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M&T Bank Corporation Announces First Quarter Results

BUFFALO, N.Y., April 17, 2017 /PRNewswire/ -- M&T Bank Corporation ("M&T")(NYSE: MTB) today reported its results of operations for the quarter ended March 31, 2017.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the initial quarter of 2017 were $2.12, up 23% from $1.73 in the year-earlier quarter and 7% higher than $1.98 in the final quarter of 2016.  GAAP-basis net income in the recent quarter was $349 million, 17% higher than $299 million in the first quarter of 2016 and 6% above the $331 million recorded in the final 2016 quarter.  Net income for the initial 2017 quarter expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.15% and 8.89%, respectively, compared with .97% and 7.44%, respectively, in the similar 2016 period and 1.05% and 8.13%, respectively, in the fourth quarter of 2016. 

During the first quarter of 2017, M&T adopted new accounting guidance for share-based transactions.  That guidance requires that all excess tax benefits and tax deficiencies associated with share-based compensation be recognized as income tax expense or benefit in the income statement.  Previously, tax effects resulting from changes in M&T's share price subsequent to the grant date were recorded through shareholders' equity at the time of vesting or exercise.  The adoption of the amended accounting guidance resulted in an $18 million reduction of income tax expense in the initial 2017 quarter, or $.12 of diluted earnings per common share.

Commenting on M&T's first quarter results, Darren J. King, Executive Vice President and Chief Financial Officer, noted, "M&T's financial performance for the first quarter was strong, led by a 26 basis point widening of the net interest margin that resulted in growth in taxable-equivalent net interest income of four percent as compared with the preceding quarter.  Expenses continued to be well-controlled, recognizing the seasonally higher costs traditionally seen in the first quarter for stock-based compensation and employee benefits, and credit quality factors remained stable.  In accordance with our capital plan, M&T repurchased $532 million of its common stock and increased the common stock dividend from $.70 to $.75 during the quarter."


Earnings Highlights





































Change 1Q 2017 vs.


($ in millions, except per share data)


1Q17



1Q16



4Q16



1Q16



4Q16























Net income


$

349



$

299



$

331




17

%



6

%

Net income available to common shareholders - diluted


$

329



$

276



$

308




19

%



7

%

Diluted earnings per common share


$

2.12



$

1.73



$

1.98




23

%



7

%

Annualized return on average assets



1.15

%



.97

%



1.05

%









Annualized return on average common equity



8.89

%



7.44

%



8.13

%









 

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 $2.15 in the first quarter of 2017, up 15% from $1.87 in the corresponding 2016 period.  Net operating income for the first three months of 2017 rose 11% to $354 million from $320 million in the year-earlier quarter.  Diluted net operating earnings per common share and net operating income in the fourth quarter of 2016 were $2.01 and $336 million, respectively. 

Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.21% and 13.05%, respectively, in the initial 2017 quarter, compared with 1.09% and 11.62%, respectively, in the year-earlier quarter and 1.10% and 11.93%, respectively, in the fourth quarter of 2016.

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income totaled $922 million in the first quarter of 2017, up 5% from $878 million in the first three months of 2016.  That growth resulted predominantly from a widening of the net interest margin to 3.34% in the recent quarter from 3.18% in the initial 2016 quarter.  Taxable-equivalent net interest income in the fourth quarter of 2016 was $883 million. The $39 million improvement in the recent quarter's taxable-equivalent net interest income as compared with the final 2016 quarter was largely due to a 26 basis point widening of the net interest margin from 3.08%.

 






















Taxable-equivalent Net Interest Income





































Change 1Q 2017 vs.


($ in millions)


1Q17



1Q16



4Q16



1Q16



4Q16























Average earning assets


$

112,008



$

111,211



$

114,254




1

%



-2

%

Net interest income - taxable equivalent


$

922



$

878



$

883




5

%



4

%

Net interest margin



3.34

%



3.18

%



3.08

%









 

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $55 million in the first quarter of 2017, compared with $49 million in the year-earlier quarter and $62 million in the final 2016 quarter.  Net charge-offs of loans during the recent quarter aggregated $43 million, compared with $42 million and $49 million in the first and fourth quarters of 2016, respectively.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .19% during each of the first quarters of 2017 and 2016, compared with .22% in the fourth quarter of 2016.

