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M&T Bank Corporation Announces 2011 Fourth Quarter and Full-Year Profits

Jan 17, 2012

BUFFALO, N.Y., Jan. 17, 2012 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for 2011.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the fourth quarter of 2011 were $1.04.  On the same basis, net income in the recent quarter totaled $148 million.  Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income for the fourth quarter of 2011 was .75% and 6.12%, respectively.

Several noteworthy items are reflected in M&T's results for the recently completed quarter.  A $79 million other-than-temporary impairment charge was recorded during the quarter related to M&T's 20% investment in Bayview Lending Group LLC ("BLG").  While the small balance commercial real estate securitization market that BLG previously operated in continues to be stagnant, Bayview's asset management operations continue to grow and its business of managing capital in the distressed real estate market is performing well.  Nevertheless, management increased its estimate of the timeframe over which M&T could reasonably anticipate recovery of the previously recorded investment amount and, as a result, concluded that the investment was other-than-temporarily impaired.  That investment was written-down to its estimated fair value of $115 million.  The impairment charge was recorded in "other costs of operations."  During December 2011, M&T received $55 million in cash resulting from the full settlement of a lawsuit initiated by M&T in 2008 against Deutsche Bank Securities, Inc. and several other parties.  M&T sought damages arising from a 2007 investment in collateralized debt obligations and alleged that the quality of the investment was not as represented.  Subsequently, M&T made a $30 million tax-deductible cash contribution to The M&T Charitable Foundation, a private charitable foundation that has supported thousands of not-for-profit organizations to improve the quality of life throughout the communities M&T serves.  Finally, an other-than-temporary impairment charge was recorded during the recent quarter on certain mortgage-backed investment securities, which totaled $25 million.  The net impact of those four noteworthy items reduced M&T's fourth quarter 2011 net income and diluted earnings per common share by $48 million and $.38, respectively.

Diluted earnings per common share were $1.59 and $1.32 in the fourth quarter of 2010 and the third quarter of 2011, respectively.  Net income for those respective quarters was $204 million and $183 million.  Net income expressed as an annualized rate of return on average assets and average common shareholders' equity for the final 2010 quarter was 1.18% and 10.03%, respectively, compared with .94% and 7.84%, respectively, in the third quarter of 2011.

For the year ended December 31, 2011, diluted earnings per common share were $6.35, up 12% from $5.69 for the year ended December 31, 2010.  Net income for 2011 and 2010 was $859 million and $736 million, respectively.  Expressed as a rate of return on average assets and average common shareholders' equity, net income was 1.16% and 9.67%, respectively, in 2011, compared with 1.08% and 9.30%, respectively, in 2010. 

Commenting on M&T's performance in 2011, Rene F. Jones, Executive Vice President and Chief Financial Officer, noted, "We were quite pleased with our operating performance during the quarter, most notably the significant loan growth we experienced in our commercial portfolios.  In total, average loans were up an annualized 6% from the third quarter, while period-end loans jumped $1.7 billion or an annualized 12% from September 30 to December 31.  The past year was highlighted by many meaningful accomplishments.  The successful consummation of the acquisition of Wilmington Trust and the conversion of the major loan and deposit systems was significant, and we started to see our projected cost savings materialize during the fourth quarter.  The full-year 12% growth in earnings per share in 2011 was impressive given the economic headwinds and the changing regulatory environment for banks."

Mr. Jones further commented, "With the favorable outcome of our CDO litigation, we were very pleased to make a significant contribution to The M&T Charitable Foundation that will allow it to continue supporting the communities where M&T does business.  We believe that the strength of our bank is directly linked to the health of the communities we serve."

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 $1.20 in the recent quarter, compared with $1.52 in the corresponding 2010 period and $1.53 in the third quarter of 2011.  Net operating income for the fourth quarters of 2011 and 2010 was $168 million and $196 million, respectively, compared with $210 million in the third quarter of 2011.  For the three months ended December 31, 2011, net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was .89% and 12.36%, respectively, compared with 1.20% and 18.43% in the similar period of 2010 and 1.14% and 16.07%, respectively, in the third quarter of 2011.

