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M&T Bank Corporation Announces 2010 Fourth Quarter and Full-Year Profits

BUFFALO, N.Y., Jan. 14, 2011 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for 2010.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") rose 53% to $1.59 in the fourth quarter of 2010 from $1.04 in the fourth quarter of 2009 and were 7% higher than $1.48 in the third quarter of 2010.  GAAP-basis net income in the recent quarter totaled $204 million, up from $137 million and $192 million in the year-earlier quarter and the third quarter of 2010, respectively.  Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income for the fourth quarter of 2010 was 1.18% and 10.03%, respectively, compared with .79% and 7.09%, respectively, in the corresponding quarter of 2009 and 1.12% and 9.56%, respectively, in the third quarter of 2010.

The recent quarter's earnings as compared with the fourth quarter of 2009 reflect higher net interest income, resulting from a widening of the net interest margin, and a significantly lower provision for credit losses.  As compared with the third quarter of 2010, a 2% decline in noninterest operating expenses and a lower provision for credit losses contributed to the recent quarter's improved performance.  

Diluted earnings per common share for the year ended December 31, 2010 were $5.69, up 97% from $2.89 for the year ended December 31, 2009.  Net income for 2010 and 2009 was $736 million and $380 million, respectively.  Expressed as a rate of return on average assets and average common shareholders' equity, net income was 1.08% and 9.30%, respectively, in 2010, compared with .56% and 5.07%, respectively, in 2009.

Reflecting on M&T's financial results, Rene F. Jones, Executive Vice President and Chief Financial Officer, noted, "M&T recorded strong fourth quarter results, capping off a successful year.  We were encouraged by the level of our credit costs, which remained well below recent industry experience, and by late fourth quarter growth in our commercial loan and commercial real estate loan portfolios, which were up a combined $1.2 billion from September 30.  Average deposits also rose by $1.7 billion, or 4%, from the third quarter.  Capital generation remained robust as evidenced by our tangible common equity ratio, which rose to 6.19% at the 2010 year-end.  Also noteworthy, during the recent quarter we completed the FDIC-assisted acquisition transaction with K Bank and announced our planned merger with Wilmington Trust.  We are pleased with the progress achieved to date on those transactions."

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 gains and expenses associated with merging acquired operations into M&T, since such amounts 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.  Reconciliations of GAAP to non-GAAP measures are provided in the financial tables included herein.

Diluted net operating earnings per common share, which exclude the impact of amortization of core deposit and other intangible assets and merger-related gains and expenses, were $1.52 in the recent quarter, compared with $1.16 in the corresponding 2009 period and $1.55 in the third quarter of 2010.  Net operating income for the fourth quarters of 2010 and 2009 was $196 million and $151 million, respectively, compared with $200 million in the third quarter of 2010.  For the three months ended December 31, 2010, net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.20% and 18.43%, respectively, compared with .92% and 16.73% in the similar period of 2009 and 1.24% and 19.58%, respectively, in the third quarter of 2010.

Diluted net operating earnings per common share rose 65% to $5.84 in 2010 from $3.54 in 2009.  Net operating income for 2010 and 2009 aggregated $755 million and $455 million, respectively.  Net operating income in 2010 expressed as a rate of return on average tangible assets and average tangible common shareholders' equity was 1.17% and 18.95%, respectively, compared with .71% and 13.42%, respectively, in 2009.

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income increased 3% to $580 million in the fourth quarter of 2010 from $565 million in the year-earlier quarter, and was up an annualized 3% from $576 million in the third quarter of 2010.  The growth in such income in the recent quarter as compared with the fourth quarter of 2009 reflects a widening of the net interest margin, which improved to 3.85% from 3.71%, partially offset by a 1% decline in average earning assets.  Net interest income on a taxable-equivalent basis aggregated $2.29 billion for the full-year of 2010, 10% higher than $2.08 billion in 2009.  That improvement resulted from lower market interest rates on deposits and borrowings that led to a 35 basis point widening of the net interest margin to 3.84% in the recent year from 3.49% in 2009.  

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $85 million during the recently completed quarter, compared with $145 million in the corresponding 2009 period and $93 million in the third quarter of 2010.  Net charge-offs of loans were $77 million in the fourth quarter of 2010, representing an annualized .60% of average loans outstanding, improved from $135 million or 1.03% in the year-earlier quarter and $93 million or .73% in 2010's third quarter.  The provision for credit losses declined 39% to $368 million for the year ended December 31, 2010 from $604 million in 2009.  Net loan charge-offs in 2010 totaled $346 million, or .67% of average loans outstanding, compared with $514 million or 1.01% of average loans in 2009.

