M&T BANK CORPORATION ANNOUNCES THIRD QUARTER RESULTS

BUFFALO, N.Y., Oct. 19, 2022 /PRNewswire/ — M&T Bank Corporation (“M&T”) (NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2022.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) were $3.53 in the third quarter of 2022, compared with $3.69 in the year-earlier quarter and $1.08 in the second quarter of 2022. GAAP-basis net income was $647 million in the recent quarter, $495 million in the third quarter of 2021 and $218 million in the second 2022 quarter. GAAP-basis net income expressed as an annualized rate of return on average assets was 1.28% in each of the third quarters of 2022 and 2021, and .42% in the second quarter of 2022. That net income produced a return on average common shareholders’ equity of 10.43% in the recent quarter, 12.16% in the similar 2021 period and 3.21% in the second quarter of 2022. The results reflect non-operating merger-related expenses associated with the acquisition of People’s United Financial, Inc. (“People’s United”) of $53 million ($39 million after-tax effect, or $0.22 of diluted earnings per common share) in the recent quarter, compared with $9 million ($7 million after-tax effect, or $.05 of diluted earnings per common share) in the year-earlier quarter and $465 million ($346 million after-tax effect, or $1.94 of diluted earnings per share) in the second quarter of 2022.

Darren J. King, Chief Financial Officer, commenting on M&T’s results noted, “We are pleased with the recent quarter gains in net operating income which are up 21% from the second quarter and 39% year over year. That improvement reflects increases in taxable-equivalent net interest income of 19% and 74%, coupled with low credit losses and well-controlled expenses. We are excited to continue our integration work to build a preeminent commercial bank across the eastern United States and we are committed to the success of the consumers, small businesses and communities across our expanded footprint.”

Earnings Highlights

Change 3Q22 vs.

($ in millions, except per share data)

3Q22

3Q21

2Q22

3Q21

2Q22

Net income

$

647

$

495

$

218

31

%

197

%

Net income available to common shareholders  ̶  diluted

$

621

$

476

$

192

30

%

223

%

Diluted earnings per common share

$

3.53

$

3.69

$

1.08

-4

%

227

%

Annualized return on average assets

1.28

%

1.28

%

.42

%

Annualized return on average common equity

10.43

%

12.16

%

3.21

%

For the first nine months of 2022, diluted earnings per common share were $7.14, compared with $10.43 in the year-earlier period. GAAP-basis net income was $1.23 billion and $1.40 billion in the first three quarters of 2022 and 2021, respectively. Expressed as an annualized rate of return on average assets and average common shareholders’ equity, GAAP-basis net income in the nine-month period ended September 30, 2022 was .87% and 7.24%, respectively, compared with 1.24% and 11.76%, respectively, in the similar 2021 period.

Supplemental Reporting of Non-GAAP Results of Operations.  M&T consistently provides supplemental reporting of its results on a “net operating” or “tangible” basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill and core deposit and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T (when incurred), since such items are considered by management to be “nonoperating” in nature. The amounts of such “nonoperating” expenses are presented in the tables that accompany this release.

Merger-related expenses generally consist of professional services and other temporary help fees associated with actual or planned conversions of systems and/or integration of operations, costs related to terminations of existing contractual arrangements to purchase various services, severance and travel costs. Reflected in merger-related expenses in the second quarter of 2022 was a provision for credit losses of $242 million. GAAP requires that acquired loans be recorded at estimated fair value, which includes the use of interest rate and expected credit loss assumptions to forecast estimated cash flows. GAAP also provides that an allowance for credit losses on loans acquired, but not classified as purchased credit deteriorated (“PCD”) also be recognized. Accordingly, M&T recorded a $242 million provision related to such loans obtained in the People’s United acquisition. Given the requirement to recognize such losses above and beyond the impact of forecasted losses used in determining the fair value of acquired loans, M&T considers that provision to be a merger-related expense. Although “net operating income” as defined by M&T is not a GAAP measure, M&T’s management believes that this information helps investors understand the effect of acquisition activity in reported results.

Diluted net operating earnings per common share were $3.83 in the third quarter of 2022, compared with $3.76 in the year-earlier quarter and $3.10 in the second quarter of 2022. Net operating income aggregated $700 million in the recent quarter, $504 million in the third quarter of 2021 and $578 million in 2022’s second quarter. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity, net operating income in the third quarter of 2022 was 1.44% and 17.89%, respectively, 1.34% and 17.54%, respectively, in the similar quarter of 2021 and 1.16% and 14.41%, respectively, in the second quarter of 2022.

Diluted net operating earnings per common share in the first nine months of 2022 totaled $9.78, compared with $10.61 in the similar 2021 period. Net operating income during the first nine months of 2022 was $1.65 billion, up from $1.42 billion in the nine-month period ended September 30, 2021. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity was 1.23% and 15.13%, respectively, in the initial nine months of 2022, compared with 1.30% and 17.10%, respectively, in the similar 2021 period.

Taxable-equivalent Net Interest Income.   Taxable-equivalent net interest income totaled $1.69 billion in the recent quarter, up from $971 million in the third quarter of 2021 and $1.42 billion in the second quarter of 2022. The increase compared with the earlier quarters reflects a higher net interest margin and, additionally, when compared with the year-earlier quarter, the impact of earning assets obtained in the acquisition of People’s United. Average earning assets totaled $182.4 billion in the recent quarter, compared with $140.4 billion in the third quarter of 2021 and $189.8 billion in the second quarter of 2022. Average loans outstanding were $127.5 billion in the third quarter of 2022, compared with $95.3 billion in the year earlier quarter and $127.6 billion in the second quarter of 2022. The higher average balances of both earnings assets and loans outstanding in the second and third quarters of 2022 compared with the third quarter of 2021 reflect the impact of additional earning assets obtained in the acquisition of People’s United. Reflecting the impact of rising interest rates, the net interest margin increased to 3.68% in the third quarter of 2022, up from 2.74% in the corresponding quarter of 2021 and 3.01% in the second quarter of 2022.

