M&T BANK CORP - FORM 8-K - EX-99.1

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8-K - 8-K - M&T BANK CORP	mtb-8k_20170119.htm

Exhibit 99.1

INVESTOR CONTACT:

Donald J. MacLeod

FOR IMMEDIATE RELEASE:

(716) 842-5138

January 19, 2017

MEDIA CONTACT:

C. Michael Zabel

(716) 842-5385

M&T BANK CORPORATION ANNOUNCES 2016 FOURTH QUARTER

AND FULL-YEAR RESULTS

BUFFALO, NEW YORK -- M&T Bank Corporation (“M&T”)(NYSE: MTB) today reported its results of operations for 2016.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the fourth quarter of 2016 were $1.98, up 20% from $1.65 in the year-earlier quarter. GAAP-basis net income in the recent quarter aggregated $331 million, 22% higher than $271 million in the fourth quarter of 2015. Diluted earnings per common share and GAAP-basis net income were $2.10 and $350 million, respectively, in the third quarter of 2016. GAAP-basis net income for the final quarter of 2016 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.05% and 8.13%, respectively, compared with .93% and 7.22%, respectively, in the year-earlier quarter and 1.12% and 8.68%, respectively, in 2016’s third quarter.

In the fourth and third quarters of 2016, M&T sold its holdings of collateralized debt obligations in response to the provisions of the so-called “Volcker Rule” realizing pre-tax gains of $2 million and $28 million, respectively. During the fourth quarter of 2016, M&T made a $30 million tax-deductible cash contribution to The M&T Charitable Foundation. The after-tax impact of that contribution reduced the recent quarter’s net income by $18 million, or $.12 of diluted earnings per common share.

Commenting on M&T's financial performance, Darren J. King, Executive Vice President and Chief Financial Officer, noted, “We are pleased with the recent quarter’s results which were highlighted by an annualized 15% growth rate in M&T’s commercial loan portfolios and a 3 basis point widening of the net interest margin as compared with the third quarter. Expenses remained well-controlled in the quarter. Consistent with recent performance, net charge-offs as a percentage of loans were below M&T’s long-term average.”

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M&T BANK CORPORATION

Earnings Highlights

										Change 4Q 2016 vs.
($ in millions, except per share data)	4Q16			4Q15			3Q16			4Q15			3Q16

Net income	$	331		$	271		$	350			22	%		-6	%
Net income available to common shareholders - diluted	$	308		$	248		$	327			24	%		-6	%
Diluted earnings per common share	$	1.98		$	1.65		$	2.10			20	%		-6	%
Annualized return on average assets		1.05	%		.93	%		1.12	%
Annualized return on average common equity		8.13	%		7.22	%		8.68	%

For the year ended December 31, 2016, diluted earnings per common share were $7.78, up 8% from $7.18 in 2015. GAAP-basis net income for 2016 aggregated $1.32 billion, 22% higher than $1.08 billion in 2015. Expressed as a rate of return on average assets, GAAP-basis net income was 1.06% in each of 2016 and 2015 while the rate of return on average common shareholders’ equity was 8.16% in 2016 and 8.32% in 2015.

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

Diluted net operating earnings per common share were $2.01 in the fourth quarter of 2016, compared with $2.09 in the year-earlier quarter and $2.13 in the third quarter of 2016. Net operating income during the recent quarter was $336 million, compared with $338 million in the fourth quarter of 2015 and $356 million in 2016’s third quarter. The combined impact of the securities transactions and the charitable contribution noted earlier increased net operating income in the third quarter and decreased such income in the fourth quarter of 2016 by $17 million, or $.11 per diluted common share. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.10% and 11.93%, respectively, in the recent quarter, compared with 1.21% and 13.26%, respectively, in the fourth quarter of 2015 and 1.18% and 12.77%, respectively, in the third quarter of 2016.

For the year ended December 31, 2016, diluted net operating earnings per common share were $8.08, up 4% from $7.74 in 2015. Net operating income in 2016 rose 18% to $1.36 billion from $1.16 billion in 2015. Expressed as a rate of return on average tangible assets and average tangible common shareholders’ equity, net operating income was 1.14% and 12.25%, respectively, in 2016 and 1.18% and 13.00%, respectively, in 2015.

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Taxable-equivalent Net Interest Income. Net interest income expressed on a taxable-equivalent basis totaled $883 million in the fourth quarter of 2016, up 9% from $813 million in the year-earlier quarter. Contributing to that improvement was a 10% increase in average earning assets, which grew to $114.3 billion in the recent quarter from $103.6 billion in the fourth quarter of 2015. The growth in earning assets was predominantly the result of higher average loans, which rose to $90.0 billion in the recent quarter, up $8.9 billion, or 11%, from the fourth quarter of 2015. Partially offsetting the favorable impact of the asset growth was a 4 basis point narrowing of the net interest margin to 3.08% in the recent quarter from 3.12% in the fourth quarter of 2015. The narrowing reflects higher rates paid on interest-bearing time deposits associated with the acquisition of Hudson City Bancorp, Inc. (“Hudson City”). Taxable-equivalent net interest income in the recent quarter was 2% higher than $865 million in the third quarter of 2016. The improvement resulted from a $1.4 billion increase in average earning assets, due to growth in average balances of investment securities and loans, and a 3 basis point widening of the net interest margin from 3.05% in the third quarter of 2016. That widening reflects the impact of higher interest rates resulting from actions initiated in December by the Federal Reserve to increase its target federal funds rate.


