M&T BANK CORPORATION BUFFALO, N.Y., Jan. 19, 2017 /PRNewswire/ -- M&T Bank Corporation ("M&T")(NYSE: MTB) today reported its results of operations for 2016.
GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the fourth quarter of 2016 were $1.98, up 20% from $1.65 in the year-earlier quarter. GAAP-basis net income in the recent quarter aggregated $331 million, 22% higher than $271 million in the fourth quarter of 2015. Diluted earnings per common share and GAAP-basis net income were $2.10 and $350 million, respectively, in the third quarter of 2016. GAAP-basis net income for the final quarter of 2016 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.05% and 8.13%, respectively, compared with .93% and 7.22%, respectively, in the year-earlier quarter and 1.12% and 8.68%, respectively, in 2016's third quarter.
In the fourth and third quarters of 2016, M&T sold its holdings of collateralized debt obligations in response to the provisions of the so-called "Volcker Rule" realizing pre-tax gains of $2 million and $28 million, respectively. During the fourth quarter of 2016, M&T made a $30 million tax-deductible cash contribution to The M&T Charitable Foundation. The after-tax impact of that contribution reduced the recent quarter's net income by $18 million, or $.12 of diluted earnings per common share.
Commenting on M&T's financial performance, Darren J. King, Executive Vice President and Chief Financial Officer, noted, "We are pleased with the recent quarter's results which were highlighted by an annualized 15% growth rate in M&T's commercial loan portfolios and a 3 basis point widening of the net interest margin as compared with the third quarter. Expenses remained well-controlled in the quarter. Consistent with recent performance, net charge-offs as a percentage of loans were below M&T's long-term average."
Earnings Highlights
Change 4Q 2016 vs.
------------------
($ in millions, except per share data) 4Q16 4Q15 3Q16 4Q15 3Q16
---- ---- ---- ---- ----
Net income $331 $271 $350 22% -6%
Net income available to common shareholders - diluted $308 $248 $327 24% -6%
Diluted earnings per common share $1.98 $1.65 $2.10 20% -6%
Annualized return on average assets 1.05% .93% 1.12%
Annualized return on average common equity 8.13% 7.22% 8.68%
For the year ended December 31, 2016, diluted earnings per common share were $7.78, up 8% from $7.18 in 2015. GAAP-basis net income for 2016 aggregated $1.32 billion, 22% higher than $1.08 billion in 2015. Expressed as a rate of return on average assets, GAAP-basis net income was 1.06% in each of 2016 and 2015 while the rate of return on average common shareholders' equity was 8.16% in 2016 and 8.32% in 2015.
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 $2.01 in the fourth quarter of 2016, compared with $2.09 in the year-earlier quarter and $2.13 in the third quarter of 2016. Net operating income during the recent quarter was $336 million, compared with $338 million in the fourth quarter of 2015 and $356 million in 2016's third quarter. The combined impact of the securities transactions and the charitable contribution noted earlier increased net operating income in the third quarter and decreased such income in the fourth quarter of 2016 by $17 million, or $.11 per diluted common share. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.10% and 11.93%, respectively, in the recent quarter, compared with 1.21% and 13.26%, respectively, in the fourth quarter of 2015 and 1.18% and 12.77%, respectively, in the third quarter of 2016.
For the year ended December 31, 2016, diluted net operating earnings per common share were $8.08, up 4% from $7.74 in 2015. Net operating income in 2016 rose 18% to $1.36 billion from $1.16 billion in 2015. Expressed as a rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.14% and 12.25%, respectively, in 2016 and 1.18% and 13.00%, respectively, in 2015.
Taxable-equivalent Net Interest Income. Net interest income expressed on a taxable-equivalent basis totaled $883 million in the fourth quarter of 2016, up 9% from $813 million in the year-earlier quarter. Contributing to that improvement was a 10% increase in average earning assets, which grew to $114.3 billion in the recent quarter from $103.6 billion in the fourth quarter of 2015. The growth in earning assets was predominantly the result of higher average loans, which rose to $90.0 billion in the recent quarter, up $8.9 billion, or 11%, from the fourth quarter of 2015. Partially offsetting the favorable impact of the asset growth was a 4 basis point narrowing of the net interest margin to 3.08% in the recent quarter from 3.12% in the fourth quarter of 2015. The narrowing reflects higher rates paid on interest-bearing time deposits associated with the acquisition of Hudson City Bancorp, Inc. ("Hudson City"). Taxable-equivalent net interest income in the recent quarter was 2% higher than $865 million in the third quarter of 2016. The improvement resulted from a $1.4 billion increase in average earning assets, due to growth in average balances of investment securities and loans, and a 3 basis point widening of the net interest margin from 3.05% in the third quarter of 2016. That widening reflects the impact of higher interest rates resulting from actions initiated in December by the Federal Reserve to increase its target federal funds rate.
Taxable-equivalent Net Interest Income
Change 4Q 2016 vs.