Taxable-equivalent Net Interest Income

Change 3Q22 vs.

($ in millions)

3Q22

3Q21

2Q22

3Q21

2Q22

Average earning assets

$

182,382

$

140,420

$

189,755

30

%

-4

%

Net interest income  ̶  taxable-equivalent

$

1,691

$

971

$

1,422

74

%

19

%

Net interest margin

3.68

%

2.74

%

3.01

%

Provision for Credit Losses/Asset Quality.  The provision for credit losses was $115 million in the third quarter of 2022 and $302 million in the second quarter of 2022, compared with a $20 million recapture of provision in the third quarter of 2021. Included in the second quarter of 2022 was a $242 million provision, recorded in accordance with GAAP, related to loans obtained in the People’s United acquisition that were considered non-PCD. GAAP provides that an allowance for credit losses on such loans be recorded beyond the recognition of the fair value of the loans at the acquisition date. In addition to that merger-related provision, M&T recorded a provision for credit losses of $60 million in the second quarter of 2022. Net loan charge-offs were $63 million in the third quarter of 2022, $40 million in the third quarter of 2021 and $50 million in 2022’s second quarter. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .20% and .17% in the third quarters of 2022 and 2021, respectively, and .16% in the second quarter of 2022.

Loans classified as nonaccrual totaled $2.43 billion at September 30, 2022, compared with $2.24 billion at September 30, 2021 and $2.63 billion at June 30, 2022. The balance of nonaccrual loans at the end of the two most recent quarters as compared with September 30, 2021 reflects loans obtained in the acquisition of People’s United. Nonaccrual loans as a percentage of total loans were 1.89% at September 30, 2022, improved from 2.40% a year earlier and 2.05% at June 30, 2022. Assets taken in foreclosure of defaulted loans were $37 million at September 30, 2022, $25 million a year earlier and $29 million at June 30, 2022.

Allowance for Credit Losses.  M&T regularly performs comprehensive analyses of its loan portfolios and assesses forecasted economic conditions for purposes of determining the adequacy of the allowance for credit losses. As a result of those procedures, the allowance for credit losses totaled $1.88 billion or 1.46% of loans outstanding at September 30, 2022 compared with $1.52 billion or 1.62% of loans outstanding at September 30, 2021 and $1.82 billion or 1.42% at June 30, 2022. The acquisition of People’s United loans and leases resulted in a $341 million increase in the allowance for credit losses as of April 1, 2022, including $99 million related to PCD loans and $242 million related to non-PCD loans. Including the impact of the acquisition, M&T’s allowance for credit losses was $1.81 billion on April 1, 2022, or 1.42% of then outstanding loans. The higher allowance for credit losses as a percentage of outstanding loans at the recent quarter end as compared with June 30, 2022 reflects a modestly less optimistic macroeconomic forecast.

Asset Quality Metrics

Change 3Q22 vs.

($ in millions)

3Q22

3Q21

2Q22

3Q21

2Q22

At end of quarter

Nonaccrual loans

$

2,429

$

2,242

$

2,633

8

%

-8

%

Real estate and other foreclosed assets

$

37

$

25

$

29

49

%

29

%

Total nonperforming assets

$

2,466

$

2,267

$

2,662

9

%

-7

%

Accruing loans past due 90 days or more (1)

$

477

$

1,026

$

524

-54

%

-9

%

Nonaccrual loans as % of loans outstanding

1.89

%

2.40

%

2.05

%

Allowance for credit losses

$

1,876

$

1,515

$

1,824

24

%

3

%

Allowance for credit losses as % of loans outstanding

1.46

%

1.62

%

1.42

%

For the period

Provision for credit losses

$

115

$

(20)

$

302

-62

%

Net charge-offs (2)

$

63

$

40

$

50

58

%

27

%

Net charge-offs as % of average loans (annualized) (2)

.20

%

.17

%

.16

%

 

(1)

Predominantly government-guaranteed residential real estate loans.

(2)

For the quarter-ended June 30, 2022, net charge-offs and related data do not reflect $33 million of charge-offs related to PCD acquired loans.

Noninterest Income and Expense.  Noninterest income totaled $563 million in the third quarter of 2022, compared with $569 million in the year-earlier quarter. Trust income, service charges on deposit accounts and credit-related fees included in other revenues from operations all increased reflecting the acquisition of People’s United, but were offset by a decline in mortgage banking revenues resulting from M&T’s decision to retain recently originated mortgage loans in portfolio rather than sell such loans. Noninterest income was $571 million in this year’s second quarter. The comparative decline in the recent quarter was predominantly the result of lower service charges on deposit accounts and trust income, offset by higher credit-related fees.

Noninterest Income

Change 3Q22 vs.

($ in millions)

3Q22

3Q21

2Q22

3Q21

2Q22

Mortgage banking revenues

$

83

$

160

$

83

-48

%

Service charges on deposit accounts

115

105

124

9

%

-7

%

Trust income

187

157

190

19

%

-2

%

Brokerage services income

21

20

24

3

%

-13

%

Trading account and non-hedging derivative gains

5

6

2

-9

%

122

%

Gain (loss) on bank investment securities

(1)

Other revenues from operations

153

121

148

27

%

4

%

Total

$

563

$

569

$

571

-1

%

-1

%

Noninterest expense totaled $1.28 billion in the third quarter of 2022, compared with $899 million in the similar quarter of 2021 and $1.40 billion in the second quarter of 2022. Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets and merger-related expenses, noninterest operating expenses were $1.21 billion in the recent quarter, $888 million in the third quarter of 2021 and $1.16 billion in 2022’s second quarter. The most significant factor for the higher level of operating expenses in the recent quarter as compared with the year-earlier quarter was the impact of operations obtained in the People’s United acquisition. Compared with the second quarter of 2022, the $46 million increase in operating expenses in 2022’s third quarter predominantly resulted from a $32 million rise in salaries and benefits expenses attributable to an additional pay day in the third quarter and M&T’s continued investment in its talent base through salaries and incentive compensation.

