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M&T Bank Corporation Announces Second Quarter Profits

BUFFALO, N.Y., July 20, 2011 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2011.

GAAP Results of Operations.  Diluted  earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the second quarter of 2011 rose 66% to $2.42 from $1.46 in the year-earlier quarter and were 52% higher than $1.59 in the initial 2011 quarter.  GAAP-basis net income in the recent quarter aggregated $322 million, up from $189 million and $206 million in the second quarter of 2010 and the first quarter of 2011, respectively. GAAP-basis net income for the second quarter of 2011 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.78% and 14.94%, respectively, improved from 1.11% and 9.67%, respectively, in the year-earlier quarter and 1.23% and 10.16%, respectively, in the first quarter of 2011.

M&T's second quarter results were impacted by several noteworthy items.  Most significantly, M&T completed its acquisition of Wilmington Trust Corporation ("Wilmington Trust"), effective May 16, 2011, including the issuance of 4.7 million common shares.  Results of the operations acquired from Wilmington Trust are reflected in M&T's results since the acquisition date.  Assets acquired in the transaction totaled approximately $10.8 billion, including $6.4 billion of loans, while liabilities assumed were $10.0 billion, including $8.9 billion of deposits.  Although significant merger-related expenses will be incurred in the third and fourth quarters of 2011 as systems conversions are completed and operations are integrated, M&T recognized a net after-tax gain of $42 million, or $.33 of diluted earnings per common share, in the recent quarter related to the Wilmington Trust acquisition. That net gain was comprised of a non-taxable gain of $65 million, which represented the excess of the fair value of assets acquired less liabilities assumed over consideration exchanged, and merger-related expenses, which aggregated $23 million, after applicable tax effect. Such expenses were associated with integrating operations and introducing Wilmington Trust's former customers to M&T's products and services.  Also contributing to the recent quarter's improved performance were net gains on investment securities, which aggregated $51 million, after tax effect, or $.41 of diluted earnings per common share. Net securities gains in 2011's initial quarter contributed $14 million to that quarter's net income, or $.12 of diluted earnings per common share, while net securities losses during the second quarter of 2010 reduced net income and diluted earnings per common share by $14 million and $.11, respectively.  Other actions initiated by M&T during the recent quarter included the purchase from the U.S. Department of the Treasury ("Treasury Department") and subsequent retirement of $330 million of preferred stock that Wilmington Trust issued pursuant to the Troubled Asset Relief Program ("TARP"), the redemption of $370 million of M&T Series A Preferred Stock issued to the Treasury Department by M&T pursuant to the TARP, and the issuance by M&T of $500 million of fixed rate, perpetual non-cumulative preferred stock to supplement its Tier 1 capital.

Commenting on M&T's financial results for the recent quarter, Rene F. Jones, Executive Vice President and Chief Financial Officer, noted, "The second quarter was truly a period of significant accomplishment.  On May 16, we welcomed the employees and customers of Wilmington Trust into the M&T family.  We are excited about the possibilities this merger brings to M&T's customers, both existing and new.  Above and beyond the positive impact of the merger, M&T's results reflected higher fee income, lower operating expenses and continued improvement in credit trends.  Also exclusive of the impact of the merger, average loans during the quarter grew an annualized 2% and average core deposits rose an annualized 10%."

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 items 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 $2.16 in the recent quarter, up from $1.53 and $1.67 in the second quarter of 2010 and the first quarter of 2011, respectively.  Net operating income during the second quarter of 2011 was $289 million, improved from $198 million and $216 million in the second quarter of 2010 and the first quarter of 2011, respectively.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income in the recently completed quarter was 1.69% and 24.40%, respectively, compared with 1.23% and 20.36% in the second quarter of 2010 and 1.36% and 20.16% in the initial 2011 quarter.

Taxable-equivalent Net Interest Income.  Taxable-equivalent net interest income totaled $593 million in the second quarter of 2011, up 3% from $573 million in the year-earlier period and $575 million in the first quarter of 2011.  The improvement from the second quarter of 2010 was the result of a $3.6 billion rise in average earning assets, partially offset by a 9 basis point narrowing of the net interest margin to 3.75% in the recent quarter from 3.84% in the year-earlier quarter. The increase in taxable-equivalent net interest income from the initial 2011 quarter was due to a $4.0 billion increase in average earning assets, partially offset by a 17 basis point narrowing of the net interest margin.  The narrowing of the net interest margin in the recent quarter as compared with the year-earlier quarter and the first quarter of 2011 was partially attributable to the impact of the Wilmington Trust acquisition.  Also contributing to the narrowing were significantly higher earning balances on deposit with the Federal Reserve and higher amounts of agreements to resell securities, which in the aggregate averaged $1.3 billion during the recent quarter and totaled $2.5 billion at June 30, 2011.

