M&T BANK CORPORATION BUFFALO, N.Y., July 17, 2014 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2014.
GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the second quarter of 2014 were $1.98, up 23% from $1.61 in the first quarter of 2014. GAAP-basis net income in the recent quarter totaled $284 million, compared with $229 million in the initial 2014 quarter. Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income for the recent quarter was 1.27% and 9.79%, respectively, compared with 1.07% and 8.22%, respectively, in the first quarter of 2014.
The recent quarter's results reflect two noteworthy, but largely offsetting, items. The resolution with tax authorities of previously uncertain tax positions required M&T to reduce its accrual for income taxes and increase net income by $8 million, while an increase to M&T's litigation reserves of $12 million reduced net income by $7 million after applicable tax effect. Both accrual items were associated with pre-acquisition activities of M&T's Wilmington Trust entities.
Diluted earnings per common share and net income in last year's second quarter were $2.55 and $348 million, respectively. Those results include after-tax gains from the sale of investment securities of $34 million and the effect of the reversal of an accrual for a contingent compensation obligation assumed in the May 2011 acquisition of Wilmington Trust that resulted in a reduction of expenses having an after-tax impact of $15 million. Those items increased diluted earnings per common share by $.38 in 2013's second quarter.
Reflecting on the recent quarter's performance, Rene F. Jones, Vice Chairman and Chief Financial Officer, noted, "Results for the second quarter reflected an improvement in revenue from the first quarter in the areas of mortgage banking, trust and deposit services. M&T's credit quality measures were strong during the quarter. While operating expense levels continue to be elevated, significant progress has been made on several key initiatives related to BSA/AML activities, Compliance, Risk Management and Capital Planning."
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 gains and expenses associated with merging acquired operations into M&T, since such items 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.
Diluted net operating earnings per common share were $2.02 in the recent quarter, compared with $1.66 and $2.65 in the initial quarter of 2014 and last year's second quarter, respectively. Net operating income during the second quarter of 2014 was $290 million, compared with $235 million in the first quarter of 2014 and $361 million in the second quarter of 2013. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.35% and 14.92%, respectively, in the second quarter of 2014. The comparable returns were 1.15% and 12.76% in the first quarter of 2014 and 1.81% and 22.72% in the second quarter of 2013.
Taxable-equivalent Net Interest Income. Net interest income expressed on a taxable-equivalent basis aggregated $675 million in the second quarter of 2014, down slightly from $684 million in the year-earlier period. The effect of growth in average earning assets, predominantly due to a $5.7 billion rise in average investment securities, was offset by a 31 basis point narrowing of the net interest margin to 3.40% in the recent quarter from 3.71% in the second quarter of 2013. The significant increase in investment securities reflects M&T's continued efforts to meet proposed regulatory liquidity requirements. Taxable-equivalent net interest income in the recent quarter was up 2% from $662 million in the first quarter of 2014. That improvement reflects a $3.3 billion increase in average earning assets, including a $1.7 billion or 18% rise in average investment securities resulting from continued purchases of mortgage-backed securities, partially offset by a 12 basis point decline in the net interest margin. The narrowing of the recent quarter's net interest margin as compared with the second quarter of 2013 and the initial 2014 quarter reflects continuing downward pressure on loan yields, increased balances of investment securities and higher levels of deposits held at the Federal Reserve Bank of New York.
Provision for Credit Losses/Asset Quality. The provision for credit losses was $30 million in the second quarter of 2014, compared with $57 million and $32 million in the year-earlier quarter and the first quarter of 2014, respectively. Net charge-offs of loans were $29 million during the recent quarter, improved from $57 million in the second quarter of 2013 and $32 million in the first quarter of 2014. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .18% and .35% in the second quarters of 2014 and 2013, respectively, and .20% in the first quarter of 2014.
Loans classified as nonaccrual declined to $880 million, or 1.36% of total loans outstanding at June 30, 2014, compared with $965 million or 1.46% a year earlier and $891 million or 1.39% at March 31, 2014. Assets taken in foreclosure of defaulted loans were $60 million at June 30, 2014, improved from $82 million at June 30, 2013 and comparable to $59 million at March 31, 2014.
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 totaled $918 million or 1.42% of loans outstanding at June 30, 2014, compared with $927 million or 1.41% of loans at June 30, 2013 and $917 million or 1.43% of loans at March 31, 2014.
