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M&T Bank Corporation Announces 2016 Fourth Quarter And Full-Year Results

BUFFALO, N.Y., Jan. 19, 2017 /PRNewswire/ -- 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."

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.

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 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. 

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, 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.

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.

 

 

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 herein.

(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.

 

 

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)

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 herein.

(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. 

 

 

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

%

 

 

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


 

 

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.

 

 

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.

 

 

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


%





 

 

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.

 

 

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.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/mt-bank-corporation-announces-2016-fourth-quarter-and-full-year-results-300393487.html

SOURCE M&T Bank Corporation

News Provided by Acquire Media

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