BUFFALO, N.Y., Oct. 17, 2019 -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2019.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") were $3.47 in the third quarter of 2019, compared with $3.53 in the year-earlier quarter. GAAP-basis net income in the recent quarter was $480 million, compared with $526 million in the third quarter of 2018. GAAP-basis diluted earnings per common share and net income for the second quarter of 2019 were $3.34 and $473 million, respectively. GAAP-basis net income for the third quarter of 2019 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.58% and 12.73%, respectively, compared with 1.80% and 14.08%, respectively, in the corresponding 2018 quarter and 1.60% and 12.68%, respectively, in the second quarter of 2019. For the nine-month period ended September 30, 2019, diluted earnings per common share were $10.16, up 13% from $9.00 in the similar 2018 period. GAAP-basis net income for the first nine months of 2019 totaled $1.44 billion, 5% higher than $1.37 billion in the year-earlier period. Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income in the nine-month period ended September 30, 2019 was 1.62% and 12.85%, respectively, improved from 1.57% and 12.16%, respectively, in the corresponding 2018 period.

Commenting on M&T's third quarter results, Darren J. King, Executive Vice President and Chief Financial Officer, noted, "Overall, M&T's results were in line with our expectations given the current interest rate and economic environment. During the recent quarter we realized increased total revenues, highlighted by 28% growth in our mortgage banking businesses. Higher operating expenses reflecting investments in mortgage banking and technology accompanied the revenue growth."

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

Diluted net operating earnings per common share were $3.50 in the third quarter of 2019, compared with $3.56 in the year-earlier quarter and $3.37 in the second quarter of 2019. Net operating income in the recent quarter was $484 million, compared with $531 million in 2018's third quarter and $477 million in the second quarter of 2019. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income in the recent quarter was 1.66% and 18.85%, respectively, compared with 1.89% and 21.00%, respectively, in the similar 2018 quarter and 1.68% and 18.83%, respectively, in 2019's second quarter.

Diluted net operating earnings per common share in the first nine months of 2019 rose 13% to $10.24 from $9.10 in the corresponding period of 2018. Net operating income during the nine-month period ended September 30, 2019 was $1.45 billion, up 4% from $1.39 billion in the year-earlier period. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.70% and 19.07%, respectively, in the first nine months of 2019, compared with 1.65% and 18.09%, respectively, in the similar period of 2018.

Taxable-equivalent Net Interest Income. Net interest income expressed on a taxable-equivalent basis totaled $1.04 billion in the third quarter of 2019, little changed from the year-earlier quarter. The impact of higher average earning assets, which rose to $108.6 billion in the recent quarter from $105.8 billion in the year-earlier period, was offset by a 10 basis point narrowing of the net interest margin, to 3.78% in 2019's third quarter from 3.88% in the third quarter of 2018. Taxable-equivalent net interest income in the recent quarter declined $12 million from $1.05 billion in the second quarter of 2019 due to a 13 basis point narrowing of the net interest margin that was largely offset by higher average earning assets.

Provision for Credit Losses/Asset Quality. The provision for credit losses was $45 million in the third quarter of 2019, compared with $16 million in the year-earlier quarter and $55 million in the second quarter of 2019. Net loan charge-offs were $36 million during the recent quarter, compared with $16 million in the third quarter of 2018 and $44 million in 2019's second quarter. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .16% and .07% in the third quarters of 2019 and 2018, respectively, and .20% in the second quarter of 2019.

Loans classified as nonaccrual totaled $1.01 billion or 1.12% of total loans outstanding at September 30, 2019, compared with $871 million or 1.00% a year earlier and $865 million or .96% at June 30, 2019. The higher balance at September 30, 2019 reflects the addition of a commercial loan for $119 million to a wholesale distributor. Assets taken in foreclosure of defaulted loans were $80 million at September 30, 2019, compared with $87 million and $73 million at September 30, 2018 and June 30, 2019, 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 for credit losses increased to $1.04 billion or 1.16% of loans outstanding at September 30, 2019, compared with $1.02 billion or 1.18% at September 30, 2018 and $1.03 billion or 1.15% at June 30, 2019.