Noninterest Income and Expense. Noninterest income aggregated $456 million in the second quarter of 2014, compared with $509 million in the year-earlier quarter and $420 million in the first quarter of 2014. Reflected in the second quarter of 2013 were net pre-tax gains of $56 million from the noted sales of investment securities. Excluding those gains, noninterest income in the second quarter of 2014 was up from $452 million in the year-earlier quarter and was 9% higher than the $420 million in the initial quarter of 2014. Higher mortgage banking revenues and trust income in the recent quarter contributed to those improvements.
Noninterest expense in the second quarter of 2014 totaled $681 million, up from $599 million in the year-earlier quarter, but down from $702 million in the first quarter of 2014. 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 $672 million in the recent quarter, compared with $578 million in the second quarter of 2013 and $692 million in 2014's initial quarter. The higher level of operating expenses in the recent quarter as compared with the year-earlier period was predominantly the result of costs for professional services and salaries associated with BSA/AML activities, compliance, capital planning and stress testing, risk management, and other operational initiatives. As compared with the first quarter of 2014, the recent quarter's lower level of operating expenses was due, in large part, to a decline in salaries and employee benefits, including stock-based compensation, which were seasonally higher in the initial 2014 period, partially offset by the noted increase in litigation reserves.
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 59.4% in the second quarter of 2014, compared with 50.9% in the year-earlier quarter and 63.9% in the first quarter of 2014.
Balance Sheet. M&T had total assets of $90.8 billion at June 30, 2014, up 9% from $83.2 billion a year earlier. Investment securities were $12.1 billion at June 30, 2014, up $6.9 billion or 133% from June 30, 2013. M&T has added investment securities during 2013 and 2014 through purchase and loan securitization transactions in order to enhance its liquidity position in response to proposed regulatory requirements. Loans and leases, net of unearned discount, totaled $64.7 billion at the recent quarter-end, compared with $66.0 billion at June 30, 2013. Total deposits rose 6% to $69.8 billion at June 30, 2014 from $65.7 billion a year earlier.
Total shareholders' equity rose 14% to $12.2 billion at June 30, 2014 from $10.7 billion a year earlier, representing 13.40% and 12.88%, respectively, of total assets. Common shareholders' equity was $10.9 billion, or $82.86 per share, at June 30, 2014, up from $9.8 billion, or $75.98 per share, at June 30, 2013. Tangible equity per common share rose 16% to $55.89 at the recent quarter-end from $48.26 a year earlier. Common shareholders' equity per share and tangible equity per common share were $81.05 and $53.92, respectively, at March 31, 2014. 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 estimated Tier 1 common ratio, a regulatory capital measure, was 9.62% at June 30, 2014, compared with 8.55% and 9.45% at June 30, 2013 and March 31, 2014, respectively. M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under the capital rules approved in July 2013 on a fully phased-in basis was approximately 9.35% as of June 30, 2014.
Conference Call. Investors will have an opportunity to listen to M&T's conference call to discuss second 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# 66984191. 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 Sunday, July 20, 2014 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID# 66984191. 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, 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 Six months ended
Amounts in thousands, June 30 June 30
------- -------
except per share 2014 2013 Change 2014 2013 Change
---- ---- ------ ---- ---- ------
Performance
-----------
Net income $284,336 348,466 -18% $513,353 622,579 -18%
