MTB
$144.77
M&T Bank
($4.59)
(3.07%)
Earnings Details
3rd Quarter September 2020
Thursday, October 22, 2020 6:37:00 AM
Tweet Share Watch
Summary

M&T Bank (MTB) Recent Earnings

M&T Bank (MTB) reported 3rd Quarter September 2020 earnings of $2.77 per share on revenue of $1.5 billion. The consensus earnings estimate was $2.63 per share on revenue of $1.5 billion. Revenue fell 13.4% compared to the same quarter a year ago.

M&T Bank Corp is a New York business corporation and a bank holding company. The Company through subsidiaries provides individuals, corporations and other businesses, and institutions with commercial and retail banking services.

Results
Reported Earnings
$2.77
Earnings Whisper
-
Consensus Estimate
$2.63
Reported Revenue
$1.52 Bil
Revenue Estimate
$1.46 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

M&T Bank Corporation Announces Third Quarter Results

BUFFALO, N.Y., Oct. 22, 2020 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2020.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") were $2.75 in the third quarter of 2020, compared with $3.47 in the year-earlier quarter and $1.74 in the second quarter of 2020. GAAP-basis net income was $372 million in the recent quarter, $480 million in the third quarter of 2019 and $241 million in the second 2020 quarter. GAAP-basis net income in the third quarter of 2020 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.06% and 9.53%, respectively, compared with 1.58% and 12.73%, respectively, in the similar 2019 period and .71% and 6.13%, respectively, in the second quarter of 2020. 

Darren J. King, Executive Vice President and Chief Financial Officer, commented on M&T's third quarter results, "Our results for the recent quarter reflect an uptick in economic activity across large portions of our customer base that contributed significantly to higher transaction levels and robust mortgage banking revenues. Coupled with well-controlled expenses that were in line with our expectations and prudent loan loss provisioning, M&T remains well-positioned as we enter the final quarter of 2020."

Earnings Highlights





































Change 3Q20 vs.


($ in millions, except per share data)


3Q20



3Q19



2Q20



3Q19



2Q20























Net income


$

372



$

480



$

241




-22

%



54

%

Net income available to common shareholders  ?  diluted


$

353



$

461



$

223




-23

%



58

%

Diluted earnings per common share


$

2.75



$

3.47



$

1.74




-21

%



58

%

Annualized return on average assets



1.06

%



1.58

%



.71

%









Annualized return on average common equity



9.53

%



12.73

%



6.13

%









For the first nine months of 2020 and 2019, diluted earnings per common share were $6.42 and $10.16, respectively.  GAAP-basis net income for the nine-month period ended September 30, 2020 totaled $882 million, compared with $1.44 billion in the year-earlier period. Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income during the nine-month period ended September 30, 2020 was .89% and 7.57%, respectively, and was 1.62% and 12.85%, respectively, in the similar 2019 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.  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 $2.77 in the third quarter of 2020, $3.50 in the third quarter of 2019 and $1.76 in the second quarter of 2020.  Net operating income in 2020's third quarter was $375 million, compared with $484 million in the third quarter of 2019 and $244 million in the second quarter of 2020.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income in the recent quarter was 1.10% and 13.94%, respectively, 1.66% and 18.85%, respectively, in the corresponding quarter of 2019 and .74% and 9.04%, respectively, in the second quarter of 2020.

Diluted net operating earnings per common share during the first nine months of 2020 and 2019 were $6.49 and $10.24, respectively.  Net operating income during the nine-month period ended September 30, 2020 was $891 million, compared with $1.45 billion in the similar 2019 period.  Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was .93% and 11.15%, respectively, in the initial nine months of 2020 and was 1.70% and 19.07%, respectively, in the year-earlier period.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis totaled $947 million in the recent quarter, compared with $1.04 billion in the third quarter of 2019. That decline resulted from an 83 basis point narrowing of the net interest margin, to 2.95% in the third quarter of 2020 from 3.78% in the year-earlier quarter, that was partially offset by the impact of a $19.1 billion or 18% increase in average earning assets to $127.7 billion in the recent quarter from $108.6 billion in the third  quarter of 2019.   In the second quarter of 2020, taxable-equivalent net interest income was $961 million, the net interest margin was 3.13% and average earning assets were $123.5 billion.  Included in average earning assets in the third and second quarters of 2020 were $6.5 billion and $4.8 billion, respectively, of balances associated with the Paycheck Protection Program ("PPP") loans originated by M&T during 2020.  As compared with the third quarter of 2019, the recent quarter's narrowing of the net interest margin resulted largely from lower yields on loans and deposits held at the Federal Reserve Bank of New York, while the rise in average earning assets reflected higher balances of those same asset types.  The narrowing of the net interest margin from the second quarter to the third quarter of 2020 resulted from lower yields on loans and investment securities and the impact of a $4.4 billion rise in average balances of short-term earning assets, which earn a significantly lower yield than loans and investment securities.






