Taxable-equivalent Net Interest Income

										Change 4Q 2016 vs.
($ in millions)	4Q16			4Q15			3Q16			4Q15			3Q16

Average earning assets	$	114,254		$	103,587		$	112,864			10	%		1	%
Net interest income - taxable equivalent	$	883		$	813		$	865			9	%		2	%
Net interest margin		3.08	%		3.12	%		3.05	%

Provision for Credit Losses/Asset Quality. The provision for credit losses was $62 million in the recent quarter, $58 million in the fourth quarter of 2015 and $47 million in 2016’s third quarter. Net charge-offs of loans were $49 million during the fourth quarter of 2016, compared with $36 million and $41 million in the fourth quarter of 2015 and third quarter of 2016, respectively. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .22% and .18% in the fourth quarters of 2016 and 2015, respectively, and .19% in the third quarter of 2016. The provision for credit losses was $190 million for the year ended December 31, 2016, compared with $170 million in 2015. Net loan charge-offs during 2016 and 2015 totaled $157 million and $134 million, respectively, or .18% and .19%, respectively, of average loans outstanding.

Loans classified as nonaccrual totaled $920 million, or 1.01% of total loans outstanding at December 31, 2016, compared with $799 million or .91% at December 31, 2015 and $837 million or .93% at September 30, 2016. The higher level of nonaccrual loans at the recent quarter-end as compared with September 30, 2016 reflects higher commercial loans in this category and the normal migration of previously performing loans obtained in the acquisition of Hudson City that became past due over 90 days during the fourth quarter of 2016, and, as such, were not identifiable as purchased impaired as of the acquisition date. Nonaccrual Hudson City-related

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M&T BANK CORPORATION

residential real estate loans aggregated $190 million and $149 million at December 31 and September 30, 2016, respectively. Following the acquisition accounting provisions of GAAP, Hudson City-related loans classified as nonaccrual were insignificant at December 31, 2015. Assets taken in foreclosure of defaulted loans totaled $139 million at December 31, 2016, compared with $195 million a year earlier and $160 million at September 30, 2016.

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 totaled $989 million at December 31, 2016, compared with $956 million at December 31, 2015 and $976 million at September 30, 2016. The allowance represented 1.09% of loans outstanding at each of those dates.

Asset Quality Metrics

										Change 4Q 2016 vs.
($ in millions)	4Q16			4Q15			3Q16			4Q15			3Q16

At end of quarter
Nonaccrual loans	$	920		$	799		$	837			15	%		10	%
Real estate and other foreclosed assets	$	139		$	195		$	160			-29	%		-13	%
Total nonperforming assets	$	1,059		$	994		$	997			7	%		6	%
Accruing loans past due 90 days or more (1)	$	301		$	317		$	317			-5	%		-5	%
Nonaccrual loans as % of loans outstanding		1.01	%		.91	%		.93	%

Allowance for credit losses	$	989		$	956		$	976			3	%		1	%
Allowance for credit losses as % of loans outstanding		1.09	%		1.09	%		1.09	%

For the period
Provision for credit losses	$	62		$	58		$	47			7	%		32	%
Net charge-offs	$	49		$	36		$	41			37	%		19	%
Net charge-offs as % of average loans (annualized)		.22	%		.18	%		.19	%

(1)	Excludes loans acquired at a discount. Predominantly residential real estate loans.

Noninterest Income and Expense. Noninterest income totaled $465 million in the recent quarter, compared with $448 million in the fourth quarter of 2015 and $491 million in the third quarter of 2016. The recent quarter’s improvement as compared with the final 2015 quarter resulted largely from higher mortgage banking revenues and trust income. As compared with the third quarter of 2016, lower gains on investment securities and declines in residential mortgage banking revenues and trading account and foreign exchange gains were the predominant factors for the recent quarter’s decline in noninterest income.

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M&T BANK CORPORATION

Noninterest Income

							Change 4Q 2016 vs.
($ in millions)	4Q16		4Q15		3Q16		4Q15			3Q16

Mortgage banking revenues	$	98	$	88	$	104		13	%		-5	%
Service charges on deposit accounts		105		106		108		-1	%		-3	%
Trust income		122		114		119		6	%		3	%
Brokerage services income		15		15		16		-2	%		-4	%
Trading account and foreign exchange gains		7		10		12		-23	%		-40	%
Gain (loss) on bank investment securities		2		—		28		—			—
Other revenues from operations		116		115		104		1	%		11	%
Total other income	$	465	$	448	$	491		4	%		-5	%

Noninterest income totaled $1.83 billion in each of 2016 and 2015. Higher gains on investment securities and trading account and foreign exchange activities in 2016 were offset by a $45 million gain in 2015 from the sale of M&T’s trade processing business.