Diluted net operating earnings per common share rose 12% to $6.55 in 2011 from $5.84 in 2010.  Net operating income for 2011 and 2010 aggregated $884 million and $755 million, respectively. Net operating income in 2011 expressed as a rate of return on average tangible assets and average tangible common shareholders' equity was 1.26% and 17.96%, respectively, compared with 1.17% and 18.95%, respectively, in 2010.

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income aggregated $625 million in the fourth quarter of 2011, up from $580 million in the year-earlier quarter and $623 million in the third quarter of 2011.  The growth in such income in the recent quarter as compared with the year-earlier quarter resulted from higher average earning assets, partially offset by a narrowing of the net interest margin.  Earning assets rose 15% to $68.8 billion in the recent quarter from $59.7 billion in the fourth quarter of 2010, predominantly due to the impact of the May 16, 2011 acquisition of Wilmington Trust Corporation ("Wilmington Trust").  That transaction added approximately $9.6 billion of earning assets on the acquisition date.  The net interest margin was 3.60% in the recent quarter, compared with 3.85% in the last quarter of 2010.  The narrowing of the net interest margin in the recent quarter as compared with the year-earlier quarter reflected the impact of the Wilmington Trust transaction, including significantly higher earning balances on deposit at the Federal Reserve.  Growth in average earning assets of $1.6 billion from the third to the fourth quarter of 2011 was largely offset by an 8 basis point narrowing of the net interest margin.  Net interest income on a taxable-equivalent basis totaled $2.42 billion for the full-year of 2011, 5% higher than $2.29 billion in 2010.  That improvement resulted from a $5.0 billion increase in average earning assets, partially offset by a narrowing of the net interest margin to 3.73% in 2011 from 3.84% in 2010.

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $74 million during the recently completed quarter, compared with $85 million in the corresponding 2010 quarter and $58 million in the third quarter of 2011.  Net charge-offs of loans were $74 million in the fourth quarter of 2011, representing an annualized .50% of average loans outstanding, compared with $77 million or .60% in the year-earlier quarter and $57 million or .39% in 2011's third quarter.  The provision for credit losses declined 27% to $270 million for the year ended December 31, 2011 from $368 million in 2010.  Net loan charge-offs in 2011 totaled $265 million, or .47% of average loans outstanding, compared with $346 million, or .67% of average loans in 2010.

Loans classified as nonaccrual totaled $1.10 billion, or 1.83% of total loans at December 31, 2011, improved from $1.14 billion or 2.19% a year earlier and $1.11 billion or 1.91% at September 30, 2011.

Assets taken in foreclosure of defaulted loans were $157 million at December 31, 2011, compared with $220 million and $150 million at December 31, 2010 and September 30, 2011, respectively.  The decline in such assets at the two most recent quarter-ends as compared with December 31, 2010 resulted from the sale during the second quarter of 2011 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 December 31 and September 30, 2011 were $48 million and $51 million, respectively, of assets related to the Wilmington Trust acquisition.

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 $908 million at December 31, 2011, compared with $903 million a year earlier and $909 million at September 30, 2011.  The allowance expressed as a percentage of outstanding loans was 1.51% at the recent quarter-end, compared with 1.74% at December 31, 2010 and 1.56% at September 30, 2011.  The decline from December 31, 2010 reflects the impact of loans obtained in the Wilmington Trust acquisition for which GAAP requires that expected credit losses be reflected in the estimation of loan fair value as of the acquisition date and prohibits any carry-over of an allowance for credit losses.  The remaining portion of that fair valuation adjustment to the Wilmington Trust loans which is not part of the allowance for credit losses was $485 million at December 31, 2011.

Noninterest Income and Expense.  Noninterest income totaled $398 million in the recent quarter, compared with $287 million and $368 million in the fourth quarter of 2010 and the third quarter of 2011, respectively.  Reflected in those amounts were net losses from investment securities of $25 million, $27 million and $10 million, each predominantly due to other-than-temporary impairment charges.  Also included in noninterest income in the recent quarter was the $55 million litigation settlement related to M&T's 2007 investment in certain collateralized debt obligations, as previously noted.  Noninterest income in 2010's final quarter reflected a $28 million gain realized on M&T's FDIC-assisted acquisition of select assets and liabilities of K Bank.

