BUFFALO, N.Y., Jan. 17, 2014 -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for 2013.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the fourth quarter of 2013 were $1.74, compared with $2.16 in the year-earlier quarter and $2.11 in the third quarter of 2013.  GAAP-basis net income in the recent quarter totaled $246 million, compared with $296 million and $294 million in the fourth quarter of 2012 and the third quarter of 2013, respectively.  Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income for the recent quarter was 1.14% and 8.93%, respectively, compared with 1.45% and 12.10%, respectively, in the year-earlier quarter and 1.39% and 11.06%, respectively, in the third quarter of 2013.

For the full year of 2013, diluted earnings per common share were $8.38, up 11% from $7.54 for 2012.  Net income rose to $1.16 billion in 2013 from $1.03 billion in 2012.  Expressed as a rate of return on average assets and average common shareholders' equity, net income in 2013 was 1.39% and 11.18%, respectively, compared with 1.29% and 10.96%, respectively, in 2012.  

Reflecting on M&T's performance in 2013, Rene F. Jones, Executive Vice President and Chief Financial Officer, commented, "While expenses were elevated by investments in our infrastructure during 2013, M&T achieved a net operating return on average tangible common shareholders' equity of 18.17% for the full year.  Our core capital position strengthened, as the Tier 1 common ratio grew to 9.25% at the 2013 year-end, up 17 basis points from September 30 and 168 basis points higher than at December 31, 2012.  We are also pleased with the continued improvement in credit quality.  M&T's liquidity and risk profile was enhanced during the year through several actions, including replacing less liquid investment securities with Ginnie Mae securities and the securitization of loans held in the loan portfolio.  During the final two quarters of 2013 we invested heavily in several key areas, including risk management, capital planning and stress testing, regulatory compliance, and other operational and technology initiatives.  Those investments will better position M&T for the future."

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

Diluted net operating earnings per common share, which exclude the impact of amortization of core deposit and other intangible assets and merger-related gains and expenses, were $1.79 in the recent quarter, compared with $2.23 in the year-earlier period and $2.16 in the third quarter of 2013.  Net operating income for the fourth quarter of 2013 was $252 million, compared with $305 million and $301 million in the final quarter of 2012 and the third quarter of 2013, respectively.  For the three months ended December 31, 2013, net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.22% and 14.12%, respectively, compared with 1.56% and 20.46% in the corresponding 2012 period and 1.48% and 17.64%, respectively, in the third quarter of 2013.

For the year ended December 31, 2013, diluted net operating earnings per common share increased 10% to $8.66 from $7.88 in 2012.  Net operating income for 2013 and 2012 totaled $1.20 billion and $1.07 billion, respectively.  Net operating income in 2013 expressed as a rate of return on average tangible assets and average tangible common shareholders' equity was 1.50% and 18.17%, respectively, compared with 1.40% and 19.42%, respectively, in 2012.

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income aggregated $673 million in the fourth quarter of 2013, compared with $679 million in the immediately preceding quarter.  That decline resulted from a five basis point narrowing of the net interest margin to 3.56% in the recent quarter from 3.61% in 2013's third quarter, partially offset by an increase in average earning assets.  Taxable-equivalent net interest income in the recent quarter was little changed from the $674 million earned in the fourth quarter of 2012.  For the year ended December 31, 2013, net interest income on a taxable-equivalent basis rose 3% to $2.70 billion from $2.62 billion in 2012 as a result of a $3.7 billion or 5% increase in average earning assets, partially offset by an eight basis point narrowing of the net interest margin to 3.65% in 2013 from 3.73% in 2012.

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $42 million during the fourth quarter of 2013, down from $49 million in the year-earlier quarter and $48 million in the third quarter of 2013.  The provision was equal to net charge-offs in the third and fourth quarters of 2013, and exceeded net charge-offs by $5 million in the fourth quarter of 2012.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .26% and .27% in the final quarter of 2013 and 2012, respectively, and .29% in 2013's third quarter.  The provision for credit losses declined 9% to $185 million for the year ended December 31, 2013 from $204 million in 2012.  Net loan charge-offs for 2013 totaled $183 million, or .28% of average loans outstanding, improved from $186 million, or .30% of average loans in 2012.

Loans classified as nonaccrual declined to $871 million, or 1.36% of total loans at December 31, 2013, from $1.01 billion or 1.52% a year earlier and $916 million or 1.44% at September 30, 2013.  Assets taken in foreclosure of defaulted loans were $67 million at December 31, 2013, down from $104 million and $89 million at December 31, 2012 and September 30, 2013, respectively.  

