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M&T Bank Corporation Announces Second Quarter Results

BUFFALO, N.Y., July 12, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- M&T Bank Corporation ("M&T")(NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2006.

GAAP Results of Operations. Diluted earnings per share measured in accordance with generally accepted accounting principles ("GAAP") for the second quarter of 2006 were $1.87, up 11% from $1.69 in the year-earlier period. GAAP-basis net income in the recent quarter totaled $213 million, 8% higher than $197 million in the second quarter of 2005. GAAP-basis net income for 2006's second quarter expressed as an annualized rate of return on average assets and average common stockholders' equity was 1.54% and 14.35%, respectively, compared with 1.46% and 13.73%, respectively, in the corresponding quarter of 2005.

For the first half of 2006, GAAP-basis diluted earnings per share were $3.64, 10% higher than $3.31 in the similar 2005 period. On the same basis, net income for the first two quarters of 2006 totaled $415 million, up 8% from $386 million in the first half of 2005. GAAP-basis net income for the six- month period ended June 30, 2006 expressed as an annualized rate of return on average assets and average common stockholders' equity was 1.52% and 14.16%, respectively, compared with 1.45% and 13.57%, respectively, in the corresponding 2005 period.

As previously announced, on June 30, 2006 M&T Bank, M&T's principal banking subsidiary, completed the acquisition of 21 branch offices in Buffalo and Rochester, New York from Citibank, N.A., including approximately $269 million in loans and approximately $1.0 billion of deposits. Although the June 30 transaction had no effect on day-to-day operating results, expenses associated with systems conversions and other costs of integrating and introducing Citibank, N.A.'s former customers to M&T's products and services aggregated $2 million, after applicable tax effect, or $.02 of diluted earnings per share during the three and six-month periods ended June 30, 2006. M&T will incur additional acquisition-related expenses in the third quarter of 2006.

In discussing the recent quarter's financial results, Rene F. Jones, Executive Vice President and Chief Financial Officer of M&T noted, "Our results for the quarter reflect many of M&T's traditional strengths. Continued attention to efficiency and the benefits of our consistent credit standards led to double-digit growth in M&T's diluted earnings per share." In addition, reflecting on the recently completed branch transaction, Mr. Jones observed, "We are excited about the addition of approximately 60,000 consumer and business customers in our Buffalo and Rochester markets, the second and third largest cities in New York State. The ability to service those customers without a significant increase in distribution costs made this transaction compelling. Our new customers will benefit from having access to M&T's network of ATM and branch facilities in western New York, and our shareholders will benefit from increased operating leverage."

Supplemental Reporting of Non-GAAP Results of Operations. Since 1998, M&T has consistently provided 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 expenses are considered by management to be "nonoperating" in nature. 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. Amortization of core deposit and other intangible assets, after tax effect, was $7 million ($.06 per diluted share) in the second quarter of 2006, compared with $9 million ($.07 per diluted share) in the year-earlier quarter. Similar after tax effect amortization charges for the six-month periods ended June 30, 2006 and 2005 were $15 million ($.13 per diluted share) and $18 million ($.15 per diluted share), respectively. As already noted, expenses related to the acquisition of branch offices, deposits and loans totaled $2 million, after applicable tax effect, or $.02 per diluted share in each of the three and six-month periods ended June 30, 2006. There were no similar expenses in 2005.

Diluted net operating earnings per share, which exclude the impact of amortization of core deposit and other intangible assets and branch acquisition-related expenses, were $1.95 in 2006's second quarter, a rise of 11% from $1.76 in the year-earlier quarter. Net operating income during 2006's second quarter grew 8% to $222 million from $205 million in the similar 2005 period. Expressed as an annualized rate of return on average tangible assets and average tangible stockholders' equity, net operating income was 1.69% and 30.02%, respectively, in the recent quarter, compared with 1.62% and 29.88% in the second quarter of 2005.

Diluted net operating earnings per share for the six-month period ended June 30, 2006 rose 10% to $3.79 from $3.46 in the year-earlier period. Net operating income for the first half of 2006 was $433 million, up 7% from $405 million in the corresponding 2005 period. For the first six months of 2006, net operating income expressed as an annualized rate of return on average tangible assets and average tangible equity was 1.67% and 29.67%, respectively, compared with 1.61% and 29.77% in the first two quarters of 2005.