------------------
($ in millions) 4Q16 4Q15 3Q16 4Q15 3Q16
---- ---- ---- ---- ----
Average earning assets $114,254 $103,587 $112,864 10% 1%
Net interest income -taxable
equivalent $883 $813 $865 9% 2%
Net interest margin 3.08% 3.12% 3.05%
Provision for Credit Losses/Asset Quality. The provision for credit losses was $62 million in the recent quarter, $58 million in the fourth quarter of 2015 and $47 million in 2016's third quarter. Net charge-offs of loans were $49 million during the fourth quarter of 2016, compared with $36 million and $41 million in the fourth quarter of 2015 and third quarter of 2016, respectively. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .22% and .18% in the fourth quarters of 2016 and 2015, respectively, and .19% in the third quarter of 2016. The provision for credit losses was $190 million for the year ended December 31, 2016, compared with $170 million in 2015. Net loan charge-offs during 2016 and 2015 totaled $157 million and $134 million, respectively, or .18% and .19%, respectively, of average loans outstanding.
Loans classified as nonaccrual totaled $920 million, or 1.01% of total loans outstanding at December 31, 2016, compared with $799 million or .91% at December 31, 2015 and $837 million or .93% at September 30, 2016. The higher level of nonaccrual loans at the recent quarter-end as compared with September 30, 2016 reflects higher commercial loans in this category and the normal migration of previously performing loans obtained in the acquisition of Hudson City that became past due over 90 days during the fourth quarter of 2016, and, as such, were not identifiable as purchased impaired as of the acquisition date. Nonaccrual Hudson City-related residential real estate loans aggregated $190 million and $149 million at December 31 and September 30, 2016, respectively. Following the acquisition accounting provisions of GAAP, Hudson City-related loans classified as nonaccrual were insignificant at December 31, 2015. Assets taken in foreclosure of defaulted loans totaled $139 million at December 31, 2016, compared with $195 million a year earlier and $160 million at September 30, 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 $989 million at December 31, 2016, compared with $956 million at December 31, 2015 and $976 million at September 30, 2016. The allowance represented 1.09% of loans outstanding at each of those dates.
Asset Quality Metrics
Change 4Q 2016 vs.
------------------
($ in millions) 4Q16 4Q15 3Q16 4Q15 3Q16
---- ---- ---- ---- ----
At end of quarter
-----------------
Nonaccrual loans $920 $799 $837 15% 10%
Real estate and other foreclosed assets $139 $195 $160 -29% -13%
---- ---- ----
Total nonperforming assets $1,059 $994 $997 7% 6%
Accruing loans past due 90 days or more (1) $301 $317 $317 -5% -5%
Nonaccrual loans as % of loans outstanding 1.01% .91% .93%
Allowance for credit losses $989 $956 $976 3% 1%
Allowance for credit losses as % of loans
outstanding 1.09% 1.09% 1.09%
For the period
--------------
Provision for credit losses $62 $58 $47 7% 32%
Net charge-offs $49 $36 $41 37% 19%
Net charge-offs as % of average loans (annualized) .22% .18% .19%
(1) Excludes loans acquired at a
discount. Predominantly
residential real estate loans.
Noninterest Income and Expense. Noninterest income totaled $465 million in the recent quarter, compared with $448 million in the fourth quarter of 2015 and $491 million in the third quarter of 2016. The recent quarter's improvement as compared with the final 2015 quarter resulted largely from higher mortgage banking revenues and trust income. As compared with the third quarter of 2016, lower gains on investment securities and declines in residential mortgage banking revenues and trading account and foreign exchange gains were the predominant factors for the recent quarter's decline in noninterest income.
Noninterest Income
Change 4Q 2016 vs.
------------------
($ in millions) 4Q16 4Q15 3Q16 4Q15 3Q16
---- ---- ---- ---- ----
Mortgage banking revenues $98 $88 $104 13% -5%
Service charges on deposit accounts 105 106 108 -1% -3%
Trust income 122 114 119 6% 3%
Brokerage services income 15 15 16 -2% -4%
Trading account and foreign exchange gains 7 10 12 -23% -40%
Gain (loss) on bank investment securities 2 - 28 - -
Other revenues from operations 116 115 104 1% 11%
--- --- ---
Total other income $465 $448 $491 4% -5%
Noninterest income totaled $1.83 billion in each of 2016 and 2015. Higher gains on investment securities and trading account and foreign exchange activities in 2016 were offset by a $45 million gain in 2015 from the sale of M&T's trade processing business.
Noninterest expense totaled $769 million in the fourth quarter of 2016, $786 million in the fourth quarter of 2015 and $752 million in the third quarter of 2016. 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 $760 million in the recent quarter, $701 million in the fourth quarter of 2015 and $743 million in the third quarter of 2016. Significant factors for the higher level of operating expenses in the recent quarter as compared with the final quarter of 2015 were the $30 million contribution to The M&T Charitable Foundation and higher FDIC assessments. The increase in operating expense from the third quarter of 2016 also resulted from the recent quarter's charitable contribution that was partially offset by lower salaries and benefits and equipment and net occupancy costs.
Noninterest Expense
Change 4Q 2016 vs.