Taxable-equivalent Net Interest Income





































Change 3Q20 vs.


($ in millions)


3Q20



3Q19



2Q20



3Q19



2Q20























Average earning assets


$

127,689



$

108,643



$

123,492




18

%



3

%

Net interest income  ?  taxable-equivalent


$

947



$

1,035



$

961




-9

%



-1

%

Net interest margin



2.95

%



3.78

%



3.13

%









Provision for Credit Losses/Asset Quality.  The provision for credit losses totaled $150 million in the third quarter of 2020, up from $45 million in the year-earlier quarter, but down from $325 million in 2020's second quarter. The significantly higher level of the provision in the 2020 quarters reflected projections of expected credit losses under the provisions of new accounting guidance that became effective on January 1, 2020. Those projections included estimates of the impact of the COVID-19 pandemic. Prior to 2020, the provision for credit losses reflected incurred losses only.  Net loan charge-offs were $30 million during the recent quarter, compared with $36 million in the similar quarter of 2019 and $71 million in the second quarter of 2020. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .12% and .16% during the three-month periods ended September 30, 2020 and 2019, respectively, and .29% in the second quarter of 2020.  

Loans classified as nonaccrual totaled $1.24 billion or 1.26% of total loans outstanding at September 30, 2020, compared with $1.16 billion or 1.18% of total loans at June 30, 2020.  Nonaccrual loans outstanding at September 30, 2019 were $1.01 billion or 1.12% of total loans. The adoption of the new accounting guidance previously mentioned resulted in an increase in nonaccrual loans on January 1, 2020 of $171 million. Assets taken in foreclosure of defaulted loans were $50 million at September 30, 2020, compared with $80 million and $67 million at September 30, 2019 and June 30, 2020, 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 for credit losses totaled $1.76 billion or 1.79% of loans outstanding at September 30, 2020, compared with $1.04 billion or 1.16% at September 30, 2019, $1.64 billion or 1.68% at June 30, 2020 and $1.18 billion or 1.30% as of January 1, 2020 following adoption of the current expected credit loss accounting rules. The adoption of the amended accounting guidance resulted in an increase to the allowance of $132 million on January 1, 2020. The allowance at September 30, 2020 and June 30, 2020 represented 1.91% and 1.79%, respectively, of total loans on those dates, excluding outstanding balances of PPP loans.

Asset Quality Metrics
















Change 3Q20 vs.


($ in millions)


3Q20



3Q19



2Q20



3Q19



2Q20























At end of quarter





















Nonaccrual loans


$

1,240



$

1,005



$

1,157




23

%



7

%

Real estate and other foreclosed assets


$

50



$

80



$

67




-37

%



-25

%

Total nonperforming assets


$

1,290



$

1,085



$

1,224




19

%



5

%

Accruing loans past due 90 days or more (1)


$

527



$

461



$

536




14

%



-2

%

Nonaccrual loans as % of loans outstanding



1.26

%



1.12

%



1.18

%






























Allowance for credit losses


$

1,759



$

1,038



$

1,638




69

%



7

%

Allowance for credit losses as % of loans outstanding



1.79

%



1.16

%



1.68

%






























For the period





















Provision for credit losses


$

150



$

45



$

325




233

%



-54

%

Net charge-offs


$

30



$

36



$

71




-18

%



-58

%

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



.12

%



.16

%



.29

%

















(1)

Predominantly residential real estate loans. Prior to 2020, excludes loans acquired at a discount.

Noninterest Income and Expense.  Noninterest income was $521 million in the recent quarter, $528 million in the year-earlier quarter and $487 million in the second quarter of 2020. As compared with the third quarter of 2019, the recent quarter's higher residential mortgage banking revenues and trust income were more than offset by lower service charges on deposit accounts and trading account and foreign exchange gains. The recent quarter's improvement as compared with the second quarter of 2020 predominantly reflects higher service charges on deposit accounts, residential mortgage banking revenues and merchant discount and credit card fees.

Noninterest Income





































Change 3Q20 vs.


($ in millions)


3Q20



3Q19



2Q20



3Q19



2Q20























Mortgage banking revenues


$

153



$

137



$

145




12

%



6

%

Service charges on deposit accounts



91




111




78




-18

%



18

%

Trust income



150




144




152




4

%



-1

%

Brokerage services income



12




12




10




-4

%



11

%

Trading account and foreign exchange gains



4




16




8




-75

%



-51

%

Gain on bank investment securities



3




4




7




-26

%



-60

%

Other revenues from operations



108




104




87




4

%



23

%

Total


$

521



$

528



$

487




-1

%



7

%

Noninterest expense totaled $827 million in the third quarter of 2020, compared with $878 million in the corresponding quarter of 2019 and $807 million in the second quarter of 2020.  Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets, noninterest operating expenses were $823 million in the recent quarter, $873 million in the third quarter of 2019 and $803 million in 2020's second quarter. Contributing to the decreased level of noninterest expenses in the recent quarter as compared with the year-earlier quarter were lower costs for professional and outside services, advertising and marketing, and travel and entertainment. Additionally, the third quarter of 2019 included a $14 million addition to the valuation allowance for capitalized mortgage servicing rights, reflecting the impact of lower interest rates at that time on the valuation of such servicing rights. There was no similar increase to the valuation allowance in the recent quarter. As compared with the second 2020 quarter, higher costs for salaries and employee benefits in the recent quarter, reflective of improving business activity and one additional day, were partially offset by the impact of a $10 million addition to the valuation allowance for capitalized mortgage servicing rights recognized in the second quarter of 2020.