Loans classified as nonaccrual totaled $1.24 billion, or 2.38% of total loans at December 31, 2010, improved from $1.33 billion or 2.56% a year earlier, but up from $1.10 billion or 2.16% at September 30, 2010.  The increase in nonaccrual loans from September 30, 2010 to December 31, 2010 was due to the additions to nonaccrual status of two commercial real estate relationships.  The ratio of nonperforming assets to total loans plus real estate and other foreclosed assets was 2.79% at December 31, 2010, compared with 2.74% and 2.53% at December 31, 2009 and September 30, 2010, respectively.

Loans past due 90 days or more and accruing interest totaled $270 million at the recent year-end, including loans guaranteed by government-related entities of $214 million.  Such past due loans were $208 million and $215 million at December 31, 2009 and September 30, 2010, respectively, including $193 million  and $194 million of government guaranteed loans at those respective dates.

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.  Reflecting those analyses, the allowance for credit losses was $903 million at December 31, 2010, increased from $878 million a year earlier and $895 million at September 30, 2010.  That allowance expressed as a percentage of outstanding loans was 1.74% at the recent quarter-end, compared with 1.69% at December 31, 2009 and 1.76% at September 30, 2010.  GAAP requires that expected credit losses associated with loans obtained in an acquisition be reflected in the estimation of loan fair value as of each respective acquisition date and prohibits any carry-over of an allowance for credit losses.  Excluding amounts related to loans obtained in 2009 and 2010 acquisition transactions, the allowance-to-legacy loan ratio was 1.82% and 1.83% at December 31, 2010 and 2009, respectively, and 1.86% at September 30, 2010.

Noninterest Income and Expense.  Noninterest income totaled $287 million in the recent quarter, compared with $266 million and $290 million in the fourth quarter of 2009 and the third quarter of 2010, respectively.  Reflected in those amounts were net losses from investment securities of $27 million, $34 million and $8 million, each predominantly due to other-than-temporary impairment charges.  Those impairment charges reduced net income and diluted earnings per common share by $17 million or $.14 in the recent quarter, $21 million or $.18 in the year-earlier quarter and $6 million or $.05 in the third quarter of 2010.  Such charges reflected write-downs of certain of M&T's holdings of privately issued collateralized mortgage obligations and collateralized debt obligations backed by pooled trust preferred securities.  Excluding gains and losses from investment securities in all periods and the $28 million pre-tax merger-related gain realized on the K Bank transaction during the recent quarter, noninterest income was $286 million in the fourth quarter of 2010, compared with $300 million in the corresponding 2009 quarter and $298 million in the third quarter of 2010.  The declines from the final 2009 quarter and 2010's third quarter reflect lower residential mortgage banking revenues and service charges on deposit accounts, partially offset by higher trading account and foreign exchange gains and credit-related fees.  The decline in residential mortgage banking revenues in the recent quarter reflects lower origination volumes, M&T's decision to retain for portfolio a higher proportion of originated loans rather than selling them, and increased settlements related to M&T's obligation to repurchase previously sold loans.  

Noninterest income aggregated $1.11 billion and $1.05 billion during the years ended December 31, 2010 and 2009, respectively.  Excluding gains and losses from investment securities and merger-related gains, noninterest income was $1.16 billion in each of 2010 and 2009.  Declines in revenues related to residential mortgage banking, brokerage services and M&T's trust business were offset by higher service charges on deposit accounts, credit-related fees and other revenues from operations.

Noninterest expense in the fourth quarter of 2010 totaled $469 million, down from $478 million in the year-earlier quarter and $480 million in 2010's third quarter.  Included in such amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets and merger-related expenses.  Exclusive of those expenses, noninterest operating expenses were $455 million in each of the fourth quarters of 2010 and 2009, down from $467 million in the third quarter of 2010.  The decline from the third quarter of 2010 reflects a $6 million reduction of the allowance for impairment of capitalized residential mortgage servicing rights in the recent quarter.  In comparison, a $3 million addition to that allowance was recognized during 2010's third quarter.  

For the year ended December 31, 2010, noninterest expense aggregated $1.91 billion, compared with $1.98 billion in 2009.  Excluding those expenses considered to be nonoperating in nature, noninterest operating expenses were $1.86 billion in 2010 and $1.83 billion in 2009.  That increase was largely attributable to higher costs for professional services and advertising in 2010, and a $22 million reduction of the allowance for impairment of capitalized residential mortgage servicing rights in 2009.  For the year ended December 31, 2010, there was no change to that impairment allowance.  Partially offsetting those factors were declines in expenses related to foreclosed properties and FDIC assessments.

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 and merger-related gains), measures the relationship of operating expenses to revenues.  M&T's efficiency ratio was 52.5% in the fourth quarter of 2010, improved from 52.7% in the year-earlier quarter and 53.4% in the third quarter of 2010.  M&T's efficiency ratio for the years ended December 31, 2010 and 2009 was 53.7% and 56.5%, respectively.

