3,524,625

3,524,625

-

Core deposit and other intangible assets

257,656

139,186

85

Other assets

5,228,681

4,570,822

14

 Total assets

$

77,863,891

68,246,837

14

%

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits

$

19,637,491

14,665,603

34

%

Interest-bearing deposits

39,330,027

33,335,104

18

Deposits at Cayman Islands office

514,871

653,916

-21

 Total deposits

59,482,389

48,654,623

22

Short-term borrowings

694,398

1,211,683

-43

Accrued interest and other liabilities

1,563,121

1,157,250

35

Long-term borrowings

6,748,857

8,991,508

-25

 Total liabilities

68,488,765

60,015,064

14

Shareholders' equity:

  Preferred

862,717

737,979

17

  Common (1)  

8,512,409

7,493,794

14

    Total shareholders' equity

9,375,126

8,231,773

14

 Total liabilities and shareholders' equity

$

77,863,891

68,246,837

14

%

(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $192.5 million at September 30, 2011 and $192.6 million at September 30, 2010.

M&T BANK CORPORATION 

Condensed Consolidated Balance Sheet, Five Quarter Trend 

September 30,

June 30,

March 31,

December 31,

September 30,

Dollars in thousands

2011

2011

2011

2010

2010

ASSETS

Cash and due from banks

$

1,349,057

1,297,335

972,005

908,755

1,070,625

Interest-bearing deposits at banks

2,226,779

2,275,450

100,101

101,222

401,624

Federal funds sold and
 agreements to resell

 securities

5,000

415,580

10,300

25,000

443,700

Trading account assets

605,557

502,986

413,737

523,834

536,702

Investment securities

7,173,797

6,492,265

6,507,165

7,150,540

7,662,715

Loans and leases:

  Commercial, financial, etc.

15,218,502

15,040,892

13,826,299

13,390,610

12,788,136

  Real estate - commercial

23,961,306

24,263,726

20,891,615

21,183,161

20,580,450

  Real estate - consumer

7,065,451

6,970,921

6,154,960

5,928,056

5,754,432

  Consumer

12,156,005

12,265,690

11,245,807

11,488,555

11,668,540

    Total loans and leases, net of
      unearned discount

58,401,264

58,541,229

52,118,681

51,990,382

50,791,558

       Less: allowance for credit
         losses

908,525

907,589

903,703

902,941

894,720

 Net loans and leases

57,492,739

57,633,640

51,214,978

51,087,441

49,896,838

Goodwill

3,524,625

3,524,625

3,524,625

3,524,625

3,524,625

Core deposit and other intangible
 assets

257,656

275,057

113,603

125,917

139,186

Other assets

5,228,681

5,310,216

5,024,694

4,573,929

4,570,822

 Total assets

$

77,863,891

77,727,154

67,881,208

68,021,263

68,246,837

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits

$

19,637,491

18,598,828

15,219,562

14,557,568

14,665,603

Interest-bearing deposits

39,330,027

40,078,834

34,264,867

33,641,800

33,335,104

Deposits at Cayman Islands office

514,871

551,553

1,063,670

1,605,916

653,916

 Total deposits

59,482,389

59,229,215

50,548,099

49,805,284

48,654,623

Short-term borrowings

694,398

567,144

504,676

947,432

1,211,683

Accrued interest and other
 liabilities

1,563,121

1,557,685

1,015,495

1,070,701

1,157,250

Long-term borrowings

6,748,857

7,128,916

7,305,420

7,840,151

8,991,508

 Total liabilities

68,488,765

68,482,960

59,373,690

59,663,568

60,015,064

Shareholders' equity:

  Preferred

862,717

860,901

743,385

740,657

737,979

  Common (1)

8,512,409

8,383,293

7,764,133

7,617,038

7,493,794

    Total shareholders' equity

9,375,126

9,244,194

8,507,518

8,357,695

8,231,773

 Total liabilities and shareholders'
   equity

$

77,863,891

77,727,154

67,881,208

68,021,263

68,246,837

(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $192.5 million at September 30, 2011, $228.8 million at June 30, 2011, $197.5 million at March 31, 2011, $205.2 million at December 31, 2010 and $192.6 million at September 30, 2010.