Noninterest Expense





































Change 3Q20 vs.


($ in millions)


3Q20



3Q19



2Q20



3Q19



2Q20























Salaries and employee benefits


$

479



$

477



$

459







4

%

Equipment and net occupancy



81




83




77




-2

%



5

%

Outside data processing and software



65




60




61




7

%



5

%

FDIC assessments



12




10




14




22

%



-15

%

Advertising and marketing



12




22




10




-46

%



20

%

Printing, postage and supplies



9




10




11




-8

%



-16

%

Amortization of core deposit and other intangible assets



4




5




4




-23

%




Other costs of operations



165




211




171




-22

%



-3

%

Total


$

827



$

878



$

807




-6

%



2

%






















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 56.2% in the third quarter of 2020, 56.0% in the year-earlier quarter and 55.7% in the second quarter of 2020.

Balance Sheet.  M&T had total assets of $138.6 billion at September 30, 2020, compared with $125.5 billion and $139.5 billion at September 30, 2019 and June 30, 2020, respectively. Loans and leases, net of unearned discount, were $98.4 billion at September 30, 2020, up from $89.8 billion at September 30, 2019 and $97.8 billion at June 30, 2020. The increase in total loans and leases at the recent quarter-end as compared with the third quarter of 2019 was driven largely by growth in commercial loans of $4.7 billion and commercial real estate loans of $2.6 billion. The commercial loan growth reflects loans originated as part of the PPP, which totaled $6.5 billion at September 30, 2020. Total deposits rose to $115.2 billion at the recent quarter-end, compared with $95.1 billion at September 30, 2019 and $115.0 billion at June 30, 2020. The higher levels of deposits at the two most recent quarter-ends as compared with September 30, 2019 reflect both increased commercial and consumer deposits, as well as higher deposits associated with residential mortgage servicing activities.

Total shareholders' equity was $16.1 billion, or 11.61% of total assets at September 30, 2020, compared with $15.8 billion, or 12.57% at September 30, 2019 and $15.9 billion, or 11.43% at June 30, 2020. Common shareholders' equity was $14.9 billion, or $115.75 per share, at September 30, 2020, up from $14.5 billion, or $109.84 per share, a year-earlier and $14.7 billion, or $114.54 per share, at June 30, 2020. Tangible equity per common share was $79.85 at September 30, 2020, $74.93 at September 30, 2019 and $78.62 at June 30, 2020. 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 9.81% at September 30, 2020, up from 9.50% three months earlier.

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 (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 #1169149.  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 Thursday, October 29, 2020 by calling (800) 585-8367, or (404) 537-3406 for international participants, and by making reference to ID #1169149.  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.

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, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Virginia, West Virginia 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 and related conference call may contain 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.  Any statement that does not describe historical or current facts is a forward-looking statement, including statements regarding the potential effects of the Coronavirus Disease 2019 ("COVID-19") pandemic on M&T's business, financial condition, liquidity and results of operations. 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; risks and uncertainties relating to the impact of the COVID-19 pandemic; 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 or regulation; 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, regulatory agencies or legislation; 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.

Further, statements about the potential effects of the COVID-19 pandemic on M&T's business, financial condition, liquidity and results of operations may constitute forward-looking statements and 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 M&T's control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on customers, clients, third parties and M&T.

M&T provides further detail regarding these risks and uncertainties in its 2019 Form 10-K and subsequent Form 10-Qs, including in the respective Risk Factors sections of such reports, as well as in subsequent 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.

 

Financial Highlights




Three months ended







Nine months ended








September 30







September 30






Amounts in thousands, except per share


2020



2019



Change



2020



2019



Change


Performance

























Net income


$

372,136




480,081




-22

%


$

882,012




1,436,083




-39

%

Net income available to common shareholders



353,400




461,410




-23

%



827,204




1,376,129




-40

%

Per common share:

























Basic earnings


$

2.75




3.47




-21

%


$

6.42




10.16




-37

%

Diluted earnings



2.75




3.47




-21

%



6.42




10.16




-37

%

Cash dividends


$

1.10




1.00




10

%


$

3.30




3.00




10

%

Common shares outstanding:

























Average - diluted (1)



128,355




132,999




-3

%



128,813




135,443




-5

%

Period end (2)



128,303




132,277




-3

%



128,303




132,277




-3

%

Return on (annualized):

