Excluding the specific items referred to in the preceding paragraph, noninterest income was $368 million in the fourth quarter of 2011, compared with $286 million in the year-earlier quarter and $378 million in the third quarter of 2011.  The improvement in the recent quarter as compared with the fourth quarter of 2010 was predominantly attributable to the Wilmington Trust transaction, while the decline from the third quarter of 2011 was due to lower fees for providing consumer deposit services resulting from the Durbin amendment, which limits debit card interchange fees.

Noninterest income aggregated $1.58 billion and $1.11 billion during the years ended December 31, 2011 and 2010, respectively.  The predominant contributor to the rise in noninterest income in 2011 as compared with 2010 was higher trust income resulting from the acquisition of Wilmington Trust. Net gains from investment securities, the previously noted litigation settlement and merger-related gains also contributed to the year-over-year improvement.  

Noninterest expense in the fourth quarter of 2011 totaled $740 million, compared with $469 million in the year-earlier quarter and $662 million in 2011's third quarter.  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 $706 million in the fourth quarter of 2011, compared with $455 million and $619 million in the fourth quarter of 2010 and the third quarter of 2011, respectively.  The most significant factors for the higher level of operating expenses in the recent quarter as compared with the fourth quarter of 2010 were the impact of the operations obtained in the Wilmington Trust acquisition in May 2011, the aforementioned $79 million impairment charge related to BLG, the $30 million charitable contribution and a 52% increase in FDIC assessments that was largely attributable to a regulatory mandated change in the assessment methodology.  Noninterest operating expenses in the recent quarter as compared with the immediately preceding quarter also reflected the realization of significant cost savings due to the August conversion of the banking operations of Wilmington Trust.  Specifically, salaries and employee benefits declined $13 million from 2011's third quarter.

For the year ended December 31, 2011, noninterest expense aggregated $2.48 billion, compared with $1.91 billion in 2010.  Excluding those previously noted expenses considered to be nonoperating in nature, noninterest operating expenses were $2.33 billion in 2011 and $1.86 billion in 2010.  The increase in such expenses was largely attributable to the impact of the operations obtained in the Wilmington Trust acquisition, the impairment charge related to BLG, the charitable contribution and a 26% increase in FDIC assessments.

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 67.4% in the fourth quarter of 2011, compared with 52.5% in the year-earlier quarter and 61.8% in the third quarter of 2011.  M&T's efficiency ratio for the years ended December 31, 2011 and 2010 was 60.4% and 53.7%, respectively.  Excluding the $79 million impairment charge related to M&T's investment in BLG, the $55 million litigation settlement and the $30 million charitable contribution in the fourth quarter of 2011, the efficiency ratio for the three months and twelve months ended December 31, 2011 would have been 60.1% and 58.4%, respectively.

Balance Sheet.  M&T had total assets of $77.9 billion at December 31, 2011, compared with $68.0 billion a year earlier.  Loans and leases, net of unearned discount, totaled $60.1 billion at the 2011 year-end, up from $52.0 billion at December 31, 2010.  Outstanding loans and leases at the end of 2011 grew $1.7 billion from $58.4 billion at September 30, 2011.  That growth reflects increases in commercial loans, commercial real estate loans and residential real estate loans.  Total deposits were $59.4 billion at December 31, 2011, 19% higher than $49.8 billion at the end of 2010. 

Total shareholders' equity rose 11% to $9.3 billion at December 31, 2011 from $8.4 billion a year earlier, representing 11.90% and 12.29% respectively, of total assets.  Common shareholders' equity was $8.4 billion, or $66.82 per share at December 31, 2011, compared with $7.6 billion, or $63.54 per share, a year earlier.  Tangible equity per common share rose 14% to $37.79 at December 31, 2011 from $33.26 a year earlier.  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 6.40% at December 31, 2011, compared with 6.19% and 6.53% at December 31, 2010 and September 30, 2011, respectively. M&T's estimated Tier 1 common ratio was 6.86% at December 31, 2011, compared with 6.51% and 6.87% at December 31, 2010 and September 30, 2011, respectively.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss fourth quarter and full-year financial results today at 11:00 a.m. Eastern Time.  Those wishing to participate in the call may dial (877)780-2276.  International participants, using any applicable international calling codes, may dial (973)582-2700.  Callers should reference M&T Bank Corporation or the conference ID #41414631.  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 January 19, 2012 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #41414631.  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 bank branches in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware 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 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

