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M&T Bank Corporation Announces Third Quarter Results

BUFFALO, N.Y., Oct. 18, 2017 /PRNewswire/ -- M&T Bank Corporation ("M&T")(NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2017.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the third quarter of 2017 were $2.21, up 5% from $2.10 in the year-earlier period. GAAP-basis net income in the recently completed quarter totaled $356 million, 2% above $350 million in the third quarter of 2016. Diluted earnings per common share and GAAP-basis net income for the second quarter of 2017 were $2.35 and $381 million, respectively. GAAP-basis net income for the third quarter of 2017 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.18% and 8.89%, respectively, compared with 1.12% and 8.68%, respectively, in the year-earlier quarter and 1.27% and 9.67%, respectively, in the second quarter of 2017.

On October 9, 2017, Wilmington Trust Corporation, a wholly owned subsidiary of M&T, reached an agreement with the U.S. Attorney's Office for the District of Delaware related to alleged conduct that took place between 2009 and 2010 prior to the acquisition of Wilmington Trust Corporation by M&T. Under terms of the agreement, Wilmington Trust Corporation was required to pay $60 million and settled the government's claims. The settlement amount included $16 million previously payed to the U.S. Securities and Exchange Commission in a related action. The result was a payment of $44 million that is not deductible for income tax purposes. Wilmington Trust did not admit any liability.

Commenting on M&T's financial results for the recent quarter, Darren J. King, Executive Vice President and Chief Financial Officer, stated, "Once again, M&T has delivered very strong financial results through its core businesses producing solid returns for shareholders. Performance in the third quarter benefited from a widening of the net interest margin, lower credit costs and continued strong fee income and well-controlled expenses. We believe the recently announced agreement between Wilmington Trust Corporation and the U.S. Attorney's Office for the District of Delaware is in the Company's best interest and we are pleased to have that legal proceeding behind us."

 

Earnings Highlights





































Change 3Q17 vs.


($ in millions, except per share data)


3Q17



3Q16



2Q17



3Q16



2Q17























Net income


$

356



$

350



$

381




2

%



-7

%

Net income available to common shareholders - diluted


$

336



$

327



$

361




3

%



-7

%

Diluted earnings per common share


$

2.21



$

2.10



$

2.35




5

%



-6

%

Annualized return on average assets



1.18

%



1.12

%



1.27

%









Annualized return on average common equity



8.89

%



8.68

%



9.67

%









 

For the nine-month period ended September 30, 2017, diluted earnings per common share were $6.69, up 15% from $5.80 in the corresponding 2016 period.  GAAP-basis net income for the first nine months of 2017 totaled $1.09 billion, 10% higher than $985 million in the year-earlier period.  Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income in the nine-month period ended September 30, 2017 was 1.20% and 9.15%, respectively, compared with 1.06% and 8.17%, respectively, in the similar 2016 period.

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

Diluted net operating earnings per common share were $2.24 in the recent quarter, compared with $2.13 and $2.38 in 2016's third quarter and the second quarter of 2017, respectively. Net operating income was $361 million in the third quarter of 2017, compared with $356 million in the corresponding quarter of 2016 and $386 million in the second quarter of 2017. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.25% and 13.03%, respectively, in the third quarter of 2017, compared with 1.18% and 12.77%, respectively, in the year-earlier quarter and 1.33% and 14.18%, respectively, in the second quarter of 2017.

Diluted net operating earnings per common share in the first nine months of 2017 increased 12% to $6.78 from $6.07 in the year-earlier period. Net operating income during the nine-month period ended September 30, 2017 was $1.10 billion, up 7% from $1.03 billion in the like-2016 period.  Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.26% and 13.42%, respectively, in the first nine months of 2017, compared with 1.15% and 12.36%, respectively, in the nine-month period ended September 30, 2016.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis totaled $966 million in the third quarter of 2017, an increase of $101 million, or 12%, from $865 million in the year-earlier quarter.  That improvement resulted predominantly from a widening of the net interest margin to 3.53% in the recent quarter from 3.05% in the third quarter of 2016. Taxable-equivalent net interest income in the recent quarter rose 2% from $947 million in the second quarter of 2017.  That growth was primarily due to an 8 basis point widening of the net interest margin from 3.45% in the second quarter of 2017.

 






















Taxable-equivalent Net Interest Income





































Change 3Q17 vs.


($ in millions)


3Q17



3Q16



2Q17



3Q16



2Q17























Average earning assets


$

108,642



$

112,864



$

109,987




-4

%



-1

%

Net interest income - taxable-equivalent


$

966



$

865



$

947




12

%



2

%

Net interest margin



3.53

%



3.05

%



3.45

%









 

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $30 million in the third quarter of 2017, compared with $47 million in 2016's third quarter and $52 million in the second quarter of 2017.  Net charge-offs of loans were $25 million during the recent quarter, compared with $41 million in the third quarter of 2016 and $45 million in the second quarter of 2017.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .11% and .19% in the third quarter of 2017 and 2016, respectively, and .20% in the second 2017 quarter.