Loans classified as nonaccrual totaled $927 million, or 1.04% of total loans outstanding at March 31, 2017, compared with $877 million or 1.00% a year earlier and $920 million or 1.01% at December 31, 2016.  The higher level of nonaccrual loans at the two most recent quarter-ends as compared with March 31, 2016 reflect the expected migration of previously performing loans obtained in the acquisition of Hudson City Bancorp, Inc. ("Hudson City") that became past due over 90 days after March 31, 2016.  Nonaccrual Hudson City-related residential real estate loans aggregated $207 million, $79 million and $190 million at March 31, 2017, March 31, 2016 and December 31, 2016, respectively.  Assets taken in foreclosure of defaulted loans totaled $119 million at March 31, 2017, compared with $188 million a year earlier and $139 million at December 31, 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 $1.00 billion at March 31, 2017, compared with $963 million at a year earlier and $989 million at December 31, 2016.  The allowance expressed as a percentage of outstanding loans was 1.12% at March 31, 2017, compared with 1.10% at March 31, 2016 and 1.09% at December 31, 2016.

 

Asset Quality Metrics





































Change 1Q 2017 vs.


($ in millions)


1Q17



1Q16



4Q16



1Q16



4Q16























At end of quarter





















Nonaccrual loans


$

927



$

877



$

920




6

%



1

%

Real estate and other foreclosed assets


$

119



$

188



$

139




-37

%



-14

%

Total nonperforming assets


$

1,046



$

1,065



$

1,059




-2

%



-1

%

Accruing loans past due 90 days or more (1)


$

280



$

336



$

301




-17

%



-7

%

Nonaccrual loans as % of loans outstanding



1.04

%



1.00

%



1.01

%






























Allowance for credit losses


$

1,001



$

963



$

989




4

%



1

%

Allowance for credit losses as % of loans outstanding



1.12

%



1.10

%



1.09

%






























For the period





















Provision for credit losses


$

55



$

49



$

62




12

%



-11

%

Net charge-offs


$

43



$

42



$

49




1

%



-13

%

Net charge-offs as % of average loans (annualized)



.19

%



.19

%



.22

%









 

(1)

Excludes loans acquired at a discount.  Predominantly residential real estate loans.

 

Noninterest Income and Expense.  Noninterest income aggregated $447 million in the initial 2017 quarter, up 6% from $421 million in the year-earlier quarter.  Contributing to that improvement were higher trust income and credit-related fees. Noninterest income was $465 million in the final three months of 2016.  The decline in such income in the recent quarter as compared with the fourth quarter of 2016 was largely due to lower commercial and residential mortgage banking revenues.

 

Noninterest Income





































Change 1Q 2017 vs.


($ in millions)


1Q17



1Q16



4Q16



1Q16



4Q16























Mortgage banking revenues


$

85



$

82



$

98




3

%



-14

%

Service charges on deposit accounts



104




102




105




2

%



-1

%

Trust income



120




111




122




8

%



-2

%

Brokerage services income



17




16




15




9

%



14

%

Trading account and foreign exchange gains



10




8




7




30

%



26

%

Gain on bank investment securities









2








Other revenues from operations



111




102




116




9

%



-4

%

Total other income


$

447



$

421



$

465




6

%



-4

%

 

Noninterest expense in the first quarter of 2017 totaled $788 million, compared with $776 million and $769 million in the first and fourth quarters of 2016, respectively.  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 $779 million in the first three months of 2017, $741 million in the year-earlier period and $760 million in the final 2016 quarter.  The higher level of operating expenses in the recent quarter as compared with the initial 2016 quarter was largely the result of increased salaries and employee benefits costs, reflecting merit increases and higher incentive-based compensation.  As compared with the final three months of 2016, the higher level of operating expenses in the recent quarter was predominately due to seasonally higher stock-based compensation and employee benefits expenses offset, in part, by the effect of a $30 million contribution to The M&T Charitable Foundation in the final 2016 quarter.

 

Noninterest Expense





































Change 1Q 2017 vs.