Average total assets



1.06

%



1.58

%







.89

%



1.62

%





Average common shareholders' equity



9.53

%



12.73

%







7.57

%



12.85

%





Taxable-equivalent net interest income


$

947,114




1,035,469




-9

%


$

2,890,353




3,138,902




-8

%

Yield on average earning assets



3.13

%



4.51

%







3.53

%



4.62

%





Cost of interest-bearing liabilities



.30

%



1.10

%







.50

%



1.09

%





Net interest spread



2.83

%



3.41

%







3.03

%



3.53

%





Contribution of interest-free funds



.12

%



.37

%







.19

%



.38

%





Net interest margin



2.95

%



3.78

%







3.22

%



3.91

%





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



.12

%



.16

%







.21

%



.15

%





Net operating results (3)

























Net operating income


$

375,029




483,830




-22

%


$

890,692




1,447,271




-38

%

Diluted net operating earnings per common share



2.77




3.50




-21

%



6.49




10.24




-37

%

Return on (annualized):

























Average tangible assets



1.10

%



1.66

%







.93

%



1.70

%





Average tangible common equity



13.94

%



18.85

%







11.15

%



19.07

%





Efficiency ratio



56.17

%



55.95

%







56.97

%



56.49

%
































At September 30
















Loan quality


2020



2019



Change














Nonaccrual loans


$

1,239,972




1,005,249




23

%













Real estate and other foreclosed assets



49,872




79,735




-37

%













Total nonperforming assets


$

1,289,844




1,084,984




19

%













Accruing loans past due 90 days or more (4)


$

527,258




461,162




14

%













Government guaranteed loans included in totals above:

























Nonaccrual loans


$

45,975




43,144




7

%













Accruing loans past due 90 days or more



505,446




434,132




16

%













Renegotiated loans


$

242,581




240,781




1

%













Accruing loans acquired at a discount past due 90 days or more (5)


N/A




40,733

















Purchased impaired loans (6):

























Outstanding customer balance


N/A




453,382

















Carrying amount


N/A




253,496

















Nonaccrual loans to total net loans



1.26

%



1.12

%

















Allowance for credit losses to total loans



1.79

%



1.16

%

























(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. Prior to 2020, excludes loans acquired at a discount.

(5)

Prior to 2020, loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

(6)

Prior to 2020, accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.

 

 

Financial Highlights, Five Quarter Trend




Three months ended




September 30,



June 30,



March 31,



December 31,



September 30,


Amounts in thousands, except per share


2020



2020



2020



2019



2019


Performance





















Net income


$

372,136




241,054




268,822




493,066




480,081


Net income available to common shareholders



353,400




223,099




250,701




473,372




461,410


Per common share:





















Basic earnings


$

2.75




1.74




1.93




3.60




3.47


Diluted earnings



2.75




1.74




1.93




3.60




3.47


Cash dividends


$

1.10




1.10




1.10




1.10




1.00


Common shares outstanding:





















Average - diluted (1)



128,355




128,333




129,755




131,549




132,999


Period end (2)



128,303




128,294




128,282




130,589




132,277


Return on (annualized):





















Average total assets



1.06

%



.71

%



.90

%



1.60

%



1.58

%

Average common shareholders' equity



9.53

%



6.13

%



7.00

%



12.95

%



12.73

%

Taxable-equivalent net interest income


$

947,114




961,371




981,868




1,014,225




1,035,469


Yield on average earning assets



3.13

%



3.38

%



4.18

%



4.27

%



4.51

%

Cost of interest-bearing liabilities



.30

%



.40

%



.83

%



.97

%



1.10

%

Net interest spread



2.83

%



2.98

%



3.35

%



3.30

%



3.41

%

Contribution of interest-free funds



.12

%



.15

%



.30

%



.34

%



.37

%

Net interest margin



2.95

%



3.13

%



3.65

%



3.64

%



3.78

%

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



.12

%



.29

%



.22

%



.18

%



.16

%

Net operating results (3)





















Net operating income


$

375,029




243,958




271,705




496,237




483,830


Diluted net operating earnings per common share



2.77




1.76




1.95




3.62




3.50


Return on (annualized):





















Average tangible assets



1.10

%



.74

%



.94

%



1.67

%



1.66

%

Average tangible common equity



13.94

%



9.04

%



10.39

%



19.08

%



18.85

%

Efficiency ratio



56.17

%



55.71

%



58.91

%



53.15

%



55.95

%
























September 30,



June 30,



March 31,



December 31,



September 30,


Loan quality


2020



2020



2020



2019



2019


Nonaccrual loans


$

1,239,972




1,156,650




1,061,748




963,112




1,005,249


Real estate and other foreclosed assets



49,872




66,763




83,605




85,646




79,735


Total nonperforming assets


$

1,289,844




1,223,413




1,145,353




1,048,758




1,084,984


Accruing loans past due 90 days or more (4)