Noninterest Expense

Change 3Q22 vs.

($ in millions)

3Q22

3Q21

2Q22

3Q21

2Q22

Salaries and employee benefits

$

736

$

510

$

776

44

%

-5

%

Equipment and net occupancy

127

81

125

57

%

2

%

Outside data processing and software

95

73

94

31

%

1

%

FDIC assessments

28

19

22

49

%

24

%

Advertising and marketing

21

15

21

41

%

4

%

Printing, postage and supplies

15

8

16

87

%

-5

%

Amortization of core deposit and other intangible assets

18

3

18

571

%

Other costs of operations

239

190

331

25

%

-28

%

Total

$

1,279

$

899

$

1,403

42

%

-9

%

The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities), measures the relationship of operating expenses to revenues. M&T’s efficiency ratio was 53.6% in the third quarter of 2022, 57.7% in the year-earlier quarter and 58.3% in the second quarter of 2022.

Balance Sheet.  M&T had total assets of $198.0 billion at September 30, 2022, compared with $151.9 billion and $204.0 billion at September 30, 2021 and June 30, 2022, respectively. Loans and leases, net of unearned discount, were $128.2 billion at September 30, 2022, compared with $93.6 billion at September 30, 2021 and $128.5 billion at June 30, 2022. The higher level of loans and leases at the recent quarter-end and June 30, 2022 as compared with September 30, 2021 is largely a reflection of balances associated with the acquisition of People’s United. Also reflective of that acquisition, total deposits were $163.8 billion at the recent quarter-end and $170.4 billion at June 30, 2022, compared with $128.7 billion at September 30, 2021.

Total shareholders’ equity was $25.3 billion or 12.76% of total assets at September 30, 2022, $17.5 billion or 11.54% at September 30, 2021 and $25.8 billion or 12.64% at June 30, 2022. Common shareholders’ equity was $23.2 billion, or $134.45 per share, at September 30, 2022, compared with $15.8 billion, or $122.60 per share, a year-earlier and $23.8 billion, or $135.16 per share, at June 30, 2022. Tangible equity per common share was $84.28 at September 30, 2022, $86.88 at September 30, 2021 and $85.78 at June 30, 2022. In the calculation of tangible equity per common share, common shareholders’ equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances. M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under regulatory capital rules was approximately 10.7% at September 30, 2022, compared with 10.9% three months earlier and 11.1% at September 30, 2021.

In accordance with its capital plan, M&T repurchased 3,282,449 shares of its common stock during the recent quarter at an average cost per share of $182.79 resulting in a total cost of $600 million.

Conference Call.  Investors will have an opportunity to listen to M&T’s conference call to discuss third quarter financial results today at 11:00 a.m. Eastern Time. Those wishing to participate in the call may dial (800) 225-9448. International participants, using any applicable international calling codes, may dial (203) 518-9708. Callers should reference M&T Bank Corporation or the conference ID #MTBQ322. The conference call will be webcast live through M&T’s website at https://ir.mtb.com/events-presentations. A replay of the call will be available through Wednesday October 26, 2022 by calling (800) 688-7339, or (402) 220-1347 for international participants. No conference ID is required. The event will also be archived and available by 3:00 p.m. today on M&T’s website at https://ir.mtb.com/events-presentations.

About M&T. M&T is a financial holding company headquartered in Buffalo, New York. M&T’s principal banking subsidiary, M&T Bank, provides banking products and services in 12 states across the eastern U.S. from Maine to Virginia and Washington, D.C. Trust-related services are provided in select markets in the U.S. and abroad by M&T’s Wilmington Trust-affiliated companies and by M&T Bank. For more information on M&T Bank, visit www.mtb.com.

Forward-Looking Statements.  This news release and related conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the rules and regulations of the SEC. Any statement that does not describe historical or current facts is a forward-looking statement, including statements based on current expectations, estimates and projections about M&T’s business, and management’s beliefs and assumptions.

Statements regarding the potential effects of events or factors specific to the Company and/or the financial industry as a whole, as well as national and global events generally, on the Company’s business, financial condition, liquidity and results of operations may constitute forward-looking statements. Such statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the Company’s control. As described further below, statements regarding M&T’s expectations or predictions regarding the acquisition of People’s United are also forward-looking statements, including statements regarding the expected financial results, prospects, targets, goals and outlook.

Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” or “may,” or by variations of such words or by similar expressions. These statements are not guarantees of future performance and involve 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.

Examples of future factors include: the impact of the People’s United acquisition (as described in the next paragraph); economic conditions including inflation and supply chain issues; the impact of international conflicts or other events; the impact of the COVID-19 pandemic; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; legislation and/or regulations affecting the financial services industry or M&T and its subsidiaries individually or collectively, including tax policy; regulatory supervision and oversight, including monetary policy and capital requirements; governmental and public policy changes; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board, regulatory agencies or legislation; increasing price, product and 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 and services; containing costs and expenses; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; 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.

