UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 19, 2011

 

 

M&T BANK CORPORATION

(Exact name of registrant as specified in its charter)

 

 

New York

(State or other jurisdiction

of incorporation)

 

1-9861		16-0968385
(Commission File Number)		(I.R.S. Employer Identification No.)

 

One M&T Plaza, Buffalo, New York		14203
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (716) 842-5445

(NOT APPLICABLE)

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02.

Results of Operations and Financial Condition.

On October 19, 2011, M&T Bank Corporation announced its results of operations for the quarter ended September 30, 2011. The public announcement was made by means of a news release, the text of which is set forth in Exhibit 99 hereto.

The information in this Form 8-K, including Exhibit 99 attached hereto, is being furnished under Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall it be deemed incorporated by reference in any filing of M&T Bank Corporation under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit No.
99		News Release dated October 19, 2011.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		M&T BANK CORPORATION
Date: October 19, 2011		By:		/s/ René F. Jones
				René F. Jones
				Executive Vice President and Chief Financial Officer

 

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EXHIBIT INDEX

 

Exhibit No.
99		News Release dated October 19, 2011. Filed herewith.

 

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Exhibit 99

 

INVESTOR CONTACT:		Donald J. MacLeod		FOR IMMEDIATE RELEASE:
		(716) 842-5138		October 19, 2011
MEDIA CONTACT:		C. Michael Zabel
		(716) 842-5385

M&T BANK CORPORATION ANNOUNCES THIRD QUARTER PROFITS

BUFFALO, NEW YORK — M&T Bank Corporation (“M&T”)(NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2011.

GAAP Results of Operations.    Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the third quarter of 2011 were $1.32, compared with $1.48 in the year-earlier quarter. GAAP-basis net income in the recent quarter aggregated $183 million, compared with $192 million in the third quarter of 2010. GAAP-basis net income for the third quarter of 2011 expressed as an annualized rate of return on average assets and average common shareholders’ equity was .94% and 7.84%, respectively, compared with 1.12% and 9.56%, respectively, in the year-earlier quarter.

As compared with the third quarter of 2010, the recent quarter’s performance reflected higher net interest income, a lower provision for credit losses and significantly higher trust income. Those positive factors were muted by higher noninterest expenses and lower residential mortgage banking revenues. The increased net interest income, trust income and noninterest expenses were each predominantly related to the acquisition of Wilmington Trust Corporation (“Wilmington Trust”) on May 16, 2011. Included in noninterest expenses in the recent quarter were merger-related expenses associated with the Wilmington Trust acquisition of $16 million, after applicable tax effect, or $.13 of diluted earnings

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M&T BANK CORPORATION

 

per common share. Such expenses were related to systems conversions and other costs of integrating operations and introducing Wilmington Trust’s former customers to M&T’s products and services. There were no merger-related expenses in the year-earlier quarter.

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 $1.53 in the recent quarter, down 1% from $1.55 in the third quarter of 2010. Net operating income during the third quarter of 2011 was $210 million, up 5% from $200 million in the year-earlier quarter. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity, net operating income was 1.14% and 16.26%, respectively, in the recent quarter, compared with 1.24% and 19.58% in the third quarter of 2010.

 

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M&T BANK CORPORATION

 

Commenting on M&T’s financial results in the third quarter of 2011, René F. Jones, Executive Vice President and Chief Financial Officer, said, “The recent quarter’s results reflect the impact of M&T’s acquisition of Wilmington Trust. Notably, in late-August the major loan and deposit systems of Wilmington Trust were successfully converted to those of M&T, culminating a significant resource commitment. Now that the conversions are behind us, we are well positioned to turn our attention towards achieving the economic benefits from combining the organizations.”

Further commenting on recent quarter highlights, Mr. Jones noted, “Despite the continued challenging economic environment and turbulent markets, which dampened our fee income relative to the second quarter, we experienced a number of positive trends. We were pleased with the credit performance for the period. Specifically, net charge-offs declined for the fourth consecutive quarter. We also continued to experience solid growth in customer deposits.”

Taxable-equivalent Net Interest Income.    Taxable-equivalent net interest income totaled $623 million in the third quarter of 2011, up from $576 million in the year-earlier period and $593 million in the second quarter of 2011. The improvement in such income from the prior periods resulted from higher average earning assets, partially offset by a narrowing of the net interest margin. The net interest margin was 3.68% in the recent quarter, compared with 3.87% in the third quarter of 2010 and 3.75% in the second quarter of 2011. The higher levels of average earning assets in the two most recent quarters as compared with the third quarter of 2010 were predominantly due to the impact of the Wilmington Trust acquisition, which added approximately $9.6 billion of earning assets on the May 16, 2011 acquisition date. The

 

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M&T BANK CORPORATION

 

narrowing of the net interest margin in the recent quarter as compared with the year-earlier quarter and the second 2011 quarter also reflected the impact of the Wilmington Trust transaction, including significantly higher earning balances on deposit with the Federal Reserve.

