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M&T Bank Corporation Announces First Quarter Profits
PR Newswire
BUFFALO, N.Y.

BUFFALO, N.Y., April 18, 2011 -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended March 31, 2011.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the first quarter of 2011 rose 38% to $1.59 from $1.15 in the year-earlier quarter and were equal to the fourth quarter of 2010. GAAP-basis net income in the recent quarter was $206 million, compared with $151 million in the first quarter of 2010 and $204 million in 2010's final quarter.  GAAP-basis net income for the initial 2011 quarter expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.23% and 10.16%, respectively, improved from .89% and 7.86%, respectively, in the first quarter of 2010 and from 1.18% and 10.03%, respectively, in the fourth quarter of 2010.

The recent quarter's earnings as compared with the first quarter of 2010 reflect higher net interest income, resulting from a widening of the net interest margin, lower credit costs and significantly higher noninterest income.  Contributing to the rise in noninterest income were gains from the sale of investment securities, predominantly residential mortgage-backed securities guaranteed by Fannie Mae, which increased 2011's net income by $24 million, or $.20 of diluted earnings per common share.  Realized securities gains were not significant in the first and fourth quarters of 2010.  However, net income during 2010's fourth quarter reflected an after-tax gain of $17 million, or $.14 of diluted earnings per common share, related to the FDIC-assisted acquisition of certain assets and liabilities of K Bank.

Reflecting on the recent quarter's performance, Rene F. Jones, Executive Vice President and Chief Financial Officer, commented, "M&T experienced a positive start to 2011 by recording solid financial results in the first quarter.  Exclusive of net securities gains and losses, revenue showed noticeable improvement from last year's first quarter, even more impressive when considering the negative impact regulatory changes had on fee income from deposit service charges.  We are also encouraged by continuing improved credit quality, which resulted in lower credit costs in the recent quarter.  Although nonperforming assets remain at historically high levels, we have seen some encouraging signs of improving economic conditions within M&T's footprint.  In addition, the generation of capital continued at a healthy rate this quarter, as evidenced by a rise in our tangible common capital ratio to 6.44% at March 31, 2011 from 6.19% at the 2010 year-end."

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.  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 $1.67 in the recent quarter, up from $1.23 and $1.52 in the first and fourth quarters of 2010, respectively.  Net operating income for the quarter ended March 31, 2011 rose to $216 million, improved from $161 million and $196 million in the quarters ended March 31, 2010 and December 31, 2010, respectively.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.36% and 20.16%, respectively, in the initial quarter of 2011, up from 1.00% and 17.34% in the first quarter of 2010 and 1.20% and 18.43% in the final 2010 quarter.

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income increased 2% to $575 million in the first quarter of 2011 from $562 million in the year-earlier quarter.  That improvement reflects a 14 basis point widening of the net interest margin, partially offset by a lower level of average earning assets, which declined $900 million or 1% to $59.4 billion from $60.3 billion in the first quarter of 2010.  The net interest margin was 3.92% in the recent quarter, compared with 3.78% in the year-earlier quarter.  The most significant factors for the higher net interest margin were lower interest rates paid on deposits.  Taxable-equivalent net interest income totaled $580 million in the fourth quarter of 2010.  Despite an $830 million increase in average loans outstanding and a seven basis point widening of the net interest margin, the 1% decline in such income in the recent quarter as compared with 2010's fourth quarter largely reflects the fewer number of days in the first quarter of 2011.

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $75 million in the first quarter of 2011, compared with $105 million and $85 million in the first and fourth quarters of 2010, respectively.  Net charge-offs of loans during the recent quarter were $74 million, down from $95 million in the first quarter of 2010 and $77 million in the final 2010 quarter.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .58% and .74% in the initial quarters of 2011 and 2010, respectively, and .60% in the last quarter of 2010.  

Loans classified as nonaccrual totaled $1.21 billion, or 2.32% of total loans at March 31, 2011, improved from $1.24 billion or 2.38% at December 31, 2010 and $1.34 billion or 2.60% at March 31, 2010.  The ratio of nonperforming assets to total loans plus real estate and other foreclosed assets was 2.73% at March 31, 2011, improved from 2.79% and 2.78% at December 31, 2010 and March 31, 2010, respectively.

Loans past due 90 days or more and accruing interest totaled $264 million at the end of the recently completed quarter, including loans guaranteed by government-related entities of $215 million.  Such past due loans were $270 million and $203 million at December 31, 2010 and March 31, 2010, respectively, including $214 million and $195 million of government guaranteed loans at those respective dates.

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.  Reflecting those analyses, the allowance totaled $904 million at March 31, 2011, compared with $903 million at December 31, 2010 and $891 million at March 31, 2010.  Beginning in 2009, GAAP requires that expected credit losses associated with loans obtained in an acquisition be reflected in the estimation of loan fair value as of each respective acquisition date and prohibits any carryover of the acquired entity's allowance for credit losses.  Excluding the impact of loans obtained in 2009 and 2010 acquisition transactions, the allowance-to-legacy loan ratio was 1.81% at March 31, 2011, compared with 1.82% and 1.86% at December 31, 2010 and March 31, 2010, respectively.  