In addition, future factors related to the acquisition of People’s United include, among others: the outcome of any legal proceedings that may be instituted against M&T or its subsidiaries; the possibility that the anticipated benefits of the transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company does business; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships; the Company’s success in executing its business plans and strategies and managing the risks involved in the foregoing; the business, economic and political conditions in the markets in which the Company operates; and other factors that may affect future results of the Company.

Future factors related to the acquisition also include risks, such as, among others: that there could be an adverse effect on the Company’s ability to retain customers and retain or hire key personnel and maintain relationships with customers; that integration efforts may be more difficult or time-consuming than anticipated, including in areas such as sales force, cost containment, asset realization, systems integration and other key strategies; that profitability following the combination may be lower than expected including for possible reasons such as lower than expected revenues or higher or unexpected costs, charges or expenses resulting from the transaction; unforeseen risks that may exist; and other factors that may affect future results of the Company.

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.

M&T provides further detail regarding these risks and uncertainties in its Form 10-K for the year ended December 31, 2021, including in the Risk Factors section of such report, as well as in other SEC filings. Forward-looking statements speak only as of the date made, and M&T does not assume any duty and does not undertake to update forward-looking statements.

INVESTOR CONTACT: 

Brian Klock

(716) 842-5138

MEDIA CONTACT:  

Maya Dillon

(646) 735-1958

 

Financial Highlights

Three months ended

Nine months ended

September 30

September 30

Amounts in thousands, except per share

2022

2021

Change

2022

2021

Change

Performance

Net income

$

646,596

495,460

31

%

$

1,226,292

1,400,778

-12

%

Net income available to common shareholders

620,554

475,961

30

%

1,152,406

1,342,812

-14

%

Per common share:

Basic earnings

$

3.55

3.70

-4

%

$

7.18

10.44

-31

%

Diluted earnings

3.53

3.69

-4

%

7.14

10.43

-32

%

Cash dividends

$

1.20

1.10

9

%

$

3.60

3.30

9

%

Common shares outstanding:

Average – diluted (1)

175,682

128,844

36

%

161,295

128,786

25

%

Period end (2)

172,900

128,699

34

%

172,900

128,699

34

%

Return on (annualized):

Average total assets

1.28

%

1.28

%

.87

%

1.24

%

Average common shareholders’ equity

10.43

%

12.16

%

7.24

%

11.76

%

Taxable-equivalent net interest income

$

1,690,518

970,953

74

%

$

4,020,369

2,902,154

39

%

Yield on average earning assets

3.90

%

2.82

%

3.30

%

2.91

%

Cost of interest-bearing liabilities

.41

%

.14

%

.27

%

.15

%

Net interest spread

3.49

%

2.68

%

3.03

%

2.76

%

Contribution of interest-free funds

.19

%

.06

%

.12

%

.07

%

Net interest margin

3.68

%

2.74

%

3.15

%

2.83

%

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

.20

%

.17

%

.14

%

.22

%

Net operating results (3)

Net operating income

$

700,030

504,030

39

%

$

1,653,651

1,424,361

16

%

Diluted net operating earnings per common share

3.83

3.76

2

%

9.78

10.61

-8

%

Return on (annualized):

Average tangible assets

1.44

%

1.34

%

1.23

%

1.30

%

Average tangible common equity

17.89

%

17.54

%

15.13

%

17.10

%

Efficiency ratio

53.6

%

57.7

%

58.1

%

58.8

%

At September 30

Loan quality

2022

2021

Change

Nonaccrual loans

$

2,429,326

2,242,263

8

%

Real estate and other foreclosed assets

37,031

24,786

49

%

Total nonperforming assets

$

2,466,357

2,267,049

9

%

Accruing loans past due 90 days or more (4)

$

476,503

1,026,080

-54

%

Government guaranteed loans included in totals above:

Nonaccrual loans

$

44,797

47,358

-5

%

Accruing loans past due 90 days or more

423,371

947,091

-55

%

Renegotiated loans

$

356,797

242,955

47

%

Nonaccrual loans to total net loans

1.89

%

2.40

%

Allowance for credit losses to total loans

1.46

%

1.62

%

 

(1)

Includes common stock equivalents.

(2)

Includes common stock issuable under deferred compensation plans.

(3)

Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. Reconciliations of net income with net operating income appears herein.

(4)

Predominantly residential real estate loans.

 

Financial Highlights, Five Quarter Trend

Three months ended

September 30,

June 30,

March 31,

December 31,

September 30,

Amounts in thousands, except per share

2022

2022

2022

2021

2021

Performance

Net income

$

646,596

217,522

362,174

457,968

495,460

Net income available to common shareholders

620,554

192,236

339,590

434,171

475,961

Per common share:

Basic earnings

$

3.55

1.08

2.63

3.37

3.70

Diluted earnings

3.53

1.08

2.62

3.37

3.69

Cash dividends

$

1.20

1.20

1.20

1.20

1.10

Common shares outstanding:

Average – diluted (1)

175,682

178,277

129,416

128,888

128,844

Period end (2)

172,900

175,969

129,080

128,705

128,699

Return on (annualized):

Average total assets

1.28

%

.42

%

.97

%

1.15

%

1.28

%

Average common shareholders’ equity

10.43

%

3.21

%

8.55

%

10.91

%

12.16

%

Taxable-equivalent net interest income

$

1,690,518

1,422,443

907,408

937,356

970,953

Yield on average earning assets

3.90

%

3.12

%

2.72

%

2.64

%

2.82

%

Cost of interest-bearing liabilities

.41

%

.20

%

.13

%

.12

%

.14

%

Net interest spread

3.49

%

2.92

%

2.59

%

2.52

%

2.68

%

Contribution of interest-free funds

.19

%

.09

%

.06

%

.06

%

.06

%

Net interest margin

3.68

%

3.01

%

2.65

%

2.58

%

2.74

%

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

.20

%

.16

%

.03

%

.13

%

.17

%

Net operating results (3)

