INVESTOR CONTACT:		Donald J. MacLeod (716) 842-5138		FOR IMMEDIATE RELEASE: January 17, 2012
MEDIA CONTACT:		C. Michael Zabel (716) 842-5385

M&T BANK CORPORATION ANNOUNCES 2011 FOURTH QUARTER

AND FULL-YEAR PROFITS

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

GAAP Results of Operations.    Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the fourth quarter of 2011 were $1.04. On the same basis, net income in the recent quarter totaled $148 million. Expressed as an annualized rate of return on average assets and average common shareholders’ equity, GAAP-basis net income for the fourth quarter of 2011 was .75% and 6.12%, respectively.

Several noteworthy items are reflected in M&T’s results for the recently completed quarter. A $79 million other-than-temporary impairment charge was recorded during the quarter related to M&T’s 20% investment in Bayview Lending Group LLC (“BLG”). While the small balance commercial real estate securitization market that BLG previously operated in continues to be stagnant, Bayview’s asset management operations continue to grow and its business of managing capital in the distressed real estate market is performing well. Nevertheless, management increased its estimate of the timeframe over which M&T could reasonably anticipate recovery of the previously recorded investment amount and, as a result, concluded that the investment was other-than-temporarily impaired. That investment was written-down to its

 

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estimated fair value of $115 million. The impairment charge was recorded in “other costs of operations.” During December 2011, M&T received $55 million in cash resulting from the full settlement of a lawsuit initiated by M&T in 2008 against Deutsche Bank Securities, Inc. and several other parties. M&T sought damages arising from a 2007 investment in collateralized debt obligations and alleged that the quality of the investment was not as represented. Subsequently, M&T made a $30 million tax-deductible cash contribution to The M&T Charitable Foundation, a private charitable foundation that has supported thousands of not-for-profit organizations to improve the quality of life throughout the communities M&T serves. Finally, an other-than-temporary impairment charge was recorded during the recent quarter on certain mortgage-backed investment securities, which totaled $25 million. The net impact of those four noteworthy items reduced M&T’s fourth quarter 2011 net income and diluted earnings per common share by $48 million and $.38, respectively.

Diluted earnings per common share were $1.59 and $1.32 in the fourth quarter of 2010 and the third quarter of 2011, respectively. Net income for those respective quarters was $204 million and $183 million. Net income expressed as an annualized rate of return on average assets and average common shareholders’ equity for the final 2010 quarter was 1.18% and 10.03%, respectively, compared with .94% and 7.84%, respectively, in the third quarter of 2011.

For the year ended December 31, 2011, diluted earnings per common share were $6.35, up 12% from $5.69 for the year ended December 31, 2010. Net income for 2011 and 2010 was $859 million and $736 million, respectively. Expressed as a rate of return on average assets and average common shareholders’

 

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equity, net income was 1.16% and 9.67%, respectively, in 2011, compared with 1.08% and 9.30%, respectively, in 2010.

Commenting on M&T’s performance in 2011, René F. Jones, Executive Vice President and Chief Financial Officer, noted, “We were quite pleased with our operating performance during the quarter, most notably the significant loan growth we experienced in our commercial portfolios. In total, average loans were up an annualized 6% from the third quarter, while period-end loans jumped $1.7 billion or an annualized 12% from September 30 to December 31. The past year was highlighted by many meaningful accomplishments. The successful consummation of the acquisition of Wilmington Trust and the conversion of the major loan and deposit systems was significant, and we started to see our projected cost savings materialize during the fourth quarter. The full-year 12% growth in earnings per share in 2011 was impressive given the economic headwinds and the changing regulatory environment for banks.”

Mr. Jones further commented, “With the favorable outcome of our CDO litigation, we were very pleased to make a significant contribution to The M&T Charitable Foundation that will allow it to continue supporting the communities where M&T does business. We believe that the strength of our bank is directly linked to the health of the communities we serve.”

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

 

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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 $1.20 in the recent quarter, compared with $1.52 in the corresponding 2010 period and $1.53 in the third quarter of 2011. Net operating income for the fourth quarters of 2011 and 2010 was $168 million and $196 million, respectively, compared with $210 million in the third quarter of 2011. For the three months ended December 31, 2011, net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity was .89% and 12.36%, respectively, compared with 1.20% and 18.43% in the similar period of 2010 and 1.14% and 16.07%, respectively, in the third quarter of 2011.

Diluted net operating earnings per common share rose 12% to $6.55 in 2011 from $5.84 in 2010. Net operating income for 2011 and 2010 aggregated $884 million and $755 million, respectively. Net operating income in 2011 expressed as a rate of return on average tangible assets and average tangible common shareholders’ equity was 1.26% and 17.96%, respectively, compared with 1.17% and 18.95%, respectively, in 2010.