Provision for Credit Losses/Asset Quality. Credit quality continued to show solid improvement during the recent quarter.  The provision for credit losses was $63 million in the second quarter of 2011, improved from $85 million in the year-earlier quarter and $75 million in the first quarter of 2011.  Net charge-offs of loans totaled $59 million during the recent quarter, down from $82 million and $74 million in the second quarter of 2010 and the first quarter of 2011, respectively.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .43% and .64% in the second quarter of 2011 and 2010, respectively, and .58% in the first quarter of 2011.

Loans classified as nonaccrual aggregated $1.26 billion at June 30, 2011, compared with $1.09 billion a year earlier and $1.21 billion at March 31, 2011.  Reflected in nonaccrual loans at June 30, 2011 were $77 million of loans obtained in the Wilmington Trust acquisition.  Nonaccrual loans as a percentage of total loans were 2.15%, 2.13% and 2.32% at June 30, 2011, June 30, 2010 and March 31, 2011, respectively. Assets taken in foreclosure of defaulted loans were $159 million at June 30, 2011, down from $193 million at June 30, 2010 and $218 million at March 31, 2011.  The decrease in such assets at the recent quarter-end resulted from the sale of a commercial real estate property in New York City with a carrying value of $99 million.  Reflected in assets taken in foreclosure of defaulted loans at June 30, 2011 were $57 million of such assets obtained in the Wilmington Trust acquisition that were recorded at fair value on the acquisition date.  The ratio of nonperforming assets to total loans plus real estate and other foreclosed assets was 2.42% at June 30, 2011, improved from 2.73% at March 31, 2011.  That ratio was 2.50% at June 30, 2010.

Loans past due 90 days or more and accruing interest totaled $373 million at the end of the recent quarter, including loans guaranteed by government-related entities of $207 million.  Included in such loans at the recent quarter-end were $130 million of loans obtained in the Wilmington Trust acquisition.  Loans past due 90 days or more and accruing interest were $203 million and $264 million at June 30, 2010 and March 31, 2011, respectively, including $188 million and $215 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 totaled $908 million at June 30, 2011, up from $895 million and $904 million at June 30, 2010 and March 31, 2011, respectively.  Beginning in 2009, GAAP requires that expected credit losses associated with loans obtained in acquisitions be reflected in the estimation of loan fair value as of each respective acquisition date and prohibits any carry-over of the acquired entity's allowance for credit losses.  Excluding amounts related to loans obtained in acquisition transactions subsequent to 2008, the allowance-to-legacy loan ratio was 1.80% at June 30, 2011, compared with 1.86% at June 30, 2010 and 1.81% at March 31, 2011.  

Noninterest Income and Expense. Noninterest income totaled $502 million in the second quarter of 2011, compared with $274 million and $314 million in the second quarter of 2010 and the first quarter of 2011, respectively.  Reflected in those amounts were net pre-tax gains on investment securities of $84 million and $23 million in the recent quarter and the first quarter of 2011, respectively, and net pre-tax losses from investment securities of $22 million in the second quarter of 2010.  The net securities gains in the recent quarter resulted from $111 million of gains realized on the sale of investment securities available for sale, predominantly residential mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac, collateralized debt obligations and capital preferred securities, having an amortized cost of approximately $1.21 billion.  Partially offsetting those securities gains were $27 million of other-than-temporary impairment charges related to certain of M&T's holdings of privately issued collateralized mortgage obligations.  The net securities gains in the initial 2011 quarter resulted from $39 million of gains realized on the sale of investment securities available for sale having an amortized cost of approximately $484 million.  Partially offsetting those securities gains were $16 million of other-than-temporary impairment charges related to certain of M&T's holdings of privately issued collateralized mortgage obligations.  Due largely to the Wilmington Trust acquisition, M&T sold the securities in order to manage its balance sheet size and composition and the resultant capital ratios.  The net losses in the second quarter of 2010 were predominantly due to other-than-temporary impairment charges on investment securities.  

Excluding gains and losses from investment securities in all periods and the gain recorded in the recent quarter related to the Wilmington Trust acquisition, noninterest income in the second quarter of 2011 aggregated $353 million, improved from $296 million in the year-earlier quarter and $291 million in the initial quarter of 2011. Contributing to the rise from the year-earlier quarter were significantly higher trust income, predominantly due to the Wilmington Trust transaction, letter of credit and other credit-related fees and gains on the sale of previously leased equipment, partially offset by lower service charges on consumer deposit accounts.  The recent quarter's improvement in noninterest income as compared with the initial 2011 quarter resulted from higher trust income, due to the Wilmington Trust acquisition, and higher consumer service charges and other fee income.  Wilmington Trust-related revenues in the recent quarter added $54 million to other income, including $46 million to trust income and $4 million to deposit service charges.