($ in millions)


1Q17



1Q16



4Q16



1Q16



4Q16























Salaries and employee benefits


$

450



$

432



$

393




4

%



14

%

Equipment and net occupancy



74




74




70







6

%

Outside data processing and software



44




43




44




3

%



1

%

FDIC assessments



29




25




29




14

%



-1

%

Advertising and marketing



16




22




21




-25

%



-24

%

Printing, postage and supplies



10




12




9




-19

%



12

%

Amortization of core deposit and other intangible assets



9




12




9




-32

%



-7

%

Other costs of operations



156




156




194







-19

%

Total other expense


$

788



$

776



$

769




2

%



2

%






















Memo: Merger-related expenses included in above


$

-



$

23



$

-










 

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 56.9% in the first quarter of 2017, compared with 57.0% in the year-earlier quarter and 56.4% in the fourth quarter of 2016.

Balance Sheet.  M&T had total assets of $123.2 billion at March 31, 2017, compared with $124.6 billion a year earlier.  Investment securities at the recent quarter-end were $16.0 billion, up from $15.5 billion at March 31, 2016.  Loans and leases, net of unearned discount, rose $1.4 billion to $89.3 billion at March 31, 2017 from $87.9 billion a year earlier.  Total deposits were $97.0 billion at the recent quarter-end, up 3% from $94.2 billion at March 31, 2016.

Reflecting the impact of repurchases of M&T's common stock, total shareholders' equity was $16.2 billion at March 31, 2017, down from $16.4 billion at March 31, 2016, representing 13.16% and 13.12%, respectively, of total assets.  Common shareholders' equity was $15.0 billion, or $97.40 per share, at March 31, 2017, compared with $15.1 billion, or $95.00 per share, a year-earlier.  Tangible equity per common share increased to $67.16 at March 31, 2017 from $65.65 a year-earlier.  Common shareholders' equity per share and tangible equity per common share were $97.64 and $67.85, respectively, at December 31, 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 10.66% at March 31, 2017.

In accordance with its capital plan, M&T repurchased 3,233,196 shares of its common stock during the initial 2017 quarter at a total cost of $532 million

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss first quarter 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 #1401624.  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 until Monday, April 24, 2017 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #1401624.  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








March 31






Amounts in thousands, except per share


2017



2016



Change


Performance













Net income


$

348,927




298,528




17

%

Net income available to common shareholders



328,567




275,748




19

%














Per common share:













Basic earnings


$

2.13




1.74




22

%

Diluted earnings



2.12




1.73




23

%

Cash dividends


$

.75




.70




7

%














Common shares outstanding:













Average - diluted (1)



154,949




159,181




-3

%

Period end (2)



153,781




159,156




-3

%













Return on (annualized):













Average total assets



1.15

%



.97

%





Average common shareholders' equity



8.89

%



7.44

%





Taxable-equivalent net interest income


$

922,259




878,296




5

%














Yield on average earning assets



3.67

%



3.54

%





Cost of interest-bearing liabilities



.52

%



.53

%





Net interest spread



3.15

%



3.01

%





Contribution of interest-free funds



.19

%



.17

%





Net interest margin



3.34

%



3.18

%





Net charge-offs to average total net loans (annualized)



.19

%



.19

%


















Net operating results (3)













Net operating income


$

354,035




320,064




11

%

Diluted net operating earnings per common share



2.15




1.87




15

%

Return on (annualized):













Average tangible assets



1.21

%



1.09

%





Average tangible common equity



13.05

%



11.62

%





Efficiency ratio



56.93

%



57.00

%




















At March 31






Loan quality


2017



2016



Change


Nonaccrual loans


$

926,675




876,691




6

%

Real estate and other foreclosed assets



119,155




188,004




-37

%

Total nonperforming assets


$

1,045,830




1,064,695




-2

%














Accruing loans past due 90 days or more (4)


$

280,019




336,170




-17

%














Government guaranteed loans included in totals above:













Nonaccrual loans


$

39,610




49,688




-20

%

Accruing loans past due 90 days or more



252,552




279,340




-10

%














Renegotiated loans


$

191,343




200,771




-5

%














Accruing loans acquired at a discount past due 90 days or more (5)