Allowance for Credit Losses.  M&T regularly performs detailed analyses of individual borrowers and portfolios for purposes of assessing the adequacy of the allowance for credit losses.  As a result of those analyses, the allowance totaled $917 million at December 31, 2013, compared with $926 million a year earlier and $916 million at September 30, 2013.  The allowance expressed as a percentage of outstanding loans was 1.43% at the recent quarter-end, compared with 1.39% at December 31, 2012 and 1.44% at September 30, 2013.  

Noninterest Income and Expense.  Noninterest income aggregated $446 million in the recently completed quarter, compared with $453 million and $477 million in the final quarter of 2012 and the third quarter of 2013, respectively.  Reflected in noninterest income in the third quarter of 2013 were gains from loan securitization activities of $56 million.  Net losses from investment securities of $14 million were reflected in noninterest income in the fourth quarter of 2012, due to other-than-temporary impairment charges.  There were no similar gains or losses in 2013's final quarter. 

Excluding gains from securitization activities and losses from investment securities, noninterest income was $446 million in the recent quarter, compared with $468 million in the year-earlier quarter and $421 million in the third quarter of 2013.  As compared with the immediately preceding quarter, the recent quarter's improvement resulted largely from higher mortgage banking revenues, primarily related to increased servicing activities.  The decline in noninterest income as compared with the final 2012 quarter was predominantly due to lower mortgage banking revenues, partially offset by higher trust income.    

Noninterest income aggregated $1.87 billion and $1.67 billion during the years ended December 31, 2013 and 2012, respectively.  That rise was primarily the result of net gains on investment securities and gains on securitization activities, which aggregated $110 million in 2013, compared with net losses on investment securities of $48 million in 2012, supplemented by higher trust income in 2013.

Noninterest expense in the fourth quarter of 2013 totaled $703 million, up from $626 million in the year-earlier quarter and $659 million in 2013's third quarter.  Included in such amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets.  Exclusive of those expenses, noninterest operating expenses were $693 million in the recent quarter, up from $612 million and $648 million in the fourth quarter of 2012 and the third quarter of 2013, respectively.  The higher noninterest operating expenses in the recent quarter reflect increased costs for professional services largely associated with investments in M&T's infrastructure related to BSA/AML compliance, capital planning and stress testing, risk management, and operational and technology initiatives.  Those increases amounted to approximately $40 million when compared to the immediately preceding quarter and $50 million in comparison to the fourth quarter of 2012.  The higher level of expenses in the recent quarter as compared with the year-earlier quarter also reflects salaries associated with M&T's expanded residential mortgage loan sub-servicing activities.

For the year ended December 31, 2013, noninterest expense aggregated $2.60 billion, compared with $2.51 billion in the previous year.  Noninterest operating expenses were $2.54 billion in 2013 and $2.44 billion in 2012.  That increase was largely attributable to higher costs for professional services and salaries, partially offset by lower FDIC assessments.

The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities), measures the relationship of operating expenses to revenues.  M&T's efficiency ratio was 61.9% in the recent quarter, compared with 53.6% in the year-earlier quarter and 56.0% in the third quarter of 2013.  The efficiency ratio for the full year of 2013 was unchanged from 2012 at 56.2%.   

Balance Sheet.  M&T had total assets of $85.1 billion at December 31, 2013, up from $83.0 billion a year earlier.  Loans and leases, net of unearned discount, totaled $64.1 billion at the 2013 year-end, compared with $66.6 billion at December 31, 2012.  After considering the impact of the loan securitization transactions during 2013 and a $919 million decline in loans held for sale, M&T experienced growth in its loan portfolio from December 31, 2012 to the 2013 year-end.  Total deposits were $67.1 billion at the recent year-end, $1.5 billion higher than $65.6 billion at December 31, 2012. 

Total shareholders' equity rose $1.1 billion or 11% to $11.3 billion at December 31, 2013 from $10.2 billion a year earlier, representing 13.31% and 12.29%, respectively, of total assets.  Common shareholders' equity was $10.4 billion, or $80.00 per share, at December 31, 2013, compared with $9.3 billion, or $72.73 per share, at December 31, 2012.  Tangible equity per common share rose 18% to $52.64 at December 31, 2013 from $44.61 a year earlier.  Common shareholders' equity per share and tangible equity per share were $77.81 and $50.32, respectively, at September 30, 2013.  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 8.42% at December 31, 2013, compared with 7.20% and 8.11% at December 31, 2012 and September 30, 2013, respectively. M&T's estimated Tier 1 common ratio, a regulatory capital measure, rose to 9.25% at December 31, 2013 from 7.57% and 9.08% at December 31, 2012 and September 30, 2013, respectively.  M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under the new capital rules approved in July 2013 on a fully phased-in basis was approximately 9.01% as of December 31, 2013.

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 10:30 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 #31841565.  The conference call will be webcast live on M&T's website at http://ir.mandtbank.com/events.cfm.  A replay of the call will  be available until January 20, 2014 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #31841565.  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.