Balance Sheet.  M&T had total assets of $68.0 billion at December 31, 2010, compared with $68.9 billion a year earlier.  Loans and leases, net of unearned discount, totaled $52.0 billion at the 2010 year-end, compared with $51.9 billion at December 31, 2009.  Outstanding loans and leases at the end of 2010 grew $1.2 billion from $50.8 billion at September 30, 2010.  That growth was largely attributable to December increases in commercial loans and commercial real estate loans.  Total deposits were $49.8 billion at December 31, 2010, 5% higher than $47.4 billion at the end of 2009.  Deposits at domestic offices rose $1.8 billion, or 4%, to $48.2 billion at the recent year-end from $46.4 billion at December 31, 2009.  

Total shareholders' equity was $8.4 billion and $7.8 billion at December 31, 2010 and 2009, representing 12.29% and 11.26% respectively, of total assets.  Common shareholders' equity was $7.6 billion, or $63.54 per share at December 31, 2010, up from $7.0 billion, or $59.31 per share, a year earlier.  Tangible equity per common share was $33.26 and $28.27 at December 31, 2010 and 2009, respectively.  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's tangible common equity to tangible assets ratio was 6.19% at December 31, 2010, compared with 5.13% and 5.96% at December 31, 2009 and September 30, 2010, respectively.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss fourth quarter and full-year financial results today at 10:30 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 #35785107.  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 January 16, 2011 by calling (800)642-1687, or (706)645-9291 for international participants, and by making reference to ID #35785107.  The event will also be archived and available by 6:00 p.m. today on M&T's website at http://ir.mandtbank.com/conference.cfm.

M&T is a bank holding company headquartered in Buffalo, New York.  M&T's banking subsidiaries, M&T Bank and M&T Bank, National Association, operate retail and commercial bank branches in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Jersey, the District of Columbia and Ontario, Canada.

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; 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 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, 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.

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







Year ended




Amounts in thousands,



December 31







December 31




except per share



 2010


 2009


Change





 2010


 2009


Change




















Performance




































Net income


$

204,442


136,818


49

%



$

736,161


379,891


94

%

Net income available to common shareholders



189,678


122,910


54





675,853


332,006


104




















Per common share:


















 Basic earnings


$

1.59


1.05


51

%



$

5.72


2.90


97

%

 Diluted earnings



1.59


1.04


53





5.69


2.89


97


 Cash dividends


$

.70


.70


-




$

2.80


2.80


-




















Common shares outstanding:


















 Average - diluted (1)



119,503


117,672


2

%




118,843


114,776


4

%

 Period end (2)



119,774


118,298


1





119,774


118,298


1




















Return on (annualized):


















 Average total assets



1.18

%

.79

%






1.08

%

.56

%



 Average common shareholders' equity



10.03

%

7.09

%






9.30

%

5.07

%





















Taxable-equivalent net interest income


$

580,227


564,606


3

%



$

2,291,549


2,077,577


10

%



















Yield on average earning assets



4.58

%

4.58

%






4.61

%

4.61

%



Cost of interest-bearing liabilities



.97

%

1.13

%






1.02

%

1.40

%



Net interest spread



3.61

%

3.45

%






3.59

%

3.21

%



Contribution of interest-free funds



.24

%

.26

%






.25

%

.28

%



Net interest margin



3.85

%

3.71

%






3.84

%

3.49

%





















Net charge-offs to average total


















 net loans (annualized)



.60

%

1.03

%






.67

%

1.01

%





















Net operating results (3)




































Net operating income


$

196,235


150,776


30

%



$

755,165


455,376


66

%

Diluted net operating earnings per common share



1.52


1.16


31





5.84


3.54


65


Return on (annualized):


















 Average tangible assets



1.20

%

.92

%






1.17

%

.71

%



 Average tangible common equity



18.43

%

16.73

%






18.95

%

13.42

%



Efficiency ratio



52.55

%

52.69

%






53.71

%

56.50

%









 At December 31













Loan quality



2010


2009


Change





























Nonaccrual loans


$

1,239,194


1,331,702


-7

%










Real estate and other foreclosed assets



220,049


94,604


133

%










 Total nonperforming assets


$

1,459,243


1,426,306


2

%




























Accruing loans past due 90 days or more


$

269,593


208,080


30

%




























Renegotiated loans


$

233,342


212,548


10

%




























Government guaranteed loans included in totals


















 above:


















 Nonaccrual loans


$

56,787


38,579


47

%










 Accruing loans past due 90 days or more



214,111


193,495


11

%




























Purchased impaired loans (4):


















 Outstanding customer balance


$

219,477


172,772


27

%










 Carrying amount



97,019


88,170


10

%




























Nonaccrual loans to total net loans



2.38

%

2.56

%






























Allowance for credit losses to:


















 Legacy loans



1.82

%

1.83

%












 Total loans



1.74

%

1.69

%
















































(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 gains and 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)  Accruing loans that were impaired at acquisition date and recorded at fair value.