Provision for Credit Losses/Asset Quality.    The provision for credit losses was $58 million in the recent quarter, improved from $93 million in the third quarter of 2010 and $63 million in 2011’s second quarter. Net charge-offs of loans totaled $57 million during the third quarter of 2011, compared with $93 million and $59 million in the quarters ended September 30, 2010 and June 30, 2011, respectively. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .39% and .73% in the third quarter of 2011 and 2010, respectively, and .43% in the second quarter of 2011.

Effective September 30, 2011, M&T has begun to separately report “other acquired impaired loans.” M&T defines other acquired impaired loans as loans that ceased performing in accordance with their contractual terms and became impaired subsequent to their acquisition date. Nevertheless, in accordance with GAAP, such loans are included in accounting pools which continue to accrue interest. Other acquired impaired loans, which had previously been aggregated with nonaccrual loans, totaled $218 million or .37% of total loans at September 30, 2011, compared with $141 million or .24% at June 30, 2011 and $98 million or .19% at September 30, 2010. The increase in such loans from June 30, 2011 was due to loans obtained in the acquisition of Wilmington Trust.

 

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M&T BANK CORPORATION

 

Nonaccrual loans, which exclude other acquired impaired loans, were little changed from June 30, 2011. Such loans totaled $1.11 billion and $1.12 billion at September 30 and June 30, 2011, respectively, or 1.91% of total loans at each of those dates, compared with $1.00 billion or 1.97% at September 30, 2010.

Assets taken in foreclosure of defaulted loans were $150 million at September 30, 2011, down from $193 million at September 30, 2010 and $159 million at June 30, 2011. The decrease in such assets at the two most recent quarter-ends as compared with September 30, 2010 resulted from the sale during 2011’s second quarter of a commercial real estate property in New York City with a carrying value of $99 million. Reflected in assets taken in foreclosure of defaulted loans at September 30 and June 30, 2011 were $51 million and $57 million, respectively, of assets related to the Wilmington Trust acquisition.

Loans past due 90 days or more and accruing interest totaled $310 million at September 30, 2011, down from $373 million at June 30, 2011. Included in such past due but accruing loans at the two most recent quarter-ends were $64 million and $130 million, respectively, of loans obtained in the Wilmington Trust acquisition. At September 30, 2010, loans past due 90 days or more and accruing interest were $215 million. Included in this category were $212 million, $207 million and $194 million of loans guaranteed by government-related entities at September 30, 2011, June 30, 2011 and September 30, 2010, 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 was $909 million at September 30, 2011, compared with $895 million at

 

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M&T BANK CORPORATION

 

September 30, 2010 and $908 million at June 30, 2011. 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 carry-over of the acquired entity’s allowance for credit losses. Excluding amounts related to loans obtained in acquisition transactions subsequent to 2008, the allowance-to-legacy loan ratio was 1.79% at September 30, 2011, compared with 1.86% at September 30, 2010 and 1.80% at June 30, 2011.

Noninterest Income and Expense.    Noninterest income totaled $368 million in the recent quarter, compared with $290 million and $502 million in the third quarter of 2010 and the second quarter of 2011, respectively. Reflected in such income were net pre-tax losses from investment securities of $10 million and $8 million in the recent quarter and the third quarter of 2010, respectively, and net pre-tax gains from investment securities of $84 million in the second quarter of 2011.

Excluding gains and losses from investment securities in all periods and the non-taxable gain of $65 million recorded in the second quarter of 2011 related to the Wilmington Trust acquisition, noninterest income in the third quarter of 2011 aggregated $378 million, up from $298 million in the third quarter of 2010 and $353 million in 2011’s second quarter. Contributing to those increases were significantly higher trust income, predominantly due to the Wilmington Trust transaction, partially offset by a decline in residential mortgage banking revenues. That decline reflected M&T’s decision to retain the majority of residential mortgage loan originations in the recent quarter rather than selling them.

 

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M&T BANK CORPORATION

 

Noninterest expense in the third quarter of 2011 aggregated $662 million, compared with $480 million in the year-earlier quarter and $577 million in the second quarter of 2011. 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 $619 million in the recent quarter, compared with $467 million in the third quarter of 2010 and $525 million in 2011’s second quarter. The most significant factor for the higher levels of operating expenses in the two most recent quarters as compared with the third quarter of 2010 was the impact of the operations obtained in the Wilmington Trust acquisition mid-way through 2011’s second quarter.

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 61.8% in the recent quarter, compared with 53.4% and 55.6% in the year-earlier quarter and the second quarter of 2011, respectively. The higher ratio in the recent quarter reflects expenses associated with the operations obtained in the Wilmington Trust acquisition. M&T should begin to realize certain cost savings related to that acquisition transaction during the final quarter of 2011, but expects that the full realization of operating efficiencies will not happen until 2012.