Noninterest expense in the second quarter of 2011 totaled $577 million, compared with $476 million in the year-earlier quarter and $500 million in the first quarter of 2011.  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 $525 million in the recent quarter, compared with $461 million in the second quarter of 2010 and $483 million in 2011's initial quarter.  As compared with the second quarter of 2010 and the first quarter of 2011, the recent quarter's higher level of operating expenses was due, in large part, to the operations obtained in the Wilmington Trust acquisition.  

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 55.6% in the second quarter of 2011, compared with 53.1% in the year-earlier period and 55.8% in the first quarter of 2011.  

Balance Sheet.  M&T had total assets of $77.7 billion at June 30, 2011, compared with $68.2 billion at June 30, 2010.  Loans and leases, net of unearned discount, were $58.5 billion at the recent quarter-end, compared with $51.1 billion a year earlier.  Total deposits rose to $59.2 billion at June 30, 2011 from $47.5 billion at June 30, 2010.

Total shareholders' equity increased to $9.2 billion at June 30, 2011 from $8.1 billion a year earlier, each representing 11.89% of total assets.  Common shareholders' equity was $8.4 billion, or $66.71 per share, at June 30, 2011, compared with $7.4 billion, or $61.77 per share, at June 30, 2010.  Tangible equity per common share rose 19% to $37.00 at the recent quarter-end from $31.15 a year earlier.  Common shareholders' equity per share and tangible equity per common share were $64.43 and $34.38, respectively, at March 31, 2011.  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 6.28% at June 30, 2011, compared with 5.75% and 6.44% at June 30, 2010 and March 31, 2011, respectively.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss second 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# 82574531. The conference call will be webcast live through M&T's website at http://ir.mandtbank.com/conference.cfm.  A replay of the call will be available until Friday, July 22, 2011 by calling (855)859-2056, or (404)537-3406 for international participants, and by making reference to ID# 82574531.  The event will also be archived and available by 7:00 p.m. today on M&T's website at http://ir.mandtbank.com/conference.cfm.  

M&T is a financial holding company headquartered in Buffalo, New York.  M&T's principal banking subsidiary, M&T Bank, operates retail and commercial bank branches in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Jersey, the District of Columbia and Ontario, Canada.  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; 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






Six months ended




Amounts in thousands,


June 30






June 30




except per share


2011


2010


Change




2011


2010


Change


















Performance
































Net income

$

322,358


188,749


71

%


$

528,631


339,704


56

%

Net income available to common shareholders


297,179


173,597


71




487,308


310,037


57


















Per common share:
















 Basic earnings

$

2.43


1.47


65

%


$

4.04


2.63


54

%

 Diluted earnings


2.42


1.46


66




4.02


2.61


54


 Cash dividends

$

.70


.70


-



$

1.40


1.40


-


















Common shares outstanding:
















 Average - diluted (1)


122,796


118,878


3

%



121,332


118,569


2

%

 Period end (2)


125,622


119,161


5




125,622


119,161


5


















Return on (annualized):
















 Average total assets


1.78

%

1.11

%





1.52

%

1.00

%



 Average common shareholders' equity


14.94

%

9.67

%





12.62

%

8.78

%



















Taxable-equivalent net interest income

$

592,670


573,332


3

%


$

1,167,801


1,135,589


3

%

















Yield on average earning assets


4.40

%

4.63

%





4.49

%

4.61

%



Cost of interest-bearing liabilities


.89

%

1.04

%





.90

%

1.04

%



Net interest spread


3.51

%

3.59

%





3.59

%

3.57

%



Contribution of interest-free funds


.24

%

.25

%





.24

%

.24

%



Net interest margin


3.75

%

3.84

%





3.83

%

3.81

%



















Net charge-offs to average total
















 net loans (annualized)


.43

%

.64

%





.50

%

.69

%



















Net operating results (3)
































Net operating income

$

289,487


197,752


46

%


$

505,847


358,705


41

%

Diluted net operating earnings per common share


2.16


1.53


41




3.83


2.77


38


Return on (annualized):
















 Average tangible assets


1.69

%

1.23

%





1.53

%

1.11

%



 Average tangible common equity


24.40

%

20.36

%





22.37

%

18.89

%



Efficiency ratio


55.56

%

53.06

%





55.65

%

54.45

%





















































At June 30












Loan quality


2011


2010


Change


























Nonaccrual loans

$

1,258,975


1,090,135


15

%









Real estate and other foreclosed assets


158,873


192,631


-18

%









 Total nonperforming assets

$

1,417,848


1,282,766


11

%

























Accruing loans past due 90 days or more

$

373,197


203,081


84

%

























Renegotiated loans

$

234,726


228,847


3

%

























Government guaranteed loans included in totals
















 above:
















 Nonaccrual loans

$

78,732


40,271


96

%









 Accruing loans past due 90 days or more


207,135


187,682


10

%

























Purchased impaired loans (4):
