Net operating income

$

700,030

577,622

375,999

475,477

504,030

Diluted net operating earnings per common share

3.83

3.10

2.73

3.50

3.76

Return on (annualized):

Average tangible assets

1.44

%

1.16

%

1.04

%

1.23

%

1.34

%

Average tangible common equity

17.89

%

14.41

%

12.44

%

15.98

%

17.54

%

Efficiency ratio

53.6

%

58.3

%

64.9

%

59.7

%

57.7

%

September 30,

June 30,

March 31,

December 31,

September 30,

Loan quality

2022

2022

2022

2021

2021

Nonaccrual loans

$

2,429,326

2,633,005

2,134,231

2,060,083

2,242,263

Real estate and other foreclosed assets

37,031

28,692

23,524

23,901

24,786

Total nonperforming assets

$

2,466,357

2,661,697

2,157,755

2,083,984

2,267,049

Accruing loans past due 90 days or more (4)

$

476,503

523,662

776,751

963,399

1,026,080

Government guaranteed loans included in totals above:

Nonaccrual loans

$

44,797

46,937

46,151

51,429

47,358

Accruing loans past due 90 days or more

423,371

467,834

689,831

927,788

947,091

Renegotiated loans

$

356,797

276,584

242,108

230,408

242,955

Nonaccrual loans to total net loans

1.89

%

2.05

%

2.32

%

2.22

%

2.40

%

Allowance for credit losses to total loans

1.46

%

1.42

%

1.60

%

1.58

%

1.62

%

 

(1)

Includes common stock equivalents.

(2)

Includes common stock issuable under deferred compensation plans.

(3)

Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. Reconciliations of net income with net operating income appears herein.

(4)

Predominantly residential real estate loans.

 

Condensed Consolidated Statement of Income

Three months ended

Nine months ended

September 30

September 30

Dollars in thousands

2022

2021

Change

2022

2021

Change

Interest income

$

1,781,513

992,946

79

%

$

4,174,911

2,980,266

40

%

Interest expense

102,822

25,696

300

180,329

89,281

102

Net interest income

1,678,691

967,250

74

3,994,582

2,890,985

38

Provision for credit losses

115,000

(20,000)

427,000

(60,000)

Net interest income after provision for credit losses

1,563,691

987,250

58

3,567,582

2,950,985

21

Other income

Mortgage banking revenues

83,041

159,995

-48

275,115

432,062

-36

Service charges on deposit accounts

115,213

105,426

9

340,890

296,721

15

Trust income

186,577

156,876

19

545,874

475,889

15

Brokerage services income

21,086

20,490

3

65,414

43,868

49

Trading account and non-hedging derivative gains

5,081

5,563

-9

12,743

18,349

-31

Gain (loss) on bank investment securities

(1,108)

291

(1,913)

(22,646)

Other revenues from operations

153,189

120,485

27

436,943

344,114

27

Total other income

563,079

569,126

-1

1,675,066

1,588,357

5

Other expense

Salaries and employee benefits

736,354

510,422

44

2,090,075

1,530,634

37

Equipment and net occupancy

127,117

80,738

57

337,584

244,057

38

Outside data processing and software

95,068

72,782

31

268,607

213,025

26

FDIC assessments

28,105

18,810

49

66,266

50,874

30

Advertising and marketing

21,398

15,208

41

58,057

43,200

34

Printing, postage and supplies

14,768

7,917

87

40,488

28,367

43

Amortization of core deposit and other
     intangible assets

18,384

2,738

571

38,024

8,213

363

Other costs of operations

238,059

190,719

25

743,047

565,753

31

Total other expense

1,279,253

899,334

42

3,642,148

2,684,123

36

Income before income taxes

847,517

657,042

29

1,600,500

1,855,219

-14

Applicable income taxes

200,921

161,582

24

374,208

454,441

-18

Net income

$

646,596

495,460

31

%

$

1,226,292

1,400,778

-12

%

 

Condensed Consolidated Statement of Income, Five Quarter Trend

Three months ended

September 30,

June 30,

March 31,

December 31,

September 30,

Dollars in thousands

2022

2022

2022

2021

2021

Interest income

$

1,781,513

1,465,142

928,256

958,518

992,946

Interest expense

102,822

53,425

24,082

24,725

25,696

Net interest income

1,678,691

1,411,717

904,174

933,793

967,250

Provision for credit losses

115,000

302,000

10,000

(15,000)

(20,000)

Net interest income after provision for credit losses

1,563,691

1,109,717

894,174

948,793

987,250

Other income

Mortgage banking revenues

83,041

82,926

109,148

139,267

159,995

Service charges on deposit accounts

115,213

124,170

101,507

105,392

105,426

Trust income

186,577

190,084

169,213

168,827

156,876

Brokerage services income

21,086

24,138

20,190

18,923

20,490

Trading account and non-hedging derivative gains

5,081

2,293

5,369

6,027

5,563

Gain (loss) on bank investment securities

(1,108)

(62)

(743)

1,426

291

Other revenues from operations

153,189

147,551

136,203

138,775

120,485

Total other income

563,079

571,100

540,887

578,637

569,126

Other expense

Salaries and employee benefits

736,354

776,201

577,520

515,043

510,422

Equipment and net occupancy

127,117

124,655

85,812

82,641

80,738

Outside data processing and software

95,068

93,820

79,719

78,814

72,782

FDIC assessments

28,105

22,585

15,576

18,830

18,810

Advertising and marketing

21,398

20,635

16,024

21,228

15,208

Printing, postage and supplies

14,768

15,570

10,150

8,140

7,917

Amortization of core deposit and other
     intangible assets

18,384

18,384

1,256

1,954

2,738

Other costs of operations

238,059

331,304

173,684

200,850

190,719

Total other expense

1,279,253

1,403,154

959,741

927,500

899,334

Income before income taxes

847,517

277,663

475,320

599,930

657,042

Applicable income taxes

200,921

60,141

113,146

141,962

161,582

Net income

$

646,596

217,522

362,174

457,968

495,460

 