Balance Sheet.    M&T had total assets of $77.9 billion at September 30, 2011, compared with $68.2 billion at September 30, 2010. Loans and leases, net of unearned discount, were $58.4 billion at September 30, 2011, compared with $50.8 billion a year

 

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earlier. Total deposits aggregated $59.5 billion at the recent quarter-end, up 22% from $48.7 billion at September 30, 2010.

Total shareholders’ equity rose 14% to $9.4 billion at September 30, 2011 from $8.2 billion a year earlier, representing 12.04% and 12.06%, respectively, of total assets. Common shareholders’ equity was $8.5 billion, or $67.70 per share, at September 30, 2011, compared with $7.5 billion, or $62.69 per share, at September 30, 2010. Tangible equity per common share rose 18% to $38.11 at September 30, 2011 from $32.23 at September 30, 2010. Common shareholders’ equity per share and tangible equity per common share were $66.71 and $37.00, respectively, at June 30, 2011. 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 6.46% at September 30, 2011, compared with 5.96% and 6.28% at September 30, 2010 and June 30, 2011, respectively. M&T’s estimated Tier 1 common ratio rose to 6.89% at September 30, 2011, improved from 6.42% and 6.67% at September 30, 2010 and June 30, 2011, respectively.

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 #18665770. 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 Friday, October 21, 2011 by calling (800)585-8367, or (404)537-3406 for international

 

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participants, and by making reference to ID #18665770. The event will also be archived and available by 5:00 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 retail and commercial bank branches in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Jersey, the District of Columbia and Ontario, Canada. 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

 

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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.

 

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Financial Highlights

 

Amounts in thousands, except per share		Three months ended September 30								Change				Nine months ended September 30								Change
		2011				2010								2011				2010
Performance
Net income		$	183,108				192,015				-5	%		$	711,739				531,719				34	%
Net income available to common shareholders			164,671				176,789				-7				651,966				486,831				34
Per common share:
Basic earnings		$	1.32				1.49				-11	%		$	5.34				4.12				30	%
Diluted earnings			1.32				1.48				-11				5.32				4.10				30
Cash dividends		$	.70				.70				—			$	2.10				2.10				—
Common shares outstanding:
Average - diluted (1)			124,860				119,155				5	%			122,521				118,766				3	%
Period end (2)			125,678				119,435				5				125,678				119,435				5
Return on (annualized):
Average total assets			.94	%			1.12	%							1.31	%			1.04	%
Average common shareholders’ equity			7.84	%			9.56	%							10.94	%			9.05	%
Taxable-equivalent net interest income		$	623,265				575,733				8	%		$	1,791,066				1,711,322				5	%
Yield on average earning assets			4.29	%			4.65	%							4.42	%			4.62	%
Cost of interest-bearing liabilities			.86	%			1.03	%							.89	%			1.04	%
Net interest spread			3.43	%			3.62	%							3.53	%			3.58	%
Contribution of interest-free funds			.25	%			.25	%							.25	%			.25	%
Net interest margin			3.68	%			3.87	%							3.78	%			3.83	%
Net charge-offs to average total net loans (annualized)			.39	%			.73	%							.46	%			.70	%
Net operating results (3)
Net operating income		$	209,996				200,225				5	%		$	715,843				558,930				28	%
Diluted net operating earnings per common share			1.53				1.55				-1				5.36				4.33				24
Return on (annualized):
Average tangible assets			1.14	%			1.24	%							1.39	%			1.16	%
Average tangible common equity			16.26	%			19.58	%							20.16	%			19.13	%
Efficiency ratio			61.79	%			53.40	%							57.84	%			54.10	%
		At September 30								Change
		2011				2010
Loan quality
Nonaccrual loans		$	1,113,788				1,001,454				11	%
Real estate and other foreclosed assets			149,868				192,600				-22	%
Total nonperforming assets		$	1,263,656				1,194,054				6	%
Other acquired impaired loans (4)		$	217,759				98,106				122	%
Accruing loans past due 90 days or more (6)		$	309,966				214,769				44	%
Renegotiated loans		$	223,233				233,671				-4	%
Government guaranteed loans included in totals above:
Nonaccrual loans		$	32,937				37,218				-12	%
Other acquired impaired loans			40,961				1,014				—	%
Accruing loans past due 90 days or more			211,808				194,223				9	%
Purchased impaired loans (5):
Outstanding customer balance		$	1,393,777				113,964				—	%
Carrying amount			703,632				52,728				—	%
Nonaccrual loans to total net loans			1.91	%			1.97	%
Allowance for credit losses to:
Legacy loans			1.79	%			1.86	%
Total loans			1.56	%			1.76	%

 

(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 on page 18.

