MTB
$158.93
M&T Bank
$.11
.07%
Earnings Details
2nd Quarter June 2019
Thursday, July 18, 2019 6:34:00 AM
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Summary

M&T Bank Misses

M&T Bank (MTB) reported 2nd Quarter June 2019 earnings of $3.34 per share on revenue of $1.8 billion. The consensus earnings estimate was $3.70 per share on revenue of $1.5 billion. The Earnings Whisper number was $3.71 per share. Revenue grew 10.3% on a year-over-year basis.

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
$3.34
Earnings Whisper
$3.71
Consensus Estimate
$3.70
Reported Revenue
$1.75 Bil
Revenue Estimate
$1.53 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

M&T Bank Corporation Announces Second Quarter Results

BUFFALO, N.Y., July 18, 2019 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2019.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") were $3.34 in the second quarter of 2019, up 2% from $3.26 in the year-earlier quarter. GAAP-basis net income in the recent quarter was $473 million, compared with $493 million in the second quarter of 2018. GAAP-basis diluted earnings per common share and net income for the initial 2019 quarter were $3.35 and $483 million, respectively. GAAP-basis net income for the second quarter of 2019 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.60% and 12.68%, respectively, compared with 1.70% and 13.32%, respectively, in the similar 2018 quarter and 1.68% and 13.14%, respectively, in the first quarter of 2019.

In July 2019, M&T agreed to sell its interest in an asset manager obtained in the 2011 acquisition of Wilmington Trust Corporation that is accounted for using the equity method of accounting and, as a result, as of June 30, 2019 recorded a $48 million charge (reflected in "other costs of operations") to reduce the carrying value of the investment to its estimated net realizable value. The after-tax impact of the charge was a reduction in net income of $36 million, or $.27 of diluted earnings per common share.

Commenting on M&T's second quarter results, Darren J. King, Executive Vice President and Chief Financial Officer, noted, "Financial results for the second quarter reflect healthy growth in mortgage banking revenues and trust income over 2019's initial quarter. Overall credit quality remains solid, with credit costs in the recent quarter at a level consistent with what we have experienced over the last several years. During the quarter, M&T continued to return capital to our common shareholders through $402 million of stock repurchases and $135 million of dividends while maintaining strong regulatory capital levels."

Earnings Highlights





































Change 2Q19 vs.


($ in millions, except per share data)


2Q19



2Q18



1Q19



2Q18



1Q19


Net income


$

473



$

493



$

483




-4

%



-2

%

Net income available to common shareholders  ?  diluted


$

453



$

473



$

462




-4

%



-2

%

Diluted earnings per common share


$

3.34



$

3.26



$

3.35




2

%




Annualized return on average assets



1.60

%



1.70

%



1.68

%









Annualized return on average common equity



12.68

%



13.32

%



13.14

%









For the six-month period ended June 30, 2019, diluted earnings per common share were $6.69, up 22% from $5.48 in the year-earlier period. GAAP-basis net income for the first six months of 2019 totaled $956 million, 13% higher than $846 million in the corresponding 2018 period. Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income in the six-month period ended June 30, 2019 was 1.64% and 12.91%, respectively, improved from 1.46% and 11.21%, respectively, in the similar 2018 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, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T, 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 $3.37 in the recent quarter, compared with $3.29 in the second quarter of 2018 and $3.38 in the first quarter of 2019.  Net operating income for the second quarter of 2019 was $477 million, compared with $498 million in the year-earlier period and $486 million in 2019's initial quarter. 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 1.68% and 18.83%, respectively, compared with 1.79% and 19.91%, respectively, in the similar 2018 quarter and 1.76% and 19.56%, respectively, in the first quarter of 2019.

Diluted net operating earnings per common share in the first six months of 2019 rose 22% to $6.74 from $5.54 in the first half of 2018. Net operating income during the six-month period ended June 30, 2019 was $963 million, up 13% from $855 million in the year-earlier period. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.72% and 19.19%, respectively, in the first half of 2019, compared with 1.53% and 16.65%, respectively, in the first six months of 2018.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis totaled $1.05 billion in 2019's second quarter, up 3% from $1.01 billion in the year-earlier quarter. That increase resulted predominantly from a widening of the net interest margin in the recent quarter to 3.91% from 3.83% in the second quarter of 2018. Also contributing to the higher net interest income was growth in average earning assets, which rose to $107.5 billion in the second quarter of 2019 from $106.2 billion in the year-earlier quarter. Taxable-equivalent net interest income in the recent quarter was little changed from $1.06 billion in the first quarter of 2019 when the net interest margin was 4.04% and average earning assets were $106.1 billion.






