$

63,732




61,767




3

%














Purchased impaired loans (6):













Outstanding customer balance


$

890,431




1,124,776




-21

%

Carrying amount



552,935




715,874




-23

%














Nonaccrual loans to total net loans



1.04

%



1.00

%


















Allowance for credit losses to total loans



1.12

%



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 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




March 31,



December 31,



September 30,



June 30,



March 31,


Amounts in thousands, except per share


2017



2016



2016



2016



2016


Performance





















Net income


$

348,927




330,571




349,984




336,031




298,528


Net income available to common shareholders



328,567




307,797




326,998




312,974




275,748


Per common share:





















Basic earnings


$

2.13




1.98




2.10




1.98




1.74


Diluted earnings



2.12




1.98




2.10




1.98




1.73


Cash dividends


$

.75




.70




.70




.70




.70


Common shares outstanding:





















Average - diluted (1)



154,949




155,700




156,026




158,341




159,181


Period end (2)



153,781




156,213




154,987




157,917




159,156


Return on (annualized):





















Average total assets



1.15

%



1.05

%



1.12

%



1.09

%



.97

%

Average common shareholders' equity



8.89

%



8.13

%



8.68

%



8.38

%



7.44

%

Taxable-equivalent net interest income


$

922,259




883,147




865,065




870,341




878,296


Yield on average earning assets



3.67

%



3.45

%



3.44

%



3.51

%



3.54

%

Cost of interest-bearing liabilities



.52

%



.57

%



.59

%



.56

%



.53

%

Net interest spread



3.15

%



2.88

%



2.85

%



2.95

%



3.01

%

Contribution of interest-free funds



.19

%



.20

%



.20

%



.18

%



.17

%

Net interest margin



3.34

%



3.08

%



3.05

%



3.13

%



3.18

%

Net charge-offs to average total net loans (annualized)



.19

%



.22

%



.19

%



.11

%



.19

%

Net operating results (3)





















Net operating income


$

354,035




336,095




355,929




350,604




320,064


Diluted net operating earnings per common share



2.15




2.01




2.13




2.07




1.87


Return on (annualized):





















Average tangible assets



1.21

%



1.10

%



1.18

%



1.18

%



1.09

%

Average tangible common equity



13.05

%



11.93

%



12.77

%



12.68

%



11.62

%

Efficiency ratio



56.93

%



56.42

%



55.92

%



55.06

%



57.00

%
























March 31,



December 31,



September 30,



June 30,



March 31,


Loan quality


2017



2016



2016



2016



2016


Nonaccrual loans


$

926,675




920,015




837,362




848,855




876,691


Real estate and other foreclosed assets



119,155




139,206




159,881




172,473




188,004


Total nonperforming assets


$

1,045,830




1,059,221




997,243




1,021,328




1,064,695


Accruing loans past due 90 days or more (4)


$

280,019




300,659




317,282




298,449




336,170


Government guaranteed loans included in totals above:





















Nonaccrual loans


$

39,610




40,610




47,130




52,486




49,688


Accruing loans past due 90 days or more



252,552




282,659




282,077




269,962




279,340


Renegotiated loans


$

191,343




190,374




217,559




211,159




200,771


Accruing loans acquired at a discount past due 90 days or more (5)


$

63,732




61,144




65,182




68,591




61,767


Purchased impaired loans (6):





















Outstanding customer balance


$

890,431




927,446




981,105




1,040,678




1,124,776


Carrying amount



552,935




578,032




616,991




662,059




715,874


Nonaccrual loans to total net loans



1.04

%



1.01

%



.93

%



.96

%



1.00

%

Allowance for credit losses to total loans



1.12

%



1.09

%



1.09

%



1.10

%



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 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