------------------
($ in millions) 4Q16 4Q15 3Q16 4Q15 3Q16
---- ---- ---- ---- ----
Salaries and employee benefits $393 $434 $400 -9% -2%
Equipment and net occupancy 70 71 75 -1% -7%
Outside data processing and software 44 45 43 -3% 3%
FDIC assessments 29 20 28 48% 2%
Advertising and marketing 21 18 22 18% -4%
Printing, postage and supplies 9 11 9 -20% -3%
Amortization of core deposit and other
intangible assets 9 9 10 -5% -7%
Other costs of operations 194 178 165 9% 17%
--- --- ---
Total other expense $769 $786 $752 -2% 2%
Memo: Merger-related expenses included in
above $ - $76 $ -
For the year ended December 31, 2016, noninterest expense aggregated $3.05 billion, compared with $2.82 billion in 2015. Noninterest operating expenses were $2.97 billion and $2.72 billion in 2016 and 2015, respectively. Those increases reflect the full year impact of noninterest expenses associated with Hudson City that was acquired by M&T on November 1, 2015.
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 56.4% in the recent quarter, 55.5% in the year-earlier quarter and 55.9% in the third quarter of 2016. The efficiency ratio for the full year 2016 was 56.1%, improved from 58.0% in 2015.
Balance Sheet. M&T had total assets of $123.4 billion at December 31, 2016 , compared with $122.8 billion at December 31, 2015. Investment securities totaled $16.3 billion at the end of 2016, up 4% from $15.7 billion at December 31, 2015. Loans and leases, net of unearned discount, aggregated $90.9 billion at December 31, 2016, $3.4 billion or 4% above $87.5 billion a year earlier. Total deposits also increased 4% to $95.5 billion at the recent year-end from $92.0 billion at December 31, 2015.
Total shareholders' equity rose 2% to $16.5 billion at December 31, 2016 from $16.2 billion a year earlier, representing 13.35% and 13.17%, respectively, of total assets. Common shareholders' equity was $15.3 billion, or $97.64 per share, at December 31, 2016, compared with $14.9 billion, or $93.60 per share, at December 31, 2015. Tangible equity per common share of $67.85 at December 31, 2016 was up 6% from $64.28 at December 31, 2015. Common shareholders' equity per share and tangible equity per common share were $97.47 and $67.42, respectively, at September 30, 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 10.96% at December 31, 2016.
In accordance with its 2016 capital plan, M&T repurchased 300,000 shares of its common stock during the recent quarter at an average cost per share of $124.45, for a total cost of $37 million. During 2016, M&T repurchased a total of 5,607,595 shares of its common stock at an average cost per share of $114.37, for a total cost of $641 million.
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 #46296658. 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 through Tuesday, January 24, 2017 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #46296658. 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 Year ended
December 31 December 31
----------- -----------
Amounts in thousands, except per share 2016 2015 Change 2016 2015 Change
---- ---- ------ ---- ---- ------
Performance
-----------
Net income $330,571 270,965 22% $1,315,114 1,079,667 22%
Net income available to common shareholders 307,797 248,059 24% 1,223,481 987,724 24%
Per common share:
Basic earnings $1.98 1.65 20% $7.80 7.22 8%
Diluted earnings 1.98 1.65 20% 7.78 7.18 8%
Cash dividends $.70 .70 - $2.80 2.80 -
Common shares outstanding:
Average - diluted (1) 155,700 150,718 3% 157,304 137,533 14%
Period end (2) 156,213 159,600 -2% 156,213 159,600 -2%
Return on (annualized):
Average total assets 1.05% .93% 1.06% 1.06%
Average common shareholders' equity 8.13% 7.22% 8.16% 8.32%
Taxable-equivalent net interest income $883,147 813,401 9% $3,496,849 2,867,050 22%
Yield on average earning assets 3.45% 3.48% 3.49% 3.50%
Cost of interest-bearing liabilities .57% .54% .56% .55%
Net interest spread 2.88% 2.94% 2.93% 2.95%
Contribution of interest-free funds .20% .18% .18% .19%
Net interest margin 3.08% 3.12% 3.11% 3.14%
Net charge-offs to average total net loans (annualized) .22% .18% .18% .19%
Net operating results (3)
------------------------
Net operating income $336,095 337,613 - $1,362,692 1,156,637 18%
Diluted net operating earnings per common share 2.01 2.09 -4% 8.08 7.74 4%
Return on (annualized):
Average tangible assets 1.10% 1.21% 1.14% 1.18%
Average tangible common equity 11.93% 13.26% 12.25% 13.00%
Efficiency ratio 56.42% 55.53% 56.10% 57.98%
At December 31
--------------
Loan quality 2016 2015 Change
------------ ---- ---- ------
Nonaccrual loans $920,015 799,409 15%
Real estate and other foreclosed assets 139,206 195,085 -29%
------- -------
Total nonperforming assets $1,059,221 994,494 7%
========== =======