 

 

 

 

 

 

Year ended

 

 

 

Amounts in thousands,

 

 

December 31

 

 

 

 

 

 

December 31

 

 

 

 except per share

 

 

2011

 

2010

 

Change

 

 

 

 

2011

 

2010

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

147,740

 

204,442

 

-28

%

 

 

$

859,479

 

736,161

 

17

%

Net income available to common shareholders

 

 

129,804

 

189,678

 

-32

 

 

 

 

781,765

 

675,853

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Basic earnings

 

$

1.04

 

1.59

 

-35

%

 

 

$

6.37

 

5.72

 

11

%

  Diluted earnings

 

 

1.04

 

1.59

 

-35

 

 

 

 

6.35

 

5.69

 

12

 

  Cash dividends

 

$

.70

 

.70

 

-

 

 

 

$

2.80

 

2.80

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Average - diluted (1)

 

 

124,736

 

119,503

 

4

%

 

 

 

123,079

 

118,843

 

4

%

  Period end (2)

 

 

125,752

 

119,774

 

5

 

 

 

 

125,752

 

119,774

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on (annualized):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Average total assets

 

 

.75

%

1.18

%

 

 

 

 

 

1.16

%

1.08

%

 

 

  Average common shareholders' equity

 

 

6.12

%

10.03

%

 

 

 

 

 

9.67

%

9.30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable-equivalent net interest income

 

$

624,566

 

580,227

 

8

%

 

 

$

2,415,632

 

2,291,549

 

5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yield on average earning assets

 

 

4.17

%

4.58

%

 

 

 

 

 

4.35

%

4.61

%

 

 

Cost of interest-bearing liabilities

 

 

.82

%

.97

%

 

 

 

 

 

.87

%

1.02

%

 

 

Net interest spread

 

 

3.35

%

3.61

%

 

 

 

 

 

3.48

%

3.59

%

 

 

Contribution of interest-free funds

 

 

.25

%

.24

%

 

 

 

 

 

.25

%

.25

%

 

 

Net interest margin

 

 

3.60

%

3.85

%

 

 

 

 

 

3.73

%

3.84

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs to average total 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  net loans (annualized)

 

 

.50

%

.60

%

 

 

 

 

 

.47

%

.67

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating results (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating income 

 

$

168,410

 

196,235

 

-14

%

 

 

$

884,253

 

755,165

 

17

%

Diluted net operating earnings per common share

 

 

1.20

 

1.52

 

-21

 

 

 

 

6.55

 

5.84

 

12

 

Return on (annualized):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Average tangible assets

 

 

.89

%

1.20

%

 

 

 

 

 

1.26

%

1.17

%

 

 

  Average tangible common equity

 

 

12.36

%

18.43

%

 

 

 

 

 

17.96

%

18.95

%

 

 

Efficiency ratio

 

 

67.38

%

52.55

%

 

 

 

 

 

60.43

%

53.71

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31

 

 

 

 

 

 

 

 

 

 

 

 

Loan quality

 

 

2011

 

2010

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

1,097,581

 

1,139,740

 

-4

%

 

 

 

 

 

 

 

 

 

Real estate and other foreclosed assets

 

 

156,592

 

220,049

 

-29

%

 

 

 

 

 

 

 

 

 

  Total nonperforming assets

 

$

1,254,173

 

1,359,789

 

-8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accruing loans past due 90 days or more (4)

 

$

287,876

 

250,705

 

15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government guaranteed loans included in totals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  above:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Nonaccrual loans

 

$

40,529

 

39,883

 

2

%

 

 

 

 

 

 

 

 

 

  Accruing loans past due 90 days or more

 

 

252,503

 

207,243

 

22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renegotiated loans

 

$

214,379

 

233,342

 

-8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired accruing loans past due 90 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  days or more (5)

 

$

163,738

 

91,022

 

80

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased impaired loans (6):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Outstanding customer balance

 

$

1,267,762

 

219,477

 

-

%

 

 

 

 

 

 

 

 

 

  Carrying amount

 

 

653,362

 

97,019

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans to total net loans

 

 

1.83

%

2.19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses to total loans

 

 

1.51

%

1.74

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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)  Excludes acquired loans. 

