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

Attached files

file	filename
8-K - 8-K - M&T BANK CORP	mtb-8k_20170719.htm

Exhibit 99.1

INVESTOR CONTACT:	Donald J. MacLeod	FOR IMMEDIATE RELEASE:
	(716) 842-5138	July 19, 2017

MEDIA CONTACT:	C. Michael Zabel
	(716) 842-5385

M&T BANK CORPORATION ANNOUNCES SECOND QUARTER RESULTS

BUFFALO, NEW YORK -- M&T Bank Corporation ("M&T")(NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2017.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the second quarter of 2017 were $2.35, up 19% from $1.98 in the year-earlier period and 11% higher than $2.12 in the first quarter of 2017. GAAP-basis net income in the recently completed quarter totaled $381 million, a 13% rise from $336 million in the corresponding 2016 quarter and 9% above the $349 million recorded in the initial 2017 quarter. GAAP-basis net income for the second quarter of 2017 expressed as an annualized rate of return on average assets and average common shareholders’ equity was 1.27% and 9.67%, respectively, compared with 1.09% and 8.38%, respectively, in the year-earlier quarter and 1.15% and 8.89%, respectively, in the first quarter of 2017.

Commenting on the recent quarter’s performance, Darren J. King, Executive Vice President and Chief Financial Officer, stated, “Financial results for M&T in the second quarter were highlighted by a continued widening of the net interest margin, which rose 11 basis points from the previous quarter to 3.45%. Also contributing to the strong performance were increased trust income and well-controlled expenses that were in line with our expectations. As has been the case for some time, credit quality continued to be solid as net charge-offs were modest and nonaccrual loans decreased.”

Earnings Highlights

										Change 2Q17 vs.
($ in millions, except per share data)	2Q17			2Q16			1Q17			2Q16			1Q17

Net income	$	381		$	336		$	349			13	%		9	%
Net income available to common shareholders - diluted	$	361		$	313		$	329			15	%		10	%
Diluted earnings per common share	$	2.35		$	1.98		$	2.12			19	%		11	%
Annualized return on average assets		1.27	%		1.09	%		1.15	%
Annualized return on average common equity		9.67	%		8.38	%		8.89	%

- more -

2-2-2-2-2

M&T BANK CORPORATION

For the six-month period ended June 30, 2017, diluted earnings per common share were $4.47, up 20% from $3.71 in the year-earlier period. GAAP-basis net income for the first six months of 2017 totaled $730 million, or 15% higher than $635 million in the similar 2016 period. Expressed as an annualized rate of return on average assets and average common shareholders’ equity, GAAP-basis net income in the six-month period ended June 30, 2017 was 1.21% and 9.28%, respectively, compared with 1.03% and 7.91%, respectively, in the corresponding 2016 period.

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" expense 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 $2.38 in the recent quarter, up from $2.07 and $2.15 in the year-earlier quarter and the first quarter of 2017, respectively. Net operating income rose to $386 million in the second quarter of 2017, 10% higher than $351 million in the second quarter of 2016 and 9% above $354 million in the initial 2017 quarter. Expressed as an annualized rate of return on average tangible assets and

average tangible common shareholders' equity, net operating income was 1.33% and 14.18%, respectively, in the second quarter of 2017, compared with 1.18% and 12.68%, respectively, in the year-earlier quarter and 1.21% and 13.05%, respectively, in the first three months of 2017.

Diluted net operating earnings per common share in the first six months of 2017 increased 15% to $4.53 from $3.94 in the first half of 2016. Net operating income during the six-month period ended June 30, 2017 was $740 million, a rise of 10% from $671 million in the similar 2016 period. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity was 1.27% and 13.61%, respectively, in the first half of 2017, compared with 1.14% and 12.15%, respectively, in the first six months of 2016.

Taxable-equivalent Net Interest Income. Net interest income expressed on a taxable-equivalent basis totaled $947 million in the second quarter of 2017, an increase of $77 million, or 9%, from $870 million in the year-earlier quarter. That improvement resulted predominantly from a widening of the net interest margin to 3.45% in the recent quarter from 3.13% in the second quarter of 2016. Taxable-equivalent net interest income in the recent quarter rose 3% from

- more -

3-3-3-3-3

M&T BANK CORPORATION

$922 million in the initial 2017 quarter. That growth was primarily due to an 11 basis point widening of the net interest margin from 3.34% in the first quarter of 2017.


Taxable-equivalent Net Interest Income

										Change 2Q17 vs.
($ in millions)	2Q17			2Q16			1Q17			2Q16			1Q17

Average earning assets	$	109,987		$	111,872		$	112,008			-2	%		-2	%
Net interest income - taxable-equivalent	$	947		$	870		$	922			9	%		3	%
Net interest margin		3.45	%		3.13	%		3.34	%

Provision for Credit Losses/Asset Quality. The provision for credit losses was $52 million in the second quarter of 2017, compared with $32 million in the year-earlier quarter and $55 million in the first quarter of 2017. Net charge-offs of loans were $45 million during the recent quarter, compared with $24 million in the second quarter of 2016 and $43 million in the initial 2017 quarter. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .20% and .11% in the second quarters of 2017 and 2016, respectively, and .19% in the first quarter of 2017.