Taxable-equivalent Net Interest Income.    Taxable-equivalent net interest income aggregated $625 million in the fourth quarter of 2011, up from $580 million in the year-earlier quarter and $623

 

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million in the third quarter of 2011. The growth in such income in the recent quarter as compared with the year-earlier quarter resulted from higher average earning assets, partially offset by a narrowing of the net interest margin. Earning assets rose 15% to $68.8 billion in the recent quarter from $59.7 million in the fourth quarter of 2010, predominantly due to the impact of the May 16, 2011 acquisition of Wilmington Trust Corporation (“Wilmington Trust”). That transaction added approximately $9.6 billion of earning assets on the acquisition date. The net interest margin was 3.60% in the recent quarter, compared with 3.85% in the last quarter of 2010. The narrowing of the net interest margin in the recent quarter as compared with the year-earlier quarter reflected the impact of the Wilmington Trust transaction, including significantly higher earning balances on deposit at the Federal Reserve. Growth in average earning assets of $1.6 billion from the third to the fourth quarter of 2011 was largely offset by an 8 basis point narrowing of the net interest margin. Net interest income on a taxable-equivalent basis totaled $2.42 billion for the full-year of 2011, 5% higher than $2.29 billion in 2010. That improvement resulted from a $5.0 billion increase in average earning assets, partially offset by a narrowing of the net interest margin to 3.73% in 2011 from 3.84% in 2010.

Provision for Credit Losses/Asset Quality.    The provision for credit losses was $74 million during the recently completed quarter, compared with $85 million in the corresponding 2010 quarter and $58 million in the third quarter of 2011. Net charge-offs of loans were $74 million in the fourth quarter of 2011, representing an annualized .50% of average loans outstanding, compared with $77 million or .60% in the year-earlier quarter and $57 million or .39% in 2011’s third quarter. The provision for credit losses declined 27% to $270 million for the year ended December 31, 2011 from $368 million in 2010. Net

 

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loan charge-offs in 2011 totaled $265 million, or .47% of average loans outstanding, compared with $346 million, or .67% of average loans in 2010.

Loans classified as nonaccrual totaled $1.10 billion, or 1.83% of total loans at December 31, 2011, improved from $1.14 billion or 2.19% a year earlier and $1.11 billion or 1.91% at September 30, 2011.

Assets taken in foreclosure of defaulted loans were $157 million at December 31, 2011, compared with $220 million and $150 million at December 31, 2010 and September 30, 2011, respectively. The decline in such assets at the two most recent quarter-ends as compared with December 31, 2010 resulted from the sale during the second quarter of 2011 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 December 31 and September 30, 2011 were $48 million and $51 million, respectively, of assets related to the Wilmington Trust acquisition.

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 $908 million at December 31, 2011, compared with $903 million a year earlier and $909 million at September 30, 2011. The allowance expressed as a percentage of outstanding loans was 1.51% at the recent quarter-end, compared with 1.74% at December 31, 2010 and 1.56% at September 30, 2011. The decline from December 31, 2010 reflects the impact of loans obtained in the Wilmington Trust acquisition for which GAAP requires that expected credit losses be reflected in the estimation of loan fair value as of the acquisition date and prohibits any carry-

 

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over of an allowance for credit losses. The remaining portion of that fair valuation adjustment to the Wilmington Trust loans which is not part of the allowance for credit losses was $485 million at December 31, 2011.

Noninterest Income and Expense.    Noninterest income totaled $398 million in the recent quarter, compared with $287 million and $368 million in the fourth quarter of 2010 and the third quarter of 2011, respectively. Reflected in those amounts were net losses from investment securities of $25 million, $27 million and $10 million, each predominantly due to other-than-temporary impairment charges. Also included in noninterest income in the recent quarter was the $55 million litigation settlement related to M&T’s 2007 investment in certain collateralized debt obligations, as previously noted. Noninterest income in 2010’s final quarter reflected a $28 million gain realized on M&T’s FDIC-assisted acquisition of select assets and liabilities of K Bank.

Excluding the specific items referred to in the preceding paragraph, noninterest income was $368 million in the fourth quarter of 2011, compared with $286 million in the year-earlier quarter and $378 million in the third quarter of 2011. The improvement in the recent quarter as compared with the fourth quarter of 2010 was predominantly attributable to the Wilmington Trust transaction, while the decline from the third quarter of 2011 was due to lower fees for providing consumer deposit services resulting from the Durbin amendment, which limits debit card interchange fees.

Noninterest income aggregated $1.58 billion and $1.11 billion during the years ended December 31, 2011 and 2010, respectively. The predominant contributor to the rise in noninterest income in 2011 as compared with 2010 was higher trust income resulting

 

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from the acquisition of Wilmington Trust. Net gains from investment securities, the previously noted litigation settlement and merger-related gains also contributed to the year-over-year improvement.

Noninterest expense in the fourth quarter of 2011 totaled $740 million, compared with $469 million in the year-earlier quarter and $662 million in 2011’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 and merger-related expenses. Exclusive of those expenses, noninterest operating expenses were $706 million in the fourth quarter of 2011, compared with $455 million and $619 million in the fourth quarter of 2010 and the third quarter of 2011, respectively. The most significant factors for the higher level of operating expenses in the recent quarter as compared with the fourth quarter of 2010 were the impact of the operations obtained in the Wilmington Trust acquisition in May 2011, the aforementioned $79 million impairment charge related to BLG, the $30 million charitable contribution and a 52% increase in FDIC assessments that was largely attributable to a regulatory mandated change in the assessment methodology. Noninterest operating expenses in the recent quarter as compared with the immediately preceding quarter also reflected the realization of significant cost savings due to the August conversion of the banking operations of Wilmington Trust. Specifically, salaries and empoyee benefits declined $13 million from 2011’s third quarter.