$

527,258




535,755




530,317




518,728




461,162


Government guaranteed loans included in totals above:





















Nonaccrual loans


$

45,975




51,165




50,561




50,891




43,144


Accruing loans past due 90 days or more



505,446




454,269




464,243




479,829




434,132


Renegotiated loans


$

242,581




234,768




232,439




234,424




240,781


Accruing loans acquired at a discount past due 90 days or

        more (5)


N/A



N/A



N/A




39,632




40,733


Purchased impaired loans (6):





















Outstanding customer balance


N/A



N/A



N/A




415,413




453,382


Carrying amount


N/A



N/A



N/A




227,545




253,496


Nonaccrual loans to total net loans



1.26

%



1.18

%



1.13

%



1.06

%



1.12

%

Allowance for credit losses to total loans



1.79

%



1.68

%



1.47

%



1.16

%



1.16

%









(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. Prior to 2020, excludes loans acquired at a discount.

(5)

Prior to 2020, loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

(6)

Prior to 2020, accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value. 

 

 

Condensed Consolidated Statement of Income




Three months ended







Nine months ended








September 30







September 30






Dollars in thousands


2020



2019



Change



2020



2019



Change


Interest income


$

1,001,161




1,229,469




-19

%


$

3,153,822




3,693,691




-15

%

Interest expense



58,066




199,579




-71




276,785




572,260




-52


Net interest income



943,095




1,029,890




-8




2,877,037




3,121,431




-8


Provision for credit losses



150,000




45,000



233




725,000




122,000




494


Net interest income after provision for credit losses



793,095




984,890




-19




2,152,037




2,999,431




-28


Other income

























Mortgage banking revenues



153,267




137,004




12




426,200




339,636




25


Service charges on deposit accounts



91,355




111,092




-18




274,971




321,991




-15


Trust income



149,937




143,915




4




450,570




421,083




7


Brokerage services income



11,602




12,077




-4




35,194




37,031




-5


Trading account and foreign exchange gains



4,026




16,072




-75




33,332




45,327




-26


Gain (loss) on bank investment securities



2,773




3,737




-26




(11,040)




24,489





Other revenues from operations



107,601




103,882




4




327,967




351,082




-7


Total other income



520,561




527,779




-1




1,537,194




1,540,639





Other expense

























Salaries and employee benefits



478,897




476,780







1,474,582




1,431,717




3


Equipment and net occupancy



81,080




82,690




-2




237,809




241,187




-1


Outside data processing and software



64,660




60,360




7




190,446




168,011




13


FDIC assessments



12,121




9,906




22




38,599




29,104




33


Advertising and marketing



11,855




22,088




-46




44,072




66,409




-34


Printing, postage and supplies



9,422




10,201




-8




31,534




30,380




4


Amortization of core deposit and other
   intangible assets



3,914




5,088




-23




11,740




15,185




-23


Other costs of operations



164,825




210,506




-22




511,450




663,006




-23


Total other expense



826,774




877,619




-6




2,540,232




2,644,999




-4


Income before income taxes



486,882




635,050




-23




1,148,999




1,895,071




-39


Applicable income taxes



114,746




154,969




-26




266,987




458,988




-42


Net income


$

372,136




480,081




-22

%


$

882,012




1,436,083




-39

%

 

 

Condensed Consolidated Statement of Income, Five Quarter Trend




Three months ended




September 30,



June 30,



March 31,



December 31,



September 30,


Dollars in thousands


2020



2020



2020



2019



2019


Interest income


$

1,001,161




1,032,242




1,120,419




1,185,902




1,229,469


Interest expense



58,066




75,105




143,614




177,069




199,579


Net interest income



943,095




957,137




976,805




1,008,833




1,029,890


Provision for credit losses



150,000




325,000




250,000




54,000




45,000


Net interest income after provision for credit losses



793,095




632,137




726,805




954,833




984,890


Other income





















Mortgage banking revenues



153,267




145,024




127,909




118,134




137,004


Service charges on deposit accounts



91,355




77,455




106,161




110,987




111,092


Trust income



149,937




151,882




148,751




151,525




143,915


Brokerage services income



11,602




10,463




13,129




11,891




12,077


Trading account and foreign exchange gains



4,026




8,290




21,016




16,717




16,072


Gain (loss) on bank investment securities



2,773




6,969




(20,782)




(6,452)




3,737


Other revenues from operations



107,601




87,190




133,176




118,238




103,882


Total other income



520,561




487,273




529,360




521,040




527,779


Other expense





















Salaries and employee benefits



478,897




458,842




536,843




469,080




476,780


Equipment and net occupancy



81,080




77,089




79,640




82,892




82,690


Outside data processing and software



64,660




61,376




64,410




61,720




60,360


FDIC assessments



12,121




14,207




12,271




12,431




9,906


Advertising and marketing



11,855




9,842




22,375




27,063




22,088


Printing, postage and supplies



9,422




11,260




10,852




9,513




10,201


Amortization of core deposit and other
   intangible assets



3,914




3,913




3,913




4,305




5,088


Other costs of operations



164,825




170,513




176,112




156,679




210,506


Total other expense



826,774




807,042




906,416




823,683




877,619


Income before income taxes



486,882




312,368




349,749




652,190




635,050


Applicable income taxes



114,746




71,314




80,927




159,124




154,969


Net income


$

372,136




241,054




268,822




493,066




480,081


 