M&T BANK CORPORATION

Financial Highlights, Five Quarter Trend



Three months ended


Amounts in thousands,


December 31,


September 30,


June 30,


March 31,


December 31,

except per share


2010


2010


2010


2010


2009

















Performance
































Net income

$

204,442



192,015



188,749



150,955



136,818


Net income available to common shareholders


189,678



176,789



173,597



136,431



122,910


















Per common share:
















 Basic earnings

$

1.59



1.49



1.47



1.16



1.05


 Diluted earnings


1.59



1.48



1.46



1.15



1.04


 Cash dividends

$

.70



.70



.70



.70



.70


















Common shares outstanding:
















 Average - diluted (1)


119,503



119,155



118,878



118,256



117,672


 Period end (2)


119,774



119,435



119,161



118,823



118,298


















Return on (annualized):
















 Average total assets


1.18

%


1.12

%


1.11

%


.89

%


.79

%

 Average common shareholders' equity


10.03

%


9.56

%


9.67

%


7.86

%


7.09

%

















Taxable-equivalent net interest income

$

580,227



575,733



573,332



562,257



564,606


















Yield on average earning assets


4.58

%


4.65

%


4.63

%


4.59

%


4.58

%

Cost of interest-bearing liabilities


.97

%


1.03

%


1.04

%


1.04

%


1.13

%

Net interest spread


3.61

%


3.62

%


3.59

%


3.55

%


3.45

%

Contribution of interest-free funds


.24

%


.25

%


.25

%


.23

%


.26

%

Net interest margin


3.85

%


3.87

%


3.84

%


3.78

%


3.71

%

















Net charge-offs to average total
















 net loans (annualized)


.60

%


.73

%


.64

%


.74

%


1.03

%

















Net operating results (3)
































Net operating income

$

196,235



200,225



197,752



160,953



150,776


Diluted net operating earnings per common share


1.52



1.55



1.53



1.23



1.16


Return on (annualized):
















 Average tangible assets


1.20

%


1.24

%


1.23

%


1.00

%


.92

%

 Average tangible common equity


18.43

%


19.58

%


20.36

%


17.34

%


16.73

%

Efficiency ratio


52.55

%


53.40

%


53.06

%


55.88

%


52.69

%

























December 31,


September 30,


June 30,


March 31,


December 31,

Loan quality


2010


2010


2010


2010


2009

















Nonaccrual loans

$

1,239,194



1,099,560



1,090,135



1,339,992



1,331,702


Real estate and other foreclosed assets


220,049



192,600



192,631



95,362



94,604


 Total nonperforming assets

$

1,459,243



1,292,160



1,282,766



1,435,354



1,426,306


















Accruing loans past due 90 days or more

$

269,593



214,769



203,081



203,443



208,080


















Renegotiated loans

$

233,342



233,671



228,847



220,885



212,548


















Government guaranteed loans included in totals
















 above:
















 Nonaccrual loans

$

56,787



38,232



40,271



37,048



38,579


 Accruing loans past due 90 days or more


214,111



194,223



187,682



194,523



193,495


















Purchased impaired loans (4):
















 Outstanding customer balance

$

219,477



113,964



130,808



148,686



172,772


 Carrying amount


97,019



52,728



61,524



73,890



88,170


















Nonaccrual loans to total net loans


2.38

%


2.16

%


2.13

%


2.60

%


2.56

%

















Allowance for credit losses to:
















 Legacy loans


1.82

%


1.86

%


1.86

%


1.86

%


1.83

%

 Total loans


1.74

%


1.76

%


1.75

%


1.73

%


1.69

%

































(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 gains and 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)  Accruing loans that were impaired at acquisition date and recorded at fair value.



M&T BANK CORPORATION

Condensed Consolidated Statement of Income



















Three months ended






Year ended






December 31






December 31




Dollars in thousands


 2010


 2009


Change




 2010


 2009


Change


















Interest income

$

682,725


692,669


-1

%


$

2,729,795


2,725,197


-

%

Interest expense


108,628


133,950


-19




462,269


669,449


-31


















Net interest income


574,097


558,719


3




2,267,526


2,055,748


10


















Provision for credit losses


85,000


145,000


-41




368,000


604,000


-39


















Net interest income after
















  provision for credit losses


489,097


413,719


18




1,899,526


1,451,748


31


















Other income
















    Mortgage banking revenues


35,013


50,176


-30




184,625


207,561


-11


    Service charges on deposit accounts


111,129


127,185


-13




478,133


469,195


2


    Trust income


31,031


29,660


5




122,613


128,568


-5


    Brokerage services income


11,648


14,396


-19




49,669


57,611


-14


    Trading account and foreign exchange gains


12,755


6,669


91




27,286


23,125


18


    Gain on bank investment securities


861


354


-




2,770


1,165


-


    Other-than-temporary impairment losses
















       recognized in earnings


(27,567)


(34,296)


-




(86,281)