Taxable-equivalent Net Interest Income





































Change 2Q19 vs.


($ in millions)


2Q19



2Q18



1Q19



2Q18



1Q19


Average earning assets


$

107,511



$

106,210



$

106,096




1

%



1

%

Net interest income  ?  taxable-equivalent


$

1,047



$

1,014



$

1,056




3

%



-1

%

Net interest margin



3.91

%



3.83

%



4.04

%









Provision for Credit Losses/Asset Quality.  The provision for credit losses was $55 million in the second quarter of 2019, compared with $35 million in the year-earlier quarter and $22 million in 2019's first quarter. Net loan charge-offs were $44 million during the recent quarter, compared with $35 million in the second quarter of 2018 and $22 million in the first quarter of 2019. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .20% and .16% in the second quarters of 2019 and 2018, respectively, and .10% in the first quarter of 2019.

Loans classified as nonaccrual totaled $865 million or .96% of total loans outstanding at June 30, 2019, compared with $820 million or .93% a year earlier and $882 million or .99% at March 31, 2019. Assets taken in foreclosure of defaulted loans were $73 million at June 30, 2019, compared with $98 million and $81 million at June 30, 2018 and March 31, 2019, 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 $1.03 billion at June 30, 2019, compared with $1.02 billion at each of June 30, 2018 and March 31, 2019. As a percentage of loans outstanding, the allowance was 1.15% at each of June 30, 2019 and March 31, 2019 and 1.16% at June 30, 2018.

Asset Quality Metrics





































Change 2Q19 vs.


($ in millions)


2Q19



2Q18



1Q19



2Q18



1Q19


At end of quarter





















Nonaccrual loans


$

865



$

820



$

882




6

%



-2

%

Real estate and other foreclosed assets


$

73



$

98



$

81




-26

%



-10

%

Total nonperforming assets


$

938



$

918



$

963




2

%



-3

%

Accruing loans past due 90 days or more (1)


$

349



$

223



$

244




56

%



43

%

Nonaccrual loans as % of loans outstanding



.96

%



.93

%



.99

%






























Allowance for credit losses


$

1,030



$

1,019



$

1,019




1

%



1

%

Allowance for credit losses as % of loans outstanding



1.15

%



1.16

%



1.15

%






























For the period





















Provision for credit losses


$

55



$

35



$

22




57

%



150

%

Net charge-offs


$

44



$

35



$

22




26

%



101

%

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



.20

%



.16

%



.10

%









______________

(1)

Excludes loans acquired at a discount.  Predominantly residential real estate loans.

Noninterest Income and Expense.  Noninterest income totaled $512 million in the recent quarter, up 12% from $457 million in the year-earlier quarter and 2% higher than $501 million in the first quarter of 2019. The recent quarter's improvement as compared with the second quarter of 2018 and the first quarter of 2019 reflects higher mortgage banking revenues, trading account and foreign exchange gains, and trust income. The initial 2019 quarter included $37 million of income from Bayview Lending Group LLC.

Noninterest Income





































Change 2Q19 vs.


($ in millions)


2Q19



2Q18



1Q19



2Q18



1Q19


Mortgage banking revenues


$

107



$

92



$

95




16

%



13

%

Service charges on deposit accounts



108




107




103




1

%



5

%

Trust income



145




138




133




5

%



9

%

Brokerage services income



12




13




12




-1

%



Trading account and foreign exchange gains



18




5




11




251

%



71

%

Gain on bank investment securities



9




2




12




283

%



-25

%

Other revenues from operations



113




100




135




12

%



-16

%

Total


$

512



$

457



$

501




12

%



2

%

Noninterest expense aggregated $873 million in the second quarter of 2019, $777 million in the year-earlier quarter and $894 million in the first quarter of 2019.  Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets, noninterest operating expenses were $868 million in the recent quarter, $770 million in the second quarter of 2018 and $889 million in the initial 2019 quarter. The most significant factors contributing to the higher level of noninterest expenses in the recent quarter as compared with the second quarter of 2018 were the $48 million charge associated with an equity investment in an asset manager recorded in the recent quarter, increased costs for salaries and employee benefits, and a $9 million valuation allowance associated with the impact of lower interest rates on mortgage servicing rights.  The higher noninterest operating expenses in the initial 2019 quarter reflected a $50 million increase in the accrual for legal matters and seasonally higher stock-based compensation and employee benefits expenses, partially offset by recent quarter charges associated with the asset manager investment, professional services and mortgage servicing rights.