 Outstanding customer balance

$

1,538,419


130,808


-










 Carrying amount


752,978


61,524


-


























Nonaccrual loans to total net loans


2.15

%

2.13

%



























Allowance for credit losses to:
















 Legacy loans


1.80

%

1.86

%











 Total loans


1.55

%

1.75

%











































(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,


June 30,


March 31,


December 31,


September 30,


June 30,

except per share


2011


2011


2010


2010


2010

















Performance
































Net income

$

322,358



206,273



204,442



192,015



188,749


Net income available to common shareholders


297,179



190,121



189,678



176,789



173,597


















Per common share:
















 Basic earnings

$

2.43



1.59



1.59



1.49



1.47


 Diluted earnings


2.42



1.59



1.59



1.48



1.46


 Cash dividends

$

.70



.70



.70



.70



.70


















Common shares outstanding:
















 Average - diluted (1)


122,796



119,852



119,503



119,155



118,878


 Period end (2)


125,622



120,410



119,774



119,435



119,161


















Return on (annualized):
















 Average total assets


1.78

%


1.23

%


1.18

%


1.12

%


1.11

%

 Average common shareholders' equity


14.94

%


10.16

%


10.03

%


9.56

%


9.67

%

















Taxable-equivalent net interest income

$

592,670



575,131



580,227



575,733



573,332


















Yield on average earning assets


4.40

%


4.60

%


4.58

%


4.65

%


4.63

%

Cost of interest-bearing liabilities


.89

%


.91

%


.97

%


1.03

%


1.04

%

Net interest spread


3.51

%


3.69

%


3.61

%


3.62

%


3.59

%

Contribution of interest-free funds


.24

%


.23

%


.24

%


.25

%


.25

%

Net interest margin


3.75

%


3.92

%


3.85

%


3.87

%


3.84

%

















Net charge-offs to average total
















 net loans (annualized)


.43

%


.58

%


.60

%


.73

%


.64

%

















Net operating results (3)
































Net operating income

$

289,487



216,360



196,235



200,225



197,752


Diluted net operating earnings per common share


2.16



1.67



1.52



1.55



1.53


Return on (annualized):
















 Average tangible assets


1.69

%


1.36

%


1.20

%


1.24

%


1.23

%

 Average tangible common equity


24.40

%


20.16

%


18.43

%


19.58

%


20.36

%

Efficiency ratio


55.56

%


55.75

%


52.55

%


53.40

%


53.06

%























































June 30,


March 31,


December 31,


September 30,


June 30,


Loan quality


2011


2011


2010


2010


2010


















Nonaccrual loans

$

1,258,975



1,211,111



1,239,194



1,099,560



1,090,135


Real estate and other foreclosed assets


158,873



218,203



220,049



192,600



192,631


 Total nonperforming assets

$

1,417,848



1,429,314



1,459,243



1,292,160



1,282,766


















Accruing loans past due 90 days or more

$

373,197



264,480



269,593



214,769



203,081


















Renegotiated loans

$

234,726



241,190



233,342



233,671



228,847


















Government guaranteed loans included in totals
















 above:
















 Nonaccrual loans

$

78,732



69,353



56,787



38,232



40,271


 Accruing loans past due 90 days or more


207,135



214,505



214,111



194,223



187,682


















Purchased impaired loans (4):
















 Outstanding customer balance

$

1,538,419



206,253



219,477



113,964



130,808


 Carrying amount


752,978



88,589



97,019



52,728



61,524


















Nonaccrual loans to total net loans


2.15

%


2.32

%


2.38

%


2.16

%


2.13

%

















Allowance for credit losses to:
















 Legacy loans


1.80

%


1.81

%


1.82

%


1.86

%


1.86

%

 Total loans


1.55

%


1.73

%


1.74

%


1.76

%


1.75

%

































































(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






Six months ended





June 30






June 30




Dollars in thousands

2011


2010


Change




2011


2010


Change

















Interest income

$    688,253


684,784


1

%


$

1,355,736


1,361,170


-

%

Interest expense

102,051


117,557


-13




200,730


237,609


-16

















Net interest income

586,202


567,227


3




1,155,006


1,123,561


3

















Provision for credit losses

63,000


85,000


-26




138,000


190,000


-27

















Net interest income after















  provision for credit losses

523,202


482,227


8




1,017,006


933,561


9

















Other income















    Mortgage banking revenues

42,151


47,084


-10




87,307


88,560


-1


    Service charges on deposit accounts

119,716


128,976


-7




229,447


249,271


-8


    Trust income

75,592


30,169


151




104,913


61,097


72


    Brokerage services income

14,926


12,788


17




29,222


25,894


13


    Trading account and foreign exchange gains

6,798


3,797


79




15,077


8,496


77


    Gain on bank investment securities

110,744


10


-




150,097


469


-


    Other-than-temporary impairment losses















       recognized in earnings

(26,530)


(22,380)


-




(42,571)


