M&T BANK CORPORATION 
By BUFFALO, N.Y., Jan. 17, 2014 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for 2013.
GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the fourth quarter of 2013 were $1.74, compared with $2.16 in the year-earlier quarter and $2.11 in the third quarter of 2013. GAAP-basis net income in the recent quarter totaled $246 million, compared with $296 million and $294 million in the fourth quarter of 2012 and the third quarter of 2013, respectively. Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income for the recent quarter was 1.14% and 8.93%, respectively, compared with 1.45% and 12.10%, respectively, in the year-earlier quarter and 1.39% and 11.06%, respectively, in the third quarter of 2013.
For the full year of 2013, diluted earnings per common share were $8.38, up 11% from $7.54 for 2012. Net income rose to $1.16 billion in 2013 from $1.03 billion in 2012. Expressed as a rate of return on average assets and average common shareholders' equity, net income in 2013 was 1.39% and 11.18%, respectively, compared with 1.29% and 10.96%, respectively, in 2012.
Reflecting on M&T's performance in 2013, Rene F. Jones, Executive Vice President and Chief Financial Officer, commented, "While expenses were elevated by investments in our infrastructure during 2013, M&T achieved a net operating return on average tangible common shareholders' equity of 18.17% for the full year. Our core capital position strengthened, as the Tier 1 common ratio grew to 9.25% at the 2013 year-end, up 17 basis points from September 30 and 168 basis points higher than at December 31, 2012. We are also pleased with the continued improvement in credit quality. M&T's liquidity and risk profile was enhanced during the year through several actions, including replacing less liquid investment securities with Ginnie Mae securities and the securitization of loans held in the loan portfolio. During the final two quarters of 2013 we invested heavily in several key areas, including risk management, capital planning and stress testing, regulatory compliance, and other operational and technology initiatives. Those investments will better position M&T for the future."
Supplemental Reporting of Non-GAAP Results of Operations. M&T consistently provides supplemental reporting of its results on a "net operating" or "tangible" basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and expenses and gains associated with merging acquired operations into M&T, since such amounts are considered by management to be "nonoperating" in nature. Although "net operating income" as defined by M&T is not a GAAP measure, M&T's management believes that this information helps investors understand the effect of acquisition activity in reported results. Reconciliations of GAAP to non-GAAP measures are provided in the financial tables included herein.
Diluted net operating earnings per common share, which exclude the impact of amortization of core deposit and other intangible assets and merger-related gains and expenses, were $1.79 in the recent quarter, compared with $2.23 in the year-earlier period and $2.16 in the third quarter of 2013. Net operating income for the fourth quarter of 2013 was $252 million, compared with $305 million and $301 million in the final quarter of 2012 and the third quarter of 2013, respectively. For the three months ended December 31, 2013, net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.22% and 14.12%, respectively, compared with 1.56% and 20.46% in the corresponding 2012 period and 1.48% and 17.64%, respectively, in the third quarter of 2013.
For the year ended December 31, 2013, diluted net operating earnings per common share increased 10% to $8.66 from $7.88 in 2012. Net operating income for 2013 and 2012 totaled $1.20 billion and $1.07 billion, respectively. Net operating income in 2013 expressed as a rate of return on average tangible assets and average tangible common shareholders' equity was 1.50% and 18.17%, respectively, compared with 1.40% and 19.42%, respectively, in 2012.
Taxable-equivalent Net Interest Income. Taxable-equivalent net interest income aggregated $673 million in the fourth quarter of 2013, compared with $679 million in the immediately preceding quarter. That decline resulted from a five basis point narrowing of the net interest margin to 3.56% in the recent quarter from 3.61% in 2013's third quarter, partially offset by an increase in average earning assets. Taxable-equivalent net interest income in the recent quarter was little changed from the $674 million earned in the fourth quarter of 2012. For the year ended December 31, 2013, net interest income on a taxable-equivalent basis rose 3% to $2.70 billion from $2.62 billion in 2012 as a result of a $3.7 billion or 5% increase in average earning assets, partially offset by an eight basis point narrowing of the net interest margin to 3.65% in 2013 from 3.73% in 2012.