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M&T BANK CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Highlights, Five Quarter Trend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Amounts in thousands,

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

 except per share

 

 

2011

 

2011

 

2011

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

147,740

 

 

183,108

 

 

322,358

 

 

206,273

 

 

204,442

 

 

Net income available to common shareholders

 

 

129,804

 

 

164,671

 

 

297,179

 

 

190,121

 

 

189,678

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Basic earnings

 

$

1.04

 

 

1.32

 

 

2.43

 

 

1.59

 

 

1.59

 

 

  Diluted earnings

 

 

1.04

 

 

1.32

 

 

2.42

 

 

1.59

 

 

1.59

 

 

  Cash dividends

 

$

.70

 

 

.70

 

 

.70

 

 

.70

 

 

.70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Average - diluted (1)

 

 

124,736

 

 

124,860

 

 

122,796

 

 

119,852

 

 

119,503

 

 

  Period end (2)

 

 

125,752

 

 

125,678

 

 

125,622

 

 

120,410

 

 

119,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on (annualized):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Average total assets 

 

 

.75

%

 

.94

%

 

1.78

%

 

1.23

%

 

1.18

%

 

  Average common shareholders' equity 

 

 

6.12

%

 

7.84

%

 

14.94

%

 

10.16

%

 

10.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable-equivalent net interest income

 

$

624,566

 

 

623,265

 

 

592,670

 

 

575,131

 

 

580,227

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yield on average earning assets

 

 

4.17

%

 

4.29

%

 

4.40

%

 

4.60

%

 

4.58

%

 

Cost of interest-bearing liabilities

 

 

.82

%

 

.86

%

 

.89

%

 

.91

%

 

.97

%

 

Net interest spread

 

 

3.35

%

 

3.43

%

 

3.51

%

 

3.69

%

 

3.61

%

 

Contribution of interest-free funds

 

 

.25

%

 

.25

%

 

.24

%

 

.23

%

 

.24

%

 

Net interest margin 

 

 

3.60

%

 

3.68

%

 

3.75

%

 

3.92

%

 

3.85

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs to average total 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  net loans (annualized)

 

 

.50

%

 

.39

%

 

.43

%

 

.58

%

 

.60

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating results (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating income

 

$

168,410

 

 

209,996

 

 

289,487

 

 

216,360

 

 

196,235

 

 

Diluted net operating earnings per common share

 

 

1.20

 

 

1.53

 

 

2.16

 

 

1.67

 

 

1.52

 

 

Return on (annualized):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Average tangible assets

 

 

.89

%

 

1.14

%

 

1.69

%

 

1.36

%

 

1.20

%

 

  Average tangible common equity

 

 

12.36

%

 

16.07

%

 

24.24

%

 

20.16

%

 

18.43

%

 

Efficiency ratio

 

 

67.38

%

 

61.79

%

 

55.56

%

 

55.75

%

 

52.55

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

Loan quality

 

 

2011

 

2011

 

2011

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

1,097,581

 

 

1,113,788

 

 

1,117,584

 

 

1,081,920

 

 

1,139,740

 

 

Real estate and other foreclosed assets

 

 

156,592

 

 

149,868

 

 

158,873

 

 

218,203

 

 

220,049

 

 

  Total nonperforming assets

 

$

1,254,173

 

 

1,263,656

 

 

1,276,457

 

 

1,300,123

 

 

1,359,789

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accruing loans past due 90 days or more (4)

 

$

287,876

 

 

239,970

 

 

239,527

 

 

243,990

 

 

250,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government guaranteed loans included in totals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  above:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Nonaccrual loans

 

$

40,529

 

 

32,937

 

 

42,337

 

 

36,300

 

 

39,883

 

 

  Accruing loans past due 90 days or more

 

 

252,503

 

 

210,407

 

 

205,644

 

 

209,787

 

 

207,243

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renegotiated loans

 

$

214,379

 

 

223,233

 

 

234,726

 

 

241,190

 

 

233,342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired accruing loans past due 90 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  days or more (5)

 

$

163,738

 

 

211,958

 

 

228,304

 

 

115,554

 

 

91,022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased impaired loans (6):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Outstanding customer balance

 

$

1,267,762

 

 

1,393,777

 

 

1,473,237

 

 

206,253

 

 

219,477

 

 

  Carrying amount

 

 

653,362

 

 

703,632

 

 

752,978

 

 

88,589

 

 

97,019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans to total net loans

 

 

1.83

%

 

1.91

%

 

1.91

%

 

2.08

%

 

2.19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses to total loans

 

 

1.51

%

 

1.56

%

 

1.55

%

 

1.73

%

 

1.74

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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)  Excludes acquired loans. 