Reconciliation of GAAP and Non-GAAP Results of Operations. A reconciliation of diluted earnings per share and net income with diluted net operating earnings per share and net operating income follows:

                                  Three months ended       Six months ended
                                        June 30                 June 30
                                     2006      2005         2006        2005
                                   -------   -------      -------     -------
                                      (in thousands, except per share)

    Diluted earnings per share    $   1.87      1.69         3.64        3.31
    Amortization of core deposit
     and other intangible assets(1)    .06       .07          .13         .15
    Merger-related expenses(1)         .02         -          .02           -
                                   -------   -------      -------     -------
    Diluted net operating earnings
     per share                    $   1.95      1.76         3.79        3.46
                                   =======   =======      =======     =======

    Net income                    $212,573   196,834      415,490     386,124
    Amortization of core deposit
     and other intangible
      assets(1)                      6,921     8,581       14,860      18,426
    Merger-related expenses(1)       2,344         -        2,344           -
                                   -------   -------      -------     -------
    Net operating income          $221,838   205,415      432,694     404,550
                                   =======   =======      =======     =======

    (1) After any related tax effect


Reconciliation of Total Assets and Equity to Tangible Assets and Equity. A reconciliation of average assets and equity with average tangible assets and average tangible equity follows:

                                   Three months ended       Six months ended
                                        June 30                 June 30
                                     2006      2005         2006        2005
                                   -------    ------      -------     -------
                                                  (in millions)

    Average assets                $ 55,498    53,935       55,303      53,622
    Goodwill                        (2,909)   (2,904)      (2,908)     (2,904)
    Core deposit and other
     intangible assets                (107)     (142)        (109)       (150)
    Deferred taxes                      40        55           41          58
                                   -------   -------      -------     -------
    Average tangible assets       $ 52,522    50,944       52,327      50,626
                                   =======   =======      =======     =======

    Average equity                $  5,940     5,749        5,917       5,736
    Goodwill                        (2,909)   (2,904)      (2,908)     (2,904)
    Core deposit and other
     intangible assets                (107)     (142)        (109)       (150)
    Deferred taxes                      40        55           41          58
                                   -------   -------      -------     -------
    Average tangible equity       $  2,964     2,758        2,941       2,740
                                   =======   =======      =======     =======


Taxable-equivalent Net Interest Income. Taxable-equivalent net interest income was little changed from a year earlier totaling $451 million in the second quarter of 2006. Net interest margin, or taxable-equivalent net interest income expressed as an annualized percentage of average earning assets, declined to 3.66% in the recent quarter from 3.78% in the second quarter of 2005. Such decline reflects the continuing impact of higher short- term interest rates, which resulted in the rates paid on interest-bearing liabilities rising more rapidly than the yields on many earning assets. The recent quarter's net interest margin also declined from 3.73% in 2006's initial quarter. Largely offsetting the impact of the lower net interest margin was growth in average loans and leases which totaled $41.0 billion in the recent quarter, 4% higher than $39.2 billion in the second quarter of 2005. Such growth was attributable to average outstanding balance increases in commercial loans, commercial real estate loans and residential real estate loans. Average consumer loans declined 9% from the year-earlier period, the result of lower automobile loans and leases outstanding, continuing a two-year trend during which M&T has decided not to extend such credit at unfavorable interest rates.

Provision for Credit Losses/Asset Quality. The provision for credit losses totaled $17 million in the recent quarter, down from $19 million in the second quarter of 2005. Net charge-offs of loans during the second quarter of 2006 were $10 million, compared with $14 million in the year-earlier period. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .10% and .14% in the second quarter of 2006 and 2005, respectively. Loans classified as nonperforming totaled $156 million, or .38% of total loans at June 30, 2006, compared with $184 million or .46% a year earlier, $156 million or .39% at December 31, 2005 and $143 million or .35% at March 31, 2006. Loans past due 90 days or more and accruing interest were $101 million at the end of the recently completed quarter, compared with $123 million at June 30, 2005. Included in these past due but accruing amounts were loans guaranteed by government-related entities of $79 million and $99 million at June 30, 2006 and 2005, respectively. Assets taken in foreclosure of defaulted loans were $14 million at June 30, 2006, compared with $8 million a year earlier.