Condensed Consolidated Balance Sheet

September 30

Dollars in thousands

2022

2021

Change

ASSETS

Cash and due from banks

$

2,255,810

1,479,712

52

%

Interest-bearing deposits at banks

25,391,528

38,445,788

-34

Trading account

129,672

50,920

155

Investment securities

24,603,765

6,447,622

282

Loans and leases:

Commercial, financial, etc.

38,807,949

22,514,940

72

Real estate – commercial

46,138,665

37,023,952

25

Real estate – consumer

23,074,280

16,209,354

42

Consumer

20,204,693

17,834,648

13

Total loans and leases, net of unearned discount

128,225,587

93,582,894

37

Less: allowance for credit losses

1,875,591

1,515,024

24

Net loans and leases

126,349,996

92,067,870

37

Goodwill

8,501,357

4,593,112

85

Core deposit and other intangible assets

226,974

5,952

Other assets

10,496,377

8,810,218

19

Total assets

$

197,955,479

151,901,194

30

%

LIABILITIES AND SHAREHOLDERS’ EQUITY

Noninterest-bearing deposits

$

73,023,271

56,542,309

29

%

Interest-bearing deposits

90,822,117

72,158,987

26

Total deposits

163,845,388

128,701,296

27

Short-term borrowings

917,806

103,548

786

Accrued interest and other liabilities

4,476,456

2,067,188

117

Long-term borrowings

3,459,336

3,500,391

-1

Total liabilities

172,698,986

134,372,423

29

Shareholders’ equity:

Preferred

2,010,600

1,750,000

15

Common

23,245,893

15,778,771

47

Total shareholders’ equity

25,256,493

17,528,771

44

Total liabilities and shareholders’ equity

$

197,955,479

151,901,194

30

%

 

Condensed Consolidated Balance Sheet, Five Quarter Trend

September 30,

June 30,

March 31,

December 31,

September 30,

Dollars in thousands

2022

2022

2022

2021

2021

ASSETS

Cash and due from banks

$

2,255,810

1,688,274

1,411,460

1,337,577

1,479,712

Interest-bearing deposits at banks

25,391,528

33,437,454

36,025,382

41,872,304

38,445,788

Federal funds sold and agreements to resell
     securities

250,250

Trading account

129,672

133,855

46,854

49,745

50,920

Investment securities

24,603,765

22,801,717

9,356,832

7,155,860

6,447,622

Loans and leases:

Commercial, financial, etc.

38,807,949

39,108,676

23,496,017

23,473,324

22,514,940

Real estate – commercial

46,138,665

46,795,139

34,553,558

35,389,730

37,023,952

Real estate – consumer

23,074,280

22,767,107

15,595,879

16,074,445

16,209,354

Consumer

20,204,693

19,815,198

18,162,938

17,974,953

17,834,648

Total loans and leases, net of unearned discount

128,225,587

128,486,120

91,808,392

92,912,452

93,582,894

Less: allowance for credit losses

1,875,591

1,823,790

1,472,359

1,469,226

1,515,024

Net loans and leases

126,349,996

126,662,330

90,336,033

91,443,226

92,067,870

Goodwill

8,501,357

8,501,357

4,593,112

4,593,112

4,593,112

Core deposit and other intangible assets

226,974

245,358

2,742

3,998

5,952

Other assets

10,496,377

10,312,294

8,091,137

8,651,338

8,810,218

Total assets

$

197,955,479

204,032,889

149,863,552

155,107,160

151,901,194

LIABILITIES AND SHAREHOLDERS’ EQUITY

Noninterest-bearing deposits

$

73,023,271

72,375,515

58,520,366

60,131,480

56,542,309

Interest-bearing deposits

90,822,117

97,982,881

67,798,347

71,411,929

72,158,987

Total deposits

163,845,388

170,358,396

126,318,713

131,543,409

128,701,296

Short-term borrowings

917,806

1,119,321

50,307

47,046

103,548

Accrued interest and other liabilities

4,476,456

3,743,278

2,174,925

2,127,931

2,067,188

Long-term borrowings

3,459,336

3,017,363

3,443,587

3,485,369

3,500,391

Total liabilities

172,698,986

178,238,358

131,987,532

137,203,755

134,372,423

Shareholders’ equity:

Preferred

2,010,600

2,010,600

1,750,000

1,750,000

1,750,000

Common

23,245,893

23,783,931

16,126,020

16,153,405

15,778,771

Total shareholders’ equity

25,256,493

25,794,531

17,876,020

17,903,405

17,528,771

Total liabilities and shareholders’ equity

$

197,955,479

204,032,889

149,863,552

155,107,160

151,901,194

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates

Three months ended

Change in balance

Nine months ended

September 30,

September 30,

June 30,

September 30, 2022 from

September 30,

Change

Dollars in millions

2022

2021

2022

September 30,

June 30,

2022

2021

in

Balance

Rate

Balance

Rate

Balance

Rate

2021

2022

Balance

Rate

Balance

Rate

balance

ASSETS

Interest-bearing deposits at banks

$

30,752

2.23

%

39,036

.15

%

39,386

.82

%

-21

%

-22

%

$

36,248

1.00

%

32,969

.12

%

10

%

Federal funds sold and agreements to resell
      securities

29

.55

.47

250

.41

100

-88

93

.42

223

.12

-58

Trading account

131

1.78

51

2.71

136

.59

157

-4

105

1.24

50

1.97

111

Investment securities

23,945

2.62

6,019

2.19

22,384

2.55

298

7

18,077

2.51

6,276

2.23

188

Loans and leases, net of unearned discount

Commercial, financial, etc.