Noninterest Expense





































Change 2Q19 vs.


($ in millions)


2Q19



2Q18



1Q19



2Q18



1Q19


Salaries and employee benefits


$

456



$

419



$

499




9

%



-9

%

Equipment and net occupancy



79




73




79




8

%




Outside data processing and software



55




49




52




11

%



5

%

FDIC assessments



10




20




10




-50

%



4

%

Advertising and marketing



24




22




20




10

%



19

%

Printing, postage and supplies



10




9




10




18

%



5

%

Amortization of core deposit and other intangible assets



5




6




5




-21

%



1

%

Other costs of operations



234




179




219




31

%



7

%

Total


$

873



$

777



$

894




12

%



-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 56.0% in the second quarter of 2019, 52.4% in the year-earlier quarter and 57.6% in the first quarter of 2019.

Balance Sheet.  M&T had total assets of $121.6 billion at June 30, 2019, compared with $118.4 billion and $120.0 billion at June 30, 2018 and March 31, 2019, respectively. Loans and leases, net of unearned discount, were $89.9 billion at the recent quarter-end, $87.8 billion at June 30, 2018 and $88.6 billion at March 31, 2019. Total deposits were $91.7 billion at June 30, 2019, compared with $89.3 billion a year earlier and $90.5 billion at March 31, 2019.

Total shareholders' equity was $15.7 billion at June 30, 2019 and $15.6 billion at June 30, 2018, representing 12.91% and 13.15%, respectively, of total assets. Total shareholders' equity was $15.6 billion, or 12.99% of total assets at March 31, 2019. Common shareholders' equity was $14.5 billion, or $107.73 per share, at June 30, 2019, compared with $14.3 billion, or $99.43 per share, a year-earlier and $14.4 billion, or $105.04 per share, at March 31, 2019.  Tangible equity per common share was $73.29 at June 30, 2019, compared with $67.29 at June 30, 2018 and $71.19 at March 31, 2019. 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 9.84% at June 30, 2019.

In accordance with its capital plan, M&T repurchased 2,450,000 shares of its common stock during the recent quarter at an average cost per share of $164.08, for a total cost of $402 million. In the aggregate, during the first six months of 2019, M&T repurchased 4,600,000 shares of common stock at a total cost of $768 million.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss second quarter financial results today at 10:00 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 #1491035.  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, July 25, 2019 by calling (800) 585-8367, or (404) 537-3406 for international participants, and by making reference to ID #1491035.  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 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 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.

Financial Highlights



Three months ended







Six months ended








June 30







June 30






Amounts in thousands, except per share


2019



2018



Change



2019



2018



Change


Performance

























Net income


$

473,260




493,160




-4

%


$

956,002




845,770




13

%

Net income available to common shareholders



452,633




472,600




-4

%



914,719




805,342




14

%

Per common share:

























Basic earnings


$

3.34




3.26




2

%


$

6.69




5.49




22

%

Diluted earnings



3.34




3.26




2

%



6.69




5.48




22

%

Cash dividends


$

1.00




.80




25

%


$

2.00




1.55




29

%

Common shares outstanding:

























Average - diluted (1)



135,464




144,998




-7

%



136,685




146,941




-7

%

Period end (2)



134,200




144,261




-7

%



134,200




144,261




-7

%

Return on (annualized):

























Average total assets



1.60

%



1.70

%







1.64

%



1.46

%





Average common shareholders' equity



12.68

%



13.32

%







12.91

%



11.21

%





Taxable-equivalent net interest income


$

1,047,406




1,014,184




3

%


$

2,103,433




1,994,510




5

%

Yield on average earning assets



4.64

%



4.28

%







4.68

%



4.20

%





Cost of interest-bearing liabilities



1.11

%



.71

%







1.08

%



.68

%





Net interest spread



3.53

%



3.57

%







3.60

%



3.52

%





Contribution of interest-free funds



.38

%



.26

%







.37

%



.25

%





Net interest margin



3.91

%



3.83

%







3.97

%



3.77

%





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



.20

%



.16

%







.15

%



.17

%





Net operating results (3)

