Loans classified as nonaccrual totaled $869 million, or .99% of total loans outstanding at September 30, 2017, compared with $872 million or .98% at June 30, 2017 and $837 million or .93% at September 30, 2016. The higher levels of nonaccrual loans at the two most recent quarter-ends as compared with September 30, 2016 reflect the migration of previously performing loans obtained in the acquisition of Hudson City Bancorp, Inc. ("Hudson City") that became over 90 days past due after September 30, 2016.  Nonaccrual Hudson City-related residential real estate loans totaled $211 million at each of September 30, 2017 and June 30, 2017, compared with $149 million at September 30, 2016. Assets taken in foreclosure of defaulted loans were $111 million at September 30, 2017, compared with $160 million at September 30, 2016 and $105 million at June 30, 2017.

Allowance for Credit Losses.  M&T regularly performs detailed analyses of individual borrowers and portfolios for purposes of assessing the adequacy of the allowance for credit losses.  As a result of those analyses, the allowance for credit losses totaled $1.01 billion at each of September 30, 2017 and June 30, 2017, compared with $976 million at September 30, 2016.  The allowance expressed as a percentage of outstanding loans was 1.15% at September 30, 2017, compared with 1.09% at September 30, 2016 and 1.13% at June 30, 2017

 

Asset Quality Metrics





































Change 3Q17 vs.


($ in millions)


3Q17



3Q16



2Q17



3Q16



2Q17























At end of quarter





















Nonaccrual loans


$

869



$

837



$

872




4

%




Real estate and other foreclosed assets


$

111



$

160



$

105




-31

%



6

%

Total nonperforming assets


$

980



$

997



$

977




-2

%




Accruing loans past due 90 days or more (1)


$

261



$

317



$

265




-18

%



-2

%

Nonaccrual loans as % of loans outstanding



.99

%



.93

%



.98

%






























Allowance for credit losses


$

1,013



$

976



$

1,008




4

%



1

%

Allowance for credit losses as % of loans outstanding



1.15

%



1.09

%



1.13

%






























For the period





















Provision for credit losses


$

30



$

47



$

52




-36

%



-42

%

Net charge-offs


$

25



$

41



$

45




-40

%



-45

%

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



.11

%



.19

%



.20

%









__________

(1)

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

 

Noninterest Income and Expense.  Noninterest income aggregated $459 million in the recent quarter, compared with $491 million in the third quarter of 2016 and $461 million in the second quarter of 2017. The decline in noninterest income in the recent quarter as compared with the corresponding quarter of 2016 was predominantly the result of $28 million of gains on investment securities recognized during that 2016 quarter. Higher trust income in the third quarter of 2017 was offset by lower mortgage banking revenues as compared with the year-earlier period. As compared with 2017's second quarter, a 12% rise in mortgage banking revenues during the recent quarter was offset by a decline in credit-related fees.

 

Noninterest Income





































Change 3Q17 vs.


($ in millions)


3Q17



3Q16



2Q17



3Q16



2Q17























Mortgage banking revenues


$

97



$

104



$

86




-7

%



12

%

Service charges on deposit accounts



109




108




106




1

%



3

%

Trust income



125




119




127




5

%



-1

%

Brokerage services income



15




16




17




-8

%



-12

%

Trading account and foreign exchange gains



7




13




8




-45

%



-13

%

Gain on bank investment securities






28







-100

%




Other revenues from operations



106




103




117




3

%



-9

%

Total other income


$

459



$

491



$

461




-6

%




 

Noninterest expense in the third quarter of 2017 totaled $806 million, compared with $752 million in the year-earlier quarter and $751 million in the second 2017 quarter.  Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets and merger-related expenses, noninterest operating expenses were $798 million in the recent quarter, compared with $743 million in each of the third quarter of 2016 and the second quarter of 2017. As of September 30, 2017, M&T increased its reserve for legal matters by $50 million. Higher professional services costs also contributed to the rise in operating expenses in the recent quarter as compared with the noted earlier quarters.

 

Noninterest Expense





































Change 3Q17 vs.