38,321

4.87

23,730

3.96

37,818

3.96

61

1

33,203

4.24

26,155

3.57

27

Real estate – commercial

46,282

4.49

37,547

3.87

47,227

3.87

23

-2

42,864

4.09

37,525

3.98

14

Real estate – consumer

22,962

3.84

16,379

3.59

22,761

3.64

40

1

20,557

3.69

16,932

3.56

21

Consumer

19,960

4.76

17,658

4.34

19,793

4.26

13

1

19,267

4.43

17,134

4.47

12

Total loans and leases, net

127,525

4.55

95,314

3.95

127,599

3.94

34

115,891

4.14

97,746

3.91

19

Total earning assets

182,382

3.90

140,420

2.82

189,755

3.12

30

-4

170,414

3.30

137,264

2.91

24

Goodwill

8,501

4,593

8,501

85

7,214

4,593

57

Core deposit and other intangible assets

236

7

254

-7

165

10

Other assets

10,012

9,017

10,355

11

-3

9,602

9,100

6

Total assets

$

201,131

154,037

208,865

31

%

-4

%

$

187,395

150,967

24

%

LIABILITIES AND SHAREHOLDERS’ EQUITY

Interest-bearing deposits

Savings and interest-checking deposits

$

89,360

.31

70,976

.04

95,149

.12

26

%

-6

%

$

84,006

.16

71,000

.05

18

%

Time deposits

5,050

.09

3,061

.46

5,480

.09

65

-8

4,401

.11

3,381

.62

30

Deposits at Cayman Islands office

242

.11

-100

Total interest-bearing deposits

94,410

.29

74,037

.06

100,629

.12

28

-6

88,407

.16

74,623

.08

18

Short-term borrowings

913

1.16

91

.01

1,126

1.22

-19

701

1.16

72

.01

Long-term borrowings

3,281

3.67

3,431

1.75

3,282

2.55

-4

3,335

2.69

3,569

1.76

-7

Total interest-bearing liabilities

98,604

.41

77,559

.14

105,037

.20

27

-6

92,443

.27

78,264

.15

18

Noninterest-bearing deposits

72,861

57,218

74,054

27

-2

68,406

53,864

27

Other liabilities

4,001

2,151

3,684

86

9

3,301

2,167

52

Total liabilities

175,466

136,928

182,775

28

-4

164,150

134,295

22

Shareholders’ equity

25,665

17,109

26,090

50

-2

23,245

16,672

39

Total liabilities and shareholders’ equity

$

201,131

154,037

208,865

31

%

-4

%

$

187,395

150,967

24

%

Net interest spread

3.49

2.68

2.92

3.03

2.76

Contribution of interest-free funds

.19

.06

.09

.12

.07

Net interest margin

3.68

%

2.74

%

3.01

%

3.15

%

2.83

%

 

Reconciliation of Quarterly GAAP to Non-GAAP Measures

Three months ended

Nine months ended

September 30

September 30

2022

2021

2022

2021

Income statement data

In thousands, except per share

Net income

Net income

$

646,596

495,460

1,226,292

1,400,778

Amortization of core deposit and other intangible assets (1)

14,141

2,028

29,212

6,085

Merger-related expenses (1)

39,293

6,542

398,147

17,498

Net operating income

$

700,030

504,030

1,653,651

1,424,361

Earnings per common share

Diluted earnings per common share

$

3.53

3.69

7.14

10.43

Amortization of core deposit and other intangible assets (1)

.08

.02

.18

.05

Merger-related expenses (1)

.22

.05

2.46

.13

Diluted net operating earnings per common share

$

3.83

3.76

9.78

10.61

Other expense

Other expense

$

1,279,253

899,334

3,642,148

2,684,123

Amortization of core deposit and other intangible assets

(18,384)

(2,738)

(38,024)

(8,213)

Merger-related expenses

(53,027)

(8,826)

(293,208)

(22,670)

Noninterest operating expense

$

1,207,842

887,770

3,310,916

2,653,240

Merger-related expenses

Salaries and employee benefits

$

13,094

60

98,480

64

Equipment and net occupancy

2,106

1

4,415

1

Outside data processing and software

2,277

625

3,245

869

Advertising and marketing

2,177

505

4,004

529

Printing, postage and supplies

651

730

3,833

2,779

Other costs of operations

32,722

6,905

179,231

18,428

Other expense

53,027

8,826

293,208

22,670

Provision for credit losses

242,000

Total

$

53,027

$

8,826

$

535,208

$

22,670

Efficiency ratio

Noninterest operating expense (numerator)

$

1,207,842

887,770

3,310,916

2,653,240

Taxable-equivalent net interest income

$

1,690,518

970,953

4,020,369

2,902,154

Other income

563,079

569,126

1,675,066

1,588,357

Less:  Gain (loss) on bank investment securities

(1,108)

291

(1,913)

(22,646)

Denominator

$

2,254,705

1,539,788

5,697,348

4,513,157

Efficiency ratio

53.6

%

57.7

%

58.1

%

58.8

%

Balance sheet data

In millions

Average assets

Average assets

$

201,131

154,037

187,395

150,967

Goodwill

(8,501)

(4,593)

(7,214)

(4,593)

Core deposit and other intangible assets

(236)

(7)

(165)

(10)