 

 

 

 

 

 

 

 

 

 

 

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M&T BANK CORPORATION

Condensed Consolidated Statement of Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

 

 

Year ended

 

 

 

 

 

December 31

 

 

 

 

 

December 31

 

 

 

Dollars in thousands

 

2011

 

2010

 

Change

 

 

 

2011

 

2010

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

716,000

 

682,725

 

5

%

 

$

2,792,087

 

2,729,795

 

2

%

Interest expense

 

97,969

 

108,628

 

-10

 

 

 

402,331

 

462,269

 

-13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

618,031

 

574,097

 

8

 

 

 

2,389,756

 

2,267,526

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

74,000

 

85,000

 

-13

 

 

 

270,000

 

368,000

 

-27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income after

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   provision for credit losses

 

544,031

 

489,097

 

11

 

 

 

2,119,756

 

1,899,526

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Mortgage banking revenues

 

40,573

 

35,013

 

16

 

 

 

166,021

 

184,625

 

-10

 

     Service charges on deposit accounts

 

104,071

 

111,129

 

-6

 

 

 

455,095

 

478,133

 

-5

 

     Trust income 

 

113,820

 

31,031

 

267

 

 

 

332,385

 

122,613

 

171

 

     Brokerage services income

 

13,341

 

11,648

 

15

 

 

 

56,470

 

49,669

 

14

 

     Trading account and foreign exchange gains

 

7,971

 

12,755

 

-38

 

 

 

27,224

 

27,286

 

-

 

     Gain on bank investment securities

 

1

 

861

 

-

 

 

 

150,187

 

2,770

 

-

 

     Other-than-temporary impairment losses 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        recognized in earnings

 

(24,822)

 

(27,567)

 

-

 

 

 

(77,035)

 

(86,281)

 

-

 

     Equity in earnings of Bayview Lending Group LLC

 

(5,419)

 

(7,415)

 

-

 

 

 

(24,231)

 

(25,768)

 

-

 

     Other revenues from operations

 

148,918

 

119,483

 

25

 

 

 

496,796

 

355,053

 

40

 

          Total other income

 

398,454

 

286,938

 

39

 

 

 

1,582,912

 

1,108,100

 

43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Salaries and employee benefits

 

312,528

 

243,413

 

28

 

 

 

1,203,993

 

999,709

 

20

 

     Equipment and net occupancy

 

65,080

 

50,879

 

28

 

 

 

249,514

 

216,064

 

15

 

     Printing, postage and supplies

 

11,399

 

8,435

 

35

 

 

 

40,917

 

33,847

 

21

 

     Amortization of core deposit and other 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        intangible assets

 

17,162

 

13,269

 

29

 

 

 

61,617

 

58,103

 

6

 

     FDIC assessments

 

27,826

 

18,329

 

52

 

 

 

100,230

 

79,324

 

26

 

     Other costs of operations 

 

305,588

 

134,949

 

126

 

 

 

821,797

 

527,790

 

56

 

          Total other expense

 

739,583

 

469,274

 

58

 

 

 

2,478,068

 

1,914,837

 

29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

202,902

 

306,761

 

-34

 

 

 

1,224,600

 

1,092,789

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applicable income taxes

 

55,162

 

102,319

 

-46

 

 

 

365,121

 

356,628

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

147,740

 

204,442

 

-28

%

 

$

859,479

 

736,161

 

17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

Dollars in thousands

 

2011

 

2011

 

2011

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

716,000

 

 

720,351

 

 

688,253

 

 

667,483

 

 

682,725

 

Interest expense

 

97,969

 

 

103,632

 

 

102,051

 

 

98,679

 

 

108,628

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

618,031

 

 

616,719

 

 

586,202

 

 

568,804

 

 

574,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

74,000

 

 

58,000

 

 

63,000

 

 

75,000

 

 

85,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income after

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   provision for credit losses