($ in millions)


3Q17



3Q16



2Q17



3Q16



2Q17























Salaries and employee benefits


$

399



$

400



$

399








Equipment and net occupancy



75




75




74







2

%

Outside data processing and software



46




43




45




7

%



3

%

FDIC assessments



24




28




25




-16

%



-5

%

Advertising and marketing



17




22




16




-21

%



7

%

Printing, postage and supplies



9




9




9




-3

%



-3

%

Amortization of core deposit and other intangible assets



8




10




8




-20

%



-4

%

Other costs of operations



228




165




175




38

%



30

%

Total other expense


$

806



$

752



$

751




7

%



7

%






















 

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 56.0%, 55.9% and 52.7% in the quarters ended September 30, 2017, September 30, 2016 and June 30, 2017, respectively.

Balance Sheet.  M&T had total assets of $120.4 billion at September 30, 2017, compared with $126.8 billion at September 30, 2016 and $120.9 billion at June 30, 2017. Loans and leases, net of unearned discount, totaled $87.9 billion at the recent quarter-end, compared with $89.6 billion at September 30, 2016 and $89.1 billion at June 30, 2017.  Investment securities were $15.1 billion, $14.7 billion and $15.8 billion at September 30, 2017, September 30, 2016, and June 30, 2017, respectively.  Total deposits were $93.5 billion at each of September 30, 2017 and June 30, 2017, compared with $98.1 billion at September 30, 2016.

Total shareholders' equity at each of September 30, 2017, September 30, 2016 and June 30, 2017 was $16.3 billion, representing 13.55%, 12.88% and 13.47% of total assets, respectively. Common shareholders' equity was $15.1 billion at each of those dates, or $99.70 per share at September 30, 2017, $97.47 per share at September 30, 2016 and $98.66 per share at June 30, 2017.  Tangible equity per common share rose to $69.02 at the recent quarter-end from $67.42 a year earlier and $68.20 at June 30, 2017.  In the calculation of tangible equity per common share, common shareholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances.  M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under regulatory capital rules was approximately 10.98% as of September 30, 2017

In accordance with its 2017 capital plan, M&T repurchased 1,382,746 shares of common stock during the recent quarter at an average cost per share of $162.52, for a total cost of $225 million.  In the aggregate, during the first nine months of 2017, M&T repurchased 6,025,749 shares of common stock under the 2017 and 2016 capital plans at a total cost of $982 million.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss third 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# 87313424. The conference call will be webcast live through M&T's website at http://ir.mandtbank.com/events.cfm.  A replay of the call will be available through Wednesday, October 25, 2017 by calling (800) 585-8367, or (404) 537-3406 for international participants, and by making reference to ID# 87313424.  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







Nine months ended








September 30







September 30






Amounts in thousands, except per share


2017



2016



Change



2017



2016



Change


Performance

























Net income


$

355,923




349,984




2

%


$

1,085,903




984,543




10

%

Net income available to common shareholders



335,804




326,998




3

%



1,025,023




915,686




12

%

Per common share:

























Basic earnings


$

2.22




2.10




6

%


$

6.71




5.82




15

%

Diluted earnings



2.21




2.10




5

%



6.69




5.80




15

%

Cash dividends


$

.75




.70




7

%


$

2.25




2.10




7

%

Common shares outstanding:

























Average - diluted (1)



151,691




156,026




-3

%



153,293




157,843




-3

%

Period end (2)



151,291




154,987




-2

%



151,291




154,987




-2

%

Return on (annualized):

























Average total assets



1.18

%



1.12

%







1.20

%



1.06

%





Average common shareholders' equity



8.89

%



8.68

%







9.15

%



8.17

%





Taxable-equivalent net interest income


$

965,962




865,065




12

%


$

2,835,157




2,613,702




8

%

Yield on average earning assets



3.89

%



3.44

%







3.79

%



3.50

%





Cost of interest-bearing liabilities



.57

%



.59

%







.54

%



.56

%





Net interest spread



3.32

%



2.85

%







3.25

%



2.94

%





Contribution of interest-free funds



.21

%



.20

%







.19

%



.18

%





Net interest margin



3.53

%



3.05

%







3.44

%



3.12

%





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



.11

%



.19

%







.17

%



.16

%





Net operating results (3)

























Net operating income


$

360,658




355,929




1

%


$

1,100,667




1,026,597




7

%

Diluted net operating earnings per common share



2.24




2.13




5

%



6.78




6.07




12

%

Return on (annualized):

























Average tangible assets



1.25

%



1.18

%







1.26

%



1.15

%





Average tangible common equity



13.03

%



12.77

%







13.42

%



12.36

%





Efficiency ratio



56.00

%



55.92

%







55.21

%



55.99

%
































At September 30
















Loan quality


2017



2016



Change














Nonaccrual loans


$

869,362




837,362




4

%













Real estate and other foreclosed assets



110,515




159,881




-31

%













Total nonperforming assets


$

979,877




997,243




-2

%













Accruing loans past due 90 days or more (4)