For the year ended December 31, 2011, noninterest expense aggregated $2.48 billion, compared with $1.91 billion in 2010.

 

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Excluding those previously noted expenses considered to be nonoperating in nature, noninterest operating expenses were $2.33 billion in 2011 and $1.86 billion in 2010. The increase in such expenses was largely attributable to the impact of the operations obtained in the Wilmington Trust acquisition, the impairment charge related to BLG, the charitable contribution and a 26% increase in 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 and merger-related gains), measures the relationship of operating expenses to revenues. M&T’s efficiency ratio was 67.4% in the fourth quarter of 2011, compared with 52.5% in the year-earlier quarter and 61.8% in the third quarter of 2011. M&T’s efficiency ratio for the years ended December 31, 2011 and 2010 was 60.4% and 53.7%, respectively. Excluding the $79 million impairment charge related to M&T’s investment in BLG, the $55 million litigation settlement and the $30 million charitable contribution in the fourth quarter of 2011, the efficiency ratio for the three months and twelve months ended December 31, 2011 would have been 60.1% and 58.4%, respectively.

Balance Sheet.    M&T had total assets of $77.9 billion at December 31, 2011, compared with $68.0 billion a year earlier. Loans and leases, net of unearned discount, totaled $60.1 billion at the 2011 year-end, up from $52.0 billion at December 31, 2010. Outstanding loans and leases at the end of 2011 grew $1.7 billion from $58.4 billion at September 30, 2011. That growth reflects increases in commercial loans, commercial real estate loans and residential real estate loans. Total deposits were $59.4 billion at December 31, 2011, 19% higher than $49.8 billion at the end of 2010.

 

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Total shareholders’ equity rose 11% to $9.3 billion at December 31, 2011 from $8.4 billion a year earlier, representing 11.90% and 12.29% respectively, of total assets. Common shareholders’ equity was $8.4 billion, or $66.82 per share at December 31, 2011, compared with $7.6 billion, or $63.54 per share, a year earlier. Tangible equity per common share rose 14% to $37.79 at December 31, 2011 from $33.26 a year earlier. 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 6.40% at December 31, 2011, compared with 6.19% and 6.53% at December 31, 2010 and September 30, 2011, respectively. M&T’s estimated Tier 1 common ratio was 6.86% at December 31, 2011, compared with 6.51% and 6.87% at December 31, 2010 and September 30, 2011, respectively.

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 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 #41414631. 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 19, 2012 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #41414631. 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.

 

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M&T is a financial holding company headquartered in Buffalo, New York. M&T’s principal banking subsidiary, M&T Bank, operates branches 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

 

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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

 

		Three months ended December 31								Change				Year ended December 31								Change
Amounts in thousands, except per share		2011				2010								2011				2010
Performance
Net income		$	147,740				204,442				-28	%		$	859,479				736,161				17	%
Net income available to common shareholders			129,804				189,678				-32				781,765				675,853				16
Per common share:
Basic earnings		$	1.04				1.59				-35	%		$	6.37				5.72				11	%
Diluted earnings			1.04				1.59				-35				6.35				5.69				12
Cash dividends		$	.70				.70				—			$	2.80				2.80				—
Common shares outstanding:
Average – diluted (1)			124,736				119,503				4	%			123,079				118,843				4	%
Period end (2)			125,752				119,774				5				125,752				119,774				5
Return on (annualized):
Average total assets			.75	%			1.18	%							1.16	%			1.08	%
Average common shareholders’ equity			6.12	%			10.03	%							9.67	%			9.30	%
Taxable-equivalent net interest income		$	624,566				580,227				8	%		$	2,415,632				2,291,549				5	%
Yield on average earning assets			4.17	%			4.58	%							4.35	%			4.61	%
Cost of interest-bearing liabilities			.82	%			.97	%							.87	%			1.02	%
Net interest spread			3.35	%			3.61	%							3.48	%			3.59	%
Contribution of interest-free funds			.25	%			.24	%							.25	%			.25	%
Net interest margin			3.60	%			3.85	%							3.73	%			3.84	%
Net charge-offs to average total net loans (annualized)			.50	%			.60	%							.47	%			.67	%
Net operating results (3)
Net operating income		$	168,410				196,235				-14	%		$	884,253				755,165				17	%
Diluted net operating earnings per common share			1.20				1.52				-21				6.55				5.84				12
Return on (annualized):
Average tangible assets			.89	%			1.20	%							1.26	%			1.17	%
Average tangible common equity			12.36	%			18.43	%							17.96	%			18.95	%
Efficiency ratio			67.38	%			52.55	%							60.43	%			53.71	%

 

		At December 31								Change
		2011				2010
Loan quality
Nonaccrual loans		$	1,097,581				1,139,740				-4	%
Real estate and other foreclosed assets			156,592				220,049				-29	%
Total nonperforming assets		$	1,254,173				1,359,789				-8	%
Accruing loans past due 90 days or more (4)		$	287,876				250,705				15	%
Government guaranteed loans included in totals above:
Nonaccrual loans		$	40,529				39,883				2	%
Accruing loans past due 90 days or more			252,503				207,243				22	%
Renegotiated loans		$	214,379				233,342				-8	%
Acquired accruing loans past due 90 days or more (5)		$	163,738				91,022				80	%
Purchased impaired loans (6):
Outstanding customer balance		$	1,267,762				219,477				—	%
Carrying amount			653,362				97,019				—	%
Nonaccrual loans to total net loans			1.83	%			2.19	%
Allowance for credit losses to total loans			1.51	%			1.74	%

 

(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 20.