Loans classified as nonaccrual totaled $872 million, or .98% of total loans outstanding at June 30, 2017, compared with $927 million or 1.04% at March 31, 2017 and $849 million or .96% at June 30, 2016. The decline in nonaccrual loans from March 31, 2017 to the recent quarter-end reflects the combined effect of borrower repayment performance and charge-offs of loans in nonaccrual status. The higher level of nonaccrual loans at the two most recent quarter-ends as compared with June 30, 2016 reflects the migration of previously performing loans obtained in the acquisition of Hudson City Bancorp, Inc. (“Hudson City”) that became over 90 days past due after June 30, 2016. Nonaccrual Hudson City-related residential real estate loans totaled $211 million, $113 million and $207 million at June 30, 2017, June 30, 2016 and March 31, 2017, respectively. Assets taken in foreclosure of defaulted loans were $105 million at June 30, 2017, compared with $172 million at June 30, 2016 and $119 million at March 31, 2017.

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 $1.01 billion at June 30, 2017, compared with $970 million and $1.00 billion at June 30, 2016 and March 31, 2017, respectively. The allowance expressed as a percentage of outstanding loans was 1.13% at June 30, 2017, compared with 1.10% at June 30, 2016 and 1.12% at March 31, 2017.

- more -

4-4-4-4-4

M&T BANK CORPORATION

Asset Quality Metrics

										Change 2Q17 vs.
($ in millions)	2Q17			2Q16			1Q17			2Q16			1Q17

At end of quarter
Nonaccrual loans	$	872		$	849		$	927			3	%		-6	%
Real estate and other foreclosed assets	$	105		$	172		$	119			-39	%		-12	%
Total nonperforming assets	$	977		$	1,021		$	1,046			-4	%		-7	%
Accruing loans past due 90 days or more (1)	$	265		$	298		$	280			-11	%		-5	%
Nonaccrual loans as % of loans outstanding		.98	%		.96	%		1.04	%

Allowance for credit losses	$	1,008		$	970		$	1,001			4	%		1	%
Allowance for credit losses as % of loans outstanding		1.13	%		1.10	%		1.12	%

For the period
Provision for credit losses	$	52		$	32		$	55			63	%		-5	%
Net charge-offs	$	45		$	24		$	43			86	%		6	%
Net charge-offs as % of average loans (annualized)		.20	%		.11	%		.19	%

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

Noninterest Income and Expense. Noninterest income totaled $461 million in the second quarter of 2017, compared with $448 million in the year-earlier quarter and $447 million in the initial quarter of 2017. The rise in noninterest income in the recent quarter as compared with the earlier quarters reflected higher trust income. An increase in credit-related fees also contributed to the improvement as compared with the year-earlier quarter.

Noninterest Income

							Change 2Q17 vs.
($ in millions)	2Q17		2Q16		1Q17		2Q16			1Q17

Mortgage banking revenues	$	86	$	89	$	85		-4	%		2	%
Service charges on deposit accounts		106		104		104		2	%		2	%
Trust income		127		121		120		5	%		6	%
Brokerage services income		17		16		17		2	%		-4	%
Trading account and foreign exchange gains		8		13		10		-39	%		-17	%
Other revenues from operations		117		105		111		12	%		6	%
Total other income	$	461	$	448	$	447		3	%		3	%

Noninterest expense in the second quarter of 2017 totaled $751 million, compared with $750 million in the year-earlier quarter and $788 million in the initial 2017 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 $743 million in the recent quarter, $726 million in the second quarter of 2016 and $779 million in the first quarter of 2017. The most significant factors for the higher level of operating expenses in the recent quarter as compared with the second quarter of 2016 were increased legal costs, FDIC assessments, and outside data processing and software expenses. As compared with the first quarter of 2017, the recent quarter's lower level of operating expenses was

- more -

5-5-5-5-5

M&T BANK CORPORATION

due, in large part, to a decline in salaries and employee benefits, including stock-based compensation, which were seasonally higher in the initial 2017 period. That decline was partially offset by higher legal and other professional services costs in 2017’s second quarter.

Noninterest Expense

							Change 2Q17 vs.
($ in millions)	2Q17		2Q16		1Q17		2Q16			1Q17

Salaries and employee benefits	$	399	$	399	$	450		—			-11	%
Equipment and net occupancy		74		76		74		-3	%		-1	%
Outside data processing and software		45		43		44		5	%		1	%
FDIC assessments		25		22		29		13	%		-12	%
Advertising and marketing		16		23		16		-28	%		1	%
Printing, postage and supplies		9		10		10		-10	%		-8	%
Amortization of core deposit and other intangible assets		8		11		9		-29	%		-4	%
Other costs of operations		175		166		156		5	%		12	%
Total other expense	$	751	$	750	$	788		—			-5	%

Memo: Merger-related expenses included in above		—	$	13		—		-100	%		—

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 improved to 52.7% in the recent quarter from 55.1% in the second quarter of 2016 and 56.9% in the first quarter of 2017.