March 31






Dollars in thousands


2017



2016



Change


Interest income


$

1,006,033




972,834




3

%

Interest expense



91,773




100,870




-9


Net interest income



914,260




871,964




5


Provision for credit losses



55,000




49,000




12


Net interest income after provision for credit losses



859,260




822,964




4


Other income













Mortgage banking revenues



84,692




82,063




3


Service charges on deposit accounts



104,176




102,405




2


Trust income



120,015




111,077




8


Brokerage services income



17,384




16,004




9


Trading account and foreign exchange gains



9,691




7,458




30


Gain on bank investment securities






4





Other revenues from operations



110,887




101,922




9


Total other income



446,845




420,933




6


Other expense













Salaries and employee benefits



449,862




431,785




4


Equipment and net occupancy



74,366




74,178





Outside data processing and software



44,301




43,015




3


FDIC assessments



28,827




25,225




14


Advertising and marketing



16,110




21,454




-25


Printing, postage and supplies



9,708




11,986




-19


Amortization of core deposit and other intangible assets



8,420




12,319




-32


Other costs of operations



156,258




156,133





Total other expense



787,852




776,095




2


Income before income taxes



518,253




467,802




11


Applicable income taxes



169,326




169,274





Net income


$

348,927




298,528




17

%

 

 

 

Condensed Consolidated Statement of Income, Five Quarter Trend






Three months ended




March 31,



December 31,



September 30,



June 30,



March 31,


Dollars in thousands


2017



2016



2016



2016



2016


Interest income


$

1,006,033




982,901




969,515




970,621




972,834


Interest expense



91,773




107,137




111,175




106,802




100,870


Net interest income



914,260




875,764




858,340




863,819




871,964


Provision for credit losses



55,000




62,000




47,000




32,000




49,000


Net interest income after provision for credit losses



859,260




813,764




811,340




831,819




822,964


Other income





















Mortgage banking revenues



84,692




98,504




103,747




89,383




82,063


Service charges on deposit accounts



104,176




104,890




107,935




103,872




102,405


Trust income



120,015




122,003




118,654




120,450




111,077


Brokerage services income



17,384




15,233




15,914




16,272




16,004


Trading account and foreign exchange gains



9,691




7,692




12,754




13,222




7,458


Gain on bank investment securities






1,566




28,480




264




4


Other revenues from operations



110,887




115,571




103,866




104,791




101,922


Total other income



446,845




465,459




491,350




448,254




420,933


Other expense





















Salaries and employee benefits



449,862




393,354




399,786




398,675




431,785


Equipment and net occupancy



74,366




69,976




75,263




75,724




74,178


Outside data processing and software



44,301




43,987




42,878




42,509




43,015


FDIC assessments



28,827




28,991




28,459




22,370




25,225


Advertising and marketing



16,110




21,074




21,996




22,613




21,454


Printing, postage and supplies



9,708




8,681




8,972




9,907




11,986


Amortization of core deposit and other intangible assets



8,420




9,089




9,787




11,418




12,319


Other costs of operations



156,258




193,951




165,251




166,679




156,133


Total other expense



787,852




769,103




752,392




749,895




776,095


Income before income taxes



518,253




510,120




550,298




530,178




467,802


Applicable income taxes



169,326




179,549




200,314




194,147




169,274


Net income


$

348,927




330,571




349,984




336,031




298,528


 

 

 

Condensed Consolidated Balance Sheet

















March 31







Dollars in thousands


2017



2016



Change



ASSETS














Cash and due from banks


$

1,286,962




1,178,175




9


%

Interest-bearing deposits at banks



6,945,149




9,545,181




-27



Trading account



174,854




467,987




-63



Investment securities



15,968,415




15,467,320




3



Loans and leases:














Commercial, financial, etc.



22,295,376




21,226,577




5



Real estate - commercial



33,071,654




29,713,293




11



Real estate - consumer



21,724,491




25,299,638




-14



Consumer



12,221,481




11,632,958




5



Total loans and leases, net of unearned discount



89,313,002




87,872,466




2



Less: allowance for credit losses



1,001,430




962,752




4



Net loans and leases



88,311,572




86,909,714




2



Goodwill



4,593,112




4,593,112






Core deposit and other intangible assets



94,535




127,949




-26



Other assets



5,848,652




6,336,194




-8



Total assets


$

123,223,251




124,625,632




-1


%

LIABILITIES AND SHAREHOLDERS' EQUITY














Noninterest-bearing deposits


$

34,279,591




29,709,218




15


%

Interest-bearing deposits



62,570,167




64,338,571




-3



Deposits at Cayman Islands office



192,763




166,787




16



Total deposits



97,042,521




94,214,576




3



Short-term borrowings



185,102




1,766,826




-90



Accrued interest and other liabilities



1,694,905




1,948,142




-13



Long-term borrowings



8,087,619




10,341,035




-22



Total liabilities



107,010,147




108,270,579




-1



Shareholders' equity:














Preferred



1,231,500




1,231,500






Common (1)



14,981,604




15,123,553




-1



Total shareholders' equity



16,213,104




16,355,053




-1



Total liabilities and shareholders' equity


$

123,223,251




124,625,632




-1


%

 

(1)

Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $291.6 million at March 31, 2017 and $150.2 million at March 31, 2016.

 

 

 

Condensed Consolidated Balance Sheet, Five Quarter Trend

























March 31,



December 31,



September 30,



June 30,



March 31,


Dollars in thousands


2017



2016



2016



2016



2016


ASSETS





















Cash and due from banks


$

1,286,962




1,320,549




1,332,202




1,284,442




1,178,175


Interest-bearing deposits at banks



6,945,149




5,000,638




10,777,636




8,474,839




9,545,181


Trading account



174,854




323,867




488,588




506,131




467,987


Investment securities



15,968,415




16,250,468




14,733,574




14,963,084




15,467,320


Loans and leases:





















Commercial, financial, etc.



22,295,376




22,610,047




21,917,163




21,469,242




21,226,577


Real estate - commercial



33,071,654




33,506,394




32,078,762




30,711,230




29,713,293


Real estate - consumer



21,724,491




22,590,912




23,584,420




24,530,249




25,299,638


Consumer



12,221,481




12,146,063




12,066,147




11,811,277




11,632,958


Total loans and leases, net of unearned discount



89,313,002




90,853,416




89,646,492




88,521,998




87,872,466


Less: allowance for credit losses



1,001,430




988,997




976,121




970,496




962,752


Net loans and leases



88,311,572




89,864,419




88,670,371




87,551,502




86,909,714


Goodwill



4,593,112




4,593,112




4,593,112




4,593,112




4,593,112


Core deposit and other intangible assets



94,535




97,655




106,744




116,531




127,949


Other assets



5,848,652




5,998,498




6,138,801




6,330,943




6,336,194


Total assets


$

123,223,251




123,449,206




126,841,028




123,820,584




124,625,632


LIABILITIES AND SHAREHOLDERS' EQUITY





















Noninterest-bearing deposits


$

34,279,591




33,813,896




33,127,627




30,700,066




29,709,218


Interest-bearing deposits



62,570,167




62,478,053




64,786,035




63,756,514




64,338,571


Deposits at Cayman Islands office



192,763




201,927




223,183




193,523




166,787


Total deposits



97,042,521




95,493,876




98,136,845




94,650,103




94,214,576


Short-term borrowings



185,102




163,442




213,846




407,123




1,766,826


Accrued interest and other liabilities



1,694,905




1,811,431




1,938,201




1,963,093




1,948,142


Long-term borrowings



8,087,619




9,493,835




10,211,160




10,328,751




10,341,035


Total liabilities



107,010,147




106,962,584




110,500,052




107,349,070




108,270,579


Shareholders' equity:





















Preferred



1,231,500




1,231,500




1,231,500




1,231,500




1,231,500


Common (1)



14,981,604




15,255,122




15,109,476




15,240,014




15,123,553


Total shareholders' equity



16,213,104




16,486,622




16,340,976




16,471,514




16,355,053


Total liabilities and shareholders' equity


$

123,223,251




123,449,206




126,841,028




123,820,584




124,625,632


 

(1)

Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $291.6 million at March 31, 2017, $294.6 million at December 31, 2016, $114.6 million at September 30, 2016, $101.0 million at June 30, 2016 and $150.2 million at March 31, 2016.

 

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates














Three months ended



Change in balance





March 31,



March 31,



December 31,



March 31, 2017 from



Dollars in millions


2017



2016



2016



March 31,



December 31,





Balance



Rate



Balance



Rate



Balance



Rate



2016



2016



ASSETS


































Interest-bearing deposits at banks


$

6,152




.80


%


8,193




.51


%


8,790




.54


%


-25


%


-30


%

Federal funds sold









1




.77










-100






Trading account



60




2.20




85




1.78




70




2.05




-30




-15



Investment securities



15,999




2.43




15,348




2.60




15,417




2.28




4




4



Loans and leases, net of unearned discount


































Commercial, financial, etc.