(4)	Excludes acquired loans.

(5)	Acquired loans that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

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

 

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Financial Highlights, Five Quarter Trend

 

		Three months ended
Amounts in thousands, except per share		December 31, 2011				September 30, 2011				June 30, 2011				March 31, 2011				December 31, 2010
Performance
Net income		$	147,740				183,108				322,358				206,273				204,442
Net income available to common shareholders			129,804				164,671				297,179				190,121				189,678
Per common share:
Basic earnings		$	1.04				1.32				2.43				1.59				1.59
Diluted earnings			1.04				1.32				2.42				1.59				1.59
Cash dividends		$	.70				.70				.70				.70				.70
Common shares outstanding:
Average – diluted (1)			124,736				124,860				122,796				119,852				119,503
Period end (2)			125,752				125,678				125,622				120,410				119,774
Return on (annualized):
Average total assets			.75	%			.94	%			1.78	%			1.23	%			1.18	%
Average common shareholders’ equity			6.12	%			7.84	%			14.94	%			10.16	%			10.03	%
Taxable-equivalent net interest income.		$	624,566				623,265				592,670				575,131				580,227
Yield on average earning assets			4.17	%			4.29	%			4.40	%			4.60	%			4.58	%
Cost of interest-bearing liabilities			.82	%			.86	%			.89	%			.91	%			.97	%
Net interest spread			3.35	%			3.43	%			3.51	%			3.69	%			3.61	%
Contribution of interest-free funds			.25	%			.25	%			.24	%			.23	%			.24	%
Net interest margin .			3.60	%			3.68	%			3.75	%			3.92	%			3.85	%
Net charge-offs to average total net loans (annualized)			.50	%			.39	%			.43	%			.58	%			.60	%
Net operating results (3)
Net operating income		$	168,410				209,996				289,487				216,360				196,235
Diluted net operating earnings per common share			1.20				1.53				2.16				1.67				1.52
Return on (annualized):
Average tangible assets			.89	%			1.14	%			1.69	%			1.36	%			1.20	%
Average tangible common equity			12.36	%			16.07	%			24.24	%			20.16	%			18.43	%
Efficiency ratio			67.38	%			61.79	%			55.56	%			55.75	%			52.55	%
		December 31, 2011				September 30, 2011				June 30, 2011				March 31, 2011				December 31, 2010
Loan quality
Nonaccrual loans		$	1,097,581				1,113,788				1,117,584				1,081,920				1,139,740
Real estate and other foreclosed assets			156,592				149,868				158,873				218,203				220,049
Total nonperforming assets		$	1,254,173				1,263,656				1,276,457				1,300,123				1,359,789
Accruing loans past due 90 days or more (4)		$	287,876				239,970				239,527				243,990				250,705
Government guaranteed loans included in totals above:
Nonaccrual loans.		$	40,529				32,937				42,337				36,300				39,883
Accruing loans past due 90 days or more.			252,503				210,407				205,644				209,787				207,243
Renegotiated loans		$	214,379				223,233				234,726				241,190				233,342
Acquired accruing loans past due 90 days or more (5)		$	163,738				211,958				228,304				115,554				91,022
Purchased impaired loans (6):
Outstanding customer balance		$	1,267,762				1,393,777				1,473,237				206,253				219,477
Carrying amount			653,362				703,632				752,978				88,589				97,019
Nonaccrual loans to total net loans			1.83	%			1.91	%			1.91	%			2.08	%			2.19	%
Allowance for credit losses to total loans			1.51	%			1.56	%			1.55	%			1.73	%			1.74	%

 

 

(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 20.

(4)	Excludes acquired loans.

(5)	Acquired loans that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

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

 

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Condensed Consolidated Statement of Income

 