Allowance for Credit Losses. The allowance for credit losses totaled $646 million, or 1.55% of total loans, at June 30, 2006, compared with $637 million, or 1.60%, a year earlier. The decline in the allowance as a percentage of loans reflects improvement in various credit factors, including the previously noted decreases in the rate of net loan charge-offs and the level of nonperforming loans. At December 31, 2005, the allowance for credit losses totaled $638 million, or 1.58% of total loans. The ratio of M&T's allowance for credit losses to nonperforming loans was 414%, 346% and 408% at June 30, 2006, June 30, 2005 and December 31, 2005, respectively.

Noninterest Income and Expense. Noninterest income in the recent quarter totaled $263 million, a 7% improvement from $245 million in the second quarter of 2005. Contributing to the increase were higher mortgage banking revenues, deposit account service charges and trust income.

Noninterest expense in the second quarter of 2006 totaled $377 million, 1% below the year-earlier period's total of $380 million. Included in such amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets of $11 million in 2006 and $14 million in 2005, and branch acquisition-related expenses of $4 million in 2006. Exclusive of these nonoperating expenses, noninterest operating expenses were $362 million in the recently completed quarter, down from $366 million in the second quarter of 2005. The most significant contributor to the lower level of operating expenses was an $8 million partial reversal of the valuation allowance for the impairment of capitalized mortgage servicing rights recorded during the recently completed quarter. The reduction of the valuation allowance reflects an increase in the value of capitalized servicing rights resulting from higher residential mortgage loan interest rates at the end of the recent quarter as compared with three months earlier. A $5 million addition to the valuation allowance for the impairment of capitalized mortgage servicing rights was recorded during the second quarter of 2005. Higher costs for salaries in the recent quarter as compared with the second quarter of 2005 partially offset the favorable impact of the change in the mortgage servicing rights valuation allowance.

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 50.7% in the second quarter of 2006, compared with 52.6% in the year-earlier period.

Balance Sheet. M&T had total assets of $56.5 billion at June 30, 2006, up from $54.5 billion at June 30, 2005. Loans and leases, net of unearned discount, rose 4% to $41.6 billion at the recent quarter-end, compared with $39.9 billion a year earlier. Reflecting the deposits obtained in the June 30 branch acquisition, total deposits were $38.5 billion at June 30, 2006, up 3% from $37.3 billion at June 30, 2005. Total stockholders' equity was $6.0 billion at June 30, 2006, representing 10.62% of total assets, compared with $5.8 billion or 10.71% a year earlier. Common stockholders' equity per share was $54.01 and $51.20 at June 30, 2006 and 2005, respectively. Tangible equity per common share was $25.55 at June 30, 2006, compared with $25.00 at June 30, 2005. In the calculation of tangible equity per common share, stockholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances, which aggregated $3.2 billion and $3.0 billion at June 30, 2006 and 2005, respectively.

In November 2005, M&T announced that it had been authorized by its Board of Directors to purchase up to 5,000,000 shares of its common stock. During the recent quarter, 605,700 shares of common stock were repurchased by M&T pursuant to such plan at an average cost per share of $114.61. Through June 30, 2006, M&T had repurchased 1,919,400 shares of its common stock pursuant to such plan at an average cost of $110.48 per share.

Conference Call. Investors will have an opportunity to listen to M&T's conference call to discuss second quarter financial results today at 10:00 a.m. Eastern Daylight Saving 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. The conference call will be webcast live on M&T's website at http://ir.mandtbank.com/conference.cfm. A replay of the call will be available until Thursday, July 13, 2006 by calling 877-519-4471, code 7587763 and 973-341-3080 for international participants. The event will also be archived and available by 3:00 p.m. today on M&T's website at http://ir.mandtbank.com/conference.cfm.

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 and credit losses; 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; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively; regulatory supervision and oversight, including monetary policy and required capital levels; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other 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; 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 and acquisition 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.