Provision for Credit Losses/Asset Quality. The provision for credit losses was $42 million during the fourth quarter of 2013, down from $49 million in the year-earlier quarter and $48 million in the third quarter of 2013. The provision was equal to net charge-offs in the third and fourth quarters of 2013, and exceeded net charge-offs by $5 million in the fourth quarter of 2012. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .26% and .27% in the final quarter of 2013 and 2012, respectively, and .29% in 2013's third quarter. The provision for credit losses declined 9% to $185 million for the year ended December 31, 2013 from $204 million in 2012. Net loan charge-offs for 2013 totaled $183 million, or .28% of average loans outstanding, improved from $186 million, or .30% of average loans in 2012.
Loans classified as nonaccrual declined to $871 million, or 1.36% of total loans at December 31, 2013, from $1.01 billion or 1.52% a year earlier and $916 million or 1.44% at September 30, 2013. Assets taken in foreclosure of defaulted loans were $67 million at December 31, 2013, down from $104 million and $89 million at December 31, 2012 and September 30, 2013, respectively.
Allowance for Credit Losses. M&T regularly performs detailed analyses of individual borrowers and portfolios for purposes of assessing the adequacy of the allowance for credit losses. As a result of those analyses, the allowance totaled $917 million at December 31, 2013, compared with $926 million a year earlier and $916 million at September 30, 2013. The allowance expressed as a percentage of outstanding loans was 1.43% at the recent quarter-end, compared with 1.39% at December 31, 2012 and 1.44% at September 30, 2013.
Noninterest Income and Expense. Noninterest income aggregated $446 million in the recently completed quarter, compared with $453 million and $477 million in the final quarter of 2012 and the third quarter of 2013, respectively. Reflected in noninterest income in the third quarter of 2013 were gains from loan securitization activities of $56 million. Net losses from investment securities of $14 million were reflected in noninterest income in the fourth quarter of 2012, due to other-than-temporary impairment charges. There were no similar gains or losses in 2013's final quarter.
Excluding gains from securitization activities and losses from investment securities, noninterest income was $446 million in the recent quarter, compared with $468 million in the year-earlier quarter and $421 million in the third quarter of 2013. As compared with the immediately preceding quarter, the recent quarter's improvement resulted largely from higher mortgage banking revenues, primarily related to increased servicing activities. The decline in noninterest income as compared with the final 2012 quarter was predominantly due to lower mortgage banking revenues, partially offset by higher trust income.
Noninterest income aggregated $1.87 billion and $1.67 billion during the years ended December 31, 2013 and 2012, respectively. That rise was primarily the result of net gains on investment securities and gains on securitization activities, which aggregated $110 million in 2013, compared with net losses on investment securities of $48 million in 2012, supplemented by higher trust income in 2013.
Noninterest expense in the fourth quarter of 2013 totaled $703 million, up from $626 million in the year-earlier quarter and $659 million in 2013's third quarter. Included in such amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets. Exclusive of those expenses, noninterest operating expenses were $693 million in the recent quarter, up from $612 million and $648 million in the fourth quarter of 2012 and the third quarter of 2013, respectively. The higher noninterest operating expenses in the recent quarter reflect increased costs for professional services largely associated with investments in M&T's infrastructure related to BSA/AML compliance, capital planning and stress testing, risk management, and operational and technology initiatives. Those increases amounted to approximately $40 million when compared to the immediately preceding quarter and $50 million in comparison to the fourth quarter of 2012. The higher level of expenses in the recent quarter as compared with the year-earlier quarter also reflects salaries associated with M&T's expanded residential mortgage loan sub-servicing activities.
For the year ended December 31, 2013, noninterest expense aggregated $2.60 billion, compared with $2.51 billion in the previous year. Noninterest operating expenses were $2.54 billion in 2013 and $2.44 billion in 2012. That increase was largely attributable to higher costs for professional services and salaries, partially offset by lower FDIC assessments.