Noninterest Income and Expense. Noninterest income totaled $314 million in the first quarter of 2011, compared with $258 million and $287 million in the first and fourth quarters of 2010, respectively.  Reflected in those amounts were net gains on investment securities of $23 million in the initial 2011 quarter, compared with net losses from investment securities of $26 million and $27 million in the first and fourth quarters of 2010, respectively.  The net securities gains in the recent quarter resulted from $39 million of gains realized on the sale of investment securities available for sale having an amortized cost of approximately $484 million.  In response to strong growth in average loans and in anticipation of the impending acquisition of Wilmington Trust Corporation, M&T sold the securities in order to manage its forecasted balance sheet size and resultant capital ratios.  Partially offsetting those securities gains were $16 million of other-than-temporary impairment charges related to certain of M&T's holdings of privately issued collateralized mortgage obligations.  The net losses on investment securities during the first and fourth quarters of 2010 were predominantly due to other-than-temporary impairment charges, also related to certain of M&T's privately issued collateralized mortgage obligations.  Also reflected in noninterest income in the fourth quarter of 2010 was a $28 million gain realized on the FDIC-assisted acquisition of select assets and liabilities of K Bank.

Excluding gains and losses from investment securities in all periods and the gain recorded in 2010's final quarter related to the K Bank transaction, noninterest income of $291 million in the recently completed quarter was improved from $284 million in the first quarter of 2010 and $286 million in the final 2010 quarter.  Contributing to the rise from the year-earlier quarter were higher commercial mortgage banking revenues, letter of credit and other credit-related fees, trading account and foreign exchange gains, and other operating revenues, partially offset by lower service charges on consumer deposit accounts.  The improvement in such income during the recent quarter as compared with the final 2010 quarter was largely due to higher residential mortgage banking revenues, partially offset by a decline in trading account and foreign exchange gains.  Residential mortgage banking revenues in the fourth quarter of 2010 were negatively impacted by increased settlements related to M&T's obligation to repurchase previously sold loans.  Charges associated with the obligation to repurchase previously sold loans were not significant in the recent quarter.  Also contributing to the improved revenues in 2011 were higher gains on residential real estate loans and commitments to originate loans to be sold as compared with the immediately preceding quarter.  Those higher gains reflect M&T's decision in the recent quarter to resume selling the majority of its originated residential real estate loans.

Noninterest expense in the first quarter of 2011 totaled $500 million, compared with $489 million and $469 million in the first and fourth quarters of 2010, respectively.  Included in such amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets and merger-related expenses.  Exclusive of those expenses, noninterest operating expenses were $483 million in the recently completed quarter, $473 million in the first quarter of 2010 and $455 million in the final 2010 quarter.  The higher level of operating expenses in the recent quarter as compared with the year-earlier quarter was due largely to increased costs for advertising, processing and other professional services.  The increase in expenses from the fourth quarter of 2010 was largely the result of seasonally higher costs for stock-based compensation, payroll-related taxes and employer contributions for retirement savings plan benefits related to incentive compensation payments.

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 55.8% in the first quarter of 2011, compared with 55.9% in the year-earlier quarter and 52.5% in the fourth quarter of 2010.

Balance Sheet.  M&T had total assets of $67.9 billion at March 31, 2011, compared with $68.4 billion a year earlier.  Loans and leases, net of unearned discount, were $52.1 billion at the recent quarter-end, up $675 million from $51.4 billion at March 31, 2010 and $128 million higher than $52.0 billion at December 31, 2010.  Total deposits rose 6% to $50.5 billion at March 31, 2011 from $47.5 billion a year earlier and were up 1% from $49.8 billion at December 31, 2010.

Total shareholders' equity increased 7% to $8.5 billion at March 31, 2011 from $7.9 billion at March 31, 2010, representing 12.53% and 11.57%, respectively, of total assets.  Common shareholders' equity was $7.8 billion, or $64.43 per share at March 31, 2011, up from $7.2 billion, or $60.40 per share, a year earlier.  Tangible equity per common share rose to $34.38 at March 31, 2011 from $29.59 a year earlier.  Common shareholders' equity per share and tangible equity per common share were $63.54 and $33.26, respectively, at December 31, 2010. 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 6.44% at March 31, 2011, compared with 5.43% and 6.19% at March 31, 2010 and December 31, 2010, respectively.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss first quarter financial results today at 1:30 p.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 #59879931.  The conference call will be webcast live through M&T's website at http://ir.mandtbank.com/conference.cfm.  A replay of the call will be available until Tuesday, April 19, 2011 by calling (800)642-1687, or (706)645-9291 for international participants, and by making reference to the ID #59879931.  The event will also be archived and available by 7:00 p.m. today on M&T's website at http://ir.mandtbank.com/conference.cfm.