$

261,288




317,282




-18

%













Government guaranteed loans included in totals above:

























Nonaccrual loans


$

34,687




47,130




-26

%













Accruing loans past due 90 days or more



252,072




282,077




-11

%













Renegotiated loans


$

226,672




217,559




4

%













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


$

56,225




65,182




-14

%













Purchased impaired loans (6):

























Outstanding customer balance


$

779,340




981,105




-21

%













Carrying amount



466,943




616,991




-24

%













Nonaccrual loans to total net loans



.99

%



.93

%

















Allowance for credit losses to total loans



1.15

%



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





September 30,



June 30,



March 31,



December 31,



September 30,


Amounts in thousands, except per share


2017



2017



2017



2016



2016


Performance





















Net income


$

355,923




381,053




348,927




330,571




349,984


Net income available to common shareholders



335,804




360,662




328,567




307,797




326,998


Per common share:





















Basic earnings


$

2.22




2.36




2.13




1.98




2.10


Diluted earnings



2.21




2.35




2.12




1.98




2.10


Cash dividends


$

.75




.75




.75




.70




.70


Common shares outstanding:





















Average - diluted (1)



151,691




153,276




154,949




155,700




156,026


Period end (2)



151,291




152,539




153,781




156,213




154,987


Return on (annualized):





















Average total assets



1.18

%



1.27

%



1.15

%



1.05

%



1.12

%

Average common shareholders' equity



8.89

%



9.67

%



8.89

%



8.13

%



8.68

%

Taxable-equivalent net interest income


$

965,962




946,936




922,259




883,147




865,065


Yield on average earning assets



3.89

%



3.79

%



3.67

%



3.45

%



3.44

%

Cost of interest-bearing liabilities



.57

%



.52

%



.52

%



.57

%



.59

%

Net interest spread



3.32

%



3.27

%



3.15

%



2.88

%



2.85

%

Contribution of interest-free funds



.21

%



.18

%



.19

%



.20

%



.20

%

Net interest margin



3.53

%



3.45

%



3.34

%



3.08

%



3.05

%

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



.11

%



.20

%



.19

%



.22

%



.19

%

Net operating results (3)





















Net operating income


$

360,658




385,974




354,035




336,095




355,929


Diluted net operating earnings per common share



2.24




2.38




2.15




2.01




2.13


Return on (annualized):





















Average tangible assets



1.25

%



1.33

%



1.21

%



1.10

%



1.18

%

Average tangible common equity



13.03

%



14.18

%



13.05

%



11.93

%



12.77

%

Efficiency ratio



56.00

%



52.74

%



56.93

%



56.42

%



55.92

%
























September 30,



June 30,



March 31,



December 31,



September 30,


Loan quality


2017



2017



2017



2016



2016


Nonaccrual loans


$

869,362




872,374




926,675




920,015




837,362


Real estate and other foreclosed assets



110,515




104,424




119,155




139,206




159,881


Total nonperforming assets


$

979,877




976,798




1,045,830




1,059,221




997,243


Accruing loans past due 90 days or more (4)


$

261,288




265,461




280,019




300,659




317,282


Government guaranteed loans included in totals above:





















Nonaccrual loans


$

34,687




39,296




39,610




40,610




47,130


Accruing loans past due 90 days or more



252,072




235,227




252,552




282,659




282,077


Renegotiated loans


$

226,672




221,892




191,343




190,374




217,559


Accruing loans acquired at a discount past due 90 days or

  more (5)


$

56,225




57,498




63,732




61,144




65,182


Purchased impaired loans (6):





















Outstanding customer balance


$

779,340




838,476




890,431




927,446




981,105


Carrying amount



466,943




512,393




552,935




578,032




616,991


Nonaccrual loans to total net loans



.99

%



.98

%



1.04

%



1.01

%



.93

%

Allowance for credit losses to total loans



1.15

%



1.13

%



1.12

%



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. 

 

 

Condensed Consolidated Statement of Income
































Three months ended







Nine months ended








September 30







September 30






Dollars in thousands


2017



2016



Change



2017



2016



Change


Interest income


$

1,057,210




969,515




9

%


$

3,093,656




2,912,970




6

%

Interest expense



100,076




111,175




-10




284,062




318,847




-11


Net interest income



957,134




858,340




12




2,809,594




2,594,123




8


Provision for credit losses



30,000




47,000




-36




137,000




128,000




7


Net interest income after provision for credit losses



927,134




811,340




14




2,672,594




2,466,123




8


Other income

























Mortgage banking revenues



96,737




103,747




-7




267,592




275,193




-3


Service charges on deposit accounts



109,356




107,935




1




319,589




314,212




2


Trust income



124,900




118,654




5




371,712




350,181




6


Brokerage services income



14,676




15,914




-8




48,677




48,190




1


Trading account and foreign exchange gains



7,058




12,754




-45




24,833




33,434




-26


Gain (loss) on bank investment securities






28,480




-100




(17)