		Three months ended December 31								Change				Year ended December 31								Change
Dollars in thousands		2011				2010								2011				2010
Interest income		$	716,000				682,725				5	%		$	2,792,087				2,729,795				2	%
Interest expense			97,969				108,628				-10				402,331				462,269				-13
Net interest income			618,031				574,097				8				2,389,756				2,267,526				5
Provision for credit losses			74,000				85,000				-13				270,000				368,000				-27
Net interest income after provision for credit losses			544,031				489,097				11				2,119,756				1,899,526				12
Other income
Mortgage banking revenues			40,573				35,013				16				166,021				184,625				-10
Service charges on deposit accounts			104,071				111,129				-6				455,095				478,133				-5
Trust income			113,820				31,031				267				332,385				122,613				171
Brokerage services income			13,341				11,648				15				56,470				49,669				14
Trading account and foreign exchange gains			7,971				12,755				-38				27,224				27,286				—
Gain on bank investment securities			1				861				—				150,187				2,770				—
Other-than-temporary impairment losses recognized in earnings			(24,822	)			(27,567	)			—				(77,035	)			(86,281	)			—
Equity in earnings of Bayview Lending Group LLC			(5,419	)			(7,415	)			—				(24,231	)			(25,768	)			—
Other revenues from operations			148,918				119,483				25				496,796				355,053				40
Total other income			398,454				286,938				39				1,582,912				1,108,100				43
Other expense
Salaries and employee benefits			312,528				243,413				28				1,203,993				999,709				20
Equipment and net occupancy			65,080				50,879				28				249,514				216,064				15
Printing, postage and supplies			11,399				8,435				35				40,917				33,847				21
Amortization of core deposit and other intangible assets			17,162				13,269				29				61,617				58,103				6
FDIC assessments			27,826				18,329				52				100,230				79,324				26
Other costs of operations			305,588				134,949				126				821,797				527,790				56
Total other expense			739,583				469,274				58				2,478,068				1,914,837				29
Income before income taxes			202,902				306,761				-34				1,224,600				1,092,789				12
Applicable income taxes			55,162				102,319				-46				365,121				356,628				2
Net income		$	147,740				204,442				-28	%		$	859,479				736,161				17	%

 

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16-16-16-16-16

M&T BANK CORPORATION

 

Condensed Consolidated Statement of Income, Five Quarter Trend

 

		Three months ended
Dollars in thousands		December 31, 2011				September 30, 2011				June 30, 2011				March 31, 2011				December 31, 2010
Interest income		$	716,000				720,351				688,253				667,483				682,725
Interest expense			97,969				103,632				102,051				98,679				108,628
Net interest income			618,031				616,719				586,202				568,804				574,097
Provision for credit losses			74,000				58,000				63,000				75,000				85,000
Net interest income after provision for credit losses			544,031				558,719				523,202				493,804				489,097
Other income
Mortgage banking revenues			40,573				38,141				42,151				45,156				35,013
Service charges on deposit accounts.			104,071				121,577				119,716				109,731				111,129
Trust income			113,820				113,652				75,592				29,321				31,031
Brokerage services income			13,341				13,907				14,926				14,296				11,648
Trading account and foreign exchange gains			7,971				4,176				6,798				8,279				12,755
Gain on bank investment securities			1				89				110,744				39,353				861
Other-than-temporary impairment losses recognized in earnings			(24,822	)			(9,642	)			(26,530	)			(16,041	)			(27,567	)
Equity in earnings of Bayview Lending Group LLC			(5,419	)			(6,911	)			(5,223	)			(6,678	)			(7,415	)
Other revenues from operations			148,918				93,393				163,482				91,003				119,483
Total other income			398,454				368,382				501,656				314,420				286,938
Other expense
Salaries and employee benefits			312,528				325,197				300,178				266,090				243,413
Equipment and net occupancy			65,080				68,101				59,670				56,663				50,879
Printing, postage and supplies			11,399				10,593				9,723				9,202				8,435
Amortization of core deposit and other intangible assets.			17,162				17,401				14,740				12,314				13,269
FDIC assessments			27,826				26,701				26,609				19,094				18,329
Other costs of operations .			305,588				214,026				165,975				136,208				134,949
Total other expense			739,583				662,019				576,895				499,571				469,274
Income before income taxes			202,902				265,082				447,963				308,653				306,761
Applicable income taxes			55,162				81,974				125,605				102,380				102,319
Net income		$	147,740				183,108				322,358				206,273				204,442

 

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17-17-17-17-17

M&T BANK CORPORATION

 

Condensed Consolidated Balance Sheet

 

		December 31								Change
Dollars in thousands		2011				2010
ASSETS
Cash and due from banks		$	1,449,547				908,755				60	%
Interest-bearing deposits at banks			154,960				101,222				53
Federal funds sold and agreements to resell securities			2,850				25,000				-89
Trading account assets			561,834				523,834				7
Investment securities			7,673,154				7,150,540				7
Loans and leases:
Commercial, financial, etc.			15,734,436				13,390,610				18
Real estate – commercial			24,411,114				21,183,161				15
Real estate – consumer			7,923,165				5,928,056				34
Consumer			12,027,290				11,488,555				5
Total loans and leases, net of unearned discount			60,096,005				51,990,382				16
Less: allowance for credit losses			908,290				902,941				1
Net loans and leases			59,187,715				51,087,441				16
Goodwill			3,524,625				3,524,625				—
Core deposit and other intangible assets			176,394				125,917				40
Other assets			5,193,208				4,573,929				14
Total assets		$	77,924,287				68,021,263				15	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits		$	20,017,883				14,557,568				38	%
Interest-bearing deposits			39,020,839				33,641,800				16
Deposits at Cayman Islands office			355,927				1,605,916				-78
Total deposits			59,394,649				49,805,284				19
Short-term borrowings			782,082				947,432				-17
Accrued interest and other liabilities			1,790,121				1,070,701				67
Long-term borrowings			6,686,226				7,840,151				-15
Total liabilities			68,653,078				59,663,568				15
Shareholders’ equity:
Preferred			864,585				740,657				17
Common (1)			8,406,624				7,617,038				10
Total shareholders’ equity			9,271,209				8,357,695				11
Total liabilities and shareholders’ equity		$	77,924,287				68,021,263				15	%

 

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $356.4 million at December 31, 2011 and $205.2 million at December 31, 2010.