M&T is a financial holding company headquartered in Buffalo, New York.  M&T's banking subsidiaries, M&T Bank and M&T Bank, National Association, operate retail and commercial bank branches in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Jersey, the District of Columbia and Ontario, Canada.

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; 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.

M&T BANK CORPORATION

 

Financial Highlights

 
   

Three months ended

       

Amounts in thousands,

 

March 31

       

except per share

 

2011

 

2010

 

Change

   
                 

Performance

               
                 

Net income

$

206,273

 

150,955

 

37

%

 

Net income available to common shareholders

 

190,121

 

136,431

 

39

   
                 

Per common share:

               

 Basic earnings

$

1.59

 

1.16

 

37

%

 

 Diluted earnings

 

1.59

 

1.15

 

38

   

 Cash dividends

$

.70

 

.70

 

-

   
                 

Common shares outstanding:

               

 Average - diluted (1)

 

119,852

 

118,256

 

1

%

 

 Period end (2)

 

120,410

 

118,823

 

1

   
                 

Return on (annualized):

               

 Average total assets

 

1.23

%

.89

%

     

 Average common shareholders' equity  

 

10.16

%

7.86

%

     
                 

Taxable-equivalent net interest income

$

575,131

 

562,257

 

2

%

 
                 

Yield on average earning assets

 

4.60

%

4.59

%

     

Cost of interest-bearing liabilities

 

.91

%

1.04

%

     

Net interest spread

 

3.69

%

3.55

%

     

Contribution of interest-free funds

 

.23

%

.23

%

     

Net interest margin  

 

3.92

%

3.78

%

     
                 

Net charge-offs to average total

               

 net loans (annualized)

 

.58

%

.74

%

     
                 

Net operating results (3)

               
                 

Net operating income  

$

216,360

 

160,953

 

34

%

 

Diluted net operating earnings per common share

 

1.67

 

1.23

 

36

   

Return on (annualized):

               

 Average tangible assets

 

1.36

%

1.00

%

     

 Average tangible common equity

 

20.16

%

17.34

%

     

Efficiency ratio

 

55.75

%

55.88

%

     
                 
                 
                 
     

At March 31

         

Loan quality

 

2011

 

2010

 

Change

   
                 

Nonaccrual loans

$

1,211,111

 

1,339,992

 

-10

%

 

Real estate and other foreclosed assets

 

218,203

 

95,362

 

129

%

 

 Total nonperforming assets

$

1,429,314

 

1,435,354

 

-

%

 
                 

Accruing loans past due 90 days or more

$

264,480

 

203,443

 

30

%

 
                 

Renegotiated loans

$

241,190

 

220,885

 

9

%

 
                 

Government guaranteed loans included in totals

               

 above:

               

 Nonaccrual loans

$

69,353

 

37,048

 

87

%

 

 Accruing loans past due 90 days or more

 

214,505

 

194,523

 

10

%

 
                 

Purchased impaired loans (4):

               

 Outstanding customer balance

$

206,253

 

148,686

 

39

%

 

 Carrying amount

 

88,589

 

73,890

 

20

%

 
                 

Nonaccrual loans to total net loans

 

2.32

%

2.60

%

     
                 

Allowance for credit losses to:

               

 Legacy loans

 

1.81

%

1.86

%

     

 Total loans

 

1.73

%

1.73

%

     
                 
                 
                 
                 

(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)  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,

 

March 31,

 

December 31, 

 

September 30, 

 

June 30, 

 

March 31, 

 

except per share

 

2011

 

2010  

 

2010  

 

2010  

 

2010  

 
                                 

Performance

                               
                                 

Net income

$

206,273

   

204,442

   

192,015

   

188,749

   

150,955

   

Net income available to common shareholders

 

190,121

   

189,678

   

176,789

   

173,597

   

136,431

   
                                 

Per common share:

                               

 Basic earnings

$

1.59

   

1.59

   

1.49

   

1.47

   

1.16

   

 Diluted earnings

 

1.59

   

1.59

   

1.48

   

1.46

   

1.15

   

 Cash dividends

$

.70

   

.70

   

.70

   

.70

   

.70

   
                                 

Common shares outstanding:

                               

 Average - diluted (1)

 

119,852

   

119,503

   

119,155

   

118,878

   

118,256

   

 Period end (2)

 

120,410

   

119,774

   

119,435

   

119,161

   

118,823

   
                                 

Return on (annualized):

                               

 Average total assets

 

1.23

%

 

1.18

%

 

1.12

%

 

1.11

%

 

.89

%

 

 Average common shareholders' equity

 

10.16

%

 

10.03

%

 

9.56

%

 

9.67

%

 

7.86

%

 
                                 

Taxable-equivalent net interest income

$

575,131

   

580,227

   

575,733

   

573,332

   

562,257

   
                                 

Yield on average earning assets

 

4.60

%

 

4.58

%

 

4.65

%

 

4.63

%

 

4.59

%

 

Cost of interest-bearing liabilities

 

.91

%

 

.97

%

 

1.03

%

 

1.04

%

 

1.04

%

 

Net interest spread

 