 

(4)	Acquired loans that ceased performing in accordance with their contractual terms and became impaired subsequent to the acquisition date, but are included in accounting pools that continue to accrue interest.

 

(5)	Accruing loans that were impaired at acquisition date and recorded at fair value.

 

(6)	Excludes purchased impaired and other acquired impaired loans.

 

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Financial Highlights, Five Quarter Trend

 

		Three months ended
Amounts in thousands, except per share		September 30, 2011				June 30, 2011				March 31, 2011				December 31, 2010				September 30, 2010
Performance
Net income		$	183,108				322,358				206,273				204,442				192,015
Net income available to common shareholders			164,671				297,179				190,121				189,678				176,789
Per common share:
Basic earnings		$	1.32				2.43				1.59				1.59				1.49
Diluted earnings			1.32				2.42				1.59				1.59				1.48
Cash dividends		$	.70				.70				.70				.70				.70
Common shares outstanding:
Average - diluted (1)			124,860				122,796				119,852				119,503				119,155
Period end (2)			125,678				125,622				120,410				119,774				119,435
Return on (annualized):
Average total assets			.94	%			1.78	%			1.23	%			1.18	%			1.12	%
Average common shareholders’ equity			7.84	%			14.94	%			10.16	%			10.03	%			9.56	%
Taxable-equivalent net interest income		$	623,265				592,670				575,131				580,227				575,733
Yield on average earning assets			4.29	%			4.40	%			4.60	%			4.58	%			4.65	%
Cost of interest-bearing liabilities			.86	%			.89	%			.91	%			.97	%			1.03	%
Net interest spread			3.43	%			3.51	%			3.69	%			3.61	%			3.62	%
Contribution of interest-free funds			.25	%			.24	%			.23	%			.24	%			.25	%
Net interest margin			3.68	%			3.75	%			3.92	%			3.85	%			3.87	%
Net charge-offs to average total net loans (annualized)			.39	%			.43	%			.58	%			.60	%			.73	%
Net operating results (3)
Net operating income		$	209,996				289,487				216,360				196,235				200,225
Diluted net operating earnings per common share			1.53				2.16				1.67				1.52				1.55
Return on (annualized):
Average tangible assets			1.14	%			1.69	%			1.36	%			1.20	%			1.24	%
Average tangible common equity			16.26	%			24.40	%			20.16	%			18.43	%			19.58	%
Efficiency ratio			61.79	%			55.56	%			55.75	%			52.55	%			53.40	%
		September 30, 2011				June 30, 2011				March 31, 2011				December 31, 2010				September 30, 2010
Loan quality
Nonaccrual loans		$	1,113,788				1,117,584				1,081,920				1,139,740				1,001,454
Real estate and other foreclosed assets			149,868				158,873				218,203				220,049				192,600
Total nonperforming assets		$	1,263,656				1,276,457				1,300,123				1,359,789				1,194,054
Other acquired impaired loans (4)		$	217,759				141,391				129,191				99,454				98,106
Accruing loans past due 90 days or more (6)		$	309,966				373,197				264,480				269,593				214,769
Renegotiated loans		$	223,233				234,726				241,190				233,342				233,671
Government guaranteed loans included in totals above:
Nonaccrual loans		$	32,937				42,337				36,300				39,883				37,218
Other acquired impaired loans			40,961				36,395				33,053				16,904				1,014
Accruing loans past due 90 days or more			211,808				207,135				214,505				214,111				194,223
Purchased impaired loans (5):
Outstanding customer balance		$	1,393,777				1,473,237				206,253				219,477				113,964
Carrying amount			703,632				752,978				88,589				97,019				52,728
Nonaccrual loans to total net loans			1.91	%			1.91	%			2.08	%			2.19	%			1.97	%
Allowance for credit losses to:
Legacy loans			1.79	%			1.80	%			1.81	%			1.82	%			1.86	%
Total loans			1.56	%			1.55	%			1.73	%			1.74	%			1.76	%

 

(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 on page 19.

 

(4)	Acquired loans that ceased performing in accordance with their contractual terms and became impaired subsequent to the acquisition date, but are included in accounting pools that continue to accrue interest.

 

(5)	Accruing loans that were impaired at acquisition date and recorded at fair value.

 

(6)	Excludes purchased impaired and other acquired impaired loans.