(49,182)


-


    Equity in earnings of Bayview Lending Group LLC

(5,223)


(6,179)


-




(11,901)


(11,893)


-


    Other revenues from operations

163,482


79,292


106




254,485


158,551


61


         Total other income

501,656


273,557


83




816,076


531,263


54

















Other expense















    Salaries and employee benefits

300,178


245,861


22




566,268


509,907


11


    Equipment and net occupancy

59,670


55,431


8




116,333


110,832


5


    Printing, postage and supplies

9,723


8,549


14




18,925


17,592


8


    Amortization of core deposit and other















       intangible assets

14,740


14,833


-1




27,054


31,308


-14


    FDIC assessments

26,609


21,608


23




45,703


42,956


6


    Other costs of operations

165,975


129,786


28




302,183


252,835


20


         Total other expense

576,895


476,068


21




1,076,466


965,430


12

















Income before income taxes

447,963


279,716


60




756,616


499,394


52

















Applicable income taxes

125,605


90,967


38




227,985


159,690


43

















Net income

$    322,358


188,749


71

%


$

528,631


339,704


56

%



M&T BANK CORPORATION
















Condensed Consolidated Statement of Income, Five Quarter Trend
































Three months ended




June 30,


March 31,


December 31,


September 30,


June 30,


Dollars in thousands


2011


2011


2010


2010


2010


















Interest income

$

688,253



667,483



682,725



685,900



684,784


Interest expense


102,051



98,679



108,628



116,032



117,557


















Net interest income


586,202



568,804



574,097



569,868



567,227


















Provision for credit losses


63,000



75,000



85,000



93,000



85,000


















Net interest income after
















  provision for credit losses


523,202



493,804



489,097



476,868



482,227


















Other income
















    Mortgage banking revenues


42,151



45,156



35,013



61,052



47,084


    Service charges on deposit accounts


119,716



109,731



111,129



117,733



128,976


    Trust income


75,592



29,321



31,031



30,485



30,169


    Brokerage services income


14,926



14,296



11,648



12,127



12,788


    Trading account and foreign exchange gains


6,798



8,279



12,755



6,035



3,797


    Gain on bank investment securities


110,744



39,353



861



1,440



10


    Other-than-temporary impairment losses
















       recognized in earnings


(26,530)



(16,041)



(27,567)



(9,532)



(22,380)


    Equity in earnings of Bayview Lending Group LLC


(5,223)



(6,678)



(7,415)



(6,460)



(6,179)


    Other revenues from operations


163,482



91,003



119,483



77,019



79,292


         Total other income


501,656



314,420



286,938



289,899



273,557


















Other expense
















    Salaries and employee benefits


300,178



266,090



243,413



246,389



245,861


    Equipment and net occupancy


59,670



56,663



50,879



54,353



55,431


    Printing, postage and supplies


9,723



9,202



8,435



7,820



8,549


    Amortization of core deposit and other
















       intangible assets


14,740



12,314



13,269



13,526



14,833


    FDIC assessments


26,609



19,094



18,329



18,039



21,608


    Other costs of operations


165,975



136,208



134,949



140,006



129,786


         Total other expense


576,895



499,571



469,274



480,133



476,068


















Income before income taxes


447,963



308,653



306,761



286,634



279,716


















Applicable income taxes


125,605



102,380



102,319



94,619



90,967


















Net income

$

322,358



206,273



204,442



192,015



188,749




M&T BANK CORPORATION








Condensed Consolidated Balance Sheet


















June 30




Dollars in thousands


2011


2010


Change










ASSETS
















Cash and due from banks

$

1,297,335


1,045,886


24

%









Interest-bearing deposits at banks


2,275,450


117,826


-










Federal funds sold and agreements








 to resell securities


415,580


10,000


-










Trading account assets


502,986


487,692


3










Investment securities


6,492,265


8,097,572


-20










Loans and leases:
















  Commercial, financial, etc.


15,040,892


13,017,598


16


  Real estate - commercial


24,263,726


20,612,905


18


  Real estate - consumer


6,970,921


5,729,126


22


  Consumer


12,265,690


11,701,657


5


    Total loans and leases, net of unearned discount


58,541,229


51,061,286


15


       Less: allowance for credit losses


907,589


894,667


1










 Net loans and leases


57,633,640


50,166,619


15










Goodwill


3,524,625


3,524,625


-










Core deposit and other intangible assets


275,057


152,712


80










Other assets


5,310,216


4,550,684


17










 Total assets

$

77,727,154


68,153,616


14

%

















LIABILITIES AND SHAREHOLDERS' EQUITY
















Noninterest-bearing deposits

$

18,598,828


13,960,723


33

%









Interest-bearing deposits


40,078,834


33,010,520


21










Deposits at Cayman Islands office


551,553


551,428


-










 Total deposits


59,229,215


47,522,671


25










Short-term borrowings


567,144


2,158,957


-74










Accrued interest and other liabilities


1,557,685


1,114,615


40










Long-term borrowings


7,128,916


9,255,529


-23










 Total liabilities


68,482,960


60,051,772


14










Shareholders' equity:
















  Preferred


860,901


735,350


17


  Common (1)


8,383,293


7,366,494


14










    Total shareholders' equity


9,244,194


8,101,844


14










 Total liabilities and shareholders' equity

$

77,727,154


68,153,616


14

%

















(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $228.8 million

      at June 30, 2011 and $197.2 million at June 30, 2010.