Balance Sheet. M&T had total assets of $120.9 billion at June 30, 2017, compared with $123.8 billion at June 30, 2016 and $123.2 billion at March 31, 2017. Loans and leases, net of unearned discount, totaled $89.1 billion at the recent quarter-end, modestly changed from $88.5 billion at June 30, 2016 and $89.3 billion at March 31, 2017. Investment securities were $15.8 billion, $15.0 billion and $16.0 billion at June 30, 2017, June 30, 2016, and March 31, 2017, respectively. Total deposits were $93.5 billion at June 30, 2017, compared with $94.7 billion a year earlier and $97.0 billion at March 31, 2017.

Reflecting the impact of repurchases of M&T’s common stock, total shareholders' equity declined to $16.3 billion at June 30, 2017 from $16.5 billion a year earlier, representing 13.47% and 13.30%, respectively, of total assets. Total shareholders’ equity was $16.2 billion, or 13.16% of total assets, at March 31, 2017. Common shareholders' equity was $15.1 billion, or $98.66 per share, at June 30, 2017, compared with $15.2 billion, or $96.49 per share, at June 30, 2016 and $15.0 billion, or $97.40 per share, at March 31, 2017. Tangible equity per common share rose to $68.20 at the recent quarter-end from $66.95 a year earlier and $67.16 at March 31, 2017. 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.

- more -

6-6-6-6-6

M&T BANK CORPORATION

M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under regulatory capital rules was approximately 10.80% as of June 30, 2017.

In accordance with its 2016 capital plan, M&T repurchased 1,409,807 shares of common stock during the recent quarter at an average cost per share of $159.52, for a total cost of $225 million. In the aggregate, during the first six months of 2017, M&T repurchased 4,643,003 shares of common stock under that plan at a total cost of $757 million.

Conference Call. Investors will have an opportunity to listen to M&T's conference call to discuss second quarter financial results today at 10:00 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# 40703727. 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 Wednesday, July 26, 2017 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID# 40703727. 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.

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

- more -

7-7-7-7-7

M&T BANK CORPORATION

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.

- more -

8-8-8-8-8

M&T BANK CORPORATION

Financial Highlights

	Three months ended									Six months ended
	June 30									June 30
Amounts in thousands, except per share	2017			2016			Change			2017			2016			Change
Performance
Net income	$	381,053			336,031			13	%	$	729,980			634,559			15	%
Net income available to common shareholders		360,662			312,974			15	%		689,217			588,707			17	%

Per common share:
Basic earnings	$	2.36			1.98			19	%	$	4.49			3.72			21	%
Diluted earnings		2.35			1.98			19	%		4.47			3.71			20	%
Cash dividends	$	.75			.70			7	%	$	1.50			1.40			7	%

Common shares outstanding:
Average - diluted (1)		153,276			158,341			-3	%		154,108			158,761			-3	%
Period end (2)		152,539			157,917			-3	%		152,539			157,917			-3	%

Return on (annualized):
Average total assets		1.27	%		1.09	%					1.21	%		1.03	%
Average common shareholders' equity		9.67	%		8.38	%					9.28	%		7.91	%
Taxable-equivalent net interest income	$	946,936			870,341			9	%	$	1,869,195			1,748,637			7	%
					0								$	-
Yield on average earning assets		3.79	%		3.51	%					3.73	%		3.53	%
Cost of interest-bearing liabilities		.52	%		.56	%					.52	%		.55	%
Net interest spread		3.27	%		2.95	%					3.21	%		2.98	%
Contribution of interest-free funds		.18	%		.18	%					.19	%		.17	%
Net interest margin		3.45	%		3.13	%					3.40	%		3.15	%
Net charge-offs to average total net loans (annualized)		.20	%		.11	%					.20	%		.15	%

Net operating results (3)
Net operating income	$	385,974			350,604			10	%	$	740,009			670,668			10	%
Diluted net operating earnings per common share		2.38			2.07			15	%		4.53			3.94			15	%
Return on (annualized):
Average tangible assets		1.33	%		1.18	%					1.27	%		1.14	%
Average tangible common equity		14.18	%		12.68	%					13.61	%		12.15	%
Efficiency ratio		52.74	%		55.06	%					54.81	%		56.03	%

	At June 30
Loan quality	2017			2016			Change
Nonaccrual loans	$	872,374			848,855			3	%
Real estate and other foreclosed assets		104,424			172,473			-39	%
Total nonperforming assets	$	976,798			1,021,328			-4	%
					-
Accruing loans past due 90 days or more (4)	$	265,461			298,449			-11	%