3.69

%

 

3.61

%

 

3.62

%

 

3.59

%

 

3.55

%

 

Contribution of interest-free funds

 

.23

%

 

.24

%

 

.25

%

 

.25

%

 

.23

%

 

Net interest margin

 

3.92

%

 

3.85

%

 

3.87

%

 

3.84

%

 

3.78

%

 
                                 

Net charge-offs to average total

                               

 net loans (annualized)

 

.58

%

 

.60

%

 

.73

%

 

.64

%

 

.74

%

 
                                 

Net operating results (3)

                               
                                 

Net operating income

$

216,360

   

196,235

   

200,225

   

197,752

   

160,953

   

Diluted net operating earnings per common share

 

1.67

   

1.52

   

1.55

   

1.53

   

1.23

   

Return on (annualized):

                               

 Average tangible assets

 

1.36

%

 

1.20

%

 

1.24

%

 

1.23

%

 

1.00

%

 

 Average tangible common equity

 

20.16

%

 

18.43

%

 

19.58

%

 

20.36

%

 

17.34

%

 

Efficiency ratio

 

55.75

%

 

52.55

%

 

53.40

%

 

53.06

%

 

55.88

%

 
                                 
                               

 
         
   

March 31,

 

December 31,

 

September 30, 

 

June 30, 

 

March 31, 

 

Loan quality

 

2011

 

2010

 

2010  

 

2010  

 

2010  

 
                                 

Nonaccrual loans

$

1,211,111

   

1,239,194

   

1,099,560

   

1,090,135

   

1,339,992

   

Real estate and other foreclosed assets

 

218,203

   

220,049

   

192,600

   

192,631

   

95,362

   

 Total nonperforming assets

$

1,429,314

   

1,459,243

   

1,292,160

   

1,282,766

   

1,435,354

   
                                 

Accruing loans past due 90 days or more

$

264,480

   

269,593

   

214,769

   

203,081

   

203,443

   
                                 

Renegotiated loans

$

241,190

   

233,342

   

233,671

   

228,847

   

220,885

   
                                 

Government guaranteed loans included in totals above:

                               
                               

 Nonaccrual loans

$

69,353

   

56,787

   

38,232

   

40,271

   

37,048

   

 Accruing loans past due 90 days or more

 

214,505

   

214,111

   

194,223

   

187,682

   

194,523

   
                                 

Purchased impaired loans (4):

                               

 Outstanding customer balance

$

206,253

   

219,477

   

113,964

   

130,808

   

148,686

   

 Carrying amount

 

88,589

   

97,019

   

52,728

   

61,524

   

73,890

   
                                 

Nonaccrual loans to total net loans

 

2.32

%

 

2.38

%

 

2.16

%

 

2.13

%

 

2.60

%

 
                                 

Allowance for credit losses to:

                               

 Legacy loans

 

1.81

%

 

1.82

%

 

1.86

%

 

1.86

%

 

1.86

%

 

 Total loans

 

1.73

%

 

1.74

%

 

1.76

%

 

1.75

%

 

1.73

%

 
                                 
                                 
                                 
                                 

(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)  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

       
   

March 31

       

Dollars in thousands

 

2011

 

2010

 

Change

   
                 

Interest income

$

667,483

 

676,386

 

-1

%

 

Interest expense

 

98,679

 

120,052

 

-18

   
                 

Net interest income

 

568,804

 

556,334

 

2

   
                 

Provision for credit losses

 

75,000

 

105,000

 

-29

   
                 

Net interest income after provision for credit losses

 

493,804

 

451,334

 

9

   
                 

Other income

               

    Mortgage banking revenues

 

45,156

 

41,476

 

9

   

    Service charges on deposit accounts

 

109,731

 

120,295

 

-9

   

    Trust income

 

29,321

 

30,928

 

-5

   

    Brokerage services income

 

14,296

 

13,106

 

9

   

    Trading account and foreign exchange gains

 

8,279

 

4,699

 

76

   

    Gain on bank investment securities

 

39,353

 

459

 

-

   

    Other-than-temporary impairment losses

               

       recognized in earnings

 

(16,041)

 

(26,802)

 

-

   

    Equity in earnings of Bayview Lending Group LLC

 

(6,678)

 

(5,714)

 

-

   

    Other revenues from operations

 

91,003

 

79,259

 

15

   

         Total other income

 

314,420

 

257,706

 

22

   
                 

Other expense

               

    Salaries and employee benefits

 

266,090

 

264,046

 

1

   

    Equipment and net occupancy

 

56,663

 

55,401

 

2

   

    Printing, postage and supplies

 

9,202

 

9,043

 

2

   

    Amortization of core deposit and other

               

       intangible assets

 

12,314

 

16,475

 

-25

   

    FDIC assessments

 

19,094

 

21,348

 

-11

   

    Other costs of operations

 

136,208

 

123,049

 

11

   

         Total other expense

 

499,571

 

489,362

 

2

   
                 

Income before income taxes

 

308,653

 

219,678

 