28,748




-100


Other revenues from operations



106,702




103,866




3




334,704




310,579




8


Total other income



459,429




491,350




-6




1,367,090




1,360,537





Other expense

























Salaries and employee benefits



399,089




399,786







1,247,851




1,230,246




1


Equipment and net occupancy



75,558




75,263







223,721




225,165




-1


Outside data processing and software



45,761




42,878




7




134,637




128,402




5


FDIC assessments



23,969




28,459




-16




78,149




76,054




3


Advertising and marketing



17,403




21,996




-21




49,837




66,063




-25


Printing, postage and supplies



8,732




8,972




-3




27,397




30,865




-11


Amortization of core deposit and other 
  intangible assets



7,808




9,787




-20




24,341




33,524




-27


Other costs of operations



227,705




165,251




38




558,579




488,063




14


Total other expense



806,025




752,392




7




2,344,512




2,278,382




3


Income before income taxes



580,538




550,298




5




1,695,172




1,548,278




9


Applicable income taxes



224,615




200,314




12




609,269




563,735




8


Net income


$

355,923




349,984




2

%


$

1,085,903




984,543




10

%

 

 

Condensed Consolidated Statement of Income, Five Quarter Trend






Three months ended




September 30,



June 30,



March 31,



December 31,



September 30,


Dollars in thousands


2017



2017



2017



2016



2016


Interest income


$

1,057,210




1,030,413




1,006,033




982,901




969,515


Interest expense



100,076




92,213




91,773




107,137




111,175


Net interest income



957,134




938,200




914,260




875,764




858,340


Provision for credit losses



30,000




52,000




55,000




62,000




47,000


Net interest income after provision for credit losses



927,134




886,200




859,260




813,764




811,340


Other income





















Mortgage banking revenues



96,737




86,163




84,692




98,504




103,747


Service charges on deposit accounts



109,356




106,057




104,176




104,890




107,935


Trust income



124,900




126,797




120,015




122,003




118,654


Brokerage services income



14,676




16,617




17,384




15,233




15,914


Trading account and foreign exchange gains



7,058




8,084




9,691




7,692




12,754


Gain (loss) on bank investment securities






(17)







1,566




28,480


Other revenues from operations



106,702




117,115




110,887




115,571




103,866


Total other income



459,429




460,816




446,845




465,459




491,350


Other expense





















Salaries and employee benefits



399,089




398,900




449,862




393,354




399,786


Equipment and net occupancy



75,558




73,797




74,366




69,976




75,263


Outside data processing and software



45,761




44,575




44,301




43,987




42,878


FDIC assessments



23,969




25,353




28,827




28,991




28,459


Advertising and marketing



17,403




16,324




16,110




21,074




21,996


Printing, postage and supplies



8,732




8,957




9,708




8,681




8,972


Amortization of core deposit and other intangible assets



7,808




8,113




8,420




9,089




9,787


Other costs of operations



227,705




174,616




156,258




193,951




165,251


Total other expense



806,025




750,635




787,852




769,103




752,392


Income before income taxes



580,538




596,381




518,253




510,120




550,298


Applicable income taxes



224,615




215,328




169,326




179,549




200,314


Net income


$

355,923




381,053




348,927




330,571




349,984


 

 

Condensed Consolidated Balance Sheet
















September 30







Dollars in thousands


2017



2016



Change



ASSETS














Cash and due from banks


$

1,368,252




1,332,202




3


%

Interest-bearing deposits at banks



6,306,484




10,777,636




-41



Trading account



170,516




488,588




-65



Investment securities



15,073,926




14,733,574




2



Loans and leases:














Commercial, financial, etc.



21,743,251




21,917,163




-1



Real estate - commercial



32,914,288




32,078,762




3



Real estate - consumer



20,265,162




23,584,420




-14



Consumer



13,002,433




12,066,147




8



Total loans and leases, net of unearned discount



87,925,134




89,646,492




-2



Less: allowance for credit losses



1,013,326




976,121




4



Net loans and leases



86,911,808




88,670,371




-2



Goodwill



4,593,112




4,593,112






Core deposit and other intangible assets



78,614




106,744




-26



Other assets



5,899,092




6,138,801




-4



Total assets


$

120,401,804




126,841,028




-5


%















LIABILITIES AND SHAREHOLDERS' EQUITY














Noninterest-bearing deposits


$

33,111,246




33,127,627





%

Interest-bearing deposits



60,170,133




64,786,035




-7



Deposits at Cayman Islands office



232,014




223,183




4



Total deposits



93,513,393




98,136,845




-5



Short-term borrowings



200,768




213,846




-6



Accrued interest and other liabilities



1,791,946




1,938,201




-8



Long-term borrowings



8,577,645




10,211,160




-16



Total liabilities



104,083,752




110,500,052




-6



Shareholders' equity:














Preferred



1,231,500




1,231,500






Common (1)



15,086,552




15,109,476






Total shareholders' equity



16,318,052




16,340,976






Total liabilities and shareholders' equity


$

120,401,804




126,841,028




-5


%

__________

(1)

Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $247.9 million at September 30, 2017 and $114.6 million at September 30, 2016.

 

 

Condensed Consolidated Balance Sheet, Five Quarter Trend








September 30,



June 30,



March 31,



December 31,



September 30,


Dollars in thousands


2017



2017



2017



2016



2016


ASSETS





















Cash and due from banks


$

1,368,252




1,344,478




1,286,962




1,320,549




1,332,202


Interest-bearing deposits at banks



6,306,484




5,023,829




6,945,149




5,000,638




10,777,636


Federal funds sold






1,000











Trading account



170,516




174,646




174,854




323,867




488,588


Investment securities



15,073,926




15,816,060




15,968,415




16,250,468




14,733,574


Loans and leases:





















Commercial, financial, etc.



21,743,251




22,191,051




22,295,376




22,610,047




21,917,163


Real estate - commercial



32,914,288




33,348,991




33,071,654




33,506,394




32,078,762


Real estate - consumer



20,265,162




20,960,171




21,724,491




22,590,912




23,584,420


Consumer



13,002,433




12,580,342




12,221,481




12,146,063




12,066,147


Total loans and leases, net of unearned discount



87,925,134




89,080,555




89,313,002




90,853,416




89,646,492


Less: allowance for credit losses



1,013,326




1,008,225




1,001,430




988,997




976,121


Net loans and leases



86,911,808




88,072,330




88,311,572




89,864,419




88,670,371


Goodwill



4,593,112




4,593,112




4,593,112




4,593,112




4,593,112


Core deposit and other intangible assets



78,614




86,422




94,535




97,655




106,744


Other assets



5,899,092




5,784,690




5,848,652




5,998,498




6,138,801


Total assets


$

120,401,804




120,896,567




123,223,251




123,449,206




126,841,028























LIABILITIES AND SHAREHOLDERS' EQUITY





















Noninterest-bearing deposits


$

33,111,246




32,366,426




34,279,591




32,813,896




33,127,627


Interest-bearing deposits



60,170,133




60,978,895




62,570,167




62,478,053




64,786,035


Deposits at Cayman Islands office



232,014




195,617




192,763




201,927




223,183


Total deposits



93,513,393




93,540,938




97,042,521




95,493,876




98,136,845


Short-term borrowings



200,768




1,695,453




185,102




163,442




213,846


Accrued interest and other liabilities



1,791,946




1,727,059




1,694,905




1,811,431




1,938,201


Long-term borrowings



8,577,645




7,649,580




8,087,619




9,493,835




10,211,160


Total liabilities



104,083,752




104,613,030




107,010,147




106,962,584




110,500,052


Shareholders' equity:





















Preferred



1,231,500




1,231,500




1,231,500




1,231,500




1,231,500


Common (1)



15,086,552




15,052,037




14,981,604




15,255,122




15,109,476


Total shareholders' equity



16,318,052




16,283,537




16,213,104




16,486,622




16,340,976


Total liabilities and shareholders' equity


$

120,401,804




120,896,567




123,223,251




123,449,206




126,841,028


___________

(1)

Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $247.9 million at September 30, 2017$270.1 million at June 30, 2017, $291.6 million at March 31, 2017, $294.6 million at December 31, 2016 and $114.6 million at September 30, 2016.

 

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates




Three months ended




Change in balance




Nine months ended








September 30,




September 30,




June 30,




September 30, 2017 from




September 30




Change



Dollars in millions


2017




2016




2017




September 30,




June 30,




2017




2016




in






Balance




Rate




Balance




Rate




Balance




Rate




2016




2017





Balance




Rate




Balance




Rate




balance



ASSETS























































Interest-bearing deposits at banks


$

4,740




1.25


%


9,681




.51


%


4,741




1.03


%


-51


%



%


$

5,206




1.01


%


8,864




.51


%


-41


%

Federal funds sold















1




1.44

























Trading account



73




1.92




90




1.52




64




1.50




-19




15





66




1.87




89




1.62




-26



Investment securities



15,443




2.28




14,361




2.38




15,913




2.36




8




-3





15,783




2.36




14,873




2.49




6



Loans and leases, net of unearned discount























































Commercial, financial, etc.