The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities), measures the relationship of operating expenses to revenues. M&T's efficiency ratio was 61.9% in the recent quarter, compared with 53.6% in the year-earlier quarter and 56.0% in the third quarter of 2013. The efficiency ratio for the full year of 2013 was unchanged from 2012 at 56.2%.
Balance Sheet. M&T had total assets of $85.1 billion at December 31, 2013, up from $83.0 billion a year earlier. Loans and leases, net of unearned discount, totaled $64.1 billion at the 2013 year-end, compared with $66.6 billion at December 31, 2012. After considering the impact of the loan securitization transactions during 2013 and a $919 million decline in loans held for sale, M&T experienced growth in its loan portfolio from December 31, 2012 to the 2013 year-end. Total deposits were $67.1 billion at the recent year-end, $1.5 billion higher than $65.6 billion at December 31, 2012.
Total shareholders' equity rose $1.1 billion or 11% to $11.3 billion at December 31, 2013 from $10.2 billion a year earlier, representing 13.31% and 12.29%, respectively, of total assets. Common shareholders' equity was $10.4 billion, or $80.00 per share, at December 31, 2013, compared with $9.3 billion, or $72.73 per share, at December 31, 2012. Tangible equity per common share rose 18% to $52.64 at December 31, 2013 from $44.61 a year earlier. Common shareholders' equity per share and tangible equity per share were $77.81 and $50.32, respectively, at September 30, 2013. 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 8.42% at December 31, 2013, compared with 7.20% and 8.11% at December 31, 2012 and September 30, 2013, respectively. M&T's estimated Tier 1 common ratio, a regulatory capital measure, rose to 9.25% at December 31, 2013 from 7.57% and 9.08% at December 31, 2012 and September 30, 2013, respectively. M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under the new capital rules approved in July 2013 on a fully phased-in basis was approximately 9.01% as of December 31, 2013.
Conference Call. Investors will have an opportunity to listen to M&T's conference call to discuss fourth quarter and full-year financial results today at 10:30 a.m. Eastern Time. Those wishing to participate in the call may dial (877)780-2276. International participants, using any applicable international calling codes, may dial (973)582-2700. Callers should reference M&T Bank Corporation or the conference ID #31841565. The conference call will be webcast live on M&T's website at http://ir.mandtbank.com/events.cfm. A replay of the call will be available until January 20, 2014 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #31841565. The event will also be archived and available by 7:00 p.m. today on M&T's website at http://ir.mandtbank.com/events.cfm.
M&T is a financial holding company headquartered in Buffalo, New York. M&T's principal banking subsidiary, M&T Bank, operates banking offices in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware and the District of Columbia. Trust-related services are provided by M&T's Wilmington Trust-affiliated companies and by M&T Bank.
Forward-Looking Statements. This news release contains forward-looking statements that are based on current expectations, estimates and projections about M&T's business, management's beliefs and assumptions made by management. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.
Future Factors include changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation; regulatory supervision and oversight, including monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.
These are representative of the Future Factors that could affect the outcome of the forward-looking statements. In addition, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other Future Factors.