(138,297)


-


    Equity in earnings of Bayview Lending Group LLC


(7,415)


(10,635)


-30




(25,768)


(25,898)


-1


    Other revenues from operations


119,483


82,381


45




355,053


325,076


9


         Total other income


286,938


265,890


8




1,108,100


1,048,106


6


















Other expense
















    Salaries and employee benefits


243,413


247,080


-1




999,709


1,001,873


-


    Equipment and net occupancy


50,879


53,703


-5




216,064


211,391


2


    Printing, postage and supplies


8,435


9,338


-10




33,847


38,216


-11


    Amortization of core deposit and other
















       intangible assets


13,269


16,730


-21




58,103


64,255


-10


    FDIC assessments


18,329


19,902


-8




79,324


96,519


-18


    Other costs of operations


134,949


131,698


2




527,790


568,309


-7


         Total other expense


469,274


478,451


-2




1,914,837


1,980,563


-3


















Income before income taxes


306,761


201,158


52




1,092,789


519,291


110


















Applicable income taxes


102,319


64,340


59




356,628


139,400


156


















Net income

$

204,442


136,818


49

%


$

736,161


379,891


94

%



M&T BANK CORPORATION

Condensed Consolidated Statement of Income, Five Quarter Trend


















Three months ended



December 31,


September 30,


June 30,


March 31,


December 31,

Dollars in thousands


 2010


2010


2010


2010


2009
















Interest income

$

682,725



685,900



684,784



676,386



692,669

Interest expense


108,628



116,032



117,557



120,052



133,950
















Net interest income


574,097



569,868



567,227



556,334



558,719
















Provision for credit losses


85,000



93,000



85,000



105,000



145,000
















Net interest income after















  provision for credit losses


489,097



476,868



482,227



451,334



413,719
















Other income















    Mortgage banking revenues


35,013



61,052



47,084



41,476



50,176

    Service charges on deposit accounts


111,129



117,733



128,976



120,295



127,185

    Trust income


31,031



30,485



30,169



30,928



29,660

    Brokerage services income


11,648



12,127



12,788



13,106



14,396

    Trading account and foreign exchange gains


12,755



6,035



3,797



4,699



6,669

    Gain on bank investment securities


861



1,440



10



459



354

    Other-than-temporary impairment losses















       recognized in earnings


(27,567)



(9,532)



(22,380)



(26,802)



(34,296)

    Equity in earnings of Bayview Lending Group LLC


(7,415)



(6,460)



(6,179)



(5,714)



(10,635)

    Other revenues from operations


119,483



77,019



79,292



79,259



82,381

         Total other income


286,938



289,899



273,557



257,706



265,890
















Other expense















    Salaries and employee benefits


243,413



246,389



245,861



264,046



247,080

    Equipment and net occupancy


50,879



54,353



55,431



55,401



53,703

    Printing, postage and supplies


8,435



7,820



8,549



9,043



9,338

    Amortization of core deposit and other















       intangible assets


13,269



13,526



14,833



16,475



16,730

    FDIC assessments


18,329



18,039



21,608



21,348



19,902

    Other costs of operations


134,949



140,006



129,786



123,049



131,698

         Total other expense


469,274



480,133



476,068



489,362



478,451
















Income before income taxes


306,761



286,634



279,716



219,678



201,158
















Applicable income taxes


102,319



94,619



90,967



68,723



64,340
















Net income

$

204,442



192,015



188,749



150,955



136,818



M&T BANK CORPORATION 

Condensed Consolidated Balance Sheet













December 31




Dollars in thousands



 2010


 2009


Change











ASSETS


















Cash and due from banks


$

908,755


1,226,223


-26

%










Interest-bearing deposits at banks



101,222


133,335


-24











Federal funds sold and agreements









 to resell securities



25,000


20,119


24











Trading account assets



523,834


386,984


35











Investment securities



7,150,540


7,780,609


-8











Loans and leases:


















  Commercial, financial, etc



13,390,610


13,479,447


-1


  Real estate - commercial



21,183,161


20,949,931


1


  Real estate - consumer



5,928,056


5,463,463


9


  Consumer



11,488,555


12,043,845


-5


    Total loans and leases, net of unearned discount



51,990,382


51,936,686


-


       Less: allowance for credit losses



902,941


878,022


3











 Net loans and leases



51,087,441


51,058,664


-











Goodwill



3,524,625


3,524,625


-











Core deposit and other intangible assets



125,917


182,418


-31











Other assets



4,573,929


4,567,422


-











 Total assets


$

68,021,263


68,880,399


-1

%



















LIABILITIES AND SHAREHOLDERS' EQUITY


















Noninterest-bearing deposits at U.S. offices


$

14,557,568


13,794,636


6

%










Other deposits at U.S. offices



33,641,800


32,604,764


3











Deposits at foreign office



1,605,916


1,050,438


53











 Total deposits



49,805,284


47,449,838


5











Short-term borrowings



947,432


2,442,582


-61











Accrued interest and other liabilities



1,070,701


995,056


8











Long-term borrowings



7,840,151


10,240,016


-23











 Total liabilities



59,663,568


61,127,492


-2











Shareholders' equity:


















  Preferred



740,657


730,235


1


  Common (1)



7,617,038


7,022,672


8











    Total shareholders' equity



8,357,695


7,752,907


8











 Total liabilities and shareholders' equity


$

68,021,263


68,880,399


-1

%



















(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $205.2 million
      at December 31, 2010 and $336.0 million at December 31, 2009.