21,734




3.98




21,480




3.44




22,350




3.84




1




-3





22,122




3.83




21,216




3.43




4



Real estate - commercial



33,257




4.50




31,252




4.00




33,214




4.30




6








33,216




4.33




30,274




4.08




10



Real estate - consumer



20,609




3.96




24,058




3.92




21,318




3.94




-14




-3





21,363




3.94




24,922




3.93




-14



Consumer



12,786




4.89




11,942




4.55




12,386




4.78




7




3





12,444




4.79




11,747




4.55




6



Total loans and leases, net



88,386




4.32




88,732




3.93




89,268




4.19







-1





89,145




4.20




88,159




3.97




1



Total earning assets



108,642




3.89




112,864




3.44




109,987




3.79




-4




-1





110,200




3.79




111,985




3.50




-2



Goodwill



4,593








4,593








4,593















4,593








4,593










Core deposit and other intangible assets



82








112








90








-26




-9





90








123








-26



Other assets



6,198








7,156








6,095








-13




2





6,190








7,196








-14



Total assets


$

119,515








124,725








120,765








-4


%


-1


%


$

121,073








123,897








-2


%
























































LIABILITIES AND SHAREHOLDERS' EQUITY























































Interest-bearing deposits























































Savings and interest-checking deposits


$

53,287




.28




52,516




.18




53,611




.23




1


%


-1


%


$

53,386




.24




51,570




.16




4


%

Time deposits



7,673




.72




12,334




.90




8,559




.76




-38




-10





8,591




.77




12,694




.83




-32



Deposits at Cayman Islands office



169




.73




220




.37




163




.69




-23




4





175




.66




197




.39




-11



Total interest-bearing deposits



61,129




.34




65,070




.32




62,333




.30




-6




-2





62,152




.31




64,461




.29




-4



Short-term borrowings



244




.90




231




.29




212




.71




6




15





213




.72




1,127




.41




-81



Long-term borrowings



8,033




2.35




10,287




2.28




8,292




2.16




-22




-3





8,248




2.25




10,370




2.25




-20



Total interest-bearing liabilities



69,406




.57




75,588




.59




70,837




.52




-8




-2





70,613




.54




75,958




.56




-7



Noninterest-bearing deposits



32,005








30,782








31,868








4








32,382








29,638








9



Other liabilities



1,803








2,008








1,775








-10




2





1,775








1,967








-10



Total liabilities



103,214








108,378








104,480








-5




-1





104,770








107,563








-3



Shareholders' equity



16,301








16,347








16,285















16,303








16,334










Total liabilities and shareholders' equity


$

119,515








124,725








120,765








-4


%


-1


%


$

121,073








123,897








-2


%
























































Net interest spread







3.32








2.85








3.27

















3.25








2.94







Contribution of interest-free funds







.21








.20








.18

















.19








.18







Net interest margin







3.53


%






3.05


%






3.45


%















3.44


%






3.12


%





 

 

Reconciliation of GAAP to Non-GAAP Measures
















Three months ended



Nine months ended




September 30



September 30




2017



2016



2017



2016


Income statement data

















In thousands, except per share

















Net income

















Net income


$

355,923




349,984




1,085,903




984,543


Amortization of core deposit and other intangible assets (1)



4,735




5,945




14,764




20,369


Merger-related expenses (1)












21,685


Net operating income


$

360,658




355,929




1,100,667




1,026,597



















Earnings per common share

















Diluted earnings per common share


$

2.21




2.10




6.69




5.80


Amortization of core deposit and other intangible assets (1)



.03




.03




.09




.13


Merger-related expenses (1)












.14


Diluted net operating earnings per common share


$

2.24




2.13




6.78




6.07



















Other expense

















Other expense


$

806,025




752,392




2,344,512




2,278,382


Amortization of core deposit and other intangible assets



(7,808)




(9,787)




(24,341)




(33,524)


Merger-related expenses












(35,755)


Noninterest operating expense


$

798,217




742,605




2,320,171




2,209,103



















Merger-related expenses

















Salaries and employee benefits


$










5,334


Equipment and net occupancy












1,278


Outside data processing and software












1,067


Advertising and marketing












10,522


Printing, postage and supplies












1,482


Other costs of operations












16,072


Total


$










35,755



















Efficiency ratio

















Noninterest operating expense (numerator)


$

798,217




742,605




2,320,171




2,209,103


Taxable-equivalent net interest income



965,962




865,065




2,835,157




2,613,702


Other income



459,429




491,350




1,367,090




1,360,537


Less:  Gain (loss) on bank investment securities






28,480




(17)