INVESTOR CONTACT: Donald J. MacLeod
(716) 842-5138
MEDIA CONTACT: C. Michael Zabel
(716) 842-5385
M&T BANK CORPORATION
Financial Highlights
Three months
ended Year ended
Amounts in thousands, December 31 December 31
----------- -----------
except per share 2013 2012 Change 2013 2012 Change
---- ---- ------ ---- ---- ------
Performance
-----------
Net income $245,722 296,193 -17% $1,162,780 1,029,498 13%
Net income available to common shareholders 227,449 276,605 -18% 1,086,481 953,429 14%
Per common share:
Basic earnings $1.76 2.18 -19% $8.44 7.57 11%
Diluted earnings 1.74 2.16 -19% 8.38 7.54 11%
Cash dividends $.70 .70 - $2.80 2.80 -
Common shares outstanding:
Average - diluted (1) 130,464 127,800 2% 129,603 126,405 3%
Period end (2) 130,564 128,234 2% 130,564 128,234 2%
Return on (annualized):
Average total assets 1.14% 1.45% 1.39% 1.29%
Average common shareholders' equity 8.93% 12.10% 11.18% 10.96%
Taxable-equivalent net interest income $672,683 673,929 - $2,698,200 2,624,907 3%
Yield on average earning assets 3.92% 4.17% 4.03% 4.22%
Cost of interest-bearing liabilities .56% .67% .60% .74%
Net interest spread 3.36% 3.50% 3.43% 3.48%
Contribution of interest-free funds .20% .24% .22% .25%
Net interest margin 3.56% 3.74% 3.65% 3.73%
Net charge-offs to average total
net loans (annualized) .26% .27% .28% .30%
Net operating results (3)
------------------------
Net operating income $252,097 304,657 -17% $1,198,935 1,072,510 12%
Diluted net operating earnings per common share 1.79 2.23 -20% 8.66 7.88 10%
Return on (annualized):
Average tangible assets 1.22% 1.56% 1.50% 1.40%
Average tangible common equity 14.12% 20.46% 18.17% 19.42%
Efficiency ratio 61.90% 53.63% 56.16% 56.19%
At December 31
--------------
Loan quality 2013 2012 Change
------------ ---- ---- ------
Nonaccrual loans $871,280 1,013,176 -14%
Real estate and other foreclosed assets 66,875 104,279 -36%
Total nonperforming assets $938,155 1,117,455 -16%
====== =========
Accruing loans past due 90 days or more (4) $368,510 358,397 3%
Government guaranteed loans included in totals
above:
Nonaccrual loans $63,647 57,420 11%
Accruing loans past due 90 days or more 297,918 316,403 -6%
Renegotiated loans $257,092 271,971 -5%
Acquired accruing loans past due 90 days or
more (5) $129,782 166,554 -22%
Purchased impaired loans (6):
Outstanding customer balance $579,975 828,571 -30%
Carrying amount 330,792 447,114 -26%
Nonaccrual loans to total net loans 1.36% 1.52%
Allowance for credit losses to total loans 1.43% 1.39%
(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) Excludes acquired loans.
(5) Acquired loans that were recorded at fair value at acquisition date. This category does not include
purchased impaired loans that are presented separately.
(6) Accruing loans that were impaired at acquisition date and recorded at fair
value.
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M&T BANK CORPORATION
Condensed Consolidated Statement of Income
Three months
ended Year ended
December 31 December 31
----------- -----------
Dollars in thousands 2013 2012 Change 2013 2012 Change
---- ---- ------ ---- ---- ------
Interest income $734,466 745,353 -1% $2,957,334 2,941,685 1%
Interest expense 67,982 77,931 -13 284,105 343,169 -17
------ ------ ------- -------
Net interest income 666,484 667,422 - 2,673,229 2,598,516 3
Provision for credit losses 42,000 49,000 -14 185,000 204,000 -9
------ ------ ------- -------
Net interest income after
provision for credit losses 624,484 618,422 1 2,488,229 2,394,516 4
Other income
Mortgage banking revenues 82,169 116,546 -29 331,265 349,064 -5
Service charges on deposit accounts 110,436 112,364 -2 446,941 446,698 -
Trust income 125,876 116,915 8 496,008 471,852 5
Brokerage services income 15,807 14,872 6 65,647 59,059 11
Trading account and foreign exchange gains 13,690 10,356 32 40,828 35,634 15
Gain on bank investment securities - - - 56,457 9 -
Other-than-temporary impairment losses
recognized in earnings - (14,491) - (9,800) (47,822) -
Equity in earnings of Bayview Lending Group LLC (6,136) (4,941) - (16,126) (21,511) -
Other revenues from operations 104,404 101,543 3 453,985 374,287 21
------- ------- ------- -------
Total other income 446,246 453,164 -2 1,865,205 1,667,270 12
Other expense
Salaries and employee benefits 336,159 323,010 4 1,355,178 1,314,540 3
Equipment and net occupancy 68,670 62,884 9 264,327 257,551 3
Printing, postage and supplies 8,808 10,417 -15 39,557 41,929 -6
Amortization of core deposit and other
intangible assets 10,439 13,865 -25 46,912 60,631 -23