 

Condensed Consolidated Balance Sheet




September 30







Dollars in thousands


2020



2019



Change



ASSETS














Cash and due from banks


$

1,489,232




1,818,861




-18


%

Interest-bearing deposits at banks



20,197,937




12,495,524




62



Federal funds sold






200






Trading account



1,215,573




614,256




98



Investment securities



7,723,004




10,677,583




-28



Loans and leases:














Commercial, financial, etc.



27,891,648




23,201,372




20



Real estate - commercial



37,582,084




34,945,231




8



Real estate - consumer



16,663,708




16,500,955




1



Consumer



16,309,608




15,175,635




7



Total loans and leases, net of unearned discount



98,447,048




89,823,193




10



Less: allowance for credit losses



1,758,505




1,038,437




69



Net loans and leases



96,688,543




88,784,756




9



Goodwill



4,593,112




4,593,112






Core deposit and other intangible assets



17,294




33,339




-48



Other assets



6,702,048




6,483,295




3



Total assets


$

138,626,743




125,500,926




10


%















LIABILITIES AND SHAREHOLDERS' EQUITY














Noninterest-bearing deposits


$

44,201,670




31,766,724




39


%

Interest-bearing deposits



70,061,680




61,785,212




13



Deposits at Cayman Islands office



899,989




1,561,997




-42



Total deposits



115,163,339




95,113,933




21



Short-term borrowings



46,123




5,513,896




-99



Accrued interest and other liabilities



1,857,383




2,090,762




-11



Long-term borrowings



5,458,885




7,002,524




-22



Total liabilities



122,525,730




109,721,115




12



Shareholders' equity:














Preferred



1,250,000




1,250,000






Common



14,851,013




14,529,811




2



Total shareholders' equity



16,101,013




15,779,811




2



Total liabilities and shareholders' equity


$

138,626,743




125,500,926




10


%

 

 

Condensed Consolidated Balance Sheet, Five Quarter Trend







September 30,



June 30,



March 31,



December 31,



September 30,


Dollars in thousands


2020



2020



2020



2019



2019


ASSETS





















Cash and due from banks


$

1,489,232




1,354,815




1,298,192




1,432,805




1,818,861


Interest-bearing deposits at banks



20,197,937




20,888,341




8,896,307




7,190,154




12,495,524


Federal funds sold












3,500




200


Trading account



1,215,573




1,293,534




1,224,291




470,129




614,256


Investment securities



7,723,004




8,454,344




8,956,590




9,497,251




10,677,583


Loans and leases:





















Commercial, financial, etc.



27,891,648




29,203,862




26,243,648




23,838,168




23,201,372


Real estate - commercial



37,582,084




37,159,451




36,684,106




35,541,914




34,945,231


Real estate - consumer



16,663,708




15,611,462




15,643,014




16,156,094




16,500,955


Consumer



16,309,608




15,782,773




15,571,507




15,386,693




15,175,635


Total loans and leases, net of unearned discount



98,447,048




97,757,548




94,142,275




90,922,869




89,823,193


Less: allowance for credit losses



1,758,505




1,638,236




1,384,366




1,051,071




1,038,437


Net loans and leases



96,688,543




96,119,312




92,757,909




89,871,798




88,784,756


Goodwill



4,593,112




4,593,112




4,593,112




4,593,112




4,593,112


Core deposit and other intangible assets



17,294




21,208




25,121




29,034




33,339


Other assets



6,702,048




6,812,303




6,826,311




6,784,974




6,483,295


Total assets


$

138,626,743




139,536,969




124,577,833




119,872,757




125,500,926























LIABILITIES AND SHAREHOLDERS' EQUITY





















Noninterest-bearing deposits


$

44,201,670




45,397,843




35,554,715




32,396,407




31,766,724


Interest-bearing deposits



70,061,680




68,701,832




63,410,672




60,689,618




61,785,212


Deposits at Cayman Islands office



899,989




868,284




1,217,921




1,684,044




1,561,997


Total deposits



115,163,339




114,967,959




100,183,308




94,770,069




95,113,933


Short-term borrowings



46,123




52,298




59,180




62,363




5,513,896


Accrued interest and other liabilities



1,857,383




2,250,316




2,198,116




2,337,490




2,090,762


Long-term borrowings



5,458,885




6,321,291




6,321,435




6,986,186




7,002,524


Total liabilities



122,525,730




123,591,864




108,762,039




104,156,108




109,721,115


Shareholders' equity:





















