UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-9861
M&T BANK CORPORATION
| New York (State or other jurisdiction of incorporation or organization) |
16-0968385 (I.R.S. Employer Identification No.) |
|
| One M & T Plaza Buffalo, New York (Address of principal executive offices) |
14203 (Zip Code) |
(716) 842-5445
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Number of shares of the registrant’s Common Stock, $.50 par value, outstanding as of the close of business on October 28, 2002: 91,901,413 shares.
M&T BANK CORPORATION
FORM 10-Q
For the Quarterly Period Ended September 30, 2002
| Table of Contents of Information Required in Report | Page | |||||
Part I. FINANCIAL INFORMATION |
||||||
Item 1. Financial Statements. |
||||||
CONSOLIDATED
BALANCE SHEET — September 30, 2002 and December 31, 2001 |
3 | |||||
CONSOLIDATED
STATEMENT OF INCOME —
Three and nine months ended
September 30, 2002 and 2001 |
4 | |||||
CONSOLIDATED
STATEMENT OF CASH FLOWS —
Nine months ended September 30, 2002 and 2001 |
5 | |||||
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS’ EQUITY — Nine months ended
September 30, 2002 and 2001 |
6 | |||||
CONSOLIDATED SUMMARY OF CHANGES IN
ALLOWANCE FOR CREDIT LOSSES — Nine months
ended September 30, 2002 and 2001 |
6 | |||||
NOTES TO FINANCIAL STATEMENTS |
7 | |||||
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of
Operations. |
17 | |||||
Item 3. Quantitative and Qualitative Disclosures
About Market Risk. |
39 | |||||
Item 4. Controls and Procedures. |
39 | |||||
Part II. OTHER INFORMATION |
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Item 1. Legal Proceedings. |
39 | |||||
Item 2. Changes in Securities and Use of Proceeds. |
39 | |||||
Item 3. Defaults Upon Senior Securities. |
39 | |||||
Item 4. Submission of Matters to a Vote of Security
Holders. |
39 | |||||
Item 5. Other Information. |
39 | |||||
Item 6. Exhibits and Reports on Form 8-K. |
39 | |||||
SIGNATURES |
40 | |||||
CERTIFICATIONS |
41 | |||||
EXHIBIT INDEX |
43 | |||||
-2-
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Unaudited)
| September 30, | December 31, | ||||||||||||||
| Dollars in thousands, except per share | 2002 | 2001 | |||||||||||||
| Assets | Cash and due from banks |
$ | 1,197,615 | 965,664 | |||||||||||
Money-market assets |
|||||||||||||||
Interest-bearing deposits at banks |
6,497 | 4,341 | |||||||||||||
Federal funds sold and agreements to resell securities |
238,095 | 41,086 | |||||||||||||
Trading account |
50,821 | 38,929 | |||||||||||||
Total money-market assets |
295,413 | 84,356 | |||||||||||||
Investment securities |
|||||||||||||||
Available for sale (cost: $3,736,677 at September 30, 2002;
$2,627,509 at December 31, 2001) |
3,806,492 | 2,663,184 | |||||||||||||
Held to maturity (market value: $103,062 at September 30, 2002;
$122,107 at December 31, 2001) |
101,111 | 121,508 | |||||||||||||
Other (market value: $273,871 at September 30, 2002;
$239,445 at December 31, 2001) |
273,871 | 239,445 | |||||||||||||
Total investment securities |
4,181,474 | 3,024,137 | |||||||||||||
Loans and leases |
26,509,660 | 25,395,468 | |||||||||||||
Unearned discount |
(201,041 | ) | (207,708 | ) | |||||||||||
Allowance for credit losses |
(437,340 | ) | (425,008 | ) | |||||||||||
Loans and leases, net |
25,871,279 | 24,762,752 | |||||||||||||
Premises and equipment |
243,859 | 261,877 | |||||||||||||
Goodwill |
1,097,553 | 1,097,553 | |||||||||||||
Core deposit and other intangible assets |
130,577 | 170,273 | |||||||||||||
Accrued interest and other assets |
1,130,720 | 1,083,584 | |||||||||||||
Total assets |
$ | 34,148,490 | 31,450,196 | ||||||||||||
| Liabilities | Noninterest-bearing deposits |
$ | 4,000,097 | 3,704,004 | |||||||||||
NOW accounts |
1,001,328 | 930,400 | |||||||||||||
Savings deposits |
8,877,575 | 7,980,065 | |||||||||||||
Time deposits |
6,890,351 | 8,188,036 | |||||||||||||
Deposits at foreign office |
1,770,820 | 777,895 | |||||||||||||
Total deposits |
22,540,171 | 21,580,400 | |||||||||||||
Federal funds purchased and agreements
to repurchase securities |
2,598,647 | 2,133,558 | |||||||||||||
Other short-term borrowings |
1,212,094 | 912,272 | |||||||||||||
Accrued interest and other liabilities |
424,667 | 422,746 | |||||||||||||
Long-term borrowings |
4,314,359 | 3,461,769 | |||||||||||||