    INVESTOR CONTACT: Donald J. MacLeod
                      (716) 842-5138

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


    M&T BANK CORPORATION
    Financial Highlights

                              Three months ended         Six months ended
    Amounts in thousands,            June 30                 June 30
     except per share         -----------------         ---------------
                                2006      2005  Change    2006     2005 Change
                              --------   ------ ------  --------  ------ -----
    Performance

    Net income               $ 212,573  196,834   8%   $ 415,490 386,124   8%
    Per common share:
     Basic earnings          $    1.91     1.73  10%   $    3.73    3.38  10%
     Diluted earnings             1.87     1.69  11         3.64    3.31  10
     Cash dividends          $     .60      .45  33    $    1.05     .85  24

    Common shares outstanding:
     Average - diluted (1)     113,968  116,422  -2%     114,157 116,801  -2%
     Period end (2)            111,086  114,011  -3      111,086 114,011  -3

    Return on (annualized):
     Average total assets         1.54%    1.46%            1.52%   1.45%
     Average common
      stockholders' equity       14.35%   13.73%           14.16%  13.57%

    Taxable-equivalent net
     interest income         $ 451,254  451,765   -%   $ 903,011 897,940   1%

    Yield on average earning
     assets                       6.63%    5.70%            6.55%   5.61%
    Cost of interest-bearing
     liabilities                  3.56%    2.34%            3.42%   2.20%
    Net interest spread           3.07%    3.36%            3.13%   3.41%
    Contribution of
     interest-free funds           .59%     .42%             .57%    .40%
    Net interest margin           3.66%    3.78%            3.70%   3.81%

    Net charge-offs to average
     total net loans
      (annualized)                 .10%     .14%             .13%   . 17%

    Net operating results (3)

    Net operating income     $ 221,838  205,415   8%   $ 432,694 404,550   7%
    Diluted net operating
     earnings per common share    1.95     1.76  11         3.79    3.46  10
    Return on (annualized):
     Average tangible assets      1.69%    1.62%            1.67%   1.61%
     Average tangible common
      equity                     30.02%   29.88%           29.67%  29.77%
    Efficiency ratio             50.70%   52.56%           51.53%  52.10%


                                          At June 30
                                  -------------------------
    Loan quality                     2006            2005           Change
                                  ---------       ---------       --------
    Nonaccrual loans              $ 140,626         173,403           -19 %
    Renegotiated loans               15,399          10,649            45
                                  ---------       ---------
     Total nonperforming loans    $ 156,025         184,052           -15 %
                                  =========       =========
    Accruing loans past due 90
     days or more                 $ 101,001         123,301           -18 %

    Nonperforming loans to
     total net loans                    .38 %           .46 %

    Allowance for credit losses
     to total net loans                1.55 %          1.60 %

    (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.  A reconciliation of net income and
         net operating income is included herein.


    M&T BANK CORPORATION
    Condensed Consolidated Statement of Income

                         Three months ended          Six months ended
                              June 30                    June 30
                          -----------------          ----------------
    Dollars in thousands    2006     2005   Change     2006      2005   Change
                         --------  -------  ------  ---------  -------- ------

    Interest income     $ 812,911  676,518  20 %  $ 1,590,183 1,314,839  21 %
    Interest expense      366,298  229,016  60        696,544   425,282  64
                          -------  -------          --------- ---------
    Net interest income   446,613  447,502   -        893,639   889,557   -

    Provision for credit
     losses                17,000   19,000 -11         35,000    43,000 -19
                          -------  -------          --------- ---------
    Net interest income
     after provision
      for credit losses   429,613  428,502   -        858,639   846,557   1

    Other income
     Mortgage banking
      revenues             41,565   31,274  33         76,076   64,700   18
     Service charges on
      deposit accounts     95,549   92,969   3        184,425  181,322    2
     Trust income          34,757   32,745   6         68,553   66,268    3
     Brokerage services
      income               14,481   14,179   2         29,205   28,360    3
     Trading account and
      foreign exchange
       gains                6,168    5,957   4         12,674   10,826   17
     Gain on bank
      investment securities   236       30   -            294      246    -
     Other revenues from
      operations           69,846   68,208   2        144,306  127,898   13
                          -------  -------            -------  -------
        Total other
         income           262,602  245,362   7        515,533  479,620    7