Noninterest expense totaled $769 million in the fourth quarter of 2016, $786 million in the fourth quarter of 2015 and $752 million in the third quarter of 2016. 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 $760 million in the recent quarter, $701 million in the fourth quarter of 2015 and $743 million in the third quarter of 2016. Significant factors for the higher level of operating expenses in the recent quarter as compared with the final quarter of 2015 were the $30 million contribution to The M&T Charitable Foundation and higher FDIC assessments. The increase in operating expense from the third quarter of 2016 also resulted from the recent quarter’s charitable contribution that was partially offset by lower salaries and benefits and equipment and net occupancy costs.

Noninterest Expense

							Change 4Q 2016 vs.
($ in millions)	4Q16		4Q15		3Q16		4Q15			3Q16

Salaries and employee benefits	$	393	$	434	$	400		-9	%		-2	%
Equipment and net occupancy		70		71		75		-1	%		-7	%
Outside data processing and software		44		45		43		-3	%		3	%
FDIC assessments		29		20		28		48	%		2	%
Advertising and marketing		21		18		22		18	%		-4	%
Printing, postage and supplies		9		11		9		-20	%		-3	%
Amortization of core deposit and other intangible assets		9		9		10		-5	%		-7	%
Other costs of operations		194		178		165		9	%		17	%
Total other expense	$	769	$	786	$	752		-2	%		2	%

Memo: Merger-related expenses included in above	$	—	$	76	$	—

For the year ended December 31, 2016, noninterest expense aggregated $3.05 billion, compared with $2.82 billion in 2015. Noninterest operating expenses were $2.97 billion and $2.72 billion in 2016 and 2015,

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M&T BANK CORPORATION

respectively. Those increases reflect the full year impact of noninterest expenses associated with Hudson City that was acquired by M&T on November 1, 2015.

The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities), measures the relationship of operating expenses to revenues. M&T's efficiency ratio was 56.4% in the recent quarter, 55.5% in the year-earlier quarter and 55.9% in the third quarter of 2016. The efficiency ratio for the full year 2016 was 56.1%, improved from 58.0% in 2015.

Balance Sheet. M&T had total assets of $123.4 billion at December 31, 2016 , compared with $122.8 billion at December 31, 2015. Investment securities totaled $16.3 billion at the end of 2016, up 4% from $15.7 billion at December 31, 2015. Loans and leases, net of unearned discount, aggregated $90.9 billion at December 31, 2016, $3.4 billion or 4% above $87.5 billion a year earlier. Total deposits also increased 4% to $95.5 billion at the recent year-end from $92.0 billion at December 31, 2015.

Total shareholders' equity rose 2% to $16.5 billion at December 31, 2016 from $16.2 billion a year earlier, representing 13.35% and 13.17%, respectively, of total assets. Common shareholders' equity was $15.3 billion, or $97.64 per share, at December 31, 2016, compared with $14.9 billion, or $93.60 per share, at December 31, 2015. Tangible equity per common share of $67.85 at December 31, 2016 was up 6% from $64.28 at December 31, 2015. Common shareholders’ equity per share and tangible equity per common share were $97.47 and $67.42, respectively, at September 30, 2016. In the calculation of tangible equity per common share, common shareholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances. M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under regulatory capital rules was approximately 10.96% at December 31, 2016.

In accordance with its 2016 capital plan, M&T repurchased 300,000 shares of its common stock during the recent quarter at an average cost per share of $124.45, for a total cost of $37 million. During 2016, M&T repurchased a total of 5,607,595 shares of its common stock at an average cost per share of $114.37, for a total cost of $641 million.

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 #46296658. The conference call will be webcast live through M&T's website at http://ir.mandtbank.com/events.cfm. A replay of the call will be available through Tuesday, January 24, 2017 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #46296658. The event will also be archived and available by 7:00 p.m. today on M&T's website at http://ir.mandtbank.com/events.cfm.

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M&T BANK CORPORATION

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

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

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

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

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M&T BANK CORPORATION

Financial Highlights

	Three months ended									Year ended
	December 31									December 31
Amounts in thousands, except per share	2016			2015			Change			2016			2015			Change
Performance
Net income	$	330,571			270,965			22	%	$	1,315,114			1,079,667			22	%
Net income available to common shareholders		307,797			248,059			24	%		1,223,481			987,724			24	%

Per common share:
Basic earnings	$	1.98			1.65			20	%	$	7.80			7.22			8	%
Diluted earnings		1.98			1.65			20	%		7.78			7.18			8	%
Cash dividends	$	.70			.70			—		$	2.80			2.80			—

Common shares outstanding:
Average - diluted (1)		155,700			150,718			3	%		157,304			137,533			14	%
Period end (2)		156,213			159,600			-2	%		156,213			159,600			-2	%

Return on (annualized):
Average total assets		1.05	%		.93	%					1.06	%		1.06	%
Average common shareholders' equity		8.13	%		7.22	%					8.16	%		8.32	%
Taxable-equivalent net interest income	$	883,147			813,401			9	%	$	3,496,849			2,867,050			22	%

Yield on average earning assets		3.45	%		3.48	%					3.49	%		3.50	%
Cost of interest-bearing liabilities		.57	%		.54	%					.56	%		.55	%
Net interest spread		2.88	%		2.94	%					2.93	%		2.95	%
Contribution of interest-free funds		.20	%		.18	%					.18	%		.19	%
Net interest margin		3.08	%		3.12	%					3.11	%		3.14	%
Net charge-offs to average total net loans (annualized)		.22	%		.18	%					.18	%		.19	%