41

   
                 

Applicable income taxes

 

102,380

 

68,723

 

49

   
                 

Net income

$

206,273

 

150,955

 

37

%

 
               

 

M&T BANK CORPORATION

 

Condensed Consolidated Statement of Income, Five Quarter Trend

 
                               
   

Three months ended

 
   

March 31,

 

December 31, 

 

September 30, 

 

June 30, 

 

March 31,

 

Dollars in thousands

 

2011

 

2010 

 

2010 

 

2010 

 

2010

 
                               

Interest income

$

667,483

 

682,725

 

685,900

 

684,784

 

676,386

 

Interest expense

 

98,679

 

108,628

 

116,032

 

117,557

 

120,052

 
                               

Net interest income

 

568,804

 

574,097

 

569,868

 

567,227

 

556,334

 
                               

Provision for credit losses

 

75,000

 

85,000

 

93,000

 

85,000

 

105,000

 
                               

Net interest income after provision for credit losses

 

493,804

 

489,097

 

476,868

 

482,227

 

451,334

 
                               

Other income

                             

    Mortgage banking revenues

 

45,156

 

35,013

 

61,052

 

47,084

 

41,476

 

    Service charges on deposit accounts

 

109,731

 

111,129

 

117,733

 

128,976

 

120,295

 

    Trust income  

 

29,321

 

31,031

 

30,485

 

30,169

 

30,928

 

    Brokerage services income

 

14,296

 

11,648

 

12,127

 

12,788

 

13,106

 

    Trading account and foreign exchange gains

 

8,279

 

12,755

 

6,035

 

3,797

 

4,699

 

    Gain on bank investment securities

 

39,353

 

861

 

1,440

 

10

 

459

 

    Other-than-temporary impairment losses

                             

       recognized in earnings

 

(16,041)

 

(27,567)

 

(9,532)

 

(22,380)

 

(26,802)

 

    Equity in earnings of Bayview Lending Group LLC

 

(6,678)

 

(7,415)

 

(6,460)

 

(6,179)

 

(5,714)

 

    Other revenues from operations

 

91,003

 

119,483

 

77,019

 

79,292

 

79,259

 

         Total other income

 

314,420

 

286,938

 

289,899

 

273,557

 

257,706

 
                               

Other expense

                             

    Salaries and employee benefits

 

266,090

 

243,413

 

246,389

 

245,861

 

264,046

 

    Equipment and net occupancy

 

56,663

 

50,879

 

54,353

 

55,431

 

55,401

 

    Printing, postage and supplies

 

9,202

 

8,435

 

7,820

 

8,549

 

9,043

 

    Amortization of core deposit and other

                             

       intangible assets

 

12,314

 

13,269

 

13,526

 

14,833

 

16,475

 

    FDIC assessments

 

19,094

 

18,329

 

18,039

 

21,608

 

21,348

 

    Other costs of operations

 

136,208

 

134,949

 

140,006

 

129,786

 

123,049

 

         Total other expense

 

499,571

 

469,274

 

480,133

 

476,068

 

489,362

 
                               

Income before income taxes

 

308,653

 

306,761

 

286,634

 

279,716

 

219,678

 
                               

Applicable income taxes

 

102,380

 

102,319

 

94,619

 

90,967

 

68,723

 
                               

Net income

$

206,273

 

204,442

 

192,015

 

188,749

 

150,955

 
                             

 

M&T BANK CORPORATION

 

Condensed Consolidated Balance Sheet

 
                 
   

March 31

       

Dollars in thousands

 

2011

 

2010

 

Change

   
                 

ASSETS

               
                 

Cash and due from banks

$

972,005

 

1,033,269

 

-6

%

 
                 

Interest-bearing deposits at banks

 

100,101

 

121,305

 

-17

   
                 

Federal funds sold and agreements to resell securities

 

10,300

 

10,400

 

-1

   
                 

Trading account assets

 

413,737

 

403,476

 

3

   
                 

Investment securities

 

6,507,165

 

8,104,646

 

-20

   
                 

Loans and leases:

               
                 

  Commercial, financial, etc

 

13,826,299

 

13,220,181

 

5

   

  Real estate - commercial

 

20,891,615

 

20,724,118

 

1

   

  Real estate - consumer

 

6,154,960

 

5,664,159

 

9

   

  Consumer

 

11,245,807

 

11,835,583

 

-5

   

    Total loans and leases, net of unearned discount

 

52,118,681

 

51,444,041

 

1

   

       Less: allowance for credit losses

 

903,703

 

891,265

 

1

   
                 

 Net loans and leases

 

51,214,978

 

50,552,776

 

1

   
                 

Goodwill

 

3,524,625

 

3,524,625

 

-

   
                 

Core deposit and other intangible assets

 

113,603

 

167,545

 

-32

   
                 

Other assets

 

5,024,694

 

4,521,180

 

11

   
                 

 Total assets

$

67,881,208

 

68,439,222

 

-1

%

 
                 
                 

LIABILITIES AND SHAREHOLDERS' EQUITY

               
                 