M&T BANK CORPORATION













Condensed Consolidated Balance Sheet, Five Quarter Trend


















June 30,


March 31,



December 31,



September 30,



June 30,

Dollars in thousands


2011


2011



2010



2010



2010
















ASSETS






























Cash and due from banks

$

1,297,335



972,005



908,755



1,070,625



1,045,886
















Interest-bearing deposits at banks


2,275,450



100,101



101,222



401,624



117,826
















Federal funds sold and agreements















 to resell securities


415,580



10,300



25,000



443,700



10,000
















Trading account assets


502,986



413,737



523,834



536,702



487,692
















Investment securities


6,492,265



6,507,165



7,150,540



7,662,715



8,097,572
















Loans and leases:






























  Commercial, financial, etc.


15,040,892



13,826,299



13,390,610



12,788,136



13,017,598

  Real estate - commercial


24,263,726



20,891,615



21,183,161



20,580,450



20,612,905

  Real estate - consumer


6,970,921



6,154,960



5,928,056



5,754,432



5,729,126

  Consumer


12,265,690



11,245,807



11,488,555



11,668,540



11,701,657

    Total loans and leases, net of unearned discount


58,541,229



52,118,681



51,990,382



50,791,558



51,061,286

       Less: allowance for credit losses


907,589



903,703



902,941



894,720



894,667
















 Net loans and leases


57,633,640



51,214,978



51,087,441



49,896,838



50,166,619
















Goodwill


3,524,625



3,524,625



3,524,625



3,524,625



3,524,625
















Core deposit and other intangible assets


275,057



113,603



125,917



139,186



152,712
















Other assets


5,310,216



5,024,694



4,573,929



4,570,822



4,550,684
















 Total assets

$

77,727,154



67,881,208



68,021,263



68,246,837



68,153,616































LIABILITIES AND SHAREHOLDERS' EQUITY






























Noninterest-bearing deposits

$

18,598,828



15,219,562



14,557,568



14,665,603



13,960,723
















Interest-bearing deposits


40,078,834



34,264,867



33,641,800



33,335,104



33,010,520
















Deposits at Cayman Islands office


551,553



1,063,670



1,605,916



653,916



551,428
















 Total deposits


59,229,215



50,548,099



49,805,284



48,654,623



47,522,671
















Short-term borrowings


567,144



504,676



947,432



1,211,683



2,158,957
















Accrued interest and other liabilities


1,557,685



1,015,495



1,070,701



1,157,250



1,114,615
















Long-term borrowings


7,128,916



7,305,420



7,840,151



8,991,508



9,255,529
















 Total liabilities


68,482,960



59,373,690



59,663,568



60,015,064



60,051,772
















Shareholders' equity:






























  Preferred


860,901



743,385



740,657



737,979



735,350

  Common (1)


8,383,293



7,764,133



7,617,038



7,493,794



7,366,494
















    Total shareholders' equity


9,244,194



8,507,518



8,357,695



8,231,773



8,101,844
















 Total liabilities and shareholders' equity

$

77,727,154



67,881,208



68,021,263



68,246,837



68,153,616































(1)  Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $228.8 million at June 30, 2011, $197.5 million at

      March 31, 2011, $205.2 million at December 31, 2010, $192.6 million at September 30, 2010 and $197.2 million at June 30, 2010.



M&T BANK CORPORATION
















Condensed Consolidated Average Balance Sheet
















and Annualized Taxable-equivalent Rates 

















































Three months ended


Change in balance



Six months ended






June 30,


June 30,


March 31,


June 30, 2011 from



June 30




Dollars in millions


2011


2010


2011


June 30,


March 31,



2011


2010


Change in




Balance


Rate


Balance


Rate


Balance


Rate


2010


2011



Balance


Rate


Balance


Rate


balance


ASSETS






























































Interest-bearing deposits at banks

$

804


.24

%

81


.02

%

115


.13

%

894

%


597

%


$

462


.22

%

104


.02

%

345

%
































Federal funds sold and agreements































 to resell securities


622


.09


10


.41


15


.53


-



-




320


.10


17


.28


-

































Trading account assets


101


1.32


66


.96


110


1.61


51



-8




105


1.47


63


.88


66

































Investment securities


6,394


4.03


8,376


4.27


7,219


4.17


-24



-11




6,805


4.11


8,274


4.35


-18

































Loans and leases, net of unearned discount































 Commercial, financial, etc.