Net income available to common shareholders 260,695 328,557 -21 472,429 583,633 -19
Per common share:
Basic earnings $1.99 2.56 -22% $3.62 4.56 -21%
Diluted earnings 1.98 2.55 -22 3.59 4.53 -21
Cash dividends $.70 .70 - $1.40 1.40 -
Common shares outstanding:
Average - diluted (1) 131,828 129,017 2% 131,479 128,828 2%
Period end (2) 131,953 129,464 2 131,953 129,464 2
Return on (annualized):
Average total assets 1.27% 1.68% 1.17% 1.52%
Average common shareholders' equity 9.79% 13.78% 9.02% 12.47%
Taxable-equivalent net interest income $674,963 683,804 -1% $1,337,341 1,346,304 -1%
Yield on average earning assets 3.73% 4.10% 3.80% 4.12%
Cost of interest-bearing liabilities .51% .62% .53% .63%
Net interest spread 3.22% 3.48% 3.27% 3.49%
Contribution of interest-free funds .18% .23% .19% .22%
Net interest margin 3.40% 3.71% 3.46% 3.71%
Net charge-offs to average total
net loans (annualized) .18% .35% .19% .29%
Net operating results (3)
------------------------
Net operating income $289,974 360,734 -20% $525,136 645,870 -19%
Diluted net operating earnings per common share 2.02 2.65 -24 3.68 4.71 -22
Return on (annualized):
Average tangible assets 1.35% 1.81% 1.25% 1.65%
Average tangible common equity 14.92% 22.72% 13.86% 20.76%
Efficiency ratio 59.39% 50.92% 61.62% 53.36%
At June 30
-----------
Loan quality 2014 2013 Change
------------ ---- ---- ------
Nonaccrual loans $880,134 964,906 -9%
Real estate and other foreclosed assets 59,793 82,088 -27%
Total nonperforming assets $939,927 1,046,994 -10%
======== =========
Accruing loans past due 90 days or more (4) $289,016 340,467 -15%
Government guaranteed loans included in totals
above:
Nonaccrual loans $81,817 69,508 18%
Accruing loans past due 90 days or more 275,846 315,281 -13%
Renegotiated loans $270,223 263,351 3%
Acquired accruing loans past due 90
days or more (5) $124,217 155,686 -20%
Purchased impaired loans (6):
Outstanding customer balance $504,584 725,196 -30%
Carrying amount 282,517 394,697 -28%
Nonaccrual loans to total net loans 1.36% 1.46%
Allowance for credit losses to total loans 1.42% 1.41%
(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 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, June 30, March 31, December 31, September 30, June 30,
except per share 2014 2014 2013 2013 2013
---- ---- ---- ---- ----
Performance
-----------
Net income $284,336 229,017 221,422 294,479 348,466
Net income available to common shareholders 260,695 211,731 203,451 275,356 328,557
Per common share:
Basic earnings $1.99 1.63 1.57 2.13 2.56
Diluted earnings 1.98 1.61 1.56 2.11 2.55
Cash dividends $.70 .70 .70 .70 .70
Common shares outstanding:
Average - diluted (1) 131,828 131,126 130,464 130,265 129,017
Period end (2) 131,953 131,431 130,564 130,241 129,464
Return on (annualized):
Average total assets 1.27% 1.07% 1.03% 1.39% 1.68%
Average common shareholders' equity 9.79% 8.22% 7.99% 11.06% 13.78%
Taxable-equivalent net interest income $674,963 662,378 672,683 679,213 683,804
Yield on average earning assets 3.73% 3.87% 3.92% 3.98% 4.10%
Cost of interest-bearing liabilities .51% .55% .56% .58% .62%
Net interest spread 3.22% 3.32% 3.36% 3.40% 3.48%
Contribution of interest-free funds .18% .20% .20% .21% .23%
Net interest margin 3.40% 3.52% 3.56% 3.61% 3.71%
Net charge-offs to average total
net loans (annualized) .18% .20% .26% .29% .35%
Net operating results (3)
------------------------
Net operating income $289,974 235,162 227,797 300,968 360,734
Diluted net operating earnings per common share 2.02 1.66 1.61 2.16 2.65
Return on (annualized):
Average tangible assets 1.35% 1.15% 1.11% 1.48% 1.81%
Average tangible common equity 14.92% 12.76% 12.67% 17.64% 22.72%
Efficiency ratio 59.39% 63.95% 65.48% 56.03% 50.92%
June 30, March 31, December 31, September 30, June 30,
Loan quality 2014 2014 2013 2013 2013
------------ ---- ---- ---- ---- ----
Nonaccrual loans $880,134 890,893 874,156 915,871 964,906
Real estate and other foreclosed assets 59,793 59,407 66,875 89,203 82,088
Total nonperforming assets $939,927 950,300 941,031 1,005,074 1,046,994
======== ======= ======= ========= =========