28,748


Denominator


$

1,425,391




1,327,935




4,202,264




3,945,491


Efficiency ratio



56.00

%



55.92

%



55.21

%



55.99

%


















Balance sheet data

















In millions

















Average assets

















Average assets


$

119,515




124,725




121,073




123,897


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(82)




(112)




(90)




(123)


Deferred taxes



32




44




35




48


Average tangible assets


$

114,872




120,064




116,425




119,229


Average common equity

















Average total equity


$

16,301




16,347




16,303




16,334


Preferred stock



(1,232)




(1,232)




(1,232)




(1,231)


Average common equity



15,069




15,115




15,071




15,103


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(82)




(112)




(90)




(123)


Deferred taxes



32




44




35




48


Average tangible common equity


$

10,426




10,454




10,423




10,435


At end of quarter

















Total assets

















Total assets


$

120,402




126,841










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(79)




(107)










Deferred taxes



31




42










Total tangible assets


$

115,761




122,183










Total common equity

















Total equity


$

16,318




16,341










Preferred stock



(1,232)




(1,232)










Undeclared dividends - cumulative preferred stock



(3)




(3)










Common equity, net of undeclared cumulative preferred dividends



15,083




15,106










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(79)




(107)










Deferred taxes



31




42










Total tangible common equity


$

10,442




10,448










___________

(1)  After any related tax effect.


 

 

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




Three months ended




September 30,



June 30,



March 31,



December 31,



September 30,




2017



2017



2017



2016



2016


Income statement data





















In thousands, except per share





















Net income





















Net income


$

355,923




381,053




348,927




330,571




349,984


Amortization of core deposit and other intangible assets (1)



4,735




4,921




5,108




5,524




5,945


Net operating income


$

360,658




385,974




354,035




336,095




355,929


Earnings per common share





















Diluted earnings per common share


$

2.21




2.35




2.12




1.98




2.10


Amortization of core deposit and other intangible assets (1)



.03




.03




.03




.03




.03


Diluted net operating earnings per common share


$

2.24




2.38




2.15




2.01




2.13























Other expense





















Other expense


$

806,025




750,635




787,852




769,103




752,392


Amortization of core deposit and other intangible assets



(7,808)




(8,113)




(8,420)




(9,089)




(9,787)


Noninterest operating expense


$

798,217




742,522




779,432




760,014




742,605























Efficiency ratio





















Noninterest operating expense (numerator)


$

798,217




742,522




779,432




760,014




742,605


Taxable-equivalent net interest income



965,962




946,936




922,259




883,147




865,065


Other income



459,429




460,816




446,845




465,459




491,350


Less:  Gain (loss) on bank investment securities






(17)







1,566




28,480


Denominator


$

1,425,391




1,407,769




1,369,104




1,347,040




1,327,935


Efficiency ratio



56.00

%



52.74

%



56.93

%



56.42

%



55.92

%






















Balance sheet data





















In millions





















Average assets





















Average assets


$

119,515




120,765




122,978




125,734




124,725


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(82)




(90)




(98)




(102)




(112)


Deferred taxes



32




35




39




40




44


Average tangible assets


$

114,872




116,117




118,326




121,079




120,064























Average common equity





















Average total equity


$

16,301




16,285




16,323




16,673




16,347


Preferred stock



(1,232)




(1,232)




(1,232)




(1,492)




(1,232)


Average common equity



15,069




15,053




15,091




15,181




15,115


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(82)




(90)




(98)




(102)




(112)


Deferred taxes



32




35




39




40




44


Average tangible common equity


$

10,426




10,405




10,439




10,526




10,454























At end of quarter





















Total assets





















Total assets


$

120,402




120,897




123,223




123,449




126,841


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(79)




(86)




(95)




(98)




(107)


Deferred taxes



31




33




38




39




42


Total tangible assets


$

115,761




116,251




118,573




118,797




122,183























Total common equity





















Total equity


$

16,318




16,284




16,213




16,487




16,341


Preferred stock



(1,232)




(1,232)




(1,232)




(1,232)




(1,232)


Undeclared dividends - cumulative preferred stock



(3)




(3)




(3)




(3)




(3)


Common equity, net of undeclared cumulative preferred dividends



15,083




15,049




14,978




15,252




15,106


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(79)




(86)




(95)




(98)




(107)


Deferred taxes



31




33




38




39




42


Total tangible common equity


$

10,442




10,403




10,328




10,600




10,448


__________

(1)   After any related tax effect.

 

View original content:http://www.prnewswire.com/news-releases/mt-bank-corporation-announces-third-quarter-results-300538734.html

SOURCE M&T Bank Corporation

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