M&T BANK CORPORATION

Condensed Consolidated Balance Sheet, Five Quarter Trend








December 31,


September 30,


June 30,


March 31,


December 31,

Dollars in thousands



2010


2010


2010


2010


2009

















ASSETS
































Cash and due from banks


$

908,755



1,070,625



1,045,886



1,033,269



1,226,223

















Interest-bearing deposits at banks



101,222



401,624



117,826



121,305



133,335

















Federal funds sold and agreements
















 to resell securities



25,000



443,700



10,000



10,400



20,119

















Trading account assets



523,834



536,702



487,692



403,476



386,984

















Investment securities



7,150,540



7,662,715



8,097,572



8,104,646



7,780,609

















Loans and leases:
































  Commercial, financial, etc



13,390,610



12,788,136



13,017,598



13,220,181



13,479,447

  Real estate - commercial



21,183,161



20,580,450



20,612,905



20,724,118



20,949,931

  Real estate - consumer



5,928,056



5,754,432



5,729,126



5,664,159



5,463,463

  Consumer



11,488,555



11,668,540



11,701,657



11,835,583



12,043,845

    Total loans and leases, net of unearned discount



51,990,382



50,791,558



51,061,286



51,444,041



51,936,686

       Less: allowance for credit losses



902,941



894,720



894,667



891,265



878,022

















 Net loans and leases



51,087,441



49,896,838



50,166,619



50,552,776



51,058,664

















Goodwill



3,524,625



3,524,625



3,524,625



3,524,625



3,524,625

















Core deposit and other intangible assets



125,917



139,186



152,712



167,545



182,418

















Other assets



4,573,929



4,570,822



4,550,684



4,521,180



4,567,422

















 Total assets


$

68,021,263



68,246,837



68,153,616



68,439,222



68,880,399

































LIABILITIES AND SHAREHOLDERS' EQUITY
































Noninterest-bearing deposits at U.S. offices


$

14,557,568



14,665,603



13,960,723



13,622,819



13,794,636

















Other deposits at U.S. offices



33,641,800



33,335,104



33,010,520



33,125,761



32,604,764

















Deposits at foreign office



1,605,916



653,916



551,428



789,825



1,050,438

















 Total deposits



49,805,284



48,654,623



47,522,671



47,538,405



47,449,838

















Short-term borrowings



947,432



1,211,683



2,158,957



1,870,763



2,442,582

















Accrued interest and other liabilities



1,070,701



1,157,250



1,114,615



1,048,473



995,056

















Long-term borrowings



7,840,151



8,991,508



9,255,529



10,065,894



10,240,016

















 Total liabilities



59,663,568



60,015,064



60,051,772



60,523,535



61,127,492

















Shareholders' equity:
































  Preferred



740,657



737,979



735,350



732,769



730,235

  Common (1)



7,617,038



7,493,794



7,366,494



7,182,918



7,022,672

















    Total shareholders' equity



8,357,695



8,231,773



8,101,844



7,915,687



7,752,907

















 Total liabilities and shareholders' equity


$

68,021,263



68,246,837



68,153,616



68,439,222



68,880,399

































(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $205.2 million at December 31, 2010, $192.6 million at

      September 30, 2010, $197.2 million at June 30, 2010, $255.2 million at March 31, 2010 and $336.0 million at December 31, 2009.



M&T BANK CORPORATION

Condensed Consolidated Average Balance Sheet

and Annualized Taxable-equivalent Rates 































Three months ended


Change in balance



Year ended 







December 31,


December 31,


September 30,


December 31, 2010 from



 December 31




Dollars in millions



2010


2009


2010


December 31,


September 30,



 2010


 2009


Change in





Balance

Rate


Balance

Rate


Balance

Rate


2009


2010



Balance

Rate


Balance

Rate


balance


ASSETS






















































Interest-bearing deposits at banks


$

110

.15

%

74

.08

%

92

.15

%

50

%


19

%


$

102

.09

%

50

.07

%

103

%




























Federal funds sold and agreements



























 to resell securities



780

.19


23

.19


64

.26


-



-




221

.20


52

.25


323





























Trading account assets



165

.91


70

.66


82

.65


135



101




94

.84


87

.74


8





























Investment securities



7,541

4.07


8,197

4.63


7,993

4.16


-8



-6




8,018

4.24


8,403

4.79


-5





























Loans and leases, net of unearned discount



























 Commercial, financial, etc.