Net operating income


$

477,001




497,869




-4

%


$

963,441




855,367




13

%

Diluted net operating earnings per common share



3.37




3.29




2

%



6.74




5.54




22

%

Return on (annualized):

























Average tangible assets



1.68

%



1.79

%







1.72

%



1.53

%





Average tangible common equity



18.83

%



19.91

%







19.19

%



16.65

%





Efficiency ratio



55.98

%



52.42

%







56.77

%



58.16

%
































At June 30
















Loan quality


2019



2018



Change














Nonaccrual loans


$

865,384




819,984




6

%













Real estate and other foreclosed assets



72,907




98,062




-26

%













Total nonperforming assets


$

938,291




918,046




2

%













Accruing loans past due 90 days or more (4)


$

348,725




223,026




56

%













Government guaranteed loans included in totals above:

























Nonaccrual loans


$

36,765




34,870




5

%













Accruing loans past due 90 days or more



320,305




202,394




58

%













Renegotiated loans


$

254,332




242,528




5

%













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


$

43,079




47,405




-9

%













Purchased impaired loans (6):

























Outstanding customer balance


$

473,834




606,683




-22

%













Carrying amount



263,025




352,465




-25

%













Nonaccrual loans to total net loans



.96

%



.93

%

















Allowance for credit losses to total loans



1.15

%



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 appear herein.

(4)

Excludes loans acquired at a discount.  Predominantly residential real estate loans.

(5)

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)

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




June 30,



March 31,



December 31,



September 30,



June 30,


Amounts in thousands, except per share


2019



2019



2018



2018



2018


Performance





















Net income


$

473,260




482,742




546,219




526,091




493,160


Net income available to common shareholders



452,633




462,086




525,328




505,365




472,600


Per common share:





















Basic earnings


$

3.34




3.35




3.76




3.54




3.26


Diluted earnings



3.34




3.35




3.76




3.53




3.26


Cash dividends


$

1.00




1.00




1.00




1.00




.80


Common shares outstanding:





















Average - diluted (1)



135,464




137,920




139,838




142,976




144,998


Period end (2)



134,200




136,637




138,534




141,479




144,261


Return on (annualized):





















Average total assets



1.60

%



1.68

%



1.84

%



1.80

%



1.70

%

Average common shareholders' equity



12.68

%



13.14

%



14.80

%



14.08

%



13.32

%

Taxable-equivalent net interest income


$

1,047,406




1,056,027




1,064,918




1,034,771




1,014,184


Yield on average earning assets



4.64

%



4.71

%



4.51

%



4.40

%



4.28

%

Cost of interest-bearing liabilities



1.11

%



1.04

%



.94

%



.82

%



.71

%

Net interest spread



3.53

%



3.67

%



3.57

%



3.58

%



3.57

%

Contribution of interest-free funds



.38

%



.37

%



.35

%



.30

%



.26

%

Net interest margin



3.91

%



4.04

%



3.92

%



3.88

%



3.83

%

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



.20

%



.10

%



.17

%



.07

%



.16

%

Net operating results (3)





















Net operating income


$

477,001




486,440




550,169




530,619




497,869


Diluted net operating earnings per common share



3.37




3.38




3.79




3.56




3.29


Return on (annualized):





















Average tangible assets



1.68

%



1.76

%



1.93

%



1.89

%



1.79

%

Average tangible common equity



18.83

%



19.56

%



22.16

%



21.00

%



19.91

%

Efficiency ratio



55.98

%



57.56

%



51.70

%



51.41

%



52.42

%
























June 30,



March 31,



December 31,



September 30,



June 30,


Loan quality


2019



2019



2018



2018



2018


Nonaccrual loans


$

865,384




881,611




893,608




870,832




819,984


Real estate and other foreclosed assets



72,907




81,335




78,375




87,333




98,062


Total nonperforming assets


$

938,291




962,946




971,983




958,165




918,046


Accruing loans past due 90 days or more (4)


$

348,725




244,257




222,527




254,360




223,026


Government guaranteed loans included in totals above:





















Nonaccrual loans


$

36,765




35,481




34,667




33,570




34,870


Accruing loans past due 90 days or more



320,305




194,510




192,443




195,450




202,394


Renegotiated loans


$

254,332




267,952




245,367




242,892




242,528


Accruing loans acquired at a discount past due 90 days or

        more (5)


$

43,079




43,995




39,750




44,223




47,405


Purchased impaired loans (6):





















Outstanding customer balance


$

473,834




495,163




529,520




572,979




606,683


Carrying amount



263,025




278,783




303,305




325,980




352,465


Nonaccrual loans to total net loans



.96

%



.99

%



1.01

%



1.00

%



.93

%

Allowance for credit losses to total loans



1.15

%



1.15

%



1.15

%



1.18

%



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 appear herein.