Net operating results (3)
Net operating income	$	336,095			337,613			—		$	1,362,692			1,156,637			18	%
Diluted net operating earnings per common share		2.01			2.09			-4	%		8.08			7.74			4	%
Return on (annualized):
Average tangible assets		1.10	%		1.21	%					1.14	%		1.18	%
Average tangible common equity		11.93	%		13.26	%					12.25	%		13.00	%
Efficiency ratio		56.42	%		55.53	%					56.10	%		57.98	%

	At December 31
Loan quality	2016			2015			Change
Nonaccrual loans	$	920,015			799,409			15	%
Real estate and other foreclosed assets		139,206			195,085			-29	%
Total nonperforming assets	$	1,059,221			994,494			7	%

Accruing loans past due 90 days or more (4)	$	300,659			317,441			-5	%

Government guaranteed loans included in totals above:
Nonaccrual loans	$	40,610			47,052			-14	%
Accruing loans past due 90 days or more		282,659			276,285			2	%

Renegotiated loans	$	190,374			182,865			4	%

Accruing loans acquired at a discount past due 90 days or more (5)	$	61,144			68,473			-11	%

Purchased impaired loans (6):
Outstanding customer balance	$	927,446			1,204,004			-23	%
Carrying amount		578,032			768,329			-25	%

Nonaccrual loans to total net loans		1.01	%		.91	%

Allowance for credit losses to total loans		1.09	%		1.09	%

(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 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 15.

(4)	Excludes loans acquired at a discount. Predominantly residential real estate loans.

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

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

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M&T BANK CORPORATION

Financial Highlights, Five Quarter Trend

	Three months ended
	December 31,			September 30,			June 30,			March 31,			December 31,
Amounts in thousands, except per share	2016			2016			2016			2016			2015
Performance
Net income	$	330,571			349,984			336,031			298,528			270,965
Net income available to common shareholders		307,797			326,998			312,974			275,748			248,059
Per common share:
Basic earnings	$	1.98			2.10			1.98			1.74			1.65
Diluted earnings		1.98			2.10			1.98			1.73			1.65
Cash dividends	$	.70			.70			.70			.70			.70
Common shares outstanding:
Average - diluted (1)		155,700			156,026			158,341			159,181			150,718
Period end (2)		156,213			154,987			157,917			159,156			159,600
Return on (annualized):
Average total assets		1.05	%		1.12	%		1.09	%		.97	%		.93	%
Average common shareholders' equity		8.13	%		8.68	%		8.38	%		7.44	%		7.22	%
Taxable-equivalent net interest income	$	883,147			865,065			870,341			878,296			813,401
Yield on average earning assets		3.45	%		3.44	%		3.51	%		3.54	%		3.48	%
Cost of interest-bearing liabilities		.57	%		.59	%		.56	%		.53	%		.54	%
Net interest spread		2.88	%		2.85	%		2.95	%		3.01	%		2.94	%
Contribution of interest-free funds		.20	%		.20	%		.18	%		.17	%		.18	%
Net interest margin		3.08	%		3.05	%		3.13	%		3.18	%		3.12	%
Net charge-offs to average total net loans (annualized)		.22	%		.19	%		.11	%		.19	%		.18	%
Net operating results (3)
Net operating income	$	336,095			355,929			350,604			320,064			337,613
Diluted net operating earnings per common share		2.01			2.13			2.07			1.87			2.09
Return on (annualized):
Average tangible assets		1.10	%		1.18	%		1.18	%		1.09	%		1.21	%
Average tangible common equity		11.93	%		12.77	%		12.68	%		11.62	%		13.26	%
Efficiency ratio		56.42	%		55.92	%		55.06	%		57.00	%		55.53	%

	December 31,			September 30,			June 30,			March 31,			December 31,
Loan quality	2016			2016			2016			2016			2015
Nonaccrual loans	$	920,015			837,362			848,855			876,691			799,409
Real estate and other foreclosed assets		139,206			159,881			172,473			188,004			195,085
Total nonperforming assets	$	1,059,221			997,243			1,021,328			1,064,695			994,494
Accruing loans past due 90 days or more (4)	$	300,659			317,282			298,449			336,170			317,441
Government guaranteed loans included in totals above:
Nonaccrual loans	$	40,610			47,130			52,486			49,688			47,052
Accruing loans past due 90 days or more		282,659			282,077			269,962			279,340			276,285
Renegotiated loans	$	190,374			217,559			211,159			200,771			182,865
Accruing loans acquired at a discount past due 90 days or more (5)	$	61,144			65,182			68,591			61,767			68,473
Purchased impaired loans (6):
Outstanding customer balance	$	927,446			981,105			1,040,678			1,124,776			1,204,004
Carrying amount		578,032			616,991			662,059			715,874			768,329
Nonaccrual loans to total net loans		1.01	%		.93	%		.96	%		1.00	%		.91	%
Allowance for credit losses to total loans		1.09	%		1.09	%		1.10	%		1.10	%		1.09	%

(1)	Includes common stock equivalents.