Government guaranteed loans included in totals above:
Nonaccrual loans	$	39,296			52,486			-25	%
Accruing loans past due 90 days or more		235,227			269,962			-13	%
					-
Renegotiated loans	$	221,892			211,159			5	%

Accruing loans acquired at a discount past due 90 days or more (5)	$	57,498			68,591			-16	%

Purchased impaired loans (6):
Outstanding customer balance	$	838,476			1,040,678			-19	%
Carrying amount		512,393			662,059			-23	%
					0
Nonaccrual loans to total net loans		.98	%		.96	%
					0.00	%
Allowance for credit losses to total loans		1.13	%		1.10	%

(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.

- more -

9-9-9-9-9

M&T BANK CORPORATION

Financial Highlights, Five Quarter Trend

	Three months ended
	June 30,			March 31,			December 31,			September 30,			June 30,
Amounts in thousands, except per share	2017			2017			2016			2016			2016
Performance
Net income	$	381,053			348,927			330,571			349,984			336,031
Net income available to common shareholders		360,662			328,567			307,797			326,998			312,974
Per common share:
Basic earnings	$	2.36			2.13			1.98			2.10			1.98
Diluted earnings		2.35			2.12			1.98			2.10			1.98
Cash dividends	$	.75			.75			.70			.70			.70
Common shares outstanding:
Average - diluted (1)		153,276			154,949			155,700			156,026			158,341
Period end (2)		152,539			153,781			156,213			154,987			157,917
Return on (annualized):
Average total assets		1.27	%		1.15	%		1.05	%		1.12	%		1.09	%
Average common shareholders' equity		9.67	%		8.89	%		8.13	%		8.68	%		8.38	%
Taxable-equivalent net interest income	$	946,936			922,259			883,147			865,065			870,341
Yield on average earning assets		3.79	%		3.67	%		3.45	%		3.44	%		3.51	%
Cost of interest-bearing liabilities		.52	%		.52	%		.57	%		.59	%		.56	%
Net interest spread		3.27	%		3.15	%		2.88	%		2.85	%		2.95	%
Contribution of interest-free funds		.18	%		.19	%		.20	%		.20	%		.18	%
Net interest margin		3.45	%		3.34	%		3.08	%		3.05	%		3.13	%
Net charge-offs to average total net loans (annualized)		.20	%		.19	%		.22	%		.19	%		.11	%
Net operating results (3)
Net operating income	$	385,974			354,035			336,095			355,929			350,604
Diluted net operating earnings per common share		2.38			2.15			2.01			2.13			2.07
Return on (annualized):
Average tangible assets		1.33	%		1.21	%		1.10	%		1.18	%		1.18	%
Average tangible common equity		14.18	%		13.05	%		11.93	%		12.77	%		12.68	%
Efficiency ratio		52.74	%		56.93	%		56.42	%		55.92	%		55.06	%

	June 30,			March 31,			December 31,			September 30,			June 30,
Loan quality	2017			2017			2016			2016			2016
Nonaccrual loans	$	872,374			926,675			920,015			837,362			848,855
Real estate and other foreclosed assets		104,424			119,155			139,206			159,881			172,473
Total nonperforming assets	$	976,798			1,045,830			1,059,221			997,243			1,021,328
Accruing loans past due 90 days or more (4)	$	265,461			280,019			300,659			317,282			298,449
Government guaranteed loans included in totals above:
Nonaccrual loans	$	39,296			39,610			40,610			47,130			52,486
Accruing loans past due 90 days or more		235,227			252,552			282,659			282,077			269,962
Renegotiated loans	$	221,892			191,343			190,374			217,559			211,159
Accruing loans acquired at a discount past due 90 days or more (5)	$	57,498			63,732			61,144			65,182			68,591
Purchased impaired loans (6):
Outstanding customer balance	$	838,476			890,431			927,446			981,105			1,040,678
Carrying amount		512,393			552,935			578,032			616,991			662,059
Nonaccrual loans to total net loans		.98	%		1.04	%		1.01	%		.93	%		.96	%
Allowance for credit losses to total loans		1.13	%		1.12	%		1.09	%		1.09	%		1.10	%

(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.