 

 

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18-18-18-18-18

M&T BANK CORPORATION

 

Condensed Consolidated Balance Sheet, Five Quarter Trend

 

Dollars in thousands		December 31, 2011				September 30, 2011				June 30, 2011				March 31, 2011				December 31, 2010
ASSETS
Cash and due from banks		$	1,449,547				1,349,057				1,297,335				972,005				908,755
Interest-bearing deposits at banks			154,960				2,226,779				2,275,450				100,101				101,222
Federal funds sold and agreements to resell securities			2,850				5,000				415,580				10,300				25,000
Trading account assets			561,834				605,557				502,986				413,737				523,834
Investment securities			7,673,154				7,173,797				6,492,265				6,507,165				7,150,540
Loans and leases:
Commercial, financial, etc.			15,734,436				15,218,502				15,040,892				13,826,299				13,390,610
Real estate – commercial			24,411,114				23,961,306				24,263,726				20,891,615				21,183,161
Real estate – consumer			7,923,165				7,065,451				6,970,921				6,154,960				5,928,056
Consumer			12,027,290				12,156,005				12,265,690				11,245,807				11,488,555
Total loans and leases, net of unearned discount			60,096,005				58,401,264				58,541,229				52,118,681				51,990,382
Less: allowance for credit losses			908,290				908,525				907,589				903,703				902,941
Net loans and leases			59,187,715				57,492,739				57,633,640				51,214,978				51,087,441
Goodwill			3,524,625				3,524,625				3,524,625				3,524,625				3,524,625
Core deposit and other intangible assets			176,394				193,556				210,957				113,603				125,917
Other assets			5,193,208				5,292,781				5,374,316				5,024,694				4,573,929
Total assets		$	77,924,287				77,863,891				77,727,154				67,881,208				68,021,263
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits		$	20,017,883				19,637,491				18,598,828				15,219,562				14,557,568
Interest-bearing deposits			39,020,839				39,330,027				40,078,834				34,264,867				33,641,800
Deposits at Cayman Islands office			355,927				514,871				551,553				1,063,670				1,605,916
Total deposits			59,394,649				59,482,389				59,229,215				50,548,099				49,805,284
Short-term borrowings			782,082				694,398				567,144				504,676				947,432
Accrued interest and other liabilities			1,790,121				1,563,121				1,557,685				1,015,495				1,070,701
Long-term borrowings			6,686,226				6,748,857				7,128,916				7,305,420				7,840,151
Total liabilities			68,653,078				68,488,765				68,482,960				59,373,690				59,663,568
Shareholders' equity:
Preferred			864,585				862,717				860,901				743,385				740,657
Common (1)			8,406,624				8,512,409				8,383,293				7,764,133				7,617,038
Total shareholders’ equity			9,271,209				9,375,126				9,244,194				8,507,518				8,357,695
Total liabilities and shareholders’ equity		$	77,924,287				77,863,891				77,727,154				67,881,208				68,021,263

 

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $356.4 million at December 31, 2011, $192.5 million at September 30, 2011, $228.8 million at June 30, 2011, $197.5 million at March 31, 2011 and $205.2 million at December 31, 2010.

 

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19-19-19-19-19

M&T BANK CORPORATION

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates

 