Accruing loans past due 90 days or more (4) $300,659 317,441 -5%
Government guaranteed loans included in totals above:
Nonaccrual loans $40,610 47,052 -14%
Accruing loans past due 90 days or more 282,659 276,285 2%
Renegotiated loans $190,374 182,865 4%
Accruing loans acquired at a discount past due 90 days or more (5) $61,144 68,473 -11%
Purchased impaired loans (6):
Outstanding customer balance $927,446 1,204,004 -23%
Carrying amount 578,032 768,329 -25%
Nonaccrual loans to total net loans 1.01% .91%
Allowance for credit losses to total loans 1.09% 1.09%
(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
------------------
December 31, September 30, June 30, March 31, December 31,
Amounts in thousands, except per share 2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Performance
-----------
Net income $330,571 349,984 336,031 298,528 270,965
Net income available to common shareholders 307,797 326,998 312,974 275,748 248,059
Per common share:
Basic earnings $1.98 2.10 1.98 1.74 1.65
Diluted earnings 1.98 2.10 1.98 1.73 1.65
Cash dividends $.70 .70 .70 .70 .70
Common shares outstanding:
Average - diluted (1) 155,700 156,026 158,341 159,181 150,718
Period end (2) 156,213 154,987 157,917 159,156 159,600
Return on (annualized):
Average total assets 1.05% 1.12% 1.09% .97% .93%
Average common shareholders' equity 8.13% 8.68% 8.38% 7.44% 7.22%
Taxable-equivalent net interest income $883,147 865,065 870,341 878,296 813,401
Yield on average earning assets 3.45% 3.44% 3.51% 3.54% 3.48%
Cost of interest-bearing liabilities .57% .59% .56% .53% .54%
Net interest spread 2.88% 2.85% 2.95% 3.01% 2.94%
Contribution of interest-free funds .20% .20% .18% .17% .18%
Net interest margin 3.08% 3.05% 3.13% 3.18% 3.12%
Net charge-offs to average total net loans (annualized) .22% .19% .11% .19% .18%
Net operating results (3)
------------------------
Net operating income $336,095 355,929 350,604 320,064 337,613
Diluted net operating earnings per common share 2.01 2.13 2.07 1.87 2.09
Return on (annualized):
Average tangible assets 1.10% 1.18% 1.18% 1.09% 1.21%
Average tangible common equity 11.93% 12.77% 12.68% 11.62% 13.26%
Efficiency ratio 56.42% 55.92% 55.06% 57.00% 55.53%
December 31, September 30, June 30, March 31, December 31,
Loan quality 2016 2016 2016 2016 2015
------------ ---- ---- ---- ---- ----
Nonaccrual loans $920,015 837,362 848,855 876,691 799,409
Real estate and other foreclosed assets 139,206 159,881 172,473 188,004 195,085
------- ------- ------- ------- -------
Total nonperforming assets $1,059,221 997,243 1,021,328 1,064,695 994,494
========== ======= ========= ========= =======
Accruing loans past due 90 days or more (4) $300,659 317,282 298,449 336,170 317,441
Government guaranteed loans included in totals above:
Nonaccrual loans $40,610 47,130 52,486 49,688 47,052
Accruing loans past due 90 days or more 282,659 282,077 269,962 279,340 276,285
Renegotiated loans $190,374 217,559 211,159 200,771 182,865
Accruing loans acquired at a discount past due 90 days or more (5) $61,144 65,182 68,591 61,767 68,473
Purchased impaired loans (6):
Outstanding customer balance $927,446 981,105 1,040,678 1,124,776 1,204,004
Carrying amount 578,032 616,991 662,059 715,874 768,329
Nonaccrual loans to total net loans 1.01% .93% .96% 1.00% .91%
Allowance for credit losses to total loans 1.09% 1.09% 1.10% 1.10% 1.09%
(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 Year ended
December 31 December 31
----------- -----------
Dollars in thousands 2016 2015 Change 2016 2015 Change
---- ---- ------ ---- ---- ------
Interest income $982,901 902,377 9% $3,895,871 3,170,844 23%
Interest expense 107,137 95,333 12 425,984 328,257 30
------- ------ ------- -------
Net interest income 875,764 807,044 9 3,469,887 2,842,587 22
Provision for credit losses 62,000 58,000 7 190,000 170,000 12
------ ------ ------- -------
Net interest income after provision for credit losses 813,764 749,044 9 3,279,887 2,672,587 23
------- ------- --------- ---------
Other income
Mortgage banking revenues 98,504 87,500 13 373,697 375,738 -1
Service charges on deposit accounts 104,890 105,748 -1 419,102 420,608 -
Trust income 122,003 114,564 6 472,184 470,640 -
Brokerage services income 15,233 15,546 -2 63,423 64,770 -2
Trading account and foreign exchange gains 7,692 9,938 -23 41,126 30,577 34
Gain (loss) on bank investment securities 1,566 (22) - 30,314 (130) -
Other revenues from operations 115,571 114,834 1 426,150 462,834 -8
------- ------- ------- -------
Total other income 465,459 448,108 4 1,825,996 1,825,037 -
------- ------- --------- ---------
Other expense
Salaries and employee benefits 393,354 434,413 -9 1,623,600 1,549,530 5
Equipment and net occupancy 69,976 70,747 -1 295,141 272,539 8
Outside data processing and software 43,987 45,251 -3 172,389 164,133 5