Noninterest-bearing deposits  

$

15,219,562

 

13,622,819

 

12

%

 
                 

Interest-bearing deposits

 

34,264,867

 

33,125,761

 

3

   
                 

Deposits at Cayman Islands office

 

1,063,670

 

789,825

 

35

   
                 

 Total deposits

 

50,548,099

 

47,538,405

 

6

   
                 

Short-term borrowings

 

504,676

 

1,870,763

 

-73

   
                 

Accrued interest and other liabilities

 

1,015,495

 

1,048,473

 

-3

   
                 

Long-term borrowings

 

7,305,420

 

10,065,894

 

-27

   
                 

 Total liabilities

 

59,373,690

 

60,523,535

 

-2

   
                 

Shareholders' equity:

               
                 

  Preferred

 

743,385

 

732,769

 

1

   

  Common (1)

 

7,764,133

 

7,182,918

 

8

   
                 

    Total shareholders' equity

 

8,507,518

 

7,915,687

 

7

   
                 

 Total liabilities and shareholders' equity

$

67,881,208

 

68,439,222

 

-1

%

 
                 
                 

(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $197.5 million at March 31, 2011 and $255.2 million at March 31, 2010.

 
               

 

M&T BANK CORPORATION

 

Condensed Consolidated Balance Sheet, Five Quarter Trend

 
       
   

March 31,

 

December 31,

   

September 30,

   

June 30,

   

March 31,

 

Dollars in thousands

 

2011

 

2010

   

2010

   

2010

   

2010

 
                               

ASSETS

                             
                               

Cash and due from banks

$

972,005

   

908,755

   

1,070,625

   

1,045,886

   

1,033,269

 
                               

Interest-bearing deposits at banks

 

100,101

   

101,222

   

401,624

   

117,826

   

121,305

 
                               

Federal funds sold and agreements to resell securities

 

10,300

   

25,000

   

443,700

   

10,000

   

10,400

 
                               

Trading account assets

 

413,737

   

523,834

   

536,702

   

487,692

   

403,476

 
                               

Investment securities

 

6,507,165

   

7,150,540

   

7,662,715

   

8,097,572

   

8,104,646

 
                               

Loans and leases:

                             
                               

  Commercial, financial, etc

 

13,826,299

   

13,390,610

   

12,788,136

   

13,017,598

   

13,220,181

 

  Real estate - commercial

 

20,891,615

   

21,183,161

   

20,580,450

   

20,612,905

   

20,724,118

 

  Real estate - consumer

 

6,154,960

   

5,928,056

   

5,754,432

   

5,729,126

   

5,664,159

 

  Consumer

 

11,245,807

   

11,488,555

   

11,668,540

   

11,701,657

   

11,835,583

 

    Total loans and leases, net of unearned discount

 

52,118,681

   

51,990,382

   

50,791,558

   

51,061,286

   

51,444,041

 

       Less: allowance for credit losses

 

903,703

   

902,941

   

894,720

   

894,667

   

891,265

 
                               

 Net loans and leases

 

51,214,978

   

51,087,441

   

49,896,838

   

50,166,619

   

50,552,776

 
                               

Goodwill

 

3,524,625

   

3,524,625

   

3,524,625

   

3,524,625

   

3,524,625

 
                               

Core deposit and other intangible assets

 

113,603

   

125,917

   

139,186

   

152,712

   

167,545

 
                               

Other assets

 

5,024,694

   

4,573,929

   

4,570,822

   

4,550,684

   

4,521,180

 
                               

 Total assets

$

67,881,208

   

68,021,263

   

68,246,837

   

68,153,616

   

68,439,222

 
                               
                               

LIABILITIES AND SHAREHOLDERS' EQUITY

                             
                               

Noninterest-bearing deposits

$

15,219,562

   

14,557,568

   

14,665,603

   

13,960,723

   

13,622,819

 
                               

Interest-bearing deposits

 

34,264,867

   

33,641,800

   

33,335,104

   

33,010,520

   

33,125,761

 
                               

Deposits at Cayman Islands office

 

1,063,670

   

1,605,916

   

653,916

   

551,428

   

789,825

 
                               

 Total deposits

 

50,548,099

   

49,805,284

   

48,654,623

   

47,522,671

   

47,538,405

 
                               

Short-term borrowings

 

504,676

   

947,432

   

1,211,683

   

2,158,957

   

1,870,763

 
                               

Accrued interest and other liabilities

 

1,015,495

   

1,070,701

   

1,157,250

   

1,114,615

   

1,048,473

 
                               

Long-term borrowings

 

7,305,420

   

7,840,151

   

8,991,508

   

9,255,529

   

10,065,894

 
                               

 Total liabilities

 

59,373,690

   

59,663,568

   

60,015,064

   

60,051,772

   

60,523,535

 
                               

Shareholders' equity:

                             
                               

  Preferred

 

743,385

   

740,657

   

737,979

   

735,350

   

732,769

 

  Common (1)  

 

7,764,133

   

7,617,038

   

7,493,794

   

7,366,494

   

7,182,918

 
                               

    Total shareholders' equity

 

8,507,518

   

8,357,695

   

8,231,773

   

8,101,844

   

7,915,687

 
                               

 Total liabilities and shareholders' equity

$

67,881,208

   

68,021,263

   

68,246,837

   

68,153,616

   

68,439,222

 
                               
                               

(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $197.5 million at March 31, 2011, $205.2 million at December 31, 2010, $192.6 million at September 30, 2010, $197.2 million at June 30, 2010 and $255.2 million at March 31, 2010.