- more -

10-10-10-10-10

M&T BANK CORPORATION

Condensed Consolidated Statement of Income

	Three months ended								Six months ended
	June 30								June 30
Dollars in thousands	2017			2016		Change			2017			2016		Change
Interest income	$	1,030,413			970,621		6	%	$	2,036,446			1,943,455		5	%
Interest expense		92,213			106,802		-14			183,986			207,672		-11
Net interest income		938,200			863,819		9			1,852,460			1,735,783		7
Provision for credit losses		52,000			32,000		63			107,000			81,000		32
Net interest income after provision for credit losses		886,200			831,819		7			1,745,460			1,654,783		5
Other income
Mortgage banking revenues		86,163			89,383		-4			170,855			171,446		—
Service charges on deposit accounts		106,057			103,872		2			210,233			206,277		2
Trust income		126,797			120,450		5			246,812			231,527		7
Brokerage services income		16,617			16,272		2			34,001			32,276		5
Trading account and foreign exchange gains		8,084			13,222		-39			17,775			20,680		-14
Gain (loss) on bank investment securities		(17	)		264		—			(17	)		268		—
Other revenues from operations		117,115			104,791		12			228,002			206,713		10
Total other income		460,816			448,254		3			907,661			869,187		4
Other expense
Salaries and employee benefits		398,900			398,675		—			848,762			830,460		2
Equipment and net occupancy		73,797			75,724		-3			148,163			149,902		-1
Outside data processing and software		44,575			42,509		5			88,876			85,524		4
FDIC assessments		25,353			22,370		13			54,180			47,595		14
Advertising and marketing		16,324			22,613		-28			32,434			44,067		-26
Printing, postage and supplies		8,957			9,907		-10			18,665			21,893		-15
Amortization of core deposit and other intangible assets		8,113			11,418		-29			16,533			23,737		-30
Other costs of operations		174,616			166,679		5			330,874			322,812		2
Total other expense		750,635			749,895		—			1,538,487			1,525,990		1
Income before income taxes		596,381			530,178		12			1,114,634			997,980		12
Applicable income taxes		215,328			194,147		11			384,654			363,421		6
Net income	$	381,053			336,031		13	%	$	729,980			634,559		15	%

- more -

11-11-11-11-11

M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend

	Three months ended
	June 30,			March 31,		December 31,		September 30,		June 30,
Dollars in thousands	2017			2017		2016		2016		2016
Interest income	$	1,030,413			1,006,033		982,901		969,515		970,621
Interest expense		92,213			91,773		107,137		111,175		106,802
Net interest income		938,200			914,260		875,764		858,340		863,819
Provision for credit losses		52,000			55,000		62,000		47,000		32,000
Net interest income after provision for credit losses		886,200			859,260		813,764		811,340		831,819
Other income
Mortgage banking revenues		86,163			84,692		98,504		103,747		89,383
Service charges on deposit accounts		106,057			104,176		104,890		107,935		103,872
Trust income		126,797			120,015		122,003		118,654		120,450
Brokerage services income		16,617			17,384		15,233		15,914		16,272
Trading account and foreign exchange gains		8,084			9,691		7,692		12,754		13,222
Gain (loss) on bank investment securities		(17	)		—		1,566		28,480		264
Other revenues from operations		117,115			110,887		115,571		103,866		104,791
Total other income		460,816			446,845		465,459		491,350		448,254
Other expense
Salaries and employee benefits		398,900			449,862		393,354		399,786		398,675
Equipment and net occupancy		73,797			74,366		69,976		75,263		75,724
Outside data processing and software		44,575			44,301		43,987		42,878		42,509
FDIC assessments		25,353			28,827		28,991		28,459		22,370
Advertising and marketing		16,324			16,110		21,074		21,996		22,613
Printing, postage and supplies		8,957			9,708		8,681		8,972		9,907
Amortization of core deposit and other intangible assets		8,113			8,420		9,089		9,787		11,418
Other costs of operations		174,616			156,258		193,951		165,251		166,679
Total other expense		750,635			787,852		769,103		752,392		749,895
Income before income taxes		596,381			518,253		510,120		550,298		530,178
Applicable income taxes		215,328			169,326		179,549		200,314		194,147
Net income	$	381,053			348,927		330,571		349,984		336,031

- more -

12-12-12-12-12

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet

	June 30
Dollars in thousands	2017		2016		Change
ASSETS
Cash and due from banks	$	1,344,478		1,284,442		5	%
Interest-bearing deposits at banks		5,023,829		8,474,839		-41
Federal funds sold		1,000		—		—
Trading account		174,646		506,131		-65
Investment securities		15,816,060		14,963,084		6
Loans and leases:
Commercial, financial, etc.		22,191,051		21,469,242		3
Real estate - commercial		33,348,991		30,711,230		9
Real estate - consumer		20,960,171		24,530,249		-15
Consumer		12,580,342		11,811,277		7
Total loans and leases, net of unearned discount		89,080,555		88,521,998		1
Less: allowance for credit losses		1,008,225		970,496		4
Net loans and leases		88,072,330		87,551,502		1
Goodwill		4,593,112		4,593,112		—
Core deposit and other intangible assets		86,422		116,531		-26
Other assets		5,784,690		6,330,943		-9
Total assets	$	120,896,567		123,820,584		-2	%

LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	32,366,426		30,700,066		5	%
Interest-bearing deposits		60,978,895		63,756,514		-4
Deposits at Cayman Islands office		195,617		193,523		1
Total deposits		93,540,938		94,650,103		-1
Short-term borrowings		1,695,453		407,123		316
Accrued interest and other liabilities		1,727,059		1,963,093		-12
Long-term borrowings		7,649,580		10,328,751		-26
Total liabilities		104,613,030		107,349,070		-3
Shareholders' equity:
Preferred		1,231,500		1,231,500		—
Common (1)		15,052,037		15,240,014		-1
Total shareholders' equity		16,283,537		16,471,514		-1
Total liabilities and shareholders' equity	$	120,896,567		123,820,584		-2	%

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $270.1 million at June 30, 2017 and $101.0 million at June 30, 2016.