FDIC assessments 28,991 19,562 48 105,045 52,113 102
Advertising and marketing 21,074 17,892 18 87,137 59,227 47
Printing, postage and supplies 8,681 10,905 -20 39,546 38,491 3
Amortization of core deposit and other intangible assets 9,089 9,576 -5 42,613 26,424 61
Other costs of operations 193,951 177,767 9 682,014 660,475 3
------- ------- ------- -------
Total other expense 769,103 786,113 -2 3,047,485 2,822,932 8
------- ------- --------- ---------
Income before income taxes 510,120 411,039 24 2,058,398 1,674,692 23
Applicable income taxes 179,549 140,074 28 743,284 595,025 25
------- ------- ------- -------
Net income $330,571 270,965 22% $1,315,114 1,079,667 22%
======== ======= ========== =========
Condensed Consolidated Statement of Income, Five Quarter Trend
Three months ended
------------------
December 31, September 30, June 30, March 31, December 31,
Dollars in thousands 2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Interest income $982,901 969,515 970,621 972,834 902,377
Interest expense 107,137 111,175 106,802 100,870 95,333
------- ------- ------- ------- ------
Net interest income 875,764 858,340 863,819 871,964 807,044
Provision for credit losses 62,000 47,000 32,000 49,000 58,000
------ ------ ------ ------ ------
Net interest income after provision for credit losses 813,764 811,340 831,819 822,964 749,044
------- ------- ------- ------- -------
Other income
Mortgage banking revenues 98,504 103,747 89,383 82,063 87,500
Service charges on deposit accounts 104,890 107,935 103,872 102,405 105,748
Trust income 122,003 118,654 120,450 111,077 114,564
Brokerage services income 15,233 15,914 16,272 16,004 15,546
Trading account and foreign exchange gains 7,692 12,754 13,222 7,458 9,938
Gain (loss) on bank investment securities 1,566 28,480 264 4 (22)
Other revenues from operations 115,571 103,866 104,791 101,922 114,834
------- ------- ------- ------- -------
Total other income 465,459 491,350 448,254 420,933 448,108
------- ------- ------- ------- -------
Other expense
Salaries and employee benefits 393,354 399,786 398,675 431,785 434,413
Equipment and net occupancy 69,976 75,263 75,724 74,178 70,747
Outside data processing and software 43,987 42,878 42,509 43,015 45,251
FDIC assessments 28,991 28,459 22,370 25,225 19,562
Advertising and marketing 21,074 21,996 22,613 21,454 17,892
Printing, postage and supplies 8,681 8,972 9,907 11,986 10,905
Amortization of core deposit and other intangible assets 9,089 9,787 11,418 12,319 9,576
Other costs of operations 193,951 165,251 166,679 156,133 177,767
------- ------- ------- ------- -------
Total other expense 769,103 752,392 749,895 776,095 786,113
------- ------- ------- ------- -------
Income before income taxes 510,120 550,298 530,178 467,802 411,039
Applicable income taxes 179,549 200,314 194,147 169,274 140,074
------- ------- ------- ------- -------
Net income $330,571 349,984 336,031 298,528 270,965
======== ======= ======= ======= =======
Condensed Consolidated Balance Sheet
December 31
-----------
Dollars in thousands 2016 2015 Change
---- ---- ------
ASSETS
Cash and due from banks $1,320,549 1,368,040 -3 %
Interest-bearing deposits at banks 5,000,638 7,594,350 -34
Trading account assets 323,867 273,783 18
Investment securities 16,250,468 15,656,439 4
Loans and leases:
Commercial, financial, etc. 22,610,047 20,422,338 11
Real estate - commercial 33,506,394 29,197,311 15
Real estate - consumer 22,590,912 26,270,103 -14
Consumer 12,146,063 11,599,747 5
---------- ----------
Total loans and leases, net of unearned discount 90,853,416 87,489,499 4
Less: allowance for credit losses 988,997 955,992 3
------- -------
Net loans and leases 89,864,419 86,533,507 4
Goodwill 4,593,112 4,593,112 -
Core deposit and other intangible assets 97,655 140,268 -30
Other assets 5,998,498 6,628,385 -10
--------- ---------
Total assets $123,449,206 122,787,884 1 %
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $32,456,102 29,110,635 11 %
Interest-bearing deposits 62,835,847 62,677,036 -
Deposits at Cayman Islands office 201,927 170,170 19
------- -------
Total deposits 95,493,876 91,957,841 4
Short-term borrowings 163,442 2,132,182 -92
Accrued interest and other liabilities 1,811,431 1,870,714 -3
Long-term borrowings 9,493,835 10,653,858 -11
--------- ----------
Total liabilities 106,962,584 106,614,595 -
Shareholders' equity:
Preferred 1,231,500 1,231,500 -
Common (1) 15,255,122 14,941,789 2
---------- ----------
Total shareholders' equity 16,486,622 16,173,289 2
---------- ----------
Total liabilities and shareholders' equity $123,449,206 122,787,884 1 %
============ ===========
(1) Reflects accumulated other
comprehensive loss, net of
applicable income tax effect, of
$294.6 million at December 31, 2016
and $251.6 million at December 31,
2015.