Accruing loans past due 90 days or more (4) $289,016 307,017 368,510 339,792 340,467
Government guaranteed loans included in totals
above:
Nonaccrual loans $81,817 75,959 63,647 68,519 69,508
Accruing loans past due 90 days or more 275,846 291,418 297,918 320,732 315,281
Renegotiated loans $270,223 257,889 257,092 259,301 263,351
Acquired accruing loans past due 90
days or more (5) $124,217 120,996 130,162 153,585 155,686
Purchased impaired loans (6):
Outstanding customer balance $504,584 534,331 579,975 648,118 725,196
Carrying amount 282,517 303,388 330,792 357,337 394,697
Nonaccrual loans to total net loans 1.36% 1.39% 1.36% 1.44% 1.46%
Allowance for credit losses to total loans 1.42% 1.43% 1.43% 1.44% 1.41%
(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 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 Six months ended
June 30 June 30
------- -------
Dollars in thousands 2014 2013 Change 2014 2013 Change
---- ---- ------ ---- ---- ------
Interest income $734,290 750,207 -2% $1,457,242 1,480,182 -2%
Interest expense 65,176 72,620 -10 131,695 146,545 -10
------ ------ ------- -------
Net interest income 669,114 677,587 -1 1,325,547 1,333,637 -1
Provision for credit losses 30,000 57,000 -47 62,000 95,000 -35
------ ------ ------ ------
Net interest income after
provision for credit losses 639,114 620,587 3 1,263,547 1,238,637 2
Other income
Mortgage banking revenues 95,656 91,262 5 175,705 184,365 -5
Service charges on deposit accounts 107,368 111,717 -4 211,566 222,666 -5
Trust income 129,893 124,728 4 251,145 246,331 2
Brokerage services income 17,487 17,258 1 33,987 32,969 3
Trading account and foreign exchange gains 8,042 9,224 -13 14,489 18,151 -20
Gain on bank investment securities - 56,457 - - 56,457 -
Other-than-temporary impairment losses
recognized in earnings - - - - (9,800) -
Equity in earnings of Bayview Lending Group LLC (4,055) (2,453) - (8,509) (6,109) -
Other revenues from operations 102,021 100,496 2 198,136 196,541 1
------- ------- ------- -------
Total other income 456,412 508,689 -10 876,519 941,571 -7
Other expense
Salaries and employee benefits 339,713 323,136 5 711,039 679,687 5
Equipment and net occupancy 68,084 64,278 6 139,251 129,437 8
Printing, postage and supplies 9,180 10,298 -11 20,136 20,997 -4
Amortization of core deposit and other
intangible assets 9,234 12,502 -26 19,296 25,845 -25
FDIC assessments 15,155 17,695 -14 30,643 37,133 -17
Other costs of operations 239,828 170,682 41 463,100 341,088 36
------- ------- ------- -------
Total other expense 681,194 598,591 14 1,383,465 1,234,187 12
Income before income taxes 414,332 530,685 -22 756,601 946,021 -20
Applicable income taxes 129,996 182,219 -29 243,248 323,442 -25
------- ------- ------- -------
Net income $284,336 348,466 -18% $513,353 622,579 -18%
======== ======= ======== =======
M&T BANK CORPORATION
Condensed Consolidated Statement of Income, Five Quarter Trend
Three months ended
------------------
June 30, March 31, December 31, September 30, June 30,
Dollars in thousands 2014 2014 2013 2013 2013
---- ---- ---- ---- ----
Interest income $734,290 722,952 734,466 742,686 750,207
Interest expense 65,176 66,519 67,982 69,578 72,620
------ ------ ------ ------ ------
Net interest income 669,114 656,433 666,484 673,108 677,587
Provision for credit losses 30,000 32,000 42,000 48,000 57,000
------ ------ ------ ------ ------
Net interest income after
provision for credit losses 639,114 624,433 624,484 625,108 620,587
Other income
Mortgage banking revenues 95,656 80,049 82,169 64,731 91,262
Service charges on deposit accounts 107,368 104,198 110,436 113,839 111,717
Trust income 129,893 121,252 125,876 123,801 124,728
Brokerage services income 17,487 16,500 15,807 16,871 17,258
Trading account and foreign exchange gains 8,042 6,447 13,690 8,987 9,224
Gain on bank investment securities - - - - 56,457
Equity in earnings of Bayview Lending Group LLC (4,055) (4,454) (6,136) (3,881) (2,453)
Other revenues from operations 102,021 96,115 104,404 153,040 100,496
------- ------ ------- ------- -------