Preferred



1,250,000




1,250,000




1,250,000




1,250,000




1,250,000


Common



14,851,013




14,695,105




14,565,794




14,466,649




14,529,811


Total shareholders' equity



16,101,013




15,945,105




15,815,794




15,716,649




15,779,811


Total liabilities and shareholders' equity


$

138,626,743




139,536,969




124,577,833




119,872,757




125,500,926


 

 

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, 2020 from




September 30,


Change


Dollars in millions


2020


2019


2020


September 30,


June 30,



2020


2019


in




Balance



Rate


Balance



Rate


Balance



Rate


2019


2020



Balance


Rate


Balance



Rate


balance


ASSETS










































Interest-bearing deposits at banks


$

16,440



.10

%


7,405



2.16

%


16,454



.10

%


122

%


%



$

13,021


.28

%


6,054



2.30

%


115

%

Federal funds sold and agreements










































to resell securities



5,113



.13



18



2.01



692



.11





639





2,353


.33



6



2.06




Trading account



50



1.62



67



.89



49



2.04



-26



2





54


2.15



67



2.15



-19


Investment securities



7,876



1.95



11,075



2.48



8,500



2.24



-29



-7





8,490


2.14



12,058



2.50



-30


Loans and leases, net of unearned










































discount










































Commercial, financial, etc.



28,333



3.05



23,326



4.82



29,733



3.10



21



-5





27,455


3.37



23,225



4.95



18


Real estate - commercial



37,243



4.19



35,200



5.14



36,947



4.42



6



1





36,743


4.47



34,833



5.26



5


Real estate - consumer



16,558



3.69



16,673



4.20



15,599



4.00



-1



6





16,032


3.90



16,778



4.29



-4


Consumer



16,076



4.76



14,879



5.44



15,518



4.85



8



4





15,683


4.96



14,405



5.49



9


Total loans and leases, net



98,210



3.89



90,078



4.96



97,797



4.05



9







95,913


4.17



89,241



5.06



7


Total earning assets



127,689



3.13



108,643



4.51



123,492



3.38



18



3





119,831


3.53



107,426



4.62



12


Goodwill



4,593






4,593






4,593












4,593





4,593







Core deposit and other intangible










































assets



19






36






23






-46



-17





23





41






-43


Other assets



7,880






7,116






8,338






11



-5





7,983





6,524






22


Total assets


$

140,181






120,388






136,446






16

%


3

%



$

132,430





118,584






12

%











































LIABILITIES AND SHAREHOLDERS' EQUITY










































Interest-bearing deposits










































Savings and interest-checking










































deposits


$

65,848



.14



55,680



.75



62,927



.17



18

%


5

%



$

61,729


.27



53,770



.68



15

%

Time deposits



4,715



1.22



6,343



1.59



5,354



1.49



-26



-12





5,245


1.43



6,408



1.49



-18


Deposits at Cayman Islands










































office



957



.10



1,522



1.62



1,017



.06



-37



-6





1,214


.42



1,249



1.82



-3


Total interest-bearing










































deposits



71,520



.21



63,545



.85



69,298



.27



13



3





68,188


.37



61,427



.79



11


Short-term borrowings



62



.01



1,212



2.28



63



.01



-95



-1





61


.06



1,189



2.43



-95


Long-term borrowings



5,499



1.51



7,121



3.13



6,189



1.86



-23



-11





5,974


2.01



7,959



3.19



-25


Total interest-bearing liabilities



77,081



.30



71,878



1.10



75,550



.40



7



2





74,223


.50



70,575



1.09



5


Noninterest-bearing deposits



44,786






30,550






42,497






47



5





39,931





30,323






32


Other liabilities



2,241






2,123






2,446






6



-8





2,360





2,007






18


Total liabilities



124,108






104,551






120,493






19



3





116,514





102,905






13


Shareholders' equity



16,073






15,837






15,953






1



1





15,916





15,679






2


Total liabilities and










































shareholders' equity


$

140,181






120,388






136,446






16

%


3

%



$

132,430





118,584






12

%











































Net interest spread






2.83






3.41






2.98













3.03






3.53





Contribution of interest-free funds






.12






.37






.15













.19






.38





Net interest margin






2.95

%





3.78

%





3.13

%












3.22

%





3.91

%




 

 

Reconciliation of Quarterly GAAP to Non-GAAP Measures




Three months ended



Nine months ended




September 30



September 30




2020



2019



2020



2019


Income statement data

















In thousands, except per share

















Net income

















Net income


$

372,136




480,081




882,012




1,436,083


Amortization of core deposit and other intangible assets (1)



2,893




3,749




8,680




11,188


Net operating income


$

375,029




483,830




890,692




1,447,271



















Earnings per common share

















Diluted earnings per common share


$

2.75




3.47




6.42




10.16


Amortization of core deposit and other intangible assets (1)



.02




.03




.07




.08


Diluted net operating earnings per common share


$

2.77




3.50




6.49




10.24



















Other expense

















Other expense


$

826,774




877,619




2,540,232




2,644,999


Amortization of core deposit and other intangible assets



(3,914)