 

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13-13-13-13-13

M&T BANK CORPORATION

 

Condensed Consolidated Statement of Income

 

		Three months ended September 30												Nine months ended September 30
Dollars in thousands		2011				2010				Change				2011				2010				Change
Interest income		$	720,351				685,900				5	%		$	2,076,087				2,047,070				1	%
Interest expense			103,632				116,032				-11				304,362				353,641				-14
Net interest income			616,719				569,868				8				1,771,725				1,693,429				5
Provision for credit losses			58,000				93,000				-38				196,000				283,000				-31
Net interest income after provision for credit losses			558,719				476,868				17				1,575,725				1,410,429				12
Other income
Mortgage banking revenues			38,141				61,052				-38				125,448				149,612				-16
Service charges on deposit accounts			121,577				117,733				3				351,024				367,004				-4
Trust income			113,652				30,485				273				218,565				91,582				139
Brokerage services income			13,907				12,127				15				43,129				38,021				13
Trading account and foreign exchange gains			4,176				6,035				-31				19,253				14,531				32
Gain on bank investment securities			89				1,440				—				150,186				1,909				—
Other-than-temporary impairment losses recognized in earnings			(9,642	)			(9,532	)			—				(52,213	)			(58,714	)			—
Equity in earnings of Bayview Lending Group LLC			(6,911	)			(6,460	)			—				(18,812	)			(18,353	)			—
Other revenues from operations			93,393				77,019				21				347,878				235,570				48
Total other income			368,382				289,899				27				1,184,458				821,162				44
Other expense
Salaries and employee benefits			325,197				246,389				32				891,465				756,296				18
Equipment and net occupancy			68,101				54,353				25				184,434				165,185				12
Printing, postage and supplies			10,593				7,820				35				29,518				25,412				16
Amortization of core deposit and other intangible assets			17,401				13,526				29				44,455				44,834				-1
FDIC assessments			26,701				18,039				48				72,404				60,995				19
Other costs of operations			214,026				140,006				53				516,209				392,841				31
Total other expense			662,019				480,133				38				1,738,485				1,445,563				20
Income before income taxes			265,082				286,634				-8				1,021,698				786,028				30
Applicable income taxes			81,974				94,619				-13				309,959				254,309				22
Net income		$	183,108				192,015				-5	%		$	711,739				531,719				34	%

 

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14-14-14-14-14

M&T BANK CORPORATION

 

Condensed Consolidated Statement of Income, Five Quarter Trend

 

		Three months ended
Dollars in thousands		September 30, 2011				June 30, 2011				March 31, 2011				December 31, 2010				September 30, 2010
Interest income		$	720,351				688,253				667,483				682,725				685,900
Interest expense			103,632				102,051				98,679				108,628				116,032
Net interest income			616,719				586,202				568,804				574,097				569,868
Provision for credit losses			58,000				63,000				75,000				85,000				93,000
Net interest income after provision for credit losses			558,719				523,202				493,804				489,097				476,868
Other income
Mortgage banking revenues			38,141				42,151				45,156				35,013				61,052
Service charges on deposit accounts			121,577				119,716				109,731				111,129				117,733
Trust income			113,652				75,592				29,321				31,031				30,485
Brokerage services income			13,907				14,926				14,296				11,648				12,127
Trading account and foreign exchange gains			4,176				6,798				8,279				12,755				6,035
Gain on bank investment securities			89				110,744				39,353				861				1,440
Other-than-temporary impairment losses recognized in earnings			(9,642	)			(26,530	)			(16,041	)			(27,567	)			(9,532	)
Equity in earnings of Bayview Lending Group LLC			(6,911	)			(5,223	)			(6,678	)			(7,415	)			(6,460	)
Other revenues from operations			93,393				163,482				91,003				119,483				77,019
Total other income			368,382				501,656				314,420				286,938				289,899
Other expense
Salaries and employee benefits			325,197				300,178				266,090				243,413				246,389
Equipment and net occupancy			68,101				59,670				56,663				50,879				54,353
Printing, postage and supplies			10,593				9,723				9,202				8,435				7,820
Amortization of core deposit and other intangible assets			17,401				14,740				12,314				13,269				13,526
FDIC assessments			26,701				26,609				19,094				18,329				18,039
Other costs of operations			214,026				165,975				136,208				134,949				140,006
Total other expense			662,019				576,895				499,571				469,274				480,133
Income before income taxes			265,082				447,963				308,653				306,761				286,634
Applicable income taxes			81,974				125,605				102,380				102,319				94,619
Net income		$	183,108				322,358				206,273				204,442				192,015

 

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15-15-15-15-15

M&T BANK CORPORATION

 

Condensed Consolidated Balance Sheet

 