Total other income 456,412 420,107 446,246 477,388 508,689
Other expense
Salaries and employee benefits 339,713 371,326 336,159 339,332 323,136
Equipment and net occupancy 68,084 71,167 68,670 66,220 64,278
Printing, postage and supplies 9,180 10,956 8,808 9,752 10,298
Amortization of core deposit and other
intangible assets 9,234 10,062 10,439 10,628 12,502
FDIC assessments 15,155 15,488 17,574 14,877 17,695
Other costs of operations 239,828 223,272 301,422 217,817 170,682
------- ------- ------- ------- -------
Total other expense 681,194 702,271 743,072 658,626 598,591
Income before income taxes 414,332 342,269 327,658 443,870 530,685
Applicable income taxes 129,996 113,252 106,236 149,391 182,219
------- ------- ------- ------- -------
Net income $284,336 229,017 221,422 294,479 348,466
======== ======= ======= ======= =======
M&T BANK CORPORATION
Condensed Consolidated Balance Sheet
June 30
-------
Dollars in thousands 2014 2013 Change
---- ---- ------
ASSETS
Cash and due from banks $1,827,197 1,350,015 35%
Interest-bearing deposits at banks 3,032,530 2,555,354 19
Federal funds sold and agreements
to resell securities 90,239 124,487 -28
Trading account assets 313,325 378,235 -17
Investment securities 12,120,195 5,210,526 133
Loans and leases:
Commercial, financial, etc. 19,105,892 18,021,812 6
Real estate - commercial 26,374,274 26,116,394 1
Real estate - consumer 8,656,766 10,399,749 -17
Consumer 10,610,761 11,433,911 -7
---------- ----------
Total loans and leases, net of unearned discount 64,747,693 65,971,866 -2
Less: allowance for credit losses 917,666 927,065 -1
------- -------
Net loans and leases 63,830,027 65,044,801 -2
Goodwill 3,524,625 3,524,625 -
Core deposit and other intangible assets 49,555 89,918 -45
Other assets 6,047,309 4,951,044 22
--------- ---------
Total assets $90,835,002 83,229,005 9%
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $26,088,763 24,074,815 8%
Interest-bearing deposits 43,502,602 41,302,212 5
Deposits at Cayman Islands office 237,890 284,443 -16
------- -------
Total deposits 69,829,255 65,661,470 6
Short-term borrowings 161,631 307,740 -47
Accrued interest and other liabilities 1,283,430 1,421,067 -10
Long-term borrowings 7,391,931 5,122,398 44
--------- ---------
Total liabilities 78,666,247 72,512,675 8
Shareholders' equity:
Preferred 1,231,500 876,796 40
Common (1) 10,937,255 9,839,534 11
---------- ---------
Total shareholders' equity 12,168,755 10,716,330 14
---------- ----------
Total liabilities and shareholders' equity $90,835,002 83,229,005 9%
=========== ==========
(1) Reflects accumulated other comprehensive income, net of applicable income tax effect, of $40.3 million at June 30,
2014 and accumulated other comprehensive loss, net of applicable income tax effect, of $227.8 million at June 30, 2013.
M&T BANK CORPORATION
Condensed Consolidated Balance Sheet, Five Quarter Trend
June 30, March 31, December 31, September 30, June 30,
Dollars in thousands 2014 2014 2013 2013 2013
---- ---- ---- ---- ----
ASSETS
Cash and due from banks $1,827,197 1,671,052 1,573,361 1,941,944 1,350,015
Interest-bearing deposits at banks 3,032,530 3,299,185 1,651,138 1,925,811 2,555,354
Federal funds sold and agreements
to resell securities 90,239 92,066 99,573 117,809 124,487
Trading account assets 313,325 314,807 376,131 371,370 378,235
Investment securities 12,120,195 10,364,249 8,796,497 8,309,773 5,210,526
Loans and leases:
Commercial, financial, etc. 19,105,892 18,896,070 18,705,216 17,911,149 18,021,812
Real estate - commercial 26,374,274 26,104,086 26,148,208 26,345,267 26,116,394
Real estate - consumer 8,656,766 8,774,095 8,928,221 9,228,003 10,399,749
Consumer 10,610,761 10,360,827 10,291,514 10,174,623 11,433,911
---------- ---------- ---------- ---------- ----------
Total loans and leases, net of unearned discount 64,747,693 64,135,078 64,073,159 63,659,042 65,971,866
Less: allowance for credit losses 917,666 916,768 916,676 916,370 927,065
------- ------- ------- ------- -------
Net loans and leases 63,830,027 63,218,310 63,156,483 62,742,672 65,044,801
Goodwill 3,524,625 3,524,625 3,524,625 3,524,625 3,524,625