(5,088)




(11,740)




(15,185)


Noninterest operating expense


$

822,860




872,531




2,528,492




2,629,814


Efficiency ratio

















Noninterest operating expense (numerator)


$

822,860




872,531




2,528,492




2,629,814


Taxable-equivalent net interest income



947,114




1,035,469




2,890,353




3,138,902


Other income



520,561




527,779




1,537,194




1,540,639


Less:  Gain (loss) on bank investment securities



2,773




3,737




(11,040)




24,489


Denominator


$

1,464,902




1,559,511




4,438,587




4,655,052


Efficiency ratio



56.17

%



55.95

%



56.97

%



56.49

%

Balance sheet data

















In millions

















Average assets

















Average assets


$

140,181




120,388




132,430




118,584


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(19)




(36)




(23)




(41)


Deferred taxes



5




10




6




11


Average tangible assets


$

135,574




115,769




127,820




113,961


Average common equity

















Average total equity


$

16,073




15,837




15,916




15,679


Preferred stock



(1,250)




(1,373)




(1,250)




(1,279)


Average common equity



14,823




14,464




14,666




14,400


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(19)




(36)




(23)




(41)


Deferred taxes



5




10




6




11


Average tangible common equity


$

10,216




9,845




10,056




9,777


At end of quarter

















Total assets

















Total assets


$

138,627




125,501










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(17)




(33)










Deferred taxes



4




8










Total tangible assets


$

134,021




120,883










Total common equity

















Total equity


$

16,101




15,780










Preferred stock



(1,250)




(1,250)










Common equity, net of undeclared cumulative preferred dividends



14,851




14,530










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(17)




(33)










Deferred taxes



4




8










Total tangible common equity


$

10,245



$

9,912














(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,




2020



2020



2020



2019



2019


Income statement data





















In thousands, except per share





















Net income





















Net income


$

372,136




241,054




268,822




493,066




480,081


Amortization of core deposit and other intangible assets (1)



2,893




2,904




2,883




3,171




3,749


Net operating income


$

375,029




243,958




271,705




496,237




483,830























Earnings per common share





















Diluted earnings per common share


$

2.75




1.74




1.93




3.60




3.47


Amortization of core deposit and other intangible assets (1)



.02




.02




.02




.02




.03


Diluted net operating earnings per common share


$

2.77




1.76




1.95




3.62




3.50























Other expense





















Other expense


$

826,774




807,042




906,416




823,683




877,619


Amortization of core deposit and other intangible assets



(3,914)




(3,913)




(3,913)




(4,305)




(5,088)


Noninterest operating expense


$

822,860




803,129




902,503




819,378




872,531


Efficiency ratio





















Noninterest operating expense (numerator)


$

822,860




803,129




902,503




819,378




872,531


Taxable-equivalent net interest income



947,114




961,371




981,868




1,014,225




1,035,469


Other income



520,561




487,273




529,360




521,040




527,779


Less:  Gain (loss) on bank investment securities



2,773




6,969




(20,782)




(6,452)




3,737


Denominator


$

1,464,902




1,441,675




1,532,010




1,541,717




1,559,511


Efficiency ratio



56.17

%



55.71

%



58.91

%



53.15

%



55.95

%

Balance sheet data





















In millions





















Average assets





















Average assets


$

140,181




136,446




120,585




122,554




120,388


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(19)




(23)




(27)




(31)




(36)


Deferred taxes



5




6




7




8




10


Average tangible assets


$

135,574




131,836




115,972




117,938




115,769


Average common equity





















Average total equity


$

16,073




15,953




15,720




15,832




15,837


Preferred stock



(1,250)




(1,250)




(1,250)




(1,250)




(1,373)


Average common equity



14,823




14,703




14,470




14,582




14,464


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(19)




(23)




(27)




(31)




(36)


Deferred taxes



5




6




7




8




10


Average tangible common equity


$

10,216




10,093




9,857




9,966




9,845


At end of quarter





















Total assets





















Total assets


$

138,627




139,537




124,578




119,873




125,501


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(17)




(21)




(25)




(29)




(33)


Deferred taxes



4




5




6




7




8


Total tangible assets


$

134,021




134,928




119,966




115,258




120,883


Total common equity





















Total equity


$

16,101




15,945




15,816




15,717




15,780


Preferred stock



(1,250)




(1,250)




(1,250)




(1,250)




(1,250)


Common equity, net of undeclared cumulative preferred
  
dividends



14,851




14,695




14,566




14,467




14,530


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(17)




(21)




(25)




(29)




(33)


Deferred taxes



4




5




6




7




8


Total tangible common equity


$

10,245




10,086




9,954




9,852




9,912






(1)

After any related tax effect.

 

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

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

 

M&T Bank Corporation

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/mt-bank-corporation-announces-third-quarter-results-301157856.html

SOURCE M&T Bank Corporation