13,013

4.07


13,527

3.87


12,856

3.97


-4



1




13,092

3.99


13,855

3.79


-6


 Real estate - commercial



20,624

4.84


20,950

4.48


20,612

4.85


-2



-




20,714

4.70


20,085

4.45


3


 Real estate - consumer



5,910

5.15


5,457

5.37


5,680

5.30


8



4




5,746

5.28


5,297

5.45


8


 Consumer



11,594

5.18


12,153

5.32


11,687

5.22


-5



-1




11,745

5.22


11,722

5.43


-


    Total loans and leases, net



51,141

4.74


52,087

4.59


50,835

4.74


-2



1




51,297

4.70


50,959

4.60


1





























 Total earning assets



59,737

4.58


60,451

4.58


59,066

4.65


-1



1




59,732

4.61


59,551

4.61


-





























Goodwill



3,525



3,525



3,525



-



-




3,525



3,393



4





























Core deposit and other intangible assets



132



191



146



-31



-9




153



191



-20





























Other assets



5,108



4,752



5,074



8



1




4,970



4,337



15





























 Total assets


$

68,502



68,919



67,811



-1

%


1

%


$

68,380



67,472



1

%


















































































LIABILITIES AND SHAREHOLDERS' EQUITY






















































Interest-bearing deposits



























 NOW accounts


$

608

.14


579

.18


592

.15


5

%


3

%


$

601

.14


543

.21


11

%

 Savings deposits



27,545

.31


24,237

.36


26,177

.33


14



5




26,190

.33


22,832

.49


15


 Time deposits



6,034

1.40


8,304

1.89


6,312

1.46


-27



-4




6,583

1.52


8,782

2.35


-25


 Deposits at foreign office



809

.17


1,300

.11


802

.16


-38



1




953

.14


1,665

.14


-43


    Total interest-bearing deposits



34,996

.49


34,420

.72


33,883

.53


2



3




34,327

.55


33,822

.95


1





























Short-term borrowings



1,439

.17


2,308

.17


1,858

.16


-38



-23




1,854

.16


2,911

.24


-36


Long-term borrowings



8,141

3.14


10,253

2.73


8,948

3.10


-21



-9




9,169

2.96


11,092

3.07


-17





























Total interest-bearing liabilities



44,576

.97


46,981

1.13


44,689

1.03


-5



-




45,350

1.02


47,825

1.40


-5





























Noninterest-bearing deposits



14,275



12,945



13,647



10



5




13,709



11,054



24





























Other liabilities



1,329



1,307



1,294



2



3




1,218



1,311



-7





























 Total liabilities



60,180



61,233



59,630



-2



1




60,277



60,190



-





























Shareholders' equity



8,322



7,686



8,181



8



2




8,103



7,282



11





























 Total liabilities and shareholders' equity


$

68,502



68,919



67,811



-1

%


1

%


$

68,380



67,472



1

%























































Net interest spread




3.61



3.45



3.62










3.59



3.21




Contribution of interest-free funds




.24



.26



.25










.25



.28




Net interest margin




3.85

%


3.71

%


3.87

%









3.84

%


3.49

%





M&T BANK CORPORATION

Reconciliation of Quarterly GAAP to Non-GAAP Measures












Three months ended


Year ended



December 31


December 31



2010


2009


2010


2009

Income statement data









In thousands, except per share









Net income









Net income

$

204,442


136,818

$

736,161


379,891

Amortization of core deposit and other









 intangible assets (1)


8,054


10,152


35,265


39,006

Merger-related gain (1)


(16,730)


-


(16,730)


(17,684)

Merger-related expenses (1)


469


3,806


469


54,163

 Net operating income

$

196,235


150,776

$

755,165


455,376

Earnings per common share









Diluted earnings per common share

$

1.59


1.04

$

5.69


2.89

Amortization of core deposit and other









 intangible assets (1)


.07


.09


.29


.34

Merger-related gain (1)


(.14)


-


(.14)


(.15)

Merger-related expenses (1)


-


.03


-


.46

 Diluted net operating earnings per common share

$

1.52


1.16

$

5.84


3.54

Other expense









Other expense

$

469,274


478,451

$

1,914,837


1,980,563

Amortization of core deposit and other









 intangible assets


(13,269)


(16,730)


(58,103)


(64,255)

Merger-related expenses


(771)


(6,264)


(771)


(89,157)

 Noninterest operating expense

$

455,234


455,457

$

1,855,963


1,827,151

Merger-related expenses









Salaries and employee benefits

$

7


381

$

7


10,030

Equipment and net occupancy


44


545


44


2,975

Printing, postage and supplies


74


233


74


3,677

Other costs of operations


646


5,105


646


72,475

 Total

$

771


6,264

$

771


89,157



















Balance sheet data









In millions









Average assets









Average assets

$

68,502


68,919

$

68,380


67,472

Goodwill


(3,525)