Core deposit and other intangible assets 49,555 58,789 68,851 79,290 89,918
Other assets 6,047,309 5,987,277 5,915,732 5,414,191 4,951,044
--------- --------- --------- --------- ---------
Total assets $90,835,002 88,530,360 85,162,391 84,427,485 83,229,005
=========== ========== ========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $26,088,763 25,244,200 24,661,007 24,150,771 24,074,815
Interest-bearing deposits 43,502,602 43,207,286 42,134,859 42,084,860 41,302,212
Deposits at Cayman Islands office 237,890 247,880 322,746 316,510 284,443
------- ------- ------- ------- -------
Total deposits 69,829,255 68,699,366 67,118,612 66,552,141 65,661,470
Short-term borrowings 161,631 230,209 260,455 246,019 307,740
Accrued interest and other liabilities 1,283,430 1,462,725 1,368,922 1,491,797 1,421,067
Long-term borrowings 7,391,931 6,251,197 5,108,870 5,121,326 5,122,398
--------- --------- --------- --------- ---------
Total liabilities 78,666,247 76,643,497 73,856,859 73,411,283 72,512,675
Shareholders' equity:
Preferred 1,231,500 1,231,500 881,500 879,010 876,796
Common (1) 10,937,255 10,655,363 10,424,032 10,137,192 9,839,534
---------- ---------- ---------- ---------- ---------
Total shareholders' equity 12,168,755 11,886,863 11,305,532 11,016,202 10,716,330
---------- ---------- ---------- ---------- ----------
Total liabilities and shareholders' equity $90,835,002 88,530,360 85,162,391 84,427,485 83,229,005
=========== ========== ========== ========== ==========
(1) Reflects accumulated other comprehensive income, net of applicable income tax effect, of $40.3 million at June 30, 2014, and accumulated other comprehensive loss, net of applicable income tax effect, of $25.3 million at March 31, 2014, $64.2 million at December 31, 2013, $198.1 million at September 30, 2013 and $227.8 million
at June 30, 2013.
M&T BANK CORPORATION
Condensed Consolidated Average Balance Sheet
and Annualized Taxable-equivalent Rates
Three months ended Change in balance
Six months ended
June 30, June 30, March 31, June 30, 2014 from
June 30
Dollars in millions 2014 2013 2014 June 30, March 31, 2014 2013 Change in
---- ---- ---- ---- ----
Balance Rate Balance Rate Balance Rate 2013 2014 Balance Rate Balance Rate balance
------- ---- ------- ---- ------- ---- ---- ---- ------- ---- ------- ---- -------
ASSETS
Interest-bearing deposits at banks $4,080 .25% 2,403 .24% 3,089 .25% 70% 32% $3,587 .25% 1,470 .24% 144%
Federal funds sold and agreements
to resell securities 90 .07 199 .09 100 .07 -55 -9 95 .07 141 .10 -32
Trading account assets 84 1.25 86 1.43 71 2.68 -2 18 78 1.91 81 2.45 -4
Investment securities 10,959 3.19 5,293 3.34 9,265 3.34 107 18 10,117 3.26 5,546 3.33 82
Loans and leases, net of unearned discount
Commercial, financial, etc. 18,978 3.34 17,713 3.61 18,476 3.37 7 3 18,728 3.35 17,522 3.64 7
Real estate - commercial 26,140 4.22 26,051 4.72 26,143 4.40 - - 26,141 4.31 25,983 4.57 1
Real estate - consumer 8,746 4.36 10,806 4.05 8,844 4.19 -19 -1 8,795 4.27 10,973 4.07 -20
Consumer 10,479 4.52 11,409 4.58 10,300 4.59 -8 2 10,390 4.56 11,438 4.62 -9
Total loans and leases, net 64,343 4.05 65,979 4.32 63,763 4.14 -2 1 64,054 4.09 65,916 4.28 -3
------ ------ ------ ------ ------
Total earning assets 79,556 3.73 73,960 4.10 76,288 3.87 8 4 77,931 3.80 73,154 4.12 7
Goodwill 3,525 3,525 3,525 - - 3,525 3,525 -
Core deposit and other intangible assets 53 95 64 -44 -15 59 102 -43
Other assets 6,739 5,772 6,788 17 -1 6,763 5,856 15
----- ----- ----- ----- -----
Total assets $89,873 83,352 86,665 8% 4% $88,278 82,637 7%
======= ====== ====== ======= ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
NOW accounts $1,026 .13 941 .14 988 .12 9% 4% $1,007 .13 917 .14 10%
Savings deposits 39,478 .11 36,459 .15 38,358 .12 8 3 38,921 .12 35,930 .16 8
Time deposits 3,350 .46 4,210 .71 3,460 .46 -20 -3 3,404 .46 4,323 .73 -21
Deposits at Cayman Islands office 339 .21 326 .25 380 .22 4 -11 360 .22 591 .20 -39
Total interest-bearing deposits 44,193 .14 41,936 .21 43,186 .15 5 2 43,692 .15 41,761 .22 5
------ ------ ------ ------ ------