FDIC assessments 17,574 23,398 -25 69,584 101,110 -31
Other costs of operations 261,422 192,572 36 820,327 733,499 12
------- ------- ------- -------
Total other expense 703,072 626,146 12 2,595,885 2,509,260 3
Income before income taxes 367,658 445,440 -17 1,757,549 1,552,526 13
Applicable income taxes 121,936 149,247 -18 594,769 523,028 14
------- ------- ------- -------
Net income $245,722 296,193 -17% $1,162,780 1,029,498 13%
====== ======= ======== =========
M&T BANK CORPORATION
Condensed Consolidated Statement of Income, Five Quarter Trend
Three months ended
------------------
December September June March December
31, 30, 30, 31, 31,
Dollars in thousands 2013 2013 2013 2013 2012
---- ---- ---- ---- ----
Interest income $734,466 742,686 750,207 729,975 745,353
Interest expense 67,982 69,578 72,620 73,925 77,931
------ ------ ------ ------ ------
Net interest income 666,484 673,108 677,587 656,050 667,422
Provision for credit losses 42,000 48,000 57,000 38,000 49,000
------ ------ ------ ------ ------
Net interest income after
provision for credit losses 624,484 625,108 620,587 618,050 618,422
Other income
Mortgage banking revenues 82,169 64,731 91,262 93,103 116,546
Service charges on deposit accounts 110,436 113,839 111,717 110,949 112,364
Trust income 125,876 123,801 124,728 121,603 116,915
Brokerage services income 15,807 16,871 17,258 15,711 14,872
Trading account and foreign exchange gains 13,690 8,987 9,224 8,927 10,356
Gain on bank investment securities - - 56,457 - -
Other-than-temporary impairment losses
recognized in earnings - - - (9,800) (14,491)
Equity in earnings of Bayview Lending Group LLC (6,136) (3,881) (2,453) (3,656) (4,941)
Other revenues from operations 104,404 153,040 100,496 96,045 101,543
------- ------- ------- ------ -------
Total other income 446,246 477,388 508,689 432,882 453,164
Other expense
Salaries and employee benefits 336,159 339,332 323,136 356,551 323,010
Equipment and net occupancy 68,670 66,220 64,278 65,159 62,884
Printing, postage and supplies 8,808 9,752 10,298 10,699 10,417
Amortization of core deposit and other
intangible assets 10,439 10,628 12,502 13,343 13,865
FDIC assessments 17,574 14,877 17,695 19,438 23,398
Other costs of operations 261,422 217,817 170,682 170,406 192,572
------- ------- ------- ------- -------
Total other expense 703,072 658,626 598,591 635,596 626,146
Income before income taxes 367,658 443,870 530,685 415,336 445,440
Applicable income taxes 121,936 149,391 182,219 141,223 149,247
------- ------- ------- ------- -------
Net income $245,722 294,479 348,466 274,113 296,193
======== ======= ======= ======= =======
M&T BANK CORPORATION
Condensed Consolidated Balance Sheet
December 31
-----------
Dollars in thousands 2013 2012 Change
---- ---- ------
ASSETS
Cash and due from banks $1,573,361 1,983,615 -21%
Interest-bearing deposits at banks 1,651,138 129,945 -
Federal funds sold and agreements
to resell securities 99,573 3,000 -
Trading account assets 376,131 488,966 -23
Investment securities 8,796,497 6,074,361 45
Loans and leases:
Commercial, financial, etc. 18,705,216 17,776,953 5
Real estate - commercial 26,148,208 25,993,790 1
Real estate - consumer 8,928,221 11,240,837 -21
Consumer 10,291,514 11,559,377 -11
---------- ----------
Total loans and leases, net of unearned discount 64,073,159 66,570,957 -4
Less: allowance for credit losses 916,676 925,860 -1
------- -------
Net loans and leases 63,156,483 65,645,097 -4
Goodwill 3,524,625 3,524,625 -
Core deposit and other intangible assets 68,851 115,763 -41
Other assets 5,900,032 5,043,431 17
--------- ---------
Total assets $85,146,691 83,008,803 3%
========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $24,661,007 24,240,802 2%
Interest-bearing deposits 42,134,859 40,325,932 4
Deposits at Cayman Islands office 322,746 1,044,519 -69
------- ---------
Total deposits 67,118,612 65,611,253 2
Short-term borrowings 260,455 1,074,482 -76
Accrued interest and other liabilities 1,328,922 1,512,717 -12
Long-term borrowings 5,108,870 4,607,758 11
--------- ---------
Total liabilities 73,816,859 72,806,210 1
Shareholders' equity:
Preferred 881,500 872,500 1
Common (1) 10,448,332 9,330,093 12
---------- ---------
Total shareholders' equity 11,329,832 10,202,593 11
---------- ----------
Total liabilities and shareholders' equity $85,146,691 83,008,803 3%
========= ==========
(1) Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $64.2 million
at December 31, 2013 and $240.3 million at December 31, 2012.