(2)	Includes common stock issuable under deferred compensation plans.

(3)

(4)	Excludes loans acquired at a discount. Predominantly residential real estate loans.

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

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

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10-10-10-10-10

M&T BANK CORPORATION

Condensed Consolidated Statement of Income

	Three months ended								Year ended
	December 31								December 31
Dollars in thousands	2016		2015			Change			2016		2015			Change
Interest income	$	982,901		902,377			9	%	$	3,895,871		3,170,844			23	%
Interest expense		107,137		95,333			12			425,984		328,257			30
Net interest income		875,764		807,044			9			3,469,887		2,842,587			22
Provision for credit losses		62,000		58,000			7			190,000		170,000			12
Net interest income after provision for credit losses		813,764		749,044			9			3,279,887		2,672,587			23
Other income
Mortgage banking revenues		98,504		87,500			13			373,697		375,738			-1
Service charges on deposit accounts		104,890		105,748			-1			419,102		420,608			—
Trust income		122,003		114,564			6			472,184		470,640			—
Brokerage services income		15,233		15,546			-2			63,423		64,770			-2
Trading account and foreign exchange gains		7,692		9,938			-23			41,126		30,577			34
Gain (loss) on bank investment securities		1,566		(22	)		—			30,314		(130	)		—
Other revenues from operations		115,571		114,834			1			426,150		462,834			-8
Total other income		465,459		448,108			4			1,825,996		1,825,037			—
Other expense
Salaries and employee benefits		393,354		434,413			-9			1,623,600		1,549,530			5
Equipment and net occupancy		69,976		70,747			-1			295,141		272,539			8
Outside data processing and software		43,987		45,251			-3			172,389		164,133			5
FDIC assessments		28,991		19,562			48			105,045		52,113			102
Advertising and marketing		21,074		17,892			18			87,137		59,227			47
Printing, postage and supplies		8,681		10,905			-20			39,546		38,491			3
Amortization of core deposit and other intangible assets		9,089		9,576			-5			42,613		26,424			61
Other costs of operations		193,951		177,767			9			682,014		660,475			3
Total other expense		769,103		786,113			-2			3,047,485		2,822,932			8
Income before income taxes		510,120		411,039			24			2,058,398		1,674,692			23
Applicable income taxes		179,549		140,074			28			743,284		595,025			25
Net income	$	330,571		270,965			22	%	$	1,315,114		1,079,667			22	%

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11-11-11-11-11

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend

	Three months ended
	December 31,		September 30,		June 30,		March 31,		December 31,
Dollars in thousands	2016		2016		2016		2016		2015
Interest income	$	982,901		969,515		970,621		972,834		902,377
Interest expense		107,137		111,175		106,802		100,870		95,333
Net interest income		875,764		858,340		863,819		871,964		807,044
Provision for credit losses		62,000		47,000		32,000		49,000		58,000
Net interest income after provision for credit losses		813,764		811,340		831,819		822,964		749,044
Other income
Mortgage banking revenues		98,504		103,747		89,383		82,063		87,500
Service charges on deposit accounts		104,890		107,935		103,872		102,405		105,748
Trust income		122,003		118,654		120,450		111,077		114,564
Brokerage services income		15,233		15,914		16,272		16,004		15,546
Trading account and foreign exchange gains		7,692		12,754		13,222		7,458		9,938
Gain (loss) on bank investment securities		1,566		28,480		264		4		(22	)
Other revenues from operations		115,571		103,866		104,791		101,922		114,834
Total other income		465,459		491,350		448,254		420,933		448,108
Other expense
Salaries and employee benefits		393,354		399,786		398,675		431,785		434,413
Equipment and net occupancy		69,976		75,263		75,724		74,178		70,747
Outside data processing and software		43,987		42,878		42,509		43,015		45,251
FDIC assessments		28,991		28,459		22,370		25,225		19,562
Advertising and marketing		21,074		21,996		22,613		21,454		17,892
Printing, postage and supplies		8,681		8,972		9,907		11,986		10,905
Amortization of core deposit and other intangible assets		9,089		9,787		11,418		12,319		9,576
Other costs of operations		193,951		165,251		166,679		156,133		177,767
Total other expense		769,103		752,392		749,895		776,095		786,113
Income before income taxes		510,120		550,298		530,178		467,802		411,039
Applicable income taxes		179,549		200,314		194,147		169,274		140,074
Net income	$	330,571		349,984		336,031		298,528		270,965