Short-term borrowings 220 .05 343 .11 264 .05 -36 -17 242 .05 489 .13 -51
Long-term borrowings 6,525 3.05 5,051 4.03 5,897 3.47 29 11 6,213 3.25 4,871 4.20 28
----- ----- ----- ----- -----
Total interest-bearing liabilities 50,938 .51 47,330 .62 49,347 .55 8 3 50,147 .53 47,121 .63 6
Noninterest-bearing deposits 25,466 23,744 24,141 7 5 24,807 23,352 6
Other liabilities 1,430 1,715 1,529 -17 -6 1,479 1,720 -14
----- ----- ----- ----- -----
Total liabilities 77,834 72,789 75,017 7 4 76,433 72,193 6
Shareholders' equity 12,039 10,563 11,648 14 3 11,845 10,444 13
------ ------ ------ ------ ------
Total liabilities and shareholders' equity $89,873 83,352 86,665 8% 4% $88,278 82,637 7%
======= ====== ====== ======= ======
Net interest spread 3.22 3.48 3.32 3.27 3.49
Contribution of interest-free funds .18 .23 .20 .19 .22
Net interest margin 3.40% 3.71% 3.52% 3.46% 3.71%
M&T BANK CORPORATION
Reconciliation of Quarterly GAAP to Non-GAAP Measures
Three months ended Six months ended
June 30 June 30
------- -------
2014 2013 2014 2013
---- ---- ---- ----
Income statement data
---------------------
In thousands, except per share
Net income
Net income $284,336 348,466 $513,353 622,579
Amortization of core deposit and other
intangible assets (1) 5,638 7,632 11,783 15,780
Merger-related expenses (1) - 4,636 - 7,511
Net operating income $289,974 360,734 $525,136 645,870
======== ======= ======== =======
Earnings per common share
Diluted earnings per common share $1.98 2.55 $3.59 4.53
Amortization of core deposit and other
intangible assets (1) .04 .06 .09 .12
Merger-related expenses (1) - .04 - .06
Diluted net operating earnings per common share $2.02 2.65 $3.68 4.71
===== ==== ===== ====
Other expense
Other expense $681,194 598,591 $1,383,465 1,234,187
Amortization of core deposit and other
intangible assets (9,234) (12,502) (19,296) (25,845)
Merger-related expenses - (7,632) - (12,364)
Noninterest operating expense $671,960 578,457 $1,364,169 1,195,978
======== ======= ========== =========
Merger-related expenses
Salaries and employee benefits $ - 300 $ - 836
Equipment and net occupancy - 489 - 690
Printing, postage and supplies - 998 - 1,825
Other costs of operations - 5,845 - 9,013
Total $ - 7,632 $ - 12,364
=== ===== === ======
Efficiency ratio
Noninterest operating expense (numerator) $671,960 578,457 $1,364,169 1,195,978
======== ======= ========== =========
Taxable-equivalent net interest income 674,963 683,804 1,337,341 1,346,304
Other income 456,412 508,689 876,519 941,571
Less: Gain on bank investment securities - 56,457 - 56,457
Net OTTI losses recognized in earnings - - - (9,800)
Denominator $1,131,375 1,136,036 $2,213,860 2,241,218
========== ========= ========== =========
Efficiency ratio 59.39% 50.92% 61.62% 53.36%
===== ===== ===== =====
Balance sheet data
------------------
In millions
Average assets
Average assets $89,873 83,352 $88,278 82,637
Goodwill (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (53) (95) (59) (102)
Deferred taxes 16 28 18 30
--- --- --- ---
Average tangible assets $86,311 79,760 $84,712 79,040
======= ====== ======= ======
Average common equity
Average total equity $12,039 10,563 $11,845 10,444
Preferred stock (1,231) (876) (1,152) (876)
Average common equity 10,808 9,687 10,693 9,568
Goodwill (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (53) (95) (59) (102)
Deferred taxes 16 28 18 30
--- --- --- ---
Average tangible common equity $7,246 6,095 $7,127 5,971
====== ===== ====== =====
At end of quarter
Total assets
Total assets $90,835 83,229
Goodwill (3,525) (3,525)
Core deposit and other intangible assets (49) (90)
Deferred taxes 15 27
Total tangible assets $87,276 79,641
======= ======
Total common equity
Total equity $12,169 10,716
Preferred stock (1,232) (877)
Undeclared dividends - cumulative preferred stock (3) (3)
Common equity, net of undeclared cumulative
preferred dividends 10,934 9,836
Goodwill (3,525) (3,525)
Core deposit and other intangible assets (49) (90)
Deferred taxes 15 27
Total tangible common equity $7,375 6,248
====== =====
(1) After any related tax effect.