Noninterest Income and Expense. Noninterest income totaled $528 million in the third quarter of 2019, up 15% from $459 million in the year-earlier quarter and 3% higher than $512 million in the second quarter of 2019. The recent quarter's improvement as compared with the earlier quarters was due to significantly higher residential and commercial mortgage banking revenues.

Noninterest expense aggregated $878 million in the recent quarter, $776 million in 2018's third quarter and $873 million in the second quarter of 2019. Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets, noninterest operating expenses were $873 million in the recent quarter, $770 million in the third quarter of 2018 and $868 million in the second quarter of 2019. Significant factors contributing to the higher level of noninterest expenses in the recent quarter were increased costs for salaries and employee benefits, professional services, and additions to the valuation allowance for capitalized mortgage servicing rights. Such additions were $14 million in the recent quarter and $9 million in the second quarter of 2019 and reflect the impact of lower interest rates on the valuation of servicing rights. M&T recognized a $48 million charge in the second quarter of 2019 associated with the sale of an equity investment in an asset manager.

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 55.9% in the third quarter of 2019, 51.4% in the year-earlier quarter and 56.0% in the second quarter of 2019.

Balance Sheet. M&T had total assets of $125.5 billion at September 30, 2019, compared with $116.8 billion and $121.6 billion at September 30, 2018 and June 30, 2019, respectively. Loans and leases, net of unearned discount, were $89.8 billion at the recent quarter-end, $86.7 billion at September 30, 2018 and $89.9 billion at June 30, 2019. Total deposits were $95.1 billion at September 30, 2019, up from $89.1 billion a year earlier and $91.7 billion at June 30, 2019. The higher level of deposits at the recent quarter-end as compared with the prior dates reflects increased deposits associated with residential mortgage servicing activities.

Total shareholders' equity was $15.8 billion, or 12.6% of total assets at September 30, 2019, compared with $15.4 billion, or 13.21% at September 30, 2018 and $15.7 billion, or 12.91% at June 30, 2019. Common shareholders' equity was $14.5 billion, or $109.84 per share, at September 30, 2019, compared with $14.2 billion, or $100.38 per share, a year-earlier and $14.5 billion, or $107.73 per share, at June 30, 2019. Tangible equity per common share was $74.93 at September 30, 2019, compared with $67.64 at September 30, 2018 and $73.29 at June 30, 2019. In the calculation of tangible equity per common share, common shareholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances. M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under regulatory capital rules was approximately 9.81% at September 30, 2019.

In accordance with its capital plan, M&T repurchased 1,933,000 shares of its common stock during the recent quarter at an average cost per share of $155.18, for a total cost of $300 million. In the aggregate, during the first nine months of 2019, M&T repurchased 6,533,000 shares of common stock at a total cost of $1.07 billion.

Conference Call. Investors will have an opportunity to listen to M&T's conference call to discuss third 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 #9382126. The conference call will be webcast live through M&T's website at https://ir.mtb.com/events-presentations. A replay of the call will be available through Thursday, October 24, 2019 by calling (800) 585-8367, or (404) 537-3406 for international participants, and by making reference to ID #9382126. The event will also be archived and available by 3:00 p.m. today on M&T's website at https://ir.mtb.com/events-presentations.

M&T is a financial holding company headquartered in Buffalo, New York. M&T's principal banking subsidiary, M&T Bank, operates banking offices in New York, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Virginia, West Virginia and the District of Columbia. Trust-related services are provided by M&T's Wilmington Trust-affiliated companies and by M&T Bank.

Forward-Looking Statements. This news release contains forward-looking statements that are based on current expectations, estimates and projections about M&T's business, management's beliefs and assumptions made by management. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

Future Factors include changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation; regulatory supervision and oversight, including monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

These are representative of the Future Factors that could affect the outcome of the forward-looking statements. In addition, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other Future Factors.

Financial Highlights

Financial Highlights, Five Quarter Trend

Condensed Consolidated Statement of Income

Condensed Consolidated Statement of Income, Five Quarter Trend

Condensed Consolidated Balance Sheet

Condensed Consolidated Balance Sheet, Five Quarter Trend

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates

Reconciliation of Quarterly GAAP to Non-GAAP Measures

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