- more -

13-13-13-13-13

M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend

	June 30,		March 31,		December 31,		September 30,		June 30,
Dollars in thousands	2017		2017		2016		2016		2016
ASSETS
Cash and due from banks	$	1,344,478		1,286,962		1,320,549		1,332,202		1,284,442
Interest-bearing deposits at banks		5,023,829		6,945,149		5,000,638		10,777,636		8,474,839
Federal funds sold		1,000		—		—		—		—
Trading account		174,646		174,854		323,867		488,588		506,131
Investment securities		15,816,060		15,968,415		16,250,468		14,733,574		14,963,084
Loans and leases:
Commercial, financial, etc.		22,191,051		22,295,376		22,610,047		21,917,163		21,469,242
Real estate - commercial		33,348,991		33,071,654		33,506,394		32,078,762		30,711,230
Real estate - consumer		20,960,171		21,724,491		22,590,912		23,584,420		24,530,249
Consumer		12,580,342		12,221,481		12,146,063		12,066,147		11,811,277
Total loans and leases, net of unearned discount		89,080,555		89,313,002		90,853,416		89,646,492		88,521,998
Less: allowance for credit losses		1,008,225		1,001,430		988,997		976,121		970,496
Net loans and leases		88,072,330		88,311,572		89,864,419		88,670,371		87,551,502
Goodwill		4,593,112		4,593,112		4,593,112		4,593,112		4,593,112
Core deposit and other intangible assets		86,422		94,535		97,655		106,744		116,531
Other assets		5,784,690		5,848,652		5,998,498		6,138,801		6,330,943
Total assets	$	120,896,567		123,223,251		123,449,206		126,841,028		123,820,584

LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	32,366,426		34,279,591		32,813,896		33,127,627		30,700,066
Interest-bearing deposits		60,978,895		62,570,167		62,478,053		64,786,035		63,756,514
Deposits at Cayman Islands office		195,617		192,763		201,927		223,183		193,523
Total deposits		93,540,938		97,042,521		95,493,876		98,136,845		94,650,103
Short-term borrowings		1,695,453		185,102		163,442		213,846		407,123
Accrued interest and other liabilities		1,727,059		1,694,905		1,811,431		1,938,201		1,963,093
Long-term borrowings		7,649,580		8,087,619		9,493,835		10,211,160		10,328,751
Total liabilities		104,613,030		107,010,147		106,962,584		110,500,052		107,349,070
Shareholders' equity:
Preferred		1,231,500		1,231,500		1,231,500		1,231,500		1,231,500
Common (1)		15,052,037		14,981,604		15,255,122		15,109,476		15,240,014
Total shareholders' equity		16,283,537		16,213,104		16,486,622		16,340,976		16,471,514
Total liabilities and shareholders' equity	$	120,896,567		123,223,251		123,449,206		126,841,028		123,820,584

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $270.1 million at June 30, 2017, $291.6 million at March 31, 2017, $294.6 million at December 31, 2016, $114.6 million at September 30, 2016 and $101.0 million at June 30, 2016.

- more -

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						Six months ended
	June 30,					June 30,					March 31,					June 30, 2017 from						June 30										Change
Dollars in millions	2017					2016					2017					June 30,			March 31,			2017					2016					in
	Balance		Rate			Balance		Rate			Balance		Rate			2016			2017			Balance		Rate			Balance		Rate			balance
ASSETS
Interest-bearing deposits at banks	$	4,741		1.03	%		8,711		.51	%		6,152		.80	%		-46	%		-23	%	$	5,443		.90	%		8,452		.51	%		-36	%
Federal funds sold		1		1.44			—		—			—		—			—			—			—		—			—		—			—
Trading account		64		1.50			92		1.58			60		2.20			-31			7			62		1.84			88		1.68			-30
Investment securities		15,913		2.36			14,914		2.49			15,999		2.43			7			-1			15,956		2.40			15,131		2.55			5
Loans and leases, net of unearned discount
Commercial, financial, etc.		22,350		3.84			21,450		3.47			22,290		3.66			4			—			22,320		3.75			21,083		3.43			6
Real estate - commercial		33,214		4.30			30,134		4.09			33,175		4.18			10			—			33,195		4.24			29,780		4.12			11
Real estate - consumer		21,318		3.94			24,858		3.94			22,179		3.92			-14			-4			21,746		3.93			25,359		3.94			-14
Consumer		12,386		4.78			11,713		4.55			12,153		4.68			6			2			12,270		4.73			11,648		4.55			5
Total loans and leases, net		89,268		4.19			88,155		3.99			89,797		4.09			1			-1			89,531		4.14			87,870		3.99			2
Total earning assets		109,987		3.79			111,872		3.51			112,008		3.67			-2			-2			110,992		3.73			111,541		3.53			—
Goodwill		4,593					4,593					4,593					—			—			4,593					4,593					—
Core deposit and other intangible assets		90					122					98					-26			-8			94					128					-26
Other assets		6,095					7,119					6,279					-14			-3			6,186					7,217					-14
Total assets	$	120,765					123,706					122,978					-2	%		-2	%	$	121,865					123,479					-1	%