		September 30
Dollars in thousands		2011				2010				Change
ASSETS
Cash and due from banks		$	1,349,057				1,070,625				26	%
Interest-bearing deposits at banks			2,226,779				401,624				454
Federal funds sold and agreements to resell securities			5,000				443,700				-99
Trading account assets			605,557				536,702				13
Investment securities			7,173,797				7,662,715				-6
Loans and leases:
Commercial, financial, etc.			15,218,502				12,788,136				19
Real estate - commercial			23,961,306				20,580,450				16
Real estate - consumer			7,065,451				5,754,432				23
Consumer			12,156,005				11,668,540				4
Total loans and leases, net of unearned discount			58,401,264				50,791,558				15
Less: allowance for credit losses			908,525				894,720				2
Net loans and leases			57,492,739				49,896,838				15
Goodwill			3,524,625				3,524,625				—
Core deposit and other intangible assets			257,656				139,186				85
Other assets			5,228,681				4,570,822				14
Total assets		$	77,863,891				68,246,837				14	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits		$	19,637,491				14,665,603				34	%
Interest-bearing deposits			39,330,027				33,335,104				18
Deposits at Cayman Islands office			514,871				653,916				-21
Total deposits			59,482,389				48,654,623				22
Short-term borrowings			694,398				1,211,683				-43
Accrued interest and other liabilities			1,563,121				1,157,250				35
Long-term borrowings			6,748,857				8,991,508				-25
Total liabilities			68,488,765				60,015,064				14
Shareholders’ equity:
Preferred			862,717				737,979				17
Common (1)			8,512,409				7,493,794				14
Total shareholders’ equity			9,375,126				8,231,773				14
Total liabilities and shareholders’ equity		$	77,863,891				68,246,837				14	%

 

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $192.5 million at September 30, 2011 and $192.6 million at September 30, 2010.

 

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16-16-16-16-16

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend

 

		September 30,				June 30,				March 31,				December 31,				September 30,
Dollars in thousands		2011				2011				2011				2010				2010
ASSETS
Cash and due from banks		$	1,349,057				1,297,335				972,005				908,755				1,070,625
Interest-bearing deposits at banks			2,226,779				2,275,450				100,101				101,222				401,624
Federal funds sold and agreements to resell securities			5,000				415,580				10,300				25,000				443,700
Trading account assets			605,557				502,986				413,737				523,834				536,702
Investment securities			7,173,797				6,492,265				6,507,165				7,150,540				7,662,715
Loans and leases:
Commercial, financial, etc.			15,218,502				15,040,892				13,826,299				13,390,610				12,788,136
Real estate - commercial			23,961,306				24,263,726				20,891,615				21,183,161				20,580,450
Real estate - consumer			7,065,451				6,970,921				6,154,960				5,928,056				5,754,432
Consumer			12,156,005				12,265,690				11,245,807				11,488,555				11,668,540
Total loans and leases, net of unearned discount			58,401,264				58,541,229				52,118,681				51,990,382				50,791,558
Less: allowance for credit losses			908,525				907,589				903,703				902,941				894,720
Net loans and leases			57,492,739				57,633,640				51,214,978				51,087,441				49,896,838
Goodwill			3,524,625				3,524,625				3,524,625				3,524,625				3,524,625
Core deposit and other intangible assets			257,656				275,057				113,603				125,917				139,186
Other assets			5,228,681				5,310,216				5,024,694				4,573,929				4,570,822
Total assets		$	77,863,891				77,727,154				67,881,208				68,021,263				68,246,837
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits		$	19,637,491				18,598,828				15,219,562				14,557,568				14,665,603
Interest-bearing deposits			39,330,027				40,078,834				34,264,867				33,641,800				33,335,104
Deposits at Cayman Islands office			514,871				551,553				1,063,670				1,605,916				653,916
Total deposits			59,482,389				59,229,215				50,548,099				49,805,284				48,654,623
Short-term borrowings			694,398				567,144				504,676				947,432				1,211,683
Accrued interest and other liabilities			1,563,121				1,557,685				1,015,495				1,070,701				1,157,250
Long-term borrowings			6,748,857				7,128,916				7,305,420				7,840,151				8,991,508
Total liabilities			68,488,765				68,482,960				59,373,690				59,663,568				60,015,064
Shareholders’ equity:
Preferred			862,717				860,901				743,385				740,657				737,979
Common (1)			8,512,409				8,383,293				7,764,133				7,617,038				7,493,794
Total shareholders’ equity			9,375,126				9,244,194				8,507,518				8,357,695				8,231,773
Total liabilities and shareholders’ equity		$	77,863,891				77,727,154				67,881,208				68,021,263				68,246,837

 

 

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $192.5 million at September 30, 2011, $228.8 million at June 30, 2011, $197.5 million at March 31, 2011, $205.2 million at December 31, 2010 and $192.6 million at September 30, 2010.