    Other expense
     Salaries and employee
      benefits            217,162  204,607   6        441,244  411,217    7
     Equipment and net
      occupancy            42,527   42,608   -         85,929   86,614   -1
     Printing, postage
      and supplies          8,072    8,411  -4         16,639   17,242   -3
     Amortization of core
      deposit and other
       intangible assets   11,357   14,055 -19         24,385   30,176  -19
     Other costs of
      operations           97,879  110,760 -12        190,803  202,529   -6
                          -------  -------            -------  -------
        Total other
         expense          376,997  380,441  -1        759,000  747,778    2


    Income before income
     taxes                315,218  293,423   7        615,172  578,399    6

    Applicable income
     taxes                102,645   96,589   6        199,682  192,275    4
                         --------  -------            -------  -------
    Net income          $ 212,573  196,834   8 %  $   415,490  386,124    8 %
                         ========  =======           ========  =======


    M&T BANK CORPORATION
    Condensed Consolidated Balance Sheet

                                                   June 30
                                            -----------------------
    Dollars in thousands                      2006           2005       Change
                                            ---------     ---------   --------
    ASSETS

    Cash and due from banks               $  1,572,863    1,473,675       7 %

    Interest-bearing deposits at banks          14,923        9,741      53

    Federal funds sold and agreements
      to resell securities                      16,649        4,390     279

    Trading account assets                     208,291      194,950       7

    Investment securities                    7,903,142    8,319,967      -5

    Loans and leases, net of unearned
     discount                               41,599,461   39,910,964       4
      Less: allowance for credit losses        645,851      637,345       1
                                           -----------  -----------
      Net loans and leases                  40,953,610   39,273,619       4

    Goodwill                                 2,908,849    2,904,081       -

    Core deposit and other intangible
     assets                                    290,847      135,331     115

    Other assets                             2,637,914    2,166,192      22
                                            ----------   ----------
      Total assets                        $ 56,507,088   54,481,946       4 %
                                            ==========   ==========

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Noninterest-bearing deposits at U.S.
     offices                              $  8,099,083    8,681,655      -7 %

    Other deposits at U.S. offices          27,637,294   24,442,455      13

    Deposits at foreign office               2,777,306    4,181,722     -34
                                            ----------   ----------
      Total deposits                        38,513,683   37,305,832       3

    Short-term borrowings                    5,304,814    4,284,930      24

    Accrued interest and other
     liabilities                               953,858      735,500      30

    Long-term borrowings                     5,734,509    6,317,961      -9
                                            ----------   ----------
      Total liabilities                     50,506,864   48,644,223       4

    Stockholders' equity (1)                 6,000,224    5,837,723       3
                                            ----------   ----------
      Total liabilities and stockholders'
       equity                             $ 56,507,088   54,481,946       4 %
                                            ==========   ==========

    (1) Reflects accumulated other comprehensive loss, net of applicable
        income tax effect, of $147.8 million at June 30, 2006 and $37.8
        million at June 30, 2005.


    M&T BANK CORPORATION
    Condensed Consolidated Average Balance Sheet
    and Annualized Taxable-equivalent Rates

                                         Three months ended
                                               June 30
                                   --------------------------------
    Dollars in millions                  2006             2005
                                   ---------------   --------------  Change in
                                   Balance    Rate   Balance   Rate   balance
                                   -------   -----   -------   ----  ---------
    ASSETS

    Interest-bearing deposits
     at banks                    $     16    2.85 %      10   1.48 %   54 %

    Federal funds sold and
     agreements to resell
      securities                       30    5.36        24   3.37     25

    Trading account assets            103    2.94        75   1.60     37

    Investment securities           8,314    4.81     8,593   4.41     -3

    Loans and leases, net of
     unearned discount
      Commercial, financial, etc.  11,274    7.04    10,484   5.44      8
      Real estate - commercial     14,947    7.22    14,399   6.37      4
      Real estate - consumer        4,860    6.29     3,493   6.00     39
      Consumer                      9,899    6.99    10,853   5.99     -9
                                   ------            ------
       Total loans and leases, net 40,980    7.01    39,229   5.99      4
                                   ------            ------

      Total earning assets         49,443    6.63    47,931   5.70      3

    Goodwill                        2,909             2,904             -

    Core deposit and other
     intangible assets                107               142           -25