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Savings and interest-checking deposits	$	53,611		.23			51,847		.16			53,260		.20			3	%		1	%	$	53,437		.21			51,091		.15			5	%
Time deposits		8,559		.76			12,755		.85			9,561		.81			-33			-10			9,057		.79			12,877		.80			-30
Deposits at Cayman Islands office		163		.69			182		.40			192		.56			-11			-15			177		.62			185		.41			-4
Total interest-bearing deposits		62,333		.30			64,784		.30			63,013		.29			-4			-1			62,671		.30			64,153		.28			-2
Short-term borrowings		212		.71			1,078		.43			184		.48			-80			15			199		.60			1,579		.42			-87
Long-term borrowings		8,292		2.16			10,297		2.27			8,423		2.25			-19			-2			8,357		2.20			10,413		2.24			-20
Total interest-bearing liabilities		70,837		.52			76,159		.56			71,620		.52			-7			-1			71,227		.52			76,145		.55			-6
Noninterest-bearing deposits		31,868					29,249					33,287					9			-4			32,574					29,059					12
Other liabilities		1,775					1,921					1,748					-8			2			1,760					1,947					-10
Total liabilities		104,480					107,329					106,655					-3			-2			105,561					107,151					-1
Shareholders' equity		16,285					16,377					16,323					-1			—			16,304					16,328					—
Total liabilities and shareholders' equity	$	120,765					123,706					122,978					-2	%		-2	%	$	121,865					123,479					-1	%

Net interest spread				3.27					2.95					3.15											3.21					2.98
Contribution of interest-free funds				.18					.18					.19											.19					.17
Net interest margin				3.45	%				3.13	%				3.34	%										3.40	%				3.15	%

- more -

15-15-15-15-15

M&T BANK CORPORATION

Reconciliation of GAAP to Non-GAAP Measures

	Three months ended						Six months ended
	June 30						June 30
	2017			2016			2017			2016
Income statement data
In thousands, except per share
Net income
Net income	$	381,053			336,031			729,980			634,559
Amortization of core deposit and other intangible assets (1)		4,921			6,936			10,029			14,424
Merger-related expenses (1)		—			7,637			—			21,685
Net operating income	$	385,974			350,604			740,009			670,668

Earnings per common share
Diluted earnings per common share	$	2.35			1.98			4.47			3.71
Amortization of core deposit and other intangible assets (1)		.03			.04			.06			.09
Merger-related expenses (1)		—			.05			—			.14
Diluted net operating earnings per common share	$	2.38			2.07			4.53			3.94

Other expense
Other expense	$	750,635			749,895			1,538,487			1,525,990
Amortization of core deposit and other intangible assets		(8,113	)		(11,418	)		(16,533	)		(23,737	)
Merger-related expenses		—			(12,593	)		—			(35,755	)
Noninterest operating expense	$	742,522			725,884			1,521,954			1,466,498

Merger-related expenses
Salaries and employee benefits	$	—			60			—			5,334
Equipment and net occupancy		—			339			—			1,278
Outside data processing and software		—			352			—			1,067
Advertising and marketing		—			6,327			—			10,522
Printing, postage and supplies		—			545			—			1,482
Other costs of operations		—			4,970			—			16,072
Total	$	—			12,593			—			35,755

Efficiency ratio
Noninterest operating expense (numerator)	$	742,522			725,884			1,521,954			1,466,498
Taxable-equivalent net interest income		946,936			870,341			1,869,195			1,748,637
Other income		460,816			448,254			907,661			869,187
Less: Gain (loss) on bank investment securities		(17	)		264			(17	)		268
Denominator	$	1,407,769			1,318,331			2,776,873			2,617,556
Efficiency ratio		52.74	%		55.06	%		54.81	%		56.03	%

Balance sheet data
In millions
Average assets
Average assets	$	120,765			123,706			121,865			123,479
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(90	)		(122	)		(94	)		(128	)
Deferred taxes		35			48			37			50
Average tangible assets	$	116,117			119,039			117,215			118,808
Average common equity
Average total equity	$	16,285			16,377			16,304			16,328
Preferred stock		(1,232	)		(1,232	)		(1,232	)		(1,232	)
Average common equity		15,053			15,145			15,072			15,096
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(90	)		(122	)		(94	)		(128	)
Deferred taxes		35			48			37			50
Average tangible common equity	$	10,405			10,478			10,422			10,425