14,623


3.89


13,096


4.03


13,573


3.93


12



8




14,101


3.91


13,251


3.95


6


 Real estate - commercial


22,471


4.59


20,759


4.64


21,003


4.71


8



7




21,741


4.65


20,813


4.56


4


 Real estate - consumer


6,559


5.00


5,653


5.35


6,054


5.06


16



8




6,308


5.03


5,697


5.33


11


 Consumer


11,808


5.03


11,770


5.24


11,342


5.13


-



4




11,576


5.08


11,850


5.25


-2


    Total loans and leases, net


55,461


4.55


51,278


4.71


51,972


4.67


8



7




53,726


4.61


51,611


4.67


4

































 Total earning assets


63,382


4.40


59,811


4.63


59,431


4.60


6



7




61,418


4.49


60,069


4.61


2

































Goodwill


3,525




3,525




3,525




-



-




3,525




3,525




-

































Core deposit and other intangible assets


198




160




119




24



66




159




168




-5

































Other assets


5,349




4,838




4,970




11



8




5,160




4,845




7

































 Total assets

$

72,454




68,334




68,045




6

%


6

%


$

70,262




68,607




2

%






























































































LIABILITIES AND SHAREHOLDERS' EQUITY






























































Interest-bearing deposits































 NOW accounts

$

742


.15


619


.14


628


.13


20

%


18

%


$

685


.14


602


.14


14

%

 Savings deposits


30,043


.28


25,942


.33


27,669


.28


16



9




28,863


.28


25,508


.33


13


 Time deposits


6,657


1.16


6,789


1.55


5,700


1.36


-2



17




6,181


1.25


6,998


1.60


-12


 Deposits at Cayman Islands office


820


.09


972


.16


1,182


.14


-16



-31




999


.12


1,104


.13


-9


    Total interest-bearing deposits


38,262


.42


34,322


.56


35,179


.45


11



9




36,728


.44


34,212


.58


7

































Short-term borrowings


707


.08


1,763


.17


1,344


.15


-60



-47




1,024


.13


2,063


.16


-50


Long-term borrowings


7,076


3.48


9,454


2.91


7,368


3.26


-25



-4




7,222


3.37


9,805


2.82


-26

































Total interest-bearing liabilities


46,045


.89


45,539


1.04


43,891


.91


1



5




44,974


.90


46,080


1.04


-2

































Noninterest-bearing deposits


16,195




13,610




14,501




19



12




15,353




13,453




14

































Other liabilities


1,402




1,149




1,202




22



17




1,302




1,121




16

































 Total liabilities


63,642




60,298




59,594




6



7




61,629




60,654




2

































Shareholders' equity


8,812




8,036




8,451




10



4




8,633




7,953




9

































 Total liabilities and shareholders' equity

$

72,454




68,334




68,045




6

%


6

%


$

70,262




68,607




2

%































































Net interest spread




3.51




3.59




3.69











3.59




3.57




Contribution of interest-free funds




.24




.25




.23











.24




.24




Net interest margin




3.75

%



3.84

%



3.92

%










3.83

%



3.81

%






M&T BANK CORPORATION










Reconciliation of Quarterly GAAP to Non-GAAP Measures





























Three months ended


Six months ended




June 30


June 30




2011


2010


2011


2010


Income statement data










In thousands, except per share










Net income










Net income

$

322,358


188,749

$

528,631


339,704


Amortization of core deposit and other










 intangible assets (1)


8,974


9,003


16,452


19,001


Merger-related gains (1)


(64,930)


-


(64,930)


-


Merger-related expenses (1)


23,085


-


25,694


-


 Net operating income

$

289,487


197,752

$

505,847


358,705


Earnings per common share










Diluted earnings per common share

$

2.42


1.46

$

4.02


2.61


Amortization of core deposit and other










 intangible assets (1)


.07


.07


.13


.16


Merger-related gains (1)


(.52)


-


(.53)


-


Merger-related expenses (1)


.19


-


.21


-


 Diluted net operating earnings per common share

$

2.16


1.53

$

3.83


2.77


Other expense










Other expense

$

576,895


476,068

$

1,076,466


965,430


Amortization of core deposit and other










 intangible assets


(14,740)


(14,833)


(27,054)


(31,308)


Merger-related expenses


(36,996)


-


(41,291)


-


 Noninterest operating expense

$

525,159


461,235

$

1,008,121


934,122


Merger-related expenses










Salaries and employee benefits

$

15,305


-

$

15,312


-


Equipment and net occupancy


25


-


104


-


Printing, postage and supplies


318


-


465


-


Other costs of operations


21,348


-


25,410


-


 Total

$

36,996


-

$

41,291


-






















Balance sheet data










In millions










Average assets










Average assets

$

72,454


68,334

$

70,262


68,607


Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets


(198)