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M&T BANK CORPORATION
Condensed Consolidated Average Balance Sheet
and Annualized Taxable-equivalent Rates
Three months ended Change in balance
Year ended
December December September
31, 31, 30, December 31, 2013 from
December 31,
Dollars in millions 2013 2012 2013 December September 2013 2012 Change
31, 30, in
---- ---- ---- ---- ----
Balance Rate Balance Rate Balance Rate 2012 2013 Balance Rate Balance Rate balance
------- ---- ------- ---- ------- ---- ---- ---- ------- ---- ------- ---- -------
ASSETS
Interest-bearing deposits at banks $2,948 .25% 273 .15% 2,646 .25% 982% 11% $2,139 .24% 528 .23% 305%
Federal funds sold and agreements
to resell securities 115 .07 3 .57 117 .08 - -2 128 .09 4 .55 -
Trading account assets 82 1.36 97 1.45 67 1.27 -15 23 78 1.91 96 1.45 -19
Investment securities 8,354 3.32 6,295 3.31 6,979 3.31 33 20 6,615 3.32 6,969 3.44 -5
Loans and leases, net of unearned discount
Commercial, financial, etc. 18,096 3.41 16,995 3.68 17,798 3.50 6 2 17,736 3.54 16,336 3.71 9
Real estate - commercial 26,231 4.48 25,332 4.50 26,129 4.51 4 - 26,083 4.53 24,907 4.50 5
Real estate - consumer 8,990 4.20 11,087 4.10 9,636 4.17 -19 -7 10,136 4.12 9,727 4.33 4
Consumer 10,233 4.60 11,597 4.69 11,295 4.57 -12 -9 11,098 4.60 11,732 4.77 -5
Total loans and leases, net 63,550 4.17 65,011 4.28 64,858 4.21 -2 -2 65,053 4.24 62,702 4.35 4
------ ------ ------ ------ ------
Total earning assets 75,049 3.92 71,679 4.17 74,667 3.98 5 1 74,013 4.03 70,299 4.22 5
Goodwill 3,525 3,525 3,525 - - 3,525 3,525 -
Core deposit and other intangible assets 74 122 84 -40 -13 90 144 -37
Other assets 6,682 6,040 5,735 11 17 6,034 6,015 -
----- ----- ----- ----- -----
Total assets $85,330 81,366 84,011 5% 2% $83,662 79,983 5%
======= ====== ====== ======= ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
NOW accounts $933 .13 881 .14 924 .14 6% 1% $923 .14 856 .16 8%
Savings deposits 38,079 .14 34,587 .19 36,990 .15 10 3 36,739 .15 33,398 .20 10
Time deposits 3,617 .51 4,727 .79 3,928 .62 -23 -8 4,045 .65 5,347 .86 -24
Deposits at Cayman Islands office 414 .21 763 .18 392 .22 -46 6 496 .21 605 .19 -18
--- --- ---
Total interest-bearing deposits 43,043 .17 40,958 .26 42,234 .19 5 2 42,203 .20 40,206 .29 5
------ ------ ------ ------ ------
Short-term borrowings 287 .06 677 .16 299 .08 -58 -4 390 .11 839 .15 -54
Long-term borrowings 5,009 3.91 4,510 4.52 5,010 3.89 11 - 4,941 4.05 5,527 4.08 -11
----- ----- ----- ----- -----
Total interest-bearing liabilities 48,339 .56 46,145 .67 47,543 .58 5 2 47,534 .60 46,572 .74 2
Noninterest-bearing deposits 24,169 23,311 23,998 4 1 23,721 21,761 9
Other liabilities 1,713 1,805 1,589 -5 8 1,685 1,947 -13
----- ----- ----- ----- -----
Total liabilities 74,221 71,261 73,130 4 1 72,940 70,280 4
Shareholders' equity 11,109 10,105 10,881 10 2 10,722 9,703 10
------ ------ ------ ------ -----
Total liabilities and shareholders' equity $85,330 81,366 84,011 5% 2% $83,662 79,983 5%
======= ====== ====== ======= ======
Net interest spread 3.36 3.50 3.40 3.43 3.48
Contribution of interest-free funds .20 .24 .21 .22 .25
Net interest margin 3.56% 3.74% 3.61% 3.65% 3.73%