 

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17-17-17-17-17

M&T BANK CORPORATION

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates

 

		Three months ended																																Nine months ended September 30
		September 30, 2011								September 30, 2010								June 30, 2011								Change in  balance September 30, 2011 from								2011								2010								Change  in balance
Dollars in millions		Balance				Rate				Balance				Rate				Balance				Rate				September 30, 2010				June 30, 2011				Balance				Rate				Balance				Rate
ASSETS
Interest-bearing deposits at banks		$	1,861				.25	%			92				.15	%			804				.24	%			—	%			131	%		$	933				.24	%			100				.06	%			834	%
Federal funds sold and agreements to resell securities			76				.14				64				.26				622				.09				20				-88				238				.10				33				.27				628
Trading account assets			85				1.75				82				.65				101				1.32				3				-16				98				1.55				69				.79				41
Investment securities			7,005				3.65				7,993				4.16				6,394				4.03				-12				10				6,872				3.95				8,180				4.29				-16
Loans and leases, net of unearned discount Commercial, financial, etc.			15,007				3.82				12,856				3.97				14,623				3.89				17				3				14,406				3.88				13,118				3.96				10
Real estate - commercial			23,979				4.62				20,612				4.85				22,471				4.59				16				7				22,495				4.64				20,745				4.66				8
Real estate - consumer			7,002				4.95				5,680				5.30				6,559				5.00				23				7				6,542				5.00				5,691				5.32				15
Consumer			12,200				4.95				11,687				5.22				11,808				5.03				4				3				11,787				5.03				11,795				5.24				—
Total loans and leases, net			58,188				4.51				50,835				4.74				55,461				4.55				14				5				55,230				4.57				51,349				4.69				8
Total earning assets			67,215				4.29				59,066				4.65				63,382				4.40				14				6				63,371				4.42				59,731				4.62				6
Goodwill			3,525								3,525								3,525								—				—				3,525								3,525								—
Core deposit and other intangible assets			266								146								198								83				35				195								160								22
Other assets			5,902								5,074								5,349								16				10				5,398								4,923								10
Total assets		$	76,908								67,811								72,454								13	%			6	%		$	72,489								68,339								6	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits
NOW accounts		$	814				.17				592				.15				742				.15				37	%			10	%		$	729				.15				599				.14				22	%
Savings deposits			31,654				.28				26,177				.33				30,043				.28				21				5				29,804				.28				25,733				.33				16
Time deposits			7,169				.98				6,312				1.46				6,657				1.16				14				8				6,514				1.15				6,767				1.56				-4
Deposits at Cayman Islands office			614				.12				802				.16				820				.09				-23				-25				869				.12				1,002				.14				-13
Total interest-bearing deposits			40,251				.40				33,883				.53				38,262				.42				19				5				37,916				.42				34,101				.56				11
Short-term borrowings			592				.15				1,858				.16				707				.08				-68				-16				878				.13				1,994				.16				-56
Long-term borrowings			6,829				3.63				8,948				3.10				7,076				3.48				-24				-3				7,089				3.45				9,516				2.91				-26
Total interest-bearing liabilities			47,672				.86				44,689				1.03				46,045				.89				7				4				45,883				.89				45,611				1.04				1
Noninterest-bearing deposits			18,222								13,647								16,195								34				13				16,320								13,518								21
Other liabilities			1,690								1,294								1,402								31				21				1,420								1,180								20
Total liabilities			67,584								59,630								63,642								13				6				63,623								60,309								5
Shareholders’ equity			9,324								8,181								8,812								14				6				8,866								8,030								10
Total liabilities and shareholders’ equity		$	76,908								67,811								72,454								13	%			6	%		$	72,489								68,339								6	%
Net interest spread							3.43								3.62								3.51																3.53								3.58
Contribution of interest-free funds							.25								.25								.24																.25								.25
Net interest margin							3.68	%							3.87	%							3.75	%															3.78	%							3.83	%

 

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18-18-18-18-18

M&T BANK CORPORATION

Reconciliation of Quarterly GAAP to Non-GAAP Measures

 