Condensed Consolidated Balance Sheet, Five Quarter Trend
December 31, September 30, June 30, March 31, December 31,
Dollars in thousands 2016 2016 2016 2016 2015
---- ---- ---- ---- ----
ASSETS
Cash and due from banks $1,320,549 1,332,202 1,284,442 1,178,175 1,368,040
Interest-bearing deposits at banks 5,000,638 10,777,636 8,474,839 9,545,181 7,594,350
Trading account assets 323,867 488,588 506,131 467,987 273,783
Investment securities 16,250,468 14,733,574 14,963,084 15,467,320 15,656,439
Loans and leases:
Commercial, financial, etc. 22,610,047 21,917,163 21,469,242 21,226,577 20,422,338
Real estate - commercial 33,506,394 32,078,762 30,711,230 29,713,293 29,197,311
Real estate - consumer 22,590,912 23,584,420 24,530,249 25,299,638 26,270,103
Consumer 12,146,063 12,066,147 11,811,277 11,632,958 11,599,747
---------- ---------- ---------- ---------- ----------
Total loans and leases, net of unearned discount 90,853,416 89,646,492 88,521,998 87,872,466 87,489,499
Less: allowance for credit losses 988,997 976,121 970,496 962,752 955,992
------- ------- ------- ------- -------
Net loans and leases 89,864,419 88,670,371 87,551,502 86,909,714 86,533,507
Goodwill 4,593,112 4,593,112 4,593,112 4,593,112 4,593,112
Core deposit and other intangible assets 97,655 106,744 116,531 127,949 140,268
Other assets 5,998,498 6,138,801 6,330,943 6,336,194 6,628,385
--------- --------- --------- --------- ---------
Total assets $123,449,206 126,841,028 123,820,584 124,625,632 122,787,884
============ =========== =========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $32,456,102 33,127,627 30,700,066 29,709,218 29,110,635
Interest-bearing deposits 62,835,847 64,786,035 63,756,514 64,338,571 62,677,036
Deposits at Cayman Islands office 201,927 223,183 193,523 166,787 170,170
------- ------- ------- ------- -------
Total deposits 95,493,876 98,136,845 94,650,103 94,214,576 91,957,841
Short-term borrowings 163,442 213,846 407,123 1,766,826 2,132,182
Accrued interest and other liabilities 1,811,431 1,938,201 1,963,093 1,948,142 1,870,714
Long-term borrowings 9,493,835 10,211,160 10,328,751 10,341,035 10,653,858
--------- ---------- ---------- ---------- ----------
Total liabilities 106,962,584 110,500,052 107,349,070 108,270,579 106,614,595
Shareholders' equity:
Preferred 1,231,500 1,231,500 1,231,500 1,231,500 1,231,500
Common (1) 15,255,122 15,109,476 15,240,014 15,123,553 14,941,789
---------- ---------- ---------- ---------- ----------
Total shareholders' equity 16,486,622 16,340,976 16,471,514 16,355,053 16,173,289
---------- ---------- ---------- ---------- ----------
Total liabilities and shareholders' equity $123,449,206 126,841,028 123,820,584 124,625,632 122,787,884
============ =========== =========== =========== ===========
(1) Reflects accumulated other
comprehensive loss, net of
applicable income tax effect, of
$294.6 million at December 31, 2016,
$114.6 million at September 30,
2016, $101.0 million at June 30,
2016, $150.2 million at March 31,
2016 and $251.6 million at December
31, 2015.
Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates
Three months ended Change in balance Year ended
------------------
December 31, December 31, September 30, December 31, 2016 from December 31 Change
---------------------- -----------
Dollars in millions 2016 2015 2016 December 31, September 30, 2016 2015 in
---- ---- ---- ---- ----
Balance Rate Balance Rate Balance Rate 2015 2016 Balance Rate Balance Rate balance
------- ---- ------- ---- ------- ---- ---- ---- ------- ---- ------- ---- -------
ASSETS
Interest-bearing deposits at banks $8,790 .54 % 6,622 .30 % 9,681 .51 % 33 % -9 % $8,846 .51 % 5,775 .26 % 53 %
Federal funds sold - - 1 .54 - - -100 - - - 34 .10 -100
Trading account assets 70 2.05 68 1.88 90 1.52 3 -22 85 1.71 86 1.44 -2
Investment securities 15,417 2.28 15,786 2.55 14,361 2.38 -2 7 15,009 2.44 14,456 2.62 4
Loans and leases, net of unearned discount
Commercial, financial, etc. 21,936 3.47 20,221 3.23 21,480 3.44 8 2 21,397 3.44 19,899 3.21 8
Real estate - commercial 32,822 4.01 28,973 4.11 31,252 4.00 13 5 30,915 4.06 28,276 4.16 9
Real estate - consumer 23,096 3.88 20,369 4.01 24,058 3.92 13 -4 24,463 3.92 11,458 4.09 114
Consumer 12,123 4.53 11,547 4.44 11,942 4.55 5 2 11,841 4.54 11,203 4.46 6
------ ------ ------ ------ ------
Total loans and leases, net 89,977 3.93 81,110 3.92 88,732 3.93 11 1 88,616 3.96 70,836 3.95 25
------ ------ ------ ------ ------
Total earning assets 114,254 3.45 103,587 3.48 112,864 3.44 10 1 112,556 3.49 91,187 3.50 23
Goodwill 4,593 4,218 4,593 9 - 4,593 3,694 24
Core deposit and other intangible assets 102 101 112 - -9 117 45 163
Other assets 6,785 7,146 7,156 -5 -5 7,074 6,854 3
----- ----- ----- ----- -----
Total assets $125,734 115,052 124,725 9 % 1 % $124,340 101,780 22 %
======== ======= ======= ======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Savings and interest-checking deposits $54,055 .20 47,305 .11 52,516 .18 14 % 3 % $52,194 .17 43,885 .11 19 %