M&T BANK CORPORATION
Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
Three months ended
------------------
June 30, March 31, December 31, September 30, June 30,
2014 2014 2013 2013 2013
---- ---- ---- ---- ----
Income statement data
---------------------
In thousands, except per share
Net income
Net income $284,336 229,017 221,422 294,479 348,466
Amortization of core deposit and other
intangible assets (1) 5,638 6,145 6,375 6,489 7,632
Merger-related expenses (1) - - - - 4,636
Net operating income $289,974 235,162 227,797 300,968 360,734
======== ======= ======= ======= =======
Earnings per common share
Diluted earnings per common share $1.98 1.61 1.56 2.11 2.55
Amortization of core deposit and other
intangible assets (1) .04 .05 .05 .05 .06
Merger-related expenses (1) - - - - .04
Diluted net operating earnings per common share $2.02 1.66 1.61 2.16 2.65
===== ==== ==== ==== ====
Other expense
Other expense $681,194 702,271 743,072 658,626 598,591
Amortization of core deposit and other
intangible assets (9,234) (10,062) (10,439) (10,628) (12,502)
Merger-related expenses - - - - (7,632)
Noninterest operating expense $671,960 692,209 732,633 647,998 578,457
======== ======= ======= ======= =======
Merger-related expenses
Salaries and employee benefits $ - - - - 300
Equipment and net occupancy - - - - 489
Printing, postage and supplies - - - - 998
Other costs of operations - - - - 5,845
Total $ - - - - 7,632
=== === === === =====
Efficiency ratio
Noninterest operating expense (numerator) $671,960 692,209 732,633 647,998 578,457
======== ======= ======= ======= =======
Taxable-equivalent net interest income 674,963 662,378 672,683 679,213 683,804
Other income 456,412 420,107 446,246 477,388 508,689
Less: Gain on bank investment securities - - - - 56,457
Net OTTI losses recognized in earnings - - - - -
Denominator $1,131,375 1,082,485 1,118,929 1,156,601 1,136,036
========== ========= ========= ========= =========
Efficiency ratio 59.39% 63.95% 65.48% 56.03% 50.92%
===== ===== ===== ===== =====
Balance sheet data
------------------
In millions
Average assets
Average assets $89,873 86,665 85,330 84,011 83,352
Goodwill (3,525) (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (53) (64) (74) (84) (95)
Deferred taxes 16 20 23 25 28
--- --- --- --- ---
Average tangible assets $86,311 83,096 81,754 80,427 79,760
======= ====== ====== ====== ======
Average common equity
Average total equity $12,039 11,648 11,109 10,881 10,563
Preferred stock (1,231) (1,072) (881) (878) (876)
Average common equity 10,808 10,576 10,228 10,003 9,687
Goodwill (3,525) (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (53) (64) (74) (84) (95)
Deferred taxes 16 20 23 25 28
--- --- --- --- ---
Average tangible common equity $7,246 7,007 6,652 6,419 6,095
====== ===== ===== ===== =====
At end of quarter
Total assets
Total assets $90,835 88,530 85,162 84,427 83,229
Goodwill (3,525) (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (49) (59) (69) (79) (90)
Deferred taxes 15 19 21 24 27
Total tangible assets $87,276 84,965 81,589 80,847 79,641
======= ====== ====== ====== ======
Total common equity
Total equity $12,169 11,887 11,306 11,016 10,716
Preferred stock (1,232) (1,232) (882) (879) (877)
Undeclared dividends - cumulative preferred stock (3) (3) (3) (4) (3)
--- --- ---
Common equity, net of undeclared cumulative
preferred dividends 10,934 10,652 10,421 10,133 9,836
Goodwill (3,525) (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (49) (59) (69) (79) (90)
Deferred taxes 15 19 21 24 27
Total tangible common equity $7,375 7,087 6,848 6,553 6,248
====== ===== ===== ===== =====
(1) After any related tax effect.
SOURCE M&T Bank Corporation