    Other assets                    3,039             2,958             3
                                   ------            ------

      Total assets               $ 55,498            53,935             3 %
                                  =======            ======

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Interest-bearing deposits
     NOW accounts                $    438     .71       401    .54      9 %
     Savings deposits              14,254    1.34    15,163    .88     -6
     Time deposits                 12,699    4.39     8,609   2.99     48
     Deposits at foreign office     3,598    4.88     3,850   2.93     -7
                                  -------            ------
       Total interest-bearing
        deposits                   30,989    2.99    28,023   1.80     11
                                  -------            ------
    Short-term borrowings           4,326    4.97     4,969   2.96    -13
    Long-term borrowings            5,930    5.51     6,263   4.25     -5
                                  -------            ------
    Total interest-bearing
     liabilities                   41,245    3.56    39,255   2.34      5

    Noninterest-bearing deposits    7,446             8,222            -9

    Other liabilities                 867               709            22
                                   ------            ------
     Total liabilities             49,558            48,186             3

    Stockholders' equity            5,940             5,749             3
                                   ------            ------
     Total liabilities and
      stockholders' equity       $ 55,498            53,935             3 %
                                  =======            ======

    Net interest spread                      3.07             3.36
    Contribution of interest-free funds       .59              .42
    Net interest margin                      3.66 %           3.78 %


                                           Six months ended
                                               June 30
                                   --------------------------------
    Dollars in millions                  2006             2005
                                   ---------------   --------------  Change in
                                   Balance    Rate   Balance   Rate   balance
                                   -------   -----   -------   ----  ---------
    ASSETS

    Interest-bearing deposits
     at banks                    $      13   2.91 %       10    1.32 %   26 %

    Federal funds sold and
     agreements to resell
      securities                        31   5.12         24    3.12     28

    Trading account assets             100   2.85         64    1.25     56

    Investment securities            8,349   4.76      8,583    4.36     -3

    Loans and leases, net of
     unearned discount
      Commercial, financial, etc.   11,155   6.85     10,290    5.28      8
      Real estate - commercial      14,813   7.15     14,296    6.23      4
      Real estate - consumer         4,731   6.23      3,370    5.99     40
      Consumer                      10,064   6.89     10,950    5.91     -8
                                    ------            ------
       Total loans and leases, net  40,763   6.93     38,906    5.89      5
                                    ------            ------
      Total earning assets          49,256   6.55     47,587    5.61      4

    Goodwill                         2,908             2,904              -

    Core deposit and other
     intangible assets                 109               150            -27

    Other assets                     3,030             2,981              2
                                    ------            ------

      Total assets               $  55,303            53,622              3 %
                                    ======            ======

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Interest-bearing deposits
     NOW accounts                $     423    .68        389     .45      9 %
     Savings deposits               14,294   1.29     15,123     .82     -5
     Time deposits                  12,287   4.22      8,017    2.84     53
     Deposits at foreign office      3,491   4.66      4,025    2.68    -13
                                   -------            ------
       Total interest-bearing
        deposits                    30,495   2.85     27,554    1.67     11
                                   -------            ------
    Short-term borrowings            4,440   4.73      5,081    2.73    -13
    Long-term borrowings             6,111   5.35      6,333    4.08     -4
                                   -------            ------
    Total interest-bearing
     liabilities                    41,046   3.42     38,968    2.20      5

    Noninterest-bearing deposits     7,509             8,212             -9

    Other liabilities                  831               706             18
                                   -------            ------
     Total liabilities              49,386            47,886              3

    Stockholders' equity             5,917             5,736              3
                                   -------            ------
     Total liabilities and
      stockholders' equity       $  55,303            53,622              3 %
                                   =======           =======

    Net interest spread                      3.13               3.41
    Contribution of interest-free funds       .57                .40
    Net interest margin                      3.70 %             3.81 %


SOURCE M&T Bank Corporation

Investor, Donald J. MacLeod, +1-716-842-5138, or Media, C. Michael Zabel,
+1-716-842-5385, both for M&T Bank Corporation
http://www.prnewswire.com

Copyright (C) 2006 PR Newswire. All rights reserved.

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