 

544,031

 

 

558,719

 

 

523,202

 

 

493,804

 

 

489,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Mortgage banking revenues

 

40,573

 

 

38,141

 

 

42,151

 

 

45,156

 

 

35,013

 

     Service charges on deposit accounts

 

104,071

 

 

121,577

 

 

119,716

 

 

109,731

 

 

111,129

 

     Trust income 

 

113,820

 

 

113,652

 

 

75,592

 

 

29,321

 

 

31,031

 

     Brokerage services income

 

13,341

 

 

13,907

 

 

14,926

 

 

14,296

 

 

11,648

 

     Trading account and foreign exchange gains

 

7,971

 

 

4,176

 

 

6,798

 

 

8,279

 

 

12,755

 

     Gain on bank investment securities

 

1

 

 

89

 

 

110,744

 

 

39,353

 

 

861

 

     Other-than-temporary impairment losses 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        recognized in earnings

 

(24,822)

 

 

(9,642)

 

 

(26,530)

 

 

(16,041)

 

 

(27,567)

 

     Equity in earnings of Bayview Lending Group LLC                   

 

(5,419)

 

 

(6,911)

 

 

(5,223)

 

 

(6,678)

 

 

(7,415)

 

     Other revenues from operations

 

148,918

 

 

93,393

 

 

163,482

 

 

91,003

 

 

119,483

 

          Total other income

 

398,454

 

 

368,382

 

 

501,656

 

 

314,420

 

 

286,938

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Salaries and employee benefits

 

312,528

 

 

325,197

 

 

300,178

 

 

266,090

 

 

243,413

 

     Equipment and net occupancy

 

65,080

 

 

68,101

 

 

59,670

 

 

56,663

 

 

50,879

 

     Printing, postage and supplies

 

11,399

 

 

10,593

 

 

9,723

 

 

9,202

 

 

8,435

 

     Amortization of core deposit and other 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        intangible assets

 

17,162

 

 

17,401

 

 

14,740

 

 

12,314

 

 

13,269

 

     FDIC assessments

 

27,826

 

 

26,701

 

 

26,609

 

 

19,094

 

 

18,329

 

     Other costs of operations 

 

305,588

 

 

214,026

 

 

165,975

 

 

136,208

 

 

134,949

 

          Total other expense

 

739,583

 

 

662,019

 

 

576,895

 

 

499,571

 

 

469,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

202,902

 

 

265,082

 

 

447,963

 

 

308,653

 

 

306,761

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applicable income taxes

 

55,162

 

 

81,974

 

 

125,605

 

 

102,380

 

 

102,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

147,740

 

 

183,108

 

 

322,358

 

 

206,273

 

 

204,442

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M&T BANK CORPORATION

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31

 

 

 

Dollars in thousands

 

 

2011

 

2010

 

Change

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

1,449,547

 

908,755

 

60

%

 

 

 

 

 

 

 

 

 

Interest-bearing deposits at banks

 

 

154,960

 

101,222

 

53

 

 

 

 

 

 

 

 

 

 

Federal funds sold and agreements

 

 

 

 

 

 

 

 

  to resell securities

 

 

2,850

 

25,000

 

-89

 

 

 

 

 

 

 

 

 

 

Trading account assets

 

 

561,834

 

523,834

 

7

 

 

 

 

 

 

 

 

 

 

Investment securities

 

 

7,673,154

 

7,150,540

 

7

 

 

 

 

 

 

 

 

 

 

Loans and leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Commercial, financial, etc.

 

 

15,734,436

 

13,390,610

 

18

 

   Real estate - commercial

 

 

24,411,114

 

21,183,161

 

15

 

   Real estate - consumer

 

 

7,923,165

 

5,928,056

 

34

 

   Consumer

 

 

12,027,290

 

11,488,555

 

5

 

     Total loans and leases, net of unearned discount

 

 

60,096,005

 

51,990,382

 

16

 

        Less: allowance for credit losses

 

 

908,290

 

902,941

 

1

 

 

 

 

 

 

 

 

 

 

  Net loans and leases

 

 

59,187,715

 

51,087,441

 

16

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

3,524,625

 

3,524,625

 

-

 

 

 

 

 

 

 

 

 

 

Core deposit and other intangible assets

 

 

176,394