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12-12-12-12-12

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet

	December 31
Dollars in thousands	2016		2015		Change
ASSETS
Cash and due from banks	$	1,320,549		1,368,040		-3	%
Interest-bearing deposits at banks		5,000,638		7,594,350		-34
Trading account assets		323,867		273,783		18
Investment securities		16,250,468		15,656,439		4
Loans and leases:
Commercial, financial, etc.		22,610,047		20,422,338		11
Real estate - commercial		33,506,394		29,197,311		15
Real estate - consumer		22,590,912		26,270,103		-14
Consumer		12,146,063		11,599,747		5
Total loans and leases, net of unearned discount		90,853,416		87,489,499		4
Less: allowance for credit losses		988,997		955,992		3
Net loans and leases		89,864,419		86,533,507		4
Goodwill		4,593,112		4,593,112		—
Core deposit and other intangible assets		97,655		140,268		-30
Other assets		5,998,498		6,628,385		-10
Total assets	$	123,449,206		122,787,884		1	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	32,456,102		29,110,635		11	%
Interest-bearing deposits		62,835,847		62,677,036		—
Deposits at Cayman Islands office		201,927		170,170		19
Total deposits		95,493,876		91,957,841		4
Short-term borrowings		163,442		2,132,182		-92
Accrued interest and other liabilities		1,811,431		1,870,714		-3
Long-term borrowings		9,493,835		10,653,858		-11
Total liabilities		106,962,584		106,614,595		—
Shareholders' equity:
Preferred		1,231,500		1,231,500		—
Common (1)		15,255,122		14,941,789		2
Total shareholders' equity		16,486,622		16,173,289		2
Total liabilities and shareholders' equity	$	123,449,206		122,787,884		1	%

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $294.6 million at December 31, 2016 and $251.6 million at December 31, 2015.

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13-13-13-13-13

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend

	December 31,		September 30,		June 30,		March 31,		December 31,
Dollars in thousands	2016		2016		2016		2016		2015
ASSETS
Cash and due from banks	$	1,320,549		1,332,202		1,284,442		1,178,175		1,368,040
Interest-bearing deposits at banks		5,000,638		10,777,636		8,474,839		9,545,181		7,594,350
Trading account assets		323,867		488,588		506,131		467,987		273,783
Investment securities		16,250,468		14,733,574		14,963,084		15,467,320		15,656,439
Loans and leases:
Commercial, financial, etc.		22,610,047		21,917,163		21,469,242		21,226,577		20,422,338
Real estate - commercial		33,506,394		32,078,762		30,711,230		29,713,293		29,197,311
Real estate - consumer		22,590,912		23,584,420		24,530,249		25,299,638		26,270,103
Consumer		12,146,063		12,066,147		11,811,277		11,632,958		11,599,747
Total loans and leases, net of unearned discount		90,853,416		89,646,492		88,521,998		87,872,466		87,489,499
Less: allowance for credit losses		988,997		976,121		970,496		962,752		955,992
Net loans and leases		89,864,419		88,670,371		87,551,502		86,909,714		86,533,507
Goodwill		4,593,112		4,593,112		4,593,112		4,593,112		4,593,112
Core deposit and other intangible assets		97,655		106,744		116,531		127,949		140,268
Other assets		5,998,498		6,138,801		6,330,943		6,336,194		6,628,385
Total assets	$	123,449,206		126,841,028		123,820,584		124,625,632		122,787,884
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	32,456,102		33,127,627		30,700,066		29,709,218		29,110,635
Interest-bearing deposits		62,835,847		64,786,035		63,756,514		64,338,571		62,677,036
Deposits at Cayman Islands office		201,927		223,183		193,523		166,787		170,170
Total deposits		95,493,876		98,136,845		94,650,103		94,214,576		91,957,841
Short-term borrowings		163,442		213,846		407,123		1,766,826		2,132,182
Accrued interest and other liabilities		1,811,431		1,938,201		1,963,093		1,948,142		1,870,714
Long-term borrowings		9,493,835		10,211,160		10,328,751		10,341,035		10,653,858
Total liabilities		106,962,584		110,500,052		107,349,070		108,270,579		106,614,595
Shareholders' equity:
Preferred		1,231,500		1,231,500		1,231,500		1,231,500		1,231,500
Common (1)		15,255,122		15,109,476		15,240,014		15,123,553		14,941,789
Total shareholders' equity		16,486,622		16,340,976		16,471,514		16,355,053		16,173,289
Total liabilities and shareholders' equity	$	123,449,206		126,841,028		123,820,584		124,625,632		122,787,884

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $294.6 million at December 31, 2016, $114.6 million at September 30, 2016, $101.0 million at June 30, 2016, $150.2 million at March 31, 2016 and $251.6 million at December 31, 2015.

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14-14-14-14-14

M&T BANK CORPORATION

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates

	Three months ended															Change in balance						Year ended
	December 31,					December 31,					September 30,					December 31, 2016 from						December 31										Change
Dollars in millions	2016					2015					2016					December 31,			September 30,			2016					2015					in
	Balance		Rate			Balance		Rate			Balance		Rate			2015			2016			Balance		Rate			Balance		Rate			balance
ASSETS
Interest-bearing deposits at banks	$	8,790		.54	%		6,622		.30	%		9,681		.51	%		33	%		-9	%	$	8,846		.51	%		5,775		.26	%		53	%
Federal funds sold		—		—			1		.54			—		—			-100			—			—		—			34		.10			-100
Trading account assets		70		2.05			68		1.88			90		1.52			3			-22			85		1.71			86		1.44			-2
Investment securities		15,417		2.28			15,786		2.55			14,361		2.38			-2			7			15,009		2.44			14,456		2.62			4
Loans and leases, net of unearned discount
Commercial, financial, etc.		21,936		3.47			20,221		3.23			21,480		3.44			8			2			21,397		3.44			19,899		3.21			8
Real estate - commercial		32,822		4.01			28,973		4.11			31,252		4.00			13			5			30,915		4.06			28,276		4.16			9
Real estate - consumer		23,096		3.88			20,369		4.01			24,058		3.92			13			-4			24,463		3.92			11,458		4.09			114
Consumer		12,123		4.53			11,547		4.44			11,942		4.55			5			2			11,841		4.54			11,203		4.46			6
Total loans and leases, net		89,977		3.93			81,110		3.92			88,732		3.93			11			1			88,616		3.96			70,836		3.95			25
Total earning assets		114,254		3.45			103,587		3.48			112,864		3.44			10			1			112,556		3.49			91,187		3.50			23
Goodwill		4,593					4,218					4,593					9			—			4,593					3,694					24
Core deposit and other intangible assets		102					101					112					—			-9			117					45					163
Other assets		6,785					7,146					7,156					-5			-5			7,074					6,854					3
Total assets	$	125,734					115,052					124,725					9	%		1	%	$	124,340					101,780					22	%