At end of quarter
Total assets
Total assets	$	120,897			123,821
Goodwill		(4,593	)		(4,593	)
Core deposit and other intangible assets		(86	)		(117	)
Deferred taxes		33			46
Total tangible assets	$	116,251			119,157
Total common equity
Total equity	$	16,284			16,472
Preferred stock		(1,232	)		(1,232	)
Undeclared dividends - cumulative preferred stock		(3	)		(3	)
Common equity, net of undeclared cumulative preferred dividends		15,049			15,237
Goodwill		(4,593	)		(4,593	)
Core deposit and other intangible assets		(86	)		(117	)
Deferred taxes		33			46
Total tangible common equity	$	10,403			10,573

(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
	June 30,			March 31,			December 31,			September 30,			June 30,
	2017			2017			2016			2016			2016
Income statement data
In thousands, except per share
Net income
Net income	$	381,053			348,927			330,571			349,984			336,031
Amortization of core deposit and other intangible assets (1)		4,921			5,108			5,524			5,945			6,936
Merger-related expenses (1)		—			—			—			—			7,637
Net operating income	$	385,974			354,035			336,095			355,929			350,604

Earnings per common share
Diluted earnings per common share	$	2.35			2.12			1.98			2.10			1.98
Amortization of core deposit and other intangible assets (1)		.03			.03			.03			.03			.04
Merger-related expenses (1)		—			—			—			—			.05
Diluted net operating earnings per common share	$	2.38			2.15			2.01			2.13			2.07

Other expense
Other expense	$	750,635			787,852			769,103			752,392			749,895
Amortization of core deposit and other intangible assets		(8,113	)		(8,420	)		(9,089	)		(9,787	)		(11,418	)
Merger-related expenses		—			—			—			—			(12,593	)
Noninterest operating expense	$	742,522			779,432			760,014			742,605			725,884

Merger-related expenses
Salaries and employee benefits	$	—			—			—			—			60
Equipment and net occupancy		—			—			—			—			339
Outside data processing and software		—			—			—			—			352
Advertising and marketing		—			—			—			—			6,327
Printing, postage and supplies		—			—			—			—			545
Other costs of operations		—			—			—			—			4,970
Total	$	—			—			—			—			12,593

Efficiency ratio
Noninterest operating expense (numerator)	$	742,522			779,432			760,014			742,605			725,884
Taxable-equivalent net interest income		946,936			922,259			883,147			865,065			870,341
Other income		460,816			446,845			465,459			491,350			448,254
Less: Gain (loss) on bank investment securities		(17	)		—			1,566			28,480			264
Denominator	$	1,407,769			1,369,104			1,347,040			1,327,935			1,318,331
Efficiency ratio		52.74	%		56.93	%		56.42	%		55.92	%		55.06	%

Balance sheet data
In millions
Average assets
Average assets	$	120,765			122,978			125,734			124,725			123,706
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(90	)		(98	)		(102	)		(112	)		(122	)
Deferred taxes		35			39			40			44			48
Average tangible assets	$	116,117			118,326			121,079			120,064			119,039
Average common equity
Average total equity	$	16,285			16,323			16,673			16,347			16,377
Preferred stock		(1,232	)		(1,232	)		(1,492	)		(1,232	)		(1,232	)
Average common equity		15,053			15,091			15,181			15,115			15,145
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(90	)		(98	)		(102	)		(112	)		(122	)
Deferred taxes		35			39			40			44			48
Average tangible common equity	$	10,405			10,439			10,526			10,454			10,478

At end of quarter
Total assets
Total assets	$	120,897			123,223			123,449			126,841			123,821
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(86	)		(95	)		(98	)		(107	)		(117	)
Deferred taxes		33			38			39			42			46
Total tangible assets	$	116,251			118,573			118,797			122,183			119,157
Total common equity
Total equity	$	16,284			16,213			16,487			16,341			16,472
Preferred stock		(1,232	)		(1,232	)		(1,232	)		(1,232	)		(1,232	)
Undeclared dividends - cumulative preferred stock		(3	)		(3	)		(3	)		(3	)		(3	)
Common equity, net of undeclared cumulative preferred dividends		15,049			14,978			15,252			15,106			15,237
Goodwill		(4,593	)		(4,593	)		(4,593	)		(4,593	)		(4,593	)
Core deposit and other intangible assets		(86	)		(95	)		(98	)		(107	)		(117	)
Deferred taxes		33			38			39			42			46
Total tangible common equity	$	10,403			10,328			10,600			10,448			10,573

(1)	After any related tax effect.

###

Attached files

Stock widget

Investing forum

M&T BANK CORP Reports