(160)


(159)


(168)


Deferred taxes


46


30


34


32


 Average tangible assets

$

68,777


64,679

$

66,612


64,946


Average common equity










Average total equity

$

8,812


8,036

$

8,633


7,953


Preferred stock


(716)


(734)


(730)


(733)


 Average common equity


8,096


7,302


7,903


7,220


Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets


(198)


(160)


(159)


(168)


Deferred taxes


46


30


34


32


 Average tangible common equity

$

4,419


3,647

$

4,253


3,559












At end of quarter










Total assets










Total assets

$

77,727


68,154

$

77,727


68,154


Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets


(275)


(152)


(275)


(152)


Deferred taxes


68


28


68


28


 Total tangible assets

$

73,995


64,505

$

73,995


64,505


Total common equity










Total equity

$

9,244


8,102

$

9,244


8,102


Preferred stock


(861)


(735)


(861)


(735)


Undeclared dividends - cumulative preferred stock


(3)


(7)


(3)


(7)


 Common equity, net of undeclared cumulative










   preferred dividends


8,380


7,360


8,380


7,360


Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


Core deposit and other intangible assets


(275)


(152)


(275)


(152)


Deferred taxes


68


28


68


28


 Total tangible common equity

$

4,648


3,711

$

4,648


3,711





















 (1) After any related tax effect.  



M&T BANK CORPORATION











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









































Three months ended



June 30,


March 31,


December 31,


September 30,


June 30,



2011


2011


2010


2010


2010

Income statement data











In thousands, except per share











Net income











Net income

$

322,358


206,273


204,442


192,015


188,749

Amortization of core deposit and other











 intangible assets (1)


8,974


7,478


8,054


8,210


9,003

Merger-related gain (1)


(64,930)


-


(16,730)


-


-

Merger-related expenses (1)


23,085


2,609


469


-


-

 Net operating income

$

289,487


216,360


196,235


200,225


197,752

Earnings per common share











Diluted earnings per common share

$

2.42


1.59


1.59


1.48


1.46

Amortization of core deposit and other











 intangible assets (1)


.07


.06


.07


.07


.07

Merger-related gain (1)


(.52)


-


(.14)


-


-

Merger-related expenses (1)


.19


.02


-


-


-

 Diluted net operating earnings per common share

$

2.16


1.67


1.52


1.55


1.53

Other expense











Other expense

$

576,895


499,571


469,274


480,133


476,068

Amortization of core deposit and other











 intangible assets


(14,740)


(12,314)


(13,269)


(13,526)


(14,833)

Merger-related expenses


(36,996)


(4,295)


(771)


-


-

 Noninterest operating expense

$

525,159


482,962


455,234


466,607


461,235

Merger-related expenses











Salaries and employee benefits

$

15,305


7


7


-


-

Equipment and net occupancy


25


79


44


-


-

Printing, postage and supplies


318


147


74


-


-

Other costs of operations


21,348


4,062


646


-


-

 Total

$

36,996


4,295


771


-


-























Balance sheet data











In millions











Average assets











Average assets

$

72,454


68,045


68,502


67,811


68,334

Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)

Core deposit and other intangible assets


(198)


(119)


(132)


(146)


(160)

Deferred taxes


46


22


24


27


30

 Average tangible assets

$

68,777


64,423


64,869


64,167


64,679

Average common equity











Average total equity

$

8,812


8,451


8,322


8,181


8,036

Preferred stock


(716)


(743)


(740)


(737)


(734)

 Average common equity


8,096


7,708


7,582


7,444


7,302

Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)

Core deposit and other intangible assets


(198)


(119)


(132)


(146)


(160)

Deferred taxes


46


22


24


27


30

 Average tangible common equity

$

4,419


4,086


3,949


3,800


3,647












At end of quarter











Total assets











Total assets

$

77,727


67,881


68,021


68,247


68,154

Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)

Core deposit and other intangible assets


(275)


(113)


(126)


(139)


(152)

Deferred taxes


68


20


23


26


28

 Total tangible assets

$

73,995


64,263


64,393


64,609


64,505

Total common equity











Total equity

$

9,244


8,508


8,358


8,232


8,102

Preferred stock


(861)


(743)


(741)


(738)


(735)

Undeclared dividends - cumulative preferred stock


(3)


(7)


(6)


(6)


(7)

 Common equity, net of undeclared cumulative











   preferred dividends


8,380


7,758


7,611


7,488


7,360

Goodwill


(3,525)


(3,525)


(3,525)


(3,525)


(3,525)

Core deposit and other intangible assets


(275)


(113)


(126)


(139)


(152)

Deferred taxes


68


20


23


26


28

 Total tangible common equity

$

4,648


4,140


3,983


3,850


3,711























(1) After any related tax effect.



SOURCE M&T Bank Corporation

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