 
                             

 

M&T BANK CORPORATION

 

Condensed Consolidated Average Balance Sheet

 

and Annualized Taxable-equivalent Rates

 
                                 
   

Three months ended

 

Change in balance

 
   

March 31,

 

March 31,

 

December 31,

 

March 31, 2011 from

 

Dollars in millions

 

2011

 

2010

 

2010

 

March 31,

 

December 31,

 
   

Balance

Rate

 

Balance

Rate

 

Balance

Rate

 

2010

 

2010

 

ASSETS

                               
                                 

Interest-bearing deposits at banks

$

115

.13

%

127

.02

%

110

.15

%

-9

%

 

5

%

 
                                 

Federal funds sold and agreements

                               

 to resell securities

 

15

.53

 

24

.22

 

780

.19

 

-38

   

-98

   
                                 

Trading account assets

 

110

1.61

 

60

.80

 

165

.91

 

82

   

-34

   
                                 

Investment securities

 

7,219

4.17

 

8,172

4.44

 

7,541

4.07

 

-12

   

-4

   
                                 

Loans and leases, net of unearned discount

                               

 Commercial, financial, etc

 

13,573

3.93

 

13,408

3.88

 

13,013

4.07

 

1

   

4

   

 Real estate - commercial

 

21,003

4.71

 

20,867

4.48

 

20,624

4.84

 

1

   

2

   

 Real estate - consumer

 

6,054

5.06

 

5,742

5.31

 

5,910

5.15

 

5

   

2

   

 Consumer

 

11,342

5.13

 

11,931

5.26

 

11,594

5.18

 

-5

   

-2

   

    Total loans and leases, net

 

51,972

4.67

 

51,948

4.63

 

51,141

4.74

 

-

   

2

   
                                 

 Total earning assets

 

59,431

4.60

 

60,331

4.59

 

59,737

4.58

 

-1

   

-1

   
                                 

Goodwill

 

3,525

   

3,525

   

3,525

   

-

   

-

   
                                 

Core deposit and other intangible assets

 

119

   

176

   

132

   

-32

   

-10

   
                                 

Other assets

 

4,970

   

4,851

   

5,108

   

2

   

-3

   
                                 

 Total assets

$

68,045

   

68,883

   

68,502

   

-1

%

 

-1

%

 
                                 
                                 
                                 

LIABILITIES AND SHAREHOLDERS' EQUITY

                               
                                 

Interest-bearing deposits

                               

 NOW accounts

$

628

.13

 

585

.14

 

608

.14

 

7

%

 

3

%

 

 Savings deposits

 

27,669

.28

 

25,068

.33

 

27,545

.31

 

10

   

-

   

 Time deposits

 

5,700

1.36

 

7,210

1.66

 

6,034

1.40

 

-21

   

-6

   

 Deposits at Cayman Islands office

 

1,182

.14

 

1,237

.11

 

809

.17

 

-4

   

46

   

    Total interest-bearing deposits

 

35,179

.45

 

34,100

.60

 

34,996

.49

 

3

   

1

   
                                 

Short-term borrowings

 

1,344

.15

 

2,367

.15

 

1,439

.17

 

-43

   

-7

   

Long-term borrowings

 

7,368

3.26

 

10,160

2.74

 

8,141

3.14

 

-27

   

-9

   
                                 

Total interest-bearing liabilities

 

43,891

.91

 

46,627

1.04

 

44,576

.97

 

-6

   

-2

   
                                 

Noninterest-bearing deposits

 

14,501

   

13,294

   

14,275

   

9

   

2

   
                                 

Other liabilities

 

1,202

   

1,094

   

1,329

   

10

   

-10

   
                                 

 Total liabilities

 

59,594

   

61,015

   

60,180

   

-2

   

-1

   
                                 

Shareholders' equity

 

8,451

   

7,868

   

8,322

   

7

   

2

   
                                 

 Total liabilities and shareholders' equity

$

68,045

   

68,883

   

68,502

   

-1

%

 

-1

%

 
                                 
                                 

Net interest spread

   

3.69

   

3.55

   

3.61

             

Contribution of interest-free funds

   

.23

   

.23

   

.24

             

Net interest margin

   

3.92

%

 

3.78

%

 

3.85

%

           
                               

 

M&T BANK CORPORATION

 

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

 
                       
   

Three months ended

 
   

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 
   

2011

 

2010

 

2010

 

2010

 

2010

 