Total liabilities |
31,089,938 | 28,510,745 | |||||||||||||
| Stockholders' equity | Preferred stock, $1 par, 1,000,000 shares authorized,
none outstanding |
— | — | ||||||||||||
Common stock, $.50 par, 150,000,000 shares authorized,
97,139,347 shares issued at September 30, 2002 and December 31, 2001 |
48,570 | 48,570 | |||||||||||||
Common stock issuable, 126,193 shares at September 30, 2002;
130,428 shares at December 31, 2001 |
6,153 | 6,162 | |||||||||||||
Additional paid-in capital |
1,058,670 | 1,096,340 | |||||||||||||
Retained earnings |
2,307,609 | 2,017,700 | |||||||||||||
Accumulated other comprehensive income, net |
41,778 | 22,819 | |||||||||||||
Treasury stock — common, at cost — 5,273,108 shares at
September 30, 2002; 3,455,373, shares at December 31, 2001 |
(404,228 | ) | (252,140 | ) | |||||||||||
Total stockholders’ equity |
3,058,552 | 2,939,451 | |||||||||||||
Total liabilities and stockholders’ equity |
$ | 34,148,490 | 31,450,196 | ||||||||||||
-3-
M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
| Three months ended September 30 | Nine months ended September 30 | ||||||||||||||||||||||
| In thousands, except per share | 2002 | 2001 | 2002 | 2001 | |||||||||||||||||||
| Interest income | Loans and leases, including fees |
$ | 421,427 | 472,328 | $ | 1,261,573 | $ | 1,446,895 | |||||||||||||||
Money-market assets |
|||||||||||||||||||||||
Deposits at banks |
21 | 29 | 61 | 95 | |||||||||||||||||||
Federal funds sold and agreements to
resell securities |
458 | 167 | 2,647 | 1,118 | |||||||||||||||||||
Trading account |
43 | 83 | 149 | 267 | |||||||||||||||||||
Investment securities |
|||||||||||||||||||||||
Fully taxable |
34,822 | 43,663 | 104,762 | 143,104 | |||||||||||||||||||
Exempt from federal taxes |
4,500 | 5,699 | 14,691 | 18,693 | |||||||||||||||||||
Total interest income |
461,271 | 521,969 | 1,383,883 | 1,610,172 | |||||||||||||||||||
| Interest expense | NOW accounts |
1,024 | 1,896 | 2,998 | 7,287 | ||||||||||||||||||
Savings deposits |
27,797 | 32,515 | 81,743 | 105,196 | |||||||||||||||||||
Time deposits |
54,168 | 104,985 | 190,788 | 365,894 | |||||||||||||||||||
Deposits at foreign office |
1,793 | 3,115 | 5,100 | 9,547 | |||||||||||||||||||
Short-term borrowings |
14,197 | 32,808 | 38,905 | 105,603 | |||||||||||||||||||
Long-term borrowings |
47,101 | 52,355 | 138,622 | 163,221 | |||||||||||||||||||
Total interest expense |
146,080 | 227,674 | 458,156 | 756,748 | |||||||||||||||||||
Net interest income |
315,191 | 294,295 | 925,727 | 853,424 | |||||||||||||||||||
Provision for credit losses |
37,000 | 28,000 | 89,000 | 70,500 | |||||||||||||||||||
Net interest income after provision for credit losses |
278,191 | 266,295 | 836,727 | 782,924 | |||||||||||||||||||
| Other income | Mortgage banking revenues |
30,336 | 24,789 | 81,529 | 75,478 | ||||||||||||||||||
Service charges on deposit accounts |
43,072 | 37,000 | 123,408 | 105,847 | |||||||||||||||||||
Trust income |
14,432 | 15,589 | 45,555 | 47,733 | |||||||||||||||||||
Brokerage services income |
11,055 | 9,489 | 34,052 | 28,969 | |||||||||||||||||||
Trading account and foreign exchange gains |
287 | 223 | 1,716 | 2,591 | |||||||||||||||||||
Gain (loss) on sales of bank investment securities |
(660 | ) | 244 | (659 | ) | 1,873 | |||||||||||||||||
Other revenues from operations |
29,824 | 32,833 | 88,152 | 87,239 | |||||||||||||||||||
Total other income |
128,346 | 120,167 | 373,753 | 349,730 | |||||||||||||||||||
| Other expense | Salaries and employee benefits |
113,243 | 109,250 | 342,296 | 324,592 | ||||||||||||||||||
Equipment and net occupancy |
28,073 | 28,227 | 81,004 | 84,112 | |||||||||||||||||||
Printing, postage and supplies |
6,988 | 5,838 | 18,892 | 19,142 | |||||||||||||||||||
Amortization of goodwill |
— | 15,753 | — | 46,262 | |||||||||||||||||||
Amortization of core deposit and other intangible assets |
13,011 | 15,257 | 39,696 | 45,708 | |||||||||||||||||||
Other costs of operations |
72,511 | 61,869 | 198,387 | 184,191 | |||||||||||||||||||
Total other expense |
233,826 | 236,194 | 680,275 | 704,007 | |||||||||||||||||||
Income before taxes |
172,711 | 150,268 | 530,205 | 428,647 | |||||||||||||||||||
Income taxes |
55,496 | 52,401 | 170,932 | 152,306 | |||||||||||||||||||
Net income |
$ | 117,215 | 97,867 | $ | 359,273 | ||||||||||||||||||