Time deposits 10,936 .86 9,686 .65 12,334 .90 13 -11 12,253 .84 4,641 .58 164
Deposits at Cayman Islands office 206 .42 224 .30 220 .37 -8 -6 199 .40 216 .28 -8
--- --- --- --- ---
Total interest-bearing deposits 65,197 .31 57,215 .21 65,070 .32 14 - 64,646 .30 48,742 .15 33
------ ------ ------ ------ ------
Short-term borrowings 200 .30 1,615 .39 231 .29 -88 -14 894 .41 548 .31 63
Long-term borrowings 9,901 2.26 10,748 2.36 10,287 2.28 -8 -4 10,252 2.25 10,217 2.47 -
----- ------ ------
Total interest-bearing liabilities 75,298 .57 69,578 .54 75,588 .59 8 - 75,792 .56 59,507 .55 27
Noninterest-bearing deposits 31,717 28,443 30,782 12 3 30,160 27,324 10
Other liabilities 2,046 2,024 2,008 1 2 1,969 1,721 14
----- ----- ----- ----- -----
Total liabilities 109,061 100,045 108,378 9 1 107,921 88,552 22
Shareholders' equity 16,673 15,007 16,347 11 2 16,419 13,228 24
------ ------ ------ ------ ------
Total liabilities and shareholders' equity $125,734 115,052 124,725 9 % 1 % $124,340 101,780 22 %
======== ======= ======= ======== =======
Net interest spread 2.88 2.94 2.85 2.93 2.95
Contribution of interest-free funds .20 .18 .20 .18 .19
Net interest margin 3.08 % 3.12 % 3.05 % 3.11 % 3.14 %
Reconciliation of GAAP to Non-GAAP Measures
Three months ended Year ended
December 31 December 31
----------- -----------
2016 2015 2016 2015
---- ---- ---- ----
Income statement data
---------------------
In thousands, except per share
Net income
Net income $330,571 270,965 1,315,114 1,079,667
Amortization of core deposit and other intangible assets (1) 5,524 5,828 25,893 16,150
Merger-related expenses (1) - 60,820 21,685 60,820
--- ------ ------ ------
Net operating income $336,095 337,613 1,362,692 1,156,637
======== ======= ========= =========
Earnings per common share
Diluted earnings per common share $1.98 1.65 7.78 7.18
Amortization of core deposit and other intangible assets (1) .03 .04 .16 .12
Merger-related expenses (1) - .40 .14 .44
--- --- --- ---
Diluted net operating earnings per common share $2.01 2.09 8.08 7.74
===== ==== ==== ====
Other expense
Other expense $769,103 786,113 3,047,485 2,822,932
Amortization of core deposit and other intangible assets (9,089) (9,576) (42,613) (26,424)
Merger-related expenses - (75,976) (35,755) (75,976)
--- ------- ------- -------
Noninterest operating expense $760,014 700,561 2,969,117 2,720,532
======== ======= ========= =========
Merger-related expenses
Salaries and employee benefits $ - 51,287 5,334 51,287
Equipment and net occupancy - 3 1,278 3
Outside data processing and software - 785 1,067 785
Advertising and marketing - 79 10,522 79
Printing, postage and supplies - 504 1,482 504
Other costs of operations - 23,318 16,072 23,318
--- ------ ------ ------
Other expense - 75,976 35,755 75,976
Provision for credit losses - 21,000 - 21,000
--- ------ --- ------
Total $ - 96,976 35,755 96,976
=== === ====== ====== ======
Efficiency ratio
Noninterest operating expense (numerator) $760,014 700,561 2,969,117 2,720,532
======== ======= ========= =========
Taxable-equivalent net interest income 883,147 813,401 3,496,849 2,867,050
Other income 465,459 448,108 1,825,996 1,825,037
Less: Gain (loss) on bank investment securities 1,566 (22) 30,314 (130)
----- --- ------ ----
Denominator $1,347,040 1,261,531 5,292,531 4,692,217
========== ========= ========= =========
Efficiency ratio 56.42% 55.53% 56.10% 57.98%
===== ===== ===== =====
Balance sheet data
------------------
In millions
Average assets
Average assets $125,734 115,052 124,340 101,780
Goodwill (4,593) (4,218) (4,593) (3,694)
Core deposit and other intangible assets (102) (101) (117) (45)
Deferred taxes 40 39 46 16
--- --- --- ---
Average tangible assets $121,079 110,772 119,676 98,057
======== ======= ======= ======
Average common equity
Average total equity $16,673 15,007 16,419 13,228
Preferred stock (1,492) (1,232) (1,297) (1,232)
------ ------ ------ ------
Average common equity 15,181 13,775 15,122 11,996
Goodwill (4,593) (4,218) (4,593) (3,694)
Core deposit and other intangible assets (102) (101) (117) (45)
Deferred taxes 40 39 46 16
--- --- --- ---
Average tangible common equity $10,526 9,495 10,458 8,273
======= ===== ====== =====
At end of quarter
Total assets
Total assets $123,449 122,788
Goodwill (4,593) (4,593)
Core deposit and other intangible assets (98) (140)
Deferred taxes 39 54
--- ---
Total tangible assets $118,797 118,109
======== =======
Total common equity
Total equity $16,487 16,173
Preferred stock (1,232) (1,232)
Undeclared dividends - cumulative preferred stock (3) (2)
--- ---
Common equity, net of undeclared cumulative preferred
dividends 15,252 14,939
Goodwill (4,593) (4,593)
Core deposit and other intangible assets (98) (140)
Deferred taxes 39 54
--- ---
Total tangible common equity $10,600 10,260
======= ======
(1) After any related
tax effect.
Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
Three months ended
------------------
December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Income statement data
---------------------
In thousands, except per share
Net income
Net income $330,571 349,984 336,031 298,528 270,965
Amortization of core deposit and other intangible assets (1) 5,524 5,945 6,936 7,488 5,828
Merger-related expenses (1) - - 7,637 14,048 60,820
--- --- ----- ------ ------
Net operating income $336,095 355,929 350,604 320,064 337,613
======== ======= ======= ======= =======
Earnings per common share
Diluted earnings per common share $1.98 2.10 1.98 1.73 1.65
Amortization of core deposit and other intangible assets (1) .03 .03 .04 .05 .04
Merger-related expenses (1) - - .05 .09 .40
--- --- --- --- ---
Diluted net operating earnings per common share $2.01 2.13 2.07 1.87 2.09
===== ==== ==== ==== ====
Other expense
Other expense $769,103 752,392 749,895 776,095 786,113
Amortization of core deposit and other intangible assets (9,089) (9,787) (11,418) (12,319) (9,576)
Merger-related expenses - - (12,593) (23,162) (75,976)
--- --- ------- ------- -------
Noninterest operating expense $760,014 742,605 725,884 740,614 700,561
======== ======= ======= ======= =======
Merger-related expenses
Salaries and employee benefits $ - - 60 5,274 51,287
Equipment and net occupancy - - 339 939 3
Outside data processing and software - - 352 715 785
Advertising and marketing - - 6,327 4,195 79
Printing, postage and supplies - - 545 937 504
Other costs of operations - - 4,970 11,102 23,318
--- --- ----- ------ ------
Other expense - - 12,593 23,162 75,976
Provision for credit losses - - - - 21,000
--- --- --- --- ------
Total $ - - 12,593 23,162 96,976
=== === === ====== ====== ======
Efficiency ratio
Noninterest operating expense (numerator) $760,014 742,605 725,884 740,614 700,561
======== ======= ======= ======= =======
Taxable-equivalent net interest income 883,147 865,065 870,341 878,296 813,401
Other income 465,459 491,350 448,254 420,933 448,108
Less: Gain (loss) on bank investment securities 1,566 28,480 264 4 (22)
----- ------ --- --- ---
Denominator $1,347,040 1,327,935 1,318,331 1,299,225 1,261,531
========== ========= ========= ========= =========
Efficiency ratio 56.42% 55.92% 55.06% 57.00% 55.53%
===== ===== ===== ===== =====
Balance sheet data
------------------
In millions
Average assets
Average assets $125,734 124,725 123,706 123,252 115,052
Goodwill (4,593) (4,593) (4,593) (4,593) (4,218)
Core deposit and other intangible assets (102) (112) (122) (134) (101)
Deferred taxes 40 44 48 52 39
--- --- --- --- ---
Average tangible assets $121,079 120,064 119,039 118,577 110,772
======== ======= ======= ======= =======
Average common equity
Average total equity $16,673 16,347 16,377 16,279 15,007
Preferred stock (1,492) (1,232) (1,232) (1,232) (1,232)
------ ------ ------ ------ ------
Average common equity 15,181 15,115 15,145 15,047 13,775
Goodwill (4,593) (4,593) (4,593) (4,593) (4,218)
Core deposit and other intangible assets (102) (112) (122) (134) (101)
Deferred taxes 40 44 48 52 39
--- --- --- --- ---
Average tangible common equity $10,526 10,454 10,478 10,372 9,495
======= ====== ====== ====== =====
At end of quarter
Total assets
Total assets $123,449 126,841 123,821 124,626 122,788
Goodwill (4,593) (4,593) (4,593) (4,593) (4,593)
Core deposit and other intangible assets (98) (107) (117) (128) (140)
Deferred taxes 39 42 46 50 54
--- --- --- --- ---
Total tangible assets $118,797 122,183 119,157 119,955 118,109
======== ======= ======= ======= =======
Total common equity
Total equity $16,487 16,341 16,472 16,355 16,173
Preferred stock (1,232) (1,232) (1,232) (1,232) (1,232)
Undeclared dividends - cumulative preferred stock (3) (3) (3) (3) (2)
--- --- --- --- ---
Common equity, net of undeclared cumulative preferred dividends 15,252 15,106 15,237 15,120 14,939
Goodwill (4,593) (4,593) (4,593) (4,593) (4,593)
Core deposit and other intangible assets (98) (107) (117) (128) (140)
Deferred taxes 39 42 46 50 54
--- --- --- --- ---
Total tangible common equity $10,600 10,448 10,573 10,449 10,260
======= ====== ====== ====== ======
(1) After any related
tax effect.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/mt-bank-corporation-announces-2016-fourth-quarter-and-full-year-results-300393487.html
SOURCE M&T Bank Corporation