		Three months ended																								Change in balance December 31, 2011 from								Year ended December 31,																Change in balance
		December 31, 2011								December 31, 2010								September 30, 2011																2011								2010
Dollars in millions		Balance				Rate				Balance				Rate				Balance				Rate				December 31, 2010				September 30, 2011				Balance				Rate				Balance				Rate
ASSETS
Interest-bearing deposits at banks		$	1,973				.25	%			110				.15	%			1,861				.25	%			—	%			6	%		$	1,195				.25	%			102				.09	%			—	%
Federal funds sold and agreements to resell securities			6				.38				780				.19				76				.14				-99				-92				180				.11				221				.20				-19
Trading account assets			82				1.30				165				.91				85				1.75				-50				-3				94				1.50				94				.84				—
Investment securities			7,633				3.48				7,541				4.07				7,005				3.65				1				9				7,064				3.82				8,018				4.24				-12
Loans and leases, net of unearned discount
Commercial, financial, etc.			15,392				3.78				13,013				4.07				15,007				3.82				18				3				14,655				3.85				13,092				3.99				12
Real estate – commercial			24,108				4.47				20,624				4.84				23,979				4.62				17				1				22,901				4.59				20,714				4.70				11
Real estate – consumer			7,480				4.77				5,910				5.15				7,002				4.95				27				7				6,778				4.93				5,746				5.28				18
Consumer			12,097				4.87				11,594				5.18				12,200				4.95				4				-1				11,865				4.99				11,745				5.22				1
Total loans and leases, net			59,077				4.39				51,141				4.74				58,188				4.51				16				2				56,199				4.53				51,297				4.70				10
Total earning assets			68,771				4.17				59,737				4.58				67,215				4.29				15				2				64,732				4.35				59,732				4.61				8
Goodwill			3,525								3,525								3,525								—				—				3,525								3,525								—
Core deposit and other intangible assets			185								132								202								40				-9				168								153								10
Other assets			5,912								5,108								5,966								16				-1				5,552								4,970								12
Total assets		$	78,393								68,502								76,908								14	%			2	%		$	73,977								68,380								8	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits
NOW accounts		$	826				.15				608				.14				814				.17				36	%			1	%		$	753				.15				601				.14				25	%
Savings deposits			32,179				.27				27,545				.31				31,654				.28				17				2				30,403				.28				26,190				.33				16
Time deposits			6,379				.93				6,034				1.40				7,169				.98				6				-11				6,480				1.10				6,583				1.52				-2
Deposits at Cayman Islands office			512				.15				809				.17				614				.12				-37				-17				779				.12				953				.14				-18
Total interest-bearing deposits			39,896				.37				34,996				.49				40,251				.40				14				-1				38,415				.41				34,327				.55				12
Short-term borrowings			674				.10				1,439				.17				592				.15				-53				14				827				.12				1,854				.16				-55
Long-term borrowings			6,574				3.66				8,141				3.14				6,829				3.63				-19				-4				6,959				3.50				9,169				2.96				-24
Total interest-bearing liabilities			47,144				.82				44,576				.97				47,672				.86				6				-1				46,201				.87				45,350				1.02				2
Noninterest-bearing deposits			20,103								14,275								18,222								41				10				17,273								13,709								26
Other liabilities			1,733								1,329								1,690								30				3				1,499								1,218								23
Total liabilities			68,980								60,180								67,584								15				2				64,973								60,277								8
Shareholders’ equity			9,413								8,322								9,324								13				1				9,004								8,103								11
Total liabilities and shareholders’ equity		$	78,393								68,502								76,908								14	%			2	%		$	73,977								68,380								8	%
Net interest spread							3.35								3.61								3.43																3.48								3.59
Contribution of interest-free funds							.25								.24								.25																.25								.25
Net interest margin							3.60	%							3.85	%							3.68	%															3.73	%							3.84	%

 

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20-20-20-20-20

M&T BANK CORPORATION

 

Reconciliation of GAAP to Non-GAAP Measures

 

		Three months ended December 31								Year ended December 31
		2011				2010				2011				2010
Income statement data
In thousands, except per share
Net income
Net income		$	147,740				204,442			$	859,479				736,161
Amortization of core deposit and other intangible assets (1)			10,476				8,054				37,550				35,265
Merger-related gain (1)			—				(16,730	)			(64,930	)			(16,730	)
Merger-related expenses (1)			10,194				469				52,154				469
Net operating income		$	168,410				196,235			$	884,253				755,165
Earnings per common share
Diluted earnings per common share		$	1.04				1.59			$	6.35				5.69
Amortization of core deposit and other intangible assets (1)			.08				.07				.30				.29
Merger-related gain (1)			—				(.14	)			(.52	)			(.14	)
Merger-related expenses (1)			.08				—				.42				—
Diluted net operating earnings per common share		$	1.20				1.52			$	6.55				5.84
Other expense
Other expense		$	739,583				469,274			$	2,478,068				1,914,837
Amortization of core deposit and other
intangible assets			(17,162	)			(13,269	)			(61,617	)			(58,103	)
Merger-related expenses			(16,393	)			(771	)			(83,687	)			(771	)
Noninterest operating expense		$	706,028				455,234			$	2,332,764				1,855,963
Merger-related expenses
Salaries and employee benefits		$	534				7			$	16,131				7
Equipment and net occupancy			189				44				412				44
Printing, postage and supplies			1,475				74				2,663				74
Other costs of operations			14,195				646				64,481				646
Total		$	16,393				771			$	83,687				771
Efficiency ratio
Noninterest operating expense (numerator)		$	706,028				455,234			$	2,332,764				1,855,963
Taxable-equivalent net interest income			624,566				580,227				2,415,632				2,291,549
Other income			398,454				286,938				1,582,912				1,108,100
Less: Gain on bank investment securities			1				861				150,187				2,770
Net OTTI losses recognized in earnings			(24,822	)			(27,567	)			(77,035	)			(86,281	)
Merger-related gain			—				27,539				64,930				27,539
Denominator		$	1,047,841				866,332			$	3,860,462				3,455,621
Efficiency ratio			67.38	%			52.55	%			60.43	%			53.71	%
Balance sheet data
In millions
Average assets
Average assets		$	78,393				68,502			$	73,977				68,380
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(185	)			(132	)			(168	)			(153	)
Deferred taxes			54				24				43				29
Average tangible assets		$	74,737				64,869			$	70,327				64,731
Average common equity
Average total equity		$	9,413				8,322			$	9,004				8,103
Preferred stock			(864	)			(740	)			(797	)			(736	)
Average common equity			8,549				7,582				8,207				7,367
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(185	)			(132	)			(168	)			(153	)
Deferred taxes			54				24				43				29
Average tangible common equity		$	4,893				3,949			$	4,557				3,718
At end of quarter
Total assets
Total assets		$	77,924				68,021
Goodwill			(3,525	)			(3,525	)
Core deposit and other intangible assets			(176	)			(126	)
Deferred taxes			51				23
Total tangible assets		$	74,274				64,393
Total common equity
Total equity		$	9,271				8,358
Preferred stock			(865	)			(741	)
Undeclared dividends – cumulative preferred stock			(3	)			(6	)
Common equity, net of undeclared cumulative preferred dividends			8,403				7,611
Goodwill			(3,525	)			(3,525	)
Core deposit and other intangible assets			(176	)			(126	)
Deferred taxes			51				23
Total tangible common equity		$	4,753				3,983

 

(1)	After any related tax effect.