22,290




3.66




20,717




3.39




21,936




3.47




8




2



Real estate - commercial



33,175




4.18




29,426




4.16




32,822




4.01




13




1



Real estate - consumer



22,179




3.92




25,859




3.93




23,096




3.88




-14




-4



Consumer



12,153




4.68




11,582




4.55




12,123




4.53




5






Total loans and leases, net



89,797




4.09




87,584




3.99




89,977




3.93




3






Total earning assets



112,008




3.67




111,211




3.54




114,254




3.45




1




-2



Goodwill



4,593








4,593








4,593













Core deposit and other intangible assets



98








134








102








-27




-3



Other assets



6,279








7,314








6,785








-14




-7



Total assets


$

122,978








123,252








125,734









%


-2


%



































LIABILITIES AND SHAREHOLDERS' EQUITY


































Interest-bearing deposits


































Savings and interest-checking deposits


$

53,260




.20




50,335




.13




54,055




.20




6


%


-1


%

Time deposits



9,561




.81




12,999




.75




10,936




.86




-26




-13



Deposits at Cayman Islands office



192




.56




187




.42




206




.42




2




-7



Total interest-bearing deposits



63,013




.29




63,521




.26




65,197




.31




-1




-3



Short-term borrowings



184




.48




2,082




.42




200




.30




-91




-8



Long-term borrowings



8,423




2.25




10,528




2.21




9,901




2.26




-20




-15



Total interest-bearing liabilities



71,620




.52




76,131




.53




75,298




.57




-6




-5



Noninterest-bearing deposits



33,287








28,870








31,717








15




5



Other liabilities



1,748








1,972








2,046








-11




-15



Total liabilities



106,655








106,973








109,061











-2



Shareholders' equity



16,323








16,279








16,673











-2



Total liabilities and shareholders' equity


$

122,978








123,252








125,734









%


-2


%



































Net interest spread







3.15








3.01








2.88











Contribution of interest-free funds







.19








.17








.20











Net interest margin







3.34


%






3.18


%






3.08


%









 

 

 

Reconciliation of GAAP to Non-GAAP Measures








Three months ended




March 31




2017



2016


Income statement data









In thousands, except per share









Net income









Net income


$

348,927




298,528


Amortization of core deposit and other intangible assets (1)



5,108




7,488


Merger-related expenses (1)






14,048


Net operating income


$

354,035




320,064











Earnings per common share









Diluted earnings per common share


$

2.12




1.73


Amortization of core deposit and other intangible assets (1)



.03




.05


Merger-related expenses (1)






.09


Diluted net operating earnings per common share


$

2.15




1.87











Other expense









Other expense


$

787,852




776,095


Amortization of core deposit and other intangible assets



(8,420)




(12,319)


Merger-related expenses






(23,162)


Noninterest operating expense


$

779,432




740,614











Merger-related expenses









Salaries and employee benefits


$




5,274


Equipment and net occupancy






939


Outside data processing and software






715


Advertising and marketing






4,195


Printing, postage and supplies






937


Other costs of operations






11,102


Total


$




23,162











Efficiency ratio









Noninterest operating expense (numerator)


$

779,432




740,614


Taxable-equivalent net interest income



922,259




878,296


Other income



446,845




420,933


Less:  Gain on bank investment securities






4


Denominator


$

1,369,104




1,299,225


Efficiency ratio



56.93

%



57.00

%










Balance sheet data









In millions









Average assets









Average assets


$

122,978




123,252


Goodwill



(4,593)




(4,593)


Core deposit and other intangible assets



(98)




(134)


Deferred taxes



39




52


Average tangible assets


$

118,326




118,577


Average common equity









Average total equity


$

16,323




16,279


Preferred stock



(1,232)




(1,232)


Average common equity



15,091




15,047


Goodwill



(4,593)




(4,593)


Core deposit and other intangible assets



(98)