M&T BANK CORPORATION
Reconciliation of GAAP to Non-GAAP Measures
Three months ended Year ended
December 31 December 31
----------- -----------
2013 2012 2013 2012
---- ---- ---- ----
Income statement data
---------------------
In thousands, except per share
Net income
Net income $245,722 296,193 $1,162,780 1,029,498
Amortization of core deposit and other
intangible assets (1) 6,375 8,464 28,644 37,011
Merger-related expenses (1) - - 7,511 6,001
Net operating income $252,097 304,657 $1,198,935 1,072,510
======== ======= ======== =========
Earnings per common share
Diluted earnings per common share $1.74 2.16 $8.38 7.54
Amortization of core deposit and other
intangible assets (1) .05 .07 .22 .29
Merger-related expenses (1) - - .06 .05
Diluted net operating earnings per common share $1.79 2.23 $8.66 7.88
Other expense
Other expense $703,072 626,146 $2,595,885 2,509,260
Amortization of core deposit and other
intangible assets (10,439) (13,865) (46,912) (60,631)
Merger-related expenses - - (12,364) (9,879)
Noninterest operating expense $692,633 612,281 $2,536,609 2,438,750
======== ======= ======== =========
Merger-related expenses
Salaries and employee benefits $ - - $836 4,997
Equipment and net occupancy - - 690 15
Printing, postage and supplies - - 1,825 -
Other costs of operations - - 9,013 4,867
Total $ - - $12,364 9,879
=== === ======= =====
Efficiency ratio
Noninterest operating expense (numerator) $692,633 612,281 $2,536,609 2,438,750
Taxable-equivalent net interest income 672,683 673,929 2,698,200 2,624,907
Other income 446,246 453,164 1,865,205 1,667,270
Less: Gain on bank investment securities - - 56,457 9
Net OTTI losses recognized in earnings - (14,491) (9,800) (47,822)
Denominator $1,118,929 1,141,584 $4,516,748 4,339,990
======== ========= ======== =========
Efficiency ratio 61.90% 53.63% 56.16% 56.19%
===== ===== ===== =====
Balance sheet data
------------------
In millions
Average assets
Average assets $85,330 81,366 $83,662 79,983
Goodwill (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (74) (122) (90) (144)
Deferred taxes 23 36 27 42
--- --- --- ---
Average tangible assets $81,754 77,755 $80,074 76,356
======= ====== ======= ======
Average common equity
Average total equity $11,109 10,105 $10,722 9,703
Preferred stock (881) (872) (878) (869)
Average common equity 10,228 9,233 9,844 8,834
Goodwill (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (74) (122) (90) (144)
Deferred taxes 23 36 27 42
--- --- --- ---
Average tangible common equity $6,652 5,622 $6,256 5,207
====== ===== ====== =====
At end of quarter
Total assets
Total assets $85,147 83,009
Goodwill (3,525) (3,525)
Core deposit and other intangible assets (69) (116)
Deferred taxes 21 34
Total tangible assets $81,574 79,402
======= ======
Total common equity
Total equity $11,330 10,203
Preferred stock (882) (873)
Undeclared dividends - cumulative preferred stock (3) (3)
Common equity, net of undeclared cumulative
preferred dividends 10,445 9,327
Goodwill (3,525) (3,525)
Core deposit and other intangible assets (69) (116)
Deferred taxes 21 34
Total tangible common equity $6,872 5,720
====== =====
(1) After any related tax effect.