M&T BANK CORPORATION

Condensed Consolidated Average Balance Sheet

and Annualized Taxable-equivalent Rates 

Three months ended

Change in balance

Nine months ended 

September 30,

September 30,

June 30,

September 30, 2011 from

September 30 

Dollars in millions

2011

2010

2011

September 30,

June 30,

2011

2010

Change in

Balance

Rate

Balance

Rate

Balance

Rate

2010

2011

Balance

Rate

Balance

Rate

balance

ASSETS

Interest-
 bearing
 deposits
 at banks

$

1,861

.25

%

92

.15

%

804

.24

%

-

%

131

%

$

933

.24

%

100

.06

%

834

%

Federal funds
 sold and
 agreements
 to resell
 securities

76

.14

64

.26

622

.09

20

-88

238

.10

33

.27

628

Trading
 account
 assets

85

1.75

82

.65

101

1.32

3

-16

98

1.55

69

.79

41

Investment
 securities

7,005

3.65

7,993

4.16

6,394

4.03

-12

10

6,872

3.95

8,180

4.29

-16

Loans and
 leases, net of
 unearned discount

 Commercial,
   financial, etc.

15,007

3.82

12,856

3.97

14,623

3.89

17

3

14,406

3.88

13,118

3.96

10

 Real estate -
   commercial

23,979

4.62

20,612

4.85

22,471

4.59

16

7

22,495

4.64

20,745

4.66

8

 Real estate -
   consumer

7,002

4.95

5,680

5.30

6,559

5.00

23

7

6,542

5.00

5,691

5.32

15

 Consumer

12,200

4.95

11,687

5.22

11,808

5.03

4

3

11,787

5.03

11,795

5.24

-

    Total loans
      and leases,
      net

58,188

4.51

50,835

4.74

55,461

4.55

14

5

55,230

4.57

51,349

4.69

8

 Total earning
   assets

67,215

4.29

59,066

4.65

63,382

4.40

14

6

63,371

4.42

59,731

4.62

6

Goodwill

3,525

3,525

3,525

-

-

3,525

3,525

-

Core deposit
 and other
 intangible
 assets

266

146

198

83

35

195

160

22

Other assets

5,902

5,074

5,349

16

10

5,398

4,923

10

 Total assets

$

76,908

67,811

72,454

13

%

6

%

$

72,489

68,339

6

%

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-
 bearing
 deposits

 NOW
   accounts

$

814

.17

592

.15

742

.15

37

%

10

%

$

729

.15

599

.14

22

%

 Savings
   deposits

31,654

.28

26,177

.33

30,043

.28

21

5

29,804

.28

25,733

.33

16

 Time
   deposits

7,169

.98

6,312

1.46

6,657

1.16

14

8

6,514

1.15

6,767

1.56

-4

 Deposits
   at Cayman
   Islands
   office

614

.12

802

.16

820

.09

-23

-25

869

.12

1,002

.14

-13

    Total
      interest-
      bearing
      deposits

40,251

.40

33,883

.53

38,262

.42

19

5

37,916

.42

34,101

.56

11

Short-term
 borrowings

592

.15

1,858

.16

707

.08

-68

-16

878

.13

1,994

.16

-56

Long-term
 borrowings

6,829

3.63

8,948

3.10

7,076

3.48

-24

-3

7,089

3.45

9,516

2.91

-26

Total interest-
 bearing
 liabilities

47,672

.86

44,689

1.03

46,045

.89

7

4

45,883

.89

45,611

1.04

1

Noninterest-
 bearing
 deposits

18,222

13,647

16,195

34

13

16,320

13,518

21

Other
 liabilities

1,690

1,294

1,402

31

21

1,420

1,180

20

 Total
   liabilities

67,584

59,630

63,642

13

6

63,623

60,309

5

Shareholders'
 equity

9,324

8,181

8,812

14

6

8,866

8,030

10

 Total liabilities
   and
   shareholders'
   equity

$

76,908

67,811

72,454

13

%

6

%

$

72,489

68,339

6

%

Net interest
 spread

3.43

3.62