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Savings and interest-checking deposits	$	54,055		.20			47,305		.11			52,516		.18			14	%		3	%	$	52,194		.17			43,885		.11			19	%
Time deposits		10,936		.86			9,686		.65			12,334		.90			13			-11			12,253		.84			4,641		.58			164
Deposits at Cayman Islands office		206		.42			224		.30			220		.37			-8			-6			199		.40			216		.28			-8
Total interest-bearing deposits		65,197		.31			57,215		.21			65,070		.32			14			—			64,646		.30			48,742		.15			33
Short-term borrowings		200		.30			1,615		.39			231		.29			-88			-14			894		.41			548		.31			63
Long-term borrowings		9,901		2.26			10,748		2.36			10,287		2.28			-8			-4			10,252		2.25			10,217		2.47			—
Total interest-bearing liabilities		75,298		.57			69,578		.54			75,588		.59			8			—			75,792		.56			59,507		.55			27
Noninterest-bearing deposits		31,717					28,443					30,782					12			3			30,160					27,324					10
Other liabilities		2,046					2,024					2,008					1			2			1,969					1,721					14
Total liabilities		109,061					100,045					108,378					9			1			107,921					88,552					22
Shareholders' equity		16,673					15,007					16,347					11			2			16,419					13,228					24
Total liabilities and shareholders' equity	$	125,734					115,052					124,725					9	%		1	%	$	124,340					101,780					22	%

Net interest spread				2.88					2.94					2.85											2.93					2.95
Contribution of interest-free funds				.20					.18					.20											.18					.19
Net interest margin				3.08	%				3.12	%				3.05	%										3.11	%				3.14	%

- more -

15-15-15-15-15

M&T BANK CORPORATION

Reconciliation of GAAP to Non-GAAP Measures

	Three months ended						Year ended
	December 31						December 31
	2016			2015			2016			2015
Income statement data
In thousands, except per share
Net income
Net income	$	330,571			270,965			1,315,114			1,079,667
Amortization of core deposit and other intangible assets (1)		5,524			5,828			25,893			16,150
Merger-related expenses (1)		—			60,820			21,685			60,820
Net operating income	$	336,095			337,613			1,362,692			1,156,637

Earnings per common share
Diluted earnings per common share	$	1.98			1.65			7.78			7.18
Amortization of core deposit and other intangible assets (1)		.03			.04			.16			.12
Merger-related expenses (1)		—			.40			.14			.44
Diluted net operating earnings per common share	$	2.01			2.09			8.08			7.74

Other expense
Other expense	$	769,103			786,113			3,047,485			2,822,932
Amortization of core deposit and other intangible assets		(9,089	)		(9,576	)		(42,613	)		(26,424	)
Merger-related expenses		—			(75,976	)		(35,755	)		(75,976	)
Noninterest operating expense	$	760,014			700,561			2,969,117			2,720,532

Merger-related expenses
Salaries and employee benefits	$	—			51,287			5,334			51,287
Equipment and net occupancy		—			3			1,278			3
Outside data processing and software		—			785			1,067			785
Advertising and marketing		—			79			10,522			79
Printing, postage and supplies		—			504			1,482			504
Other costs of operations		—			23,318			16,072			23,318
Other expense		—			75,976			35,755			75,976
Provision for credit losses		—			21,000			—			21,000
Total	$	—			96,976			35,755			96,976

Efficiency ratio
Noninterest operating expense (numerator)	$	760,014			700,561			2,969,117			2,720,532
Taxable-equivalent net interest income		883,147			813,401			3,496,849			2,867,050
Other income		465,459			448,108			1,825,996			1,825,037
Less: Gain (loss) on bank investment securities		1,566			(22	)		30,314			(130	)
Denominator	$	1,347,040			1,261,531			5,292,531			4,692,217
Efficiency ratio		56.42	%		55.53	%		56.10	%		57.98	%