(3,525)


(3,525)


(3,393)

Core deposit and other intangible assets


(132)


(191)


(153)


(191)

Deferred taxes


24


37


29


33

 Average tangible assets

$

64,869


65,240

$

64,731


63,921

Average common equity









Average total equity

$

8,322


7,686

$

8,103


7,282

Preferred stock


(740)


(729)


(736)


(666)

 Average common equity


7,582


6,957


7,367


6,616

Goodwill


(3,525)


(3,525)


(3,525)


(3,393)

Core deposit and other intangible assets


(132)


(191)


(153)


(191)

Deferred taxes


24


37


29


33

 Average tangible common equity

$

3,949


3,278

$

3,718


3,065










At end of quarter









Total assets









Total assets

$

68,021


68,880





Goodwill


(3,525)


(3,525)





Core deposit and other intangible assets


(126)


(182)





Deferred taxes


23


35





 Total tangible assets

$

64,393


65,208





Total common equity









Total equity

$

8,358


7,753





Preferred stock


(741)


(730)





Undeclared dividends - preferred stock


(6)


(6)





 Common equity, net of undeclared









   preferred dividends


7,611


7,017





Goodwill


(3,525)


(3,525)





Core deposit and other intangible assets


(126)


(182)





Deferred taxes


23


35





 Total tangible common equity

$

3,983


3,345























(1) After any related tax effect.



M&T BANK CORPORATION

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














Three months ended



December 31,


September 30,


June 30,


March 31,


December 31,



2010


2010


2010


2010


2009

Income statement data











In thousands, except per share











Net income











Net income

$

204,442


192,015


188,749


150,955


136,818

Amortization of core deposit and other











 intangible assets (1)


8,054


8,210


9,003


9,998


10,152

Merger-related gain (1)


(16,730)


-


-


-


-

Merger-related expenses (1)


469


-


-


-


3,806

 Net operating income

$

196,235


200,225


197,752


160,953


150,776

Earnings per common share











Diluted earnings per common share

$

1.59


1.48


1.46


1.15


1.04

Amortization of core deposit and other











 intangible assets (1)


.07


.07


.07


.08


.09

Merger-related gain (1)


(.14)


-


-


-


-

Merger-related expenses (1)


-


-


-


-


.03

 Diluted net operating earnings per common share

$

1.52


1.55


1.53


1.23


1.16

Other expense











Other expense

$

469,274


480,133


476,068


489,362


478,451

Amortization of core deposit and other











 intangible assets


(13,269)


(13,526)


(14,833)


(16,475)


(16,730)

Merger-related expenses


(771)


-


-


-


(6,264)

 Noninterest operating expense

$

455,234


466,607


461,235


472,887


455,457

Merger-related expenses











Salaries and employee benefits

$

7


-


-


-


381

Equipment and net occupancy


44


-


-


-


545

Printing, postage and supplies


74


-


-


-


233

Other costs of operations


646


-


-


-


5,105

 Total

$

771


-


-


-


6,264























Balance sheet data











In millions











Average assets











Average assets

$

68,502


67,811


68,334


68,883


68,919

Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)

Core deposit and other intangible assets


(132)


(146)


(160)


(176)


(191)

Deferred taxes


24


27


30


34


37

 Average tangible assets

$

64,869


64,167


64,679


65,216


65,240

Average common equity











Average total equity

$

8,322


8,181


8,036


7,868


7,686

Preferred stock


(740)


(737)


(734)


(732)


(729)

 Average common equity


7,582


7,444


7,302


7,136


6,957

Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)

Core deposit and other intangible assets


(132)


(146)


(160)


(176)


(191)

Deferred taxes


24


27


30


34


37

 Average tangible common equity

$

3,949


3,800


3,647


3,469


3,278












At end of quarter











Total assets











Total assets

$

68,021


68,247


68,154


68,439


68,880

Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)

Core deposit and other intangible assets


(126)


(139)


(152)


(167)


(182)

Deferred taxes


23


26


28


31


35

 Total tangible assets

$

64,393


64,609


64,505


64,778


65,208

Total common equity











Total equity

$

8,358


8,232


8,102


7,916


7,753

Preferred stock


(741)


(738)


(735)


(733)


(730)

Undeclared dividends - preferred stock


(6)


(6)


(7)


(6)


(6)

 Common equity, net of undeclared











   preferred dividends


7,611


7,488


7,360


7,177


7,017

Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)

Core deposit and other intangible assets


(126)


(139)


(152)


(167)


(182)

Deferred taxes


23


26


28


31


35

 Total tangible common equity

$

3,983


3,850


3,711


3,516


3,345























(1) After any related tax effect.



SOURCE M&T Bank Corporation

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