Income statement data

                     

In thousands, except per share

                     

Net income

                     

Net income

$

206,273

 

204,442

 

192,015

 

188,749

 

150,955

 

Amortization of core deposit and other

                     

 intangible assets (1)

 

7,478

 

8,054

 

8,210

 

9,003

 

9,998

 

Merger-related gain (1)

 

-

 

(16,730)

 

-

 

-

 

-

 

Merger-related expenses (1)

 

2,609

 

469

 

-

 

-

 

-

 

 Net operating income

$

216,360

 

196,235

 

200,225

 

197,752

 

160,953

 

Earnings per common share

                     

Diluted earnings per common share

$

1.59

 

1.59

 

1.48

 

1.46

 

1.15

 

Amortization of core deposit and other

                     

 intangible assets (1)

 

.06

 

.07

 

.07

 

.07

 

.08

 

Merger-related gain (1)

 

-

 

(0.14)

 

-

 

-

 

-

 

Merger-related expenses (1)

 

.02

 

-

 

-

 

-

 

-

 

 Diluted net operating earnings per common share

$

1.67

 

1.52

 

1.55

 

1.53

 

1.23

 

Other expense

                     

Other expense

$

499,571

 

469,274

 

480,133

 

476,068

 

489,362

 

Amortization of core deposit and other

                     

 intangible assets

 

(12,314)

 

(13,269)

 

(13,526)

 

(14,833)

 

(16,475)

 

Merger-related expenses

 

(4,295)

 

(771)

 

-

 

-

 

-

 

 Noninterest operating expense

$

482,962

 

455,234

 

466,607

 

461,235

 

472,887

 

Merger-related expenses

                     

Salaries and employee benefits

$

7

 

7

 

-

 

-

 

-

 

Equipment and net occupancy

 

79

 

44

 

-

 

-

 

-

 

Printing, postage and supplies

 

147

 

74

 

-

 

-

 

-

 

Other costs of operations

 

4,062

 

646

 

-

 

-

 

-

 

 Total

$

4,295

 

771

 

-

 

-

 

-

 
                       
                       

Balance sheet data

                     

In millions

                     

Average assets

                     

Average assets

$

68,045

 

68,502

 

67,811

 

68,334

 

68,883

 

Goodwill

 

(3,525)

 

(3,525)

 

(3,525)

 

(3,525)

 

(3,525)

 

Core deposit and other intangible assets

 

(119)

 

(132)

 

(146)

 

(160)

 

(176)

 

Deferred taxes

 

22

 

24

 

27

 

30

 

34

 

 Average tangible assets

$

64,423

 

64,869

 

64,167

 

64,679

 

65,216

 

Average common equity

                     

Average total equity

$

8,451

 

8,322

 

8,181

 

8,036

 

7,868

 

Preferred stock

 

(743)

 

(740)

 

(737)

 

(734)

 

(732)

 

 Average common equity

 

7,708

 

7,582

 

7,444

 

7,302

 

7,136

 

Goodwill

 

(3,525)

 

(3,525)

 

(3,525)

 

(3,525)

 

(3,525)

 

Core deposit and other intangible assets

 

(119)

 

(132)

 

(146)

 

(160)

 

(176)

 

Deferred taxes

 

22

 

24

 

27

 

30

 

34

 

 Average tangible common equity  

$

4,086

 

3,949

 

3,800

 

3,647

 

3,469

 
                       

At end of quarter

                     

Total assets

                     

Total assets

$

67,881

 

68,021

 

68,247

 

68,154

 

68,439

 

Goodwill

 

(3,525)

 

(3,525)

 

(3,525)

 

(3,525)

 

(3,525)

 

Core deposit and other intangible assets

 

(113)

 

(126)

 

(139)

 

(152)

 

(167)

 

Deferred taxes

 

20

 

23

 

26

 

28

 

31

 

 Total tangible assets

$

64,263

 

64,393

 

64,609

 

64,505

 

64,778

 

Total common equity

                     

Total equity

$

8,508

 

8,358

 

8,232

 

8,102

 

7,916

 

Preferred stock

 

(743)

 

(741)

 

(738)

 

(735)

 

(733)

 

Undeclared dividends - preferred stock

 

(7)

 

(6)

 

(6)

 

(7)

 

(6)

 

 Common equity, net of undeclared

                     

   preferred dividends

 

7,758

 

7,611

 

7,488

 

7,360

 

7,177

 

Goodwill

 

(3,525)

 

(3,525)

 

(3,525)

 

(3,525)

 

(3,525)

 

Core deposit and other intangible assets

 

(113)

 

(126)

 

(139)

 

(152)

 

(167)

 

Deferred taxes

 

20

 

23

 

26

 

28

 

31

 

 Total tangible common equity  

$

4,140

 

3,983

 

3,850

 

3,711

 

3,516

 
                       
                       

(1) After any related tax effect.

 
                     

Media Contact: 

C. Michael Zabel 

(716) 842-5385

Investor Contact:

Donald J. MacLeod

(716) 842-5138