M&T BANK CORPORATION
Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
Three months ended
------------------
December 31, September 30, June 30, March 31, December 31,
2013 2013 2013 2013 2012
---- ---- ---- ---- ----
Income statement data
---------------------
In thousands, except per share
Net income
Net income $245,722 294,479 348,466 274,113 296,193
Amortization of core deposit and other
intangible assets (1) 6,375 6,489 7,632 8,148 8,464
Merger-related expenses (1) - - 4,636 2,875 -
Net operating income $252,097 300,968 360,734 285,136 304,657
Earnings per common share
Diluted earnings per common share $1.74 2.11 2.55 1.98 2.16
Amortization of core deposit and other
intangible assets (1) .05 .05 .06 .06 .07
Merger-related expenses (1) - - .04 .02 -
Diluted net operating earnings per common share $1.79 2.16 2.65 2.06 2.23
Other expense
Other expense $703,072 658,626 598,591 635,596 626,146
Amortization of core deposit and other
intangible assets (10,439) (10,628) (12,502) (13,343) (13,865)
Merger-related expenses - - (7,632) (4,732) -
Noninterest operating expense $692,633 647,998 578,457 617,521 612,281
Merger-related expenses
Salaries and employee benefits $ - - 300 536 -
Equipment and net occupancy - - 489 201 -
Printing, postage and supplies - - 998 827 -
Other costs of operations - - 5,845 3,168 -
Total $ - - 7,632 4,732 -
===
Efficiency ratio
Noninterest operating expense (numerator) $692,633 647,998 578,457 617,521 612,281
Taxable-equivalent net interest income 672,683 679,213 683,804 662,500 673,929
Other income 446,246 477,388 508,689 432,882 453,164
Less: Gain on bank investment securities - - 56,457 - -
Net OTTI losses recognized in earnings - - - (9,800) (14,491)
Denominator $1,118,929 1,156,601 1,136,036 1,105,182 1,141,584
Efficiency ratio 61.90% 56.03% 50.92% 55.88% 53.63%
===== ===== ===== ===== =====
Balance sheet data
------------------
In millions
Average assets
Average assets $85,330 84,011 83,352 81,913 81,366
Goodwill (3,525) (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (74) (84) (95) (109) (122)
Deferred taxes 23 25 28 32 36
--- --- --- --- ---
Average tangible assets $81,754 80,427 79,760 78,311 77,755
Average common equity
Average total equity $11,109 10,881 10,563 10,322 10,105
Preferred stock (881) (878) (876) (874) (872)
Average common equity 10,228 10,003 9,687 9,448 9,233
Goodwill (3,525) (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (74) (84) (95) (109) (122)
Deferred taxes 23 25 28 32 36
--- --- --- ---
Average tangible common equity $6,652 6,419 6,095 5,846 5,622
At end of quarter
Total assets
Total assets $85,147 84,427 83,229 82,812 83,009
Goodwill (3,525) (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (69) (79) (90) (102) (116)
Deferred taxes 21 24 27 30 34
Total tangible assets $81,574 80,847 79,641 79,215 79,402
Total common equity
Total equity $11,330 11,016 10,716 10,423 10,203
Preferred stock (882) (879) (877) (875) (873)
Undeclared dividends - cumulative preferred stock (3) (4) (3) (3) (3)
---
Common equity, net of undeclared cumulative
preferred dividends 10,445 10,133 9,836 9,545 9,327
Goodwill (3,525) (3,525) (3,525) (3,525) (3,525)
Core deposit and other intangible assets (69) (79) (90) (102) (116)
Deferred taxes 21 24 27 30 34
Total tangible common equity $6,872 6,553 6,248 5,948 5,720
(1) After any related tax effect.
SOURCE M&T Bank Corporation