(134)


Deferred taxes



39




52


Average tangible common equity


$

10,439




10,372











At end of quarter









Total assets









Total assets


$

123,223




124,626


Goodwill



(4,593)




(4,593)


Core deposit and other intangible assets



(95)




(128)


Deferred taxes



38




50


Total tangible assets


$

118,573




119,955


Total common equity









Total equity


$

16,213




16,355


Preferred stock



(1,232)




(1,232)


Undeclared dividends - cumulative preferred stock



(3)




(3)


Common equity, net of undeclared cumulative preferred dividends



14,978




15,120


Goodwill



(4,593)




(4,593)


Core deposit and other intangible assets



(95)




(128)


Deferred taxes



38




50


Total tangible common equity


$

10,328




10,449








(1)

After any related tax effect.


 

 

 

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






Three months ended




March 31,



December 31,



September 30,



June 30,



March 31,




2017



2016



2016



2016



2016


Income statement data





















In thousands, except per share





















Net income





















Net income


$

348,927




330,571




349,984




336,031




298,528


Amortization of core deposit and other intangible assets (1)



5,108




5,524




5,945




6,936




7,488


Merger-related expenses (1)












7,637




14,048


Net operating income


$

354,035




336,095




355,929




350,604




320,064























Earnings per common share





















Diluted earnings per common share


$

2.12




1.98




2.10




1.98




1.73


Amortization of core deposit and other intangible assets (1)



.03




.03




.03




.04




.05


Merger-related expenses (1)












.05




.09


Diluted net operating earnings per common share


$

2.15




2.01




2.13




2.07




1.87























Other expense





















Other expense


$

787,852




769,103




752,392




749,895




776,095


Amortization of core deposit and other intangible assets



(8,420)




(9,089)




(9,787)




(11,418)




(12,319)


Merger-related expenses












(12,593)




(23,162)


Noninterest operating expense


$

779,432




760,014




742,605




725,884




740,614























Merger-related expenses





















Salaries and employee benefits


$










60




5,274


Equipment and net occupancy












339




939


Outside data processing and software












352




715


Advertising and marketing












6,327




4,195


Printing, postage and supplies












545




937


Other costs of operations












4,970




11,102


Total


$










12,593




23,162























Efficiency ratio





















Noninterest operating expense (numerator)


$

779,432




760,014




742,605




725,884




740,614


Taxable-equivalent net interest income



922,259




883,147




865,065




870,341




878,296


Other income



446,845




465,459




491,350




448,254




420,933


Less:  Gain on bank investment securities






1,566




28,480




264




4


Denominator


$

1,369,104




1,347,040




1,327,935




1,318,331




1,299,225


Efficiency ratio



56.93

%



56.42

%



55.92

%



55.06

%



57.00

%






















Balance sheet data





















In millions





















Average assets





















Average assets


$

122,978




125,734




124,725




123,706




123,252


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(98)




(102)




(112)




(122)




(134)


Deferred taxes



39




40




44




48




52


Average tangible assets


$

118,326




121,079




120,064




119,039




118,577


Average common equity





















Average total equity


$

16,323




16,673




16,347




16,377




16,279


Preferred stock



(1,232)




(1,492)




(1,232)




(1,232)




(1,232)


Average common equity



15,091




15,181




15,115




15,145




15,047


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(98)




(102)




(112)




(122)




(134)


Deferred taxes



39




40




44




48




52


Average tangible common equity


$

10,439




10,526




10,454




10,478




10,372























At end of quarter





















Total assets





















Total assets


$

123,223




123,449




126,841




123,821




124,626


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(95)




(98)




(107)




(117)




(128)


Deferred taxes



38




39




42




46




50


Total tangible assets


$

118,573




118,797




122,183




119,157




119,955


Total common equity





















Total equity


$

16,213




16,487




16,341




16,472




16,355


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



14,978




15,252




15,106




15,237




15,120


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(95)




(98)




(107)




(117)




(128)


Deferred taxes



38




39




42




46




50


Total tangible common equity


$

10,328




10,600




10,448




10,573




10,449


 

(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-first-quarter-results-300440133.html

SOURCE M&T Bank Corporation

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