Deferred taxes

56

2

38

2

Average tangible assets

$

192,450

149,439

180,054

146,366

Average common equity

Average total equity

$

25,665

17,109

23,245

16,672

Preferred stock

(2,011)

(1,495)

(1,925)

(1,332)

Average common equity

23,654

15,614

21,320

15,340

Goodwill

(8,501)

(4,593)

(7,214)

(4,593)

Core deposit and other intangible assets

(236)

(7)

(165)

(10)

Deferred taxes

56

2

38

2

Average tangible common equity

$

14,973

11,016

13,979

10,739

At end of quarter

Total assets

Total assets

$

197,955

151,901

Goodwill

(8,501)

(4,593)

Core deposit and other intangible assets

(227)

(6)

Deferred taxes

54

2

Total tangible assets

$

189,281

147,304

Total common equity

Total equity

$

25,256

17,529

Preferred stock

(2,011)

(1,750)

Common equity

23,245

15,779

Goodwill

(8,501)

(4,593)

Core deposit and other intangible assets

(227)

(6)

Deferred taxes

54

2

Total tangible common equity

$

14,571

11,182

 

(1)

After any related tax effect.

 

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

Three months ended

September 30,

June 30,

March 31,

December 31,

September 30,

2022

2022

2022

2021

2021

Income statement data

In thousands, except per share

Net income

Net income

$

646,596

217,522

362,174

457,968

495,460

Amortization of core deposit and other intangible assets (1)

14,141

14,138

933

1,447

2,028

Merger-related expenses (1)

39,293

345,962

12,892

16,062

6,542

Net operating income

$

700,030

577,622

375,999

475,477

504,030

Earnings per common share

Diluted earnings per common share

$

3.53

1.08

2.62

3.37

3.69

Amortization of core deposit and other intangible assets (1)

.08

.08

.01

.01

.02

Merger-related expenses (1)

.22

1.94

.10

.12

.05

Diluted net operating earnings per common share

$

3.83

3.10

2.73

3.50

3.76

Other expense

Other expense

$

1,279,253

1,403,154

959,741

927,500

899,334

Amortization of core deposit and other intangible assets

(18,384)

(18,384)

(1,256)

(1,954)

(2,738)

Merger-related expenses

(53,027)

(222,809)

(17,372)

(21,190)

(8,826)

Noninterest operating expense

$

1,207,842

1,161,961

941,113

904,356

887,770

Merger-related expenses

Salaries and employee benefits

$

13,094

85,299

87

112

60

Equipment and net occupancy

2,106

502

1,807

340

1

Outside data processing and software

2,277

716

252

250

625

Advertising and marketing

2,177

1,199

628

337

505

Printing, postage and supplies

651

2,460

722

186

730

Other costs of operations

32,722

132,633

13,876

19,965

6,905

Other expense

53,027

222,809

17,372

21,190

8,826

Provision for credit losses

242,000

Total

$

53,027

464,809

17,372

21,190

8,826

Efficiency ratio

Noninterest operating expense (numerator)

$

1,207,842

1,161,961

941,113

904,356

887,770

Taxable-equivalent net interest income

$

1,690,518

1,422,443

907,408

937,356

970,953

Other income

563,079

571,100

540,887

578,637

569,126

Less:  Gain (loss) on bank investment securities

(1,108)

(62)

(743)

1,426

291

Denominator

$

2,254,705

1,993,605

1,449,038

1,514,567

1,539,788

Efficiency ratio

53.6

%

58.3

%

64.9

%

59.7

%

57.7

%

Balance sheet data

In millions

Average assets

Average assets

$

201,131

208,865

151,648

157,722

154,037

Goodwill

(8,501)

(8,501)

(4,593)

(4,593)

(4,593)

Core deposit and other intangible assets

(236)

(254)

(3)

(5)

(7)

Deferred taxes

56

60

1

1

2

Average tangible assets

$

192,450

200,170

147,053

153,125

149,439

Average common equity

Average total equity

$

25,665

26,090

17,894

17,613

17,109

Preferred stock

(2,011)

(2,011)

(1,750)

(1,750)

(1,495)

Average common equity

23,654

24,079

16,144

15,863

15,614

Goodwill

(8,501)

(8,501)

(4,593)

(4,593)

(4,593)

Core deposit and other intangible assets

(236)

(254)

(3)

(5)

(7)

Deferred taxes

56

60

1

1

2

Average tangible common equity

$

14,973

15,384

11,549

11,266

11,016

At end of quarter

Total assets

Total assets

$

197,955

204,033

149,864

155,107

151,901

Goodwill

(8,501)

(8,501)

(4,593)

(4,593)

(4,593)

Core deposit and other intangible assets

(227)

(245)

(3)

(4)

(6)

Deferred taxes

54

57

1

1

2

Total tangible assets

$

189,281

195,344

145,269

150,511

147,304

Total common equity

Total equity

$

25,256

25,795

17,876

17,903

17,529

Preferred stock

(2,011)

(2,011)

(1,750)

(1,750)

(1,750)

Common equity

23,245

23,784

16,126

16,153

15,779

Goodwill

(8,501)

(8,501)

(4,593)

(4,593)

(4,593)

Core deposit and other intangible assets

(227)

(245)

(3)

(4)

(6)

Deferred taxes

54

57

1

1

2

Total tangible common equity

$

14,571

15,095

11,531

11,557

11,182

 

(1)

After any related tax effect.

 

M&T Bank Corporation

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/mt-bank-corporation-announces-third-quarter-results-301653373.html

SOURCE M&T Bank Corporation

M&T BANK CORPORATION ANNOUNCES THIRD QUARTER RESULTS WeeklyReviewer

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World Reviewer Staff
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