Balance sheet data
In millions
Average assets
Average assets	$	125,734			115,052			124,340			101,780
Goodwill		(4,593	)		(4,218	)		(4,593	)		(3,694	)
Core deposit and other intangible assets		(102	)		(101	)		(117	)		(45	)
Deferred taxes		40			39			46			16
Average tangible assets	$	121,079			110,772			119,676			98,057
Average common equity
Average total equity	$	16,673			15,007			16,419			13,228
Preferred stock		(1,492	)		(1,232	)		(1,297	)		(1,232	)
Average common equity		15,181			13,775			15,122			11,996
Goodwill		(4,593	)		(4,218	)		(4,593	)		(3,694	)
Core deposit and other intangible assets		(102	)		(101	)		(117	)		(45	)
Deferred taxes		40			39			46			16
Average tangible common equity	$	10,526			9,495			10,458			8,273

At end of quarter
Total assets
Total assets	$	123,449			122,788
Goodwill		(4,593	)		(4,593	)
Core deposit and other intangible assets		(98	)		(140	)
Deferred taxes		39			54
Total tangible assets	$	118,797			118,109
Total common equity
Total equity	$	16,487			16,173
Preferred stock		(1,232	)		(1,232	)
Undeclared dividends - cumulative preferred stock		(3	)		(2	)
Common equity, net of undeclared cumulative preferred dividends		15,252			14,939
Goodwill		(4,593	)		(4,593	)
Core deposit and other intangible assets		(98	)		(140	)
Deferred taxes		39			54
Total tangible common equity	$	10,600			10,260

(1)	After any related tax effect.

- more -

16-16-16-16-16

M&T BANK CORPORATION

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

	Three months ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2016			2016			2016			2016			2015
Income statement data
In thousands, except per share
Net income
Net income	$	330,571			349,984			336,031			298,528			270,965
Amortization of core deposit and other intangible assets (1)		5,524			5,945			6,936			7,488			5,828
Merger-related expenses (1)		—			—			7,637			14,048			60,820
Net operating income	$	336,095			355,929			350,604			320,064			337,613

Earnings per common share
Diluted earnings per common share	$	1.98			2.10			1.98			1.73			1.65
Amortization of core deposit and other intangible assets (1)		.03			.03			.04			.05			.04
Merger-related expenses (1)		—			—			.05			.09			.40
Diluted net operating earnings per common share	$	2.01			2.13			2.07			1.87			2.09

Other expense
Other expense	$	769,103			752,392			749,895			776,095			786,113
Amortization of core deposit and other intangible assets		(9,089	)		(9,787	)		(11,418	)		(12,319	)		(9,576	)
Merger-related expenses		—			—			(12,593	)		(23,162	)		(75,976	)
Noninterest operating expense	$	760,014			742,605			725,884			740,614			700,561

Merger-related expenses
Salaries and employee benefits	$	—			—			60			5,274			51,287
Equipment and net occupancy		—			—			339			939			3
Outside data processing and software		—			—			352			715			785
Advertising and marketing		—			—			6,327			4,195			79
Printing, postage and supplies		—			—			545			937			504
Other costs of operations		—			—			4,970			11,102			23,318
Other expense		—			—			12,593			23,162			75,976
Provision for credit losses		—			—			—			—			21,000
Total	$	—			—			12,593			23,162			96,976

Efficiency ratio
Noninterest operating expense (numerator)	$	760,014			742,605			725,884			740,614			700,561
Taxable-equivalent net interest income		883,147			865,065			870,341			878,296			813,401
Other income		465,459			491,350			448,254			420,933			448,108
Less: Gain (loss) on bank investment securities		1,566			28,480			264			4			(22	)
Denominator	$	1,347,040			1,327,935			1,318,331			1,299,225			1,261,531
Efficiency ratio		56.42	%		55.92	%		55.06	%		57.00	%		55.53	%

Balance sheet data
In millions
Average assets
Average assets	$	125,734			124,725			123,706			123,252			115,052
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,218	)
Core deposit and other intangible assets		(102	)		(112	)		(122	)		(134	)		(101	)
Deferred taxes		40			44			48			52			39
Average tangible assets	$	121,079			120,064			119,039			118,577			110,772
Average common equity
Average total equity	$	16,673			16,347			16,377			16,279			15,007
Preferred stock		(1,492	)		(1,232	)		(1,232	)		(1,232	)		(1,232	)
Average common equity		15,181			15,115			15,145			15,047			13,775
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,218	)
Core deposit and other intangible assets		(102	)		(112	)		(122	)		(134	)		(101	)
Deferred taxes		40			44			48			52			39
Average tangible common equity	$	10,526			10,454			10,478			10,372			9,495

At end of quarter
Total assets
Total assets	$	123,449			126,841			123,821			124,626			122,788
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(98	)		(107	)		(117	)		(128	)		(140	)
Deferred taxes		39			42			46			50			54
Total tangible assets	$	118,797			122,183			119,157			119,955			118,109
Total common equity
Total equity	$	16,487			16,341			16,472			16,355			16,173
Preferred stock		(1,232	)		(1,232	)		(1,232	)		(1,232	)		(1,232	)
Undeclared dividends - cumulative preferred stock		(3	)		(3	)		(3	)		(3	)		(2	)
Common equity, net of undeclared cumulative preferred dividends		15,252			15,106			15,237			15,120			14,939
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(98	)		(107	)		(117	)		(128	)		(140	)
Deferred taxes		39			42			46			50			54
Total tangible common equity	$	10,600			10,448			10,573			10,449			10,260

(1)	After any related tax effect.

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