		Three months ended September 30								Nine months ended September 30
		2011				2010				2011				2010
Income statement data
In thousands, except per share
Net income
Net income		$	183,108				192,015			$	711,739				531,719
Amortization of core deposit and other intangible assets (1)			10,622				8,210				27,074				27,211
Merger-related gain (1)			—				—				(64,930	)			—
Merger-related expenses (1)			16,266				—				41,960				—
Net operating income		$	209,996				200,225			$	715,843				558,930
Earnings per common share
Diluted earnings per common share		$	1.32				1.48			$	5.32				4.10
Amortization of core deposit and other intangible assets (1)			.08				.07				.22				.23
Merger-related gain (1)			—				—				(.52	)			—
Merger-related expenses (1)			.13				—				.34				—
Diluted net operating earnings per common share		$	1.53				1.55			$	5.36				4.33
Other expense
Other expense		$	662,019				480,133			$	1,738,485				1,445,563
Amortization of core deposit and other intangible assets			(17,401	)			(13,526	)			(44,455	)			(44,834	)
Merger-related expenses			(26,003	)			—				(67,294	)			—
Noninterest operating expense		$	618,615				466,607			$	1,626,736				1,400,729
Merger-related expenses
Salaries and employee benefits		$	285				—			$	15,597				—
Equipment and net occupancy			119				—				223				—
Printing, postage and supplies			723				—				1,188				—
Other costs of operations			24,876				—				50,286				—
Total		$	26,003				—			$	67,294				—
Balance sheet data
In millions
Average assets
Average assets		$	76,908				67,811			$	72,489				68,339
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(266	)			(146	)			(195	)			(160	)
Deferred taxes			65				27				44				30
Average tangible assets		$	73,182				64,167			$	68,813				64,684
Average common equity
Average total equity		$	9,324				8,181			$	8,866				8,030
Preferred stock			(862	)			(737	)			(774	)			(735	)
Average common equity			8,462				7,444				8,092				7,295
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(266	)			(146	)			(195	)			(160	)
Deferred taxes			65				27				44				30
Average tangible common equity		$	4,736				3,800			$	4,416				3,640
At end of quarter
Total assets
Total assets		$	77,864				68,247
Goodwill			(3,525	)			(3,525	)
Core deposit and other intangible assets			(257	)			(139	)
Deferred taxes			63				26
Total tangible assets		$	74,145				64,609
Total common equity
Total equity		$	9,375				8,232
Preferred stock			(863	)			(738	)
Undeclared dividends—cumulative preferred stock			(3	)			(6	)
Common equity, net of undeclared cumulative preferred dividends			8,509				7,488
Goodwill			(3,525	)			(3,525	)
Core deposit and other intangible assets			(257	)			(139	)
Deferred taxes			63				26
Total tangible common equity		$	4,790				3,850

 

(1)	After any related tax effect.

 

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19-19-19-19-19

M&T BANK CORPORATION

 

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

 

		Three months ended
		September 30, 2011				June 30, 2011				March 31, 2011				December 31, 2010				September 30, 2010
Income statement data
In thousands, except per share
Net income
Net income		$	183,108				322,358				206,273				204,442				192,015
Amortization of core deposit and other intangible assets (1)			10,622				8,974				7,478				8,054				8,210
Merger-related gain (1)			—				(64,930	)			—				(16,730	)			—
Merger-related expenses (1)			16,266				23,085				2,609				469				—
Net operating income		$	209,996				289,487				216,360				196,235				200,225
Earnings per common share
Diluted earnings per common share		$	1.32				2.42				1.59				1.59				1.48
Amortization of core deposit and other intangible assets (1)			.08				.07				.06				.07				.07
Merger-related gain (1)			—				(.52	)			—				(.14	)			—
Merger-related expenses (1)			.13				.19				.02				—				—
Diluted net operating earnings per common share		$	1.53				2.16				1.67				1.52				1.55
Other expense
Other expense		$	662,019				576,895				499,571				469,274				480,133
Amortization of core deposit and other intangible assets			(17,401	)			(14,740	)			(12,314	)			(13,269	)			(13,526	)
Merger-related expenses			(26,003	)			(36,996	)			(4,295	)			(771	)			—
Noninterest operating expense		$	618,615				525,159				482,962				455,234				466,607
Merger-related expenses
Salaries and employee benefits		$	285				15,305				7				7				—
Equipment and net occupancy			119				25				79				44				—
Printing, postage and supplies			723				318				147				74				—
Other costs of operations			24,876				21,348				4,062				646				—
Total		$	26,003				36,996				4,295				771				—
Balance sheet data
In millions
Average assets
Average assets		$	76,908				72,454				68,045				68,502				67,811
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(266	)			(198	)			(119	)			(132	)			(146	)
Deferred taxes			65				46				22				24				27
Average tangible assets		$	73,182				68,777				64,423				64,869				64,167
Average common equity
Average total equity		$	9,324				8,812				8,451				8,322				8,181
Preferred stock			(862	)			(716	)			(743	)			(740	)			(737	)
Average common equity			8,462				8,096				7,708				7,582				7,444
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(266	)			(198	)			(119	)			(132	)			(146	)
Deferred taxes			65				46				22				24				27
Average tangible common equity		$	4,736				4,419				4,086				3,949				3,800
At end of quarter
Total assets
Total assets		$	77,864				77,727				67,881				68,021				68,247
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(257	)			(275	)			(113	)			(126	)			(139	)
Deferred taxes			63				68				20				23				26
Total tangible assets		$	74,145				73,995				64,263				64,393				64,609
Total common equity
Total equity		$	9,375				9,244				8,508				8,358				8,232
Preferred stock			(863	)			(861	)			(743	)			(741	)			(738	)
Undeclared dividends - cumulative preferred stock			(3	)			(3	)			(7	)			(6	)			(6	)
Common equity, net of undeclared cumulative preferred dividends			8,509				8,380				7,758				7,611				7,488
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(257	)			(275	)			(113	)			(126	)			(139	)
Deferred taxes			63				68				20				23				26
Total tangible common equity		$	4,790				4,648				4,140				3,983				3,850

 

(1)	After any related tax effect.

 

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