 

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21-21-21-21-21

M&T BANK CORPORATION

 

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

 

		Three months ended
		December 31, 2011				September 30, 2011				June 30, 2011				March 31, 2011				December 31, 2010
Income statement data
In thousands, except per share
Net income
Net income		$	147,740				183,108				322,358				206,273				204,442
Amortization of core deposit and other intangible assets (1)			10,476				10,622				8,974				7,478				8,054
Merger-related gain (1)			—				—				(64,930	)			—				(16,730	)
Merger-related expenses (1)			10,194				16,266				23,085				2,609				469
Net operating income		$	168,410				209,996				289,487				216,360				196,235
Earnings per common share
Diluted earnings per common share		$	1.04				1.32				2.42				1.59				1.59
Amortization of core deposit and other intangible assets (1)			.08				.08				.07				.06				.07
Merger-related gain (1)			—				—				(.52	)			—				(.14	)
Merger-related expenses (1)			.08				.13				.19				.02				—
Diluted net operating earnings per common share		$	1.20				1.53				2.16				1.67				1.52
Other expense
Other expense		$	739,583				662,019				576,895				499,571				469,274
Amortization of core deposit and other intangible assets			(17,162	)			(17,401	)			(14,740	)			(12,314	)			(13,269	)
Merger-related expenses			(16,393	)			(26,003	)			(36,996	)			(4,295	)			(771	)
Noninterest operating expense		$	706,028				618,615				525,159				482,962				455,234
Merger-related expenses
Salaries and employee benefits		$	534				285				15,305				7				7
Equipment and net occupancy			189				119				25				79				44
Printing, postage and supplies			1,475				723				318				147				74
Other costs of operations			14,195				24,876				21,348				4,062				646
Total		$	16,393				26,003				36,996				4,295				771
Efficiency ratio
Noninterest operating expense (numerator)		$	706,028				618,615				525,159				482,962				455,234
Taxable-equivalent net interest income			624,566				623,265				592,670				575,131				580,227
Other income			398,454				368,382				501,656				314,420				286,938
Less:    Gain on bank investment securities			1				89				110,744				39,353				861
Net OTTI losses recognized in earnings			(24,822	)			(9,642	)			(26,530	)			(16,041	)			(27,567	)
Merger-related gain			—				—				64,930				—				27,539
Denominator		$	1,047,841				1,001,200				945,182				866,239				866,332
Efficiency ratio			67.38	%			61.79	%			55.56	%			55.75	%			52.55	%
Balance sheet data
In millions
Average assets
Average assets		$	78,393				76,908				72,454				68,045				68,502
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(185	)			(202	)(2)			(165	)(2)			(119	)			(132	)
Deferred taxes			54				58				42				22				24
Average tangible assets		$	74,737				73,239				68,806				64,423				64,869
Average common equity
Average total equity		$	9,413				9,324				8,812				8,451				8,322
Preferred stock			(864	)			(862	)			(716	)			(743	)			(740	)
Average common equity			8,549				8,462				8,096				7,708				7,582
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(185	)			(202	)(2)			(165	)(2)			(119	)			(132	)
Deferred taxes			54				58				42				22				24
Average tangible common equity		$	4,893				4,793				4,448				4,086				3,949
At end of quarter
Total assets
Total assets		$	77,924				77,864				77,727				67,881				68,021
Goodwill.			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(176	)			(193	)(2)			(210	)(2)			(113	)			(126	)
Deferred taxes			51				55				60				20				23
Total tangible assets		$	74,274				74,201				74,052				64,263				64,393
Total common equity
Total equity		$	9,271				9,375				9,244				8,508				8,358
Preferred stock			(865	)			(863	)			(861	)			(743	)			(741	)
Undeclared dividends - cumulative preferred stock			(3	)			(3	)			(3	)			(7	)			(6	)
Common equity, net of undeclared cumulative preferred dividends			8,403				8,509				8,380				7,758				7,611
Goodwill			(3,525	)			(3,525	)			(3,525	)			(3,525	)			(3,525	)
Core deposit and other intangible assets			(176	)			(193	)(2)			(210	)(2)			(113	)			(126	)
Deferred taxes			51				55				60				20				23
Total tangible common equity		$	4,753				4,846				4,705				4,140				3,983

 

(1)	After any related tax effect.

 

(2)

During the fourth quarter of 2011, the Company reclassified $64 million of investment in unconsolidated subsidiary from other intangible assets to other assets. Similar reclassification amounts have been reflected in the three-month periods ended September 30, 2011 and June 30, 2011 to conform to the 2011 year-end presentation.

 

 

 

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