(4)

Excludes loans acquired at a discount.  Predominantly residential real estate loans.

(5)

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)

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







Six months ended








June 30







June 30






Dollars in thousands


2019



2018



Change



2019



2018



Change


Interest income


$

1,237,913




1,128,905




10

%


$

2,464,222




2,211,055




11

%

Interest expense



196,432




120,118




64




372,681




226,751




64


Net interest income



1,041,481




1,008,787




3




2,091,541




1,984,304




5


Provision for credit losses



55,000




35,000




57




77,000




78,000




-1


Net interest income after provision for credit losses



986,481




973,787




1




2,014,541




1,906,304




6


Other income

























Mortgage banking revenues



107,321




92,499




16




202,632




179,805




13


Service charges on deposit accounts



107,787




106,784




1




210,899




211,899





Trust income



144,382




137,641




5




277,168




269,016




3


Brokerage services income



12,478




12,629




-1




24,954




26,021




-4


Trading account and foreign exchange gains



18,453




5,255




251




29,255




9,892




196


Gain (loss) on bank investment securities



8,911




2,326




283




20,752




(7,105)





Other revenues from operations



112,763




100,280




12




247,200




226,582




9


Total other income



512,095




457,414




12




1,012,860




916,110




11


Other expense

























Salaries and employee benefits



455,737




418,537




9




954,937




881,965




8


Equipment and net occupancy



79,150




73,031




8




158,497




147,828




7


Outside data processing and software



55,234




49,712




11




107,651




98,141




10


FDIC assessments



9,772




19,560




-50




19,198




39,840




-52


Advertising and marketing



24,046




21,768




10




44,321




38,016




17


Printing, postage and supplies



10,324




8,719




18




20,179




18,038




12


Amortization of core deposit and other
 
 intangible assets



5,077




6,388




-21




10,097




13,020




-22


Other costs of operations



233,692




178,862




31




452,500




473,073




-4


Total other expense



873,032




776,577




12




1,767,380




1,709,921




3


Income before income taxes



625,544




654,624




-4




1,260,021




1,112,493




13


Applicable income taxes



152,284




161,464




-6




304,019




266,723




14


Net income


$

473,260




493,160




-4

%


$

956,002




845,770




13

%

 

Condensed Consolidated Statement of Income, Five Quarter Trend



Three months ended




June 30,



March 31,



December 31,



September 30,



June 30,


Dollars in thousands


2019



2019



2018



2018



2018


Interest income


$

1,237,913




1,226,309




1,220,281




1,167,375




1,128,905


Interest expense



196,432




176,249




161,321




138,337




120,118


Net interest income



1,041,481




1,050,060




1,058,960




1,029,038




1,008,787


Provision for credit losses



55,000




22,000




38,000




16,000




35,000


Net interest income after provision for credit losses



986,481




1,028,060




1,020,960




1,013,038




973,787


Other income





















Mortgage banking revenues



107,321




95,311




92,229




88,408




92,499


Service charges on deposit accounts



107,787




103,112




108,791




108,647




106,784


Trust income



144,382




132,786




135,024




133,545




137,641


Brokerage services income



12,478




12,476




12,781




12,267




12,629


Trading account and foreign exchange gains



18,453




10,802




16,582




6,073




5,255


Gain (loss) on bank investment securities



8,911




11,841




4,219




(3,415)




2,326


Other revenues from operations



112,763




134,437




110,970




113,769




100,280


Total other income



512,095




500,765




480,596




459,294




457,414


Other expense





















Salaries and employee benefits



455,737




499,200




438,928




431,371




418,537


Equipment and net occupancy



79,150




79,347




73,519




77,481




73,031


Outside data processing and software



55,234




52,417




50,206




50,678




49,712


FDIC assessments



9,772




9,426




9,837




18,849




19,560


Advertising and marketing



24,046




20,275




25,910




21,784




21,768


Printing, postage and supplies



10,324




9,855




8,777




8,843




8,719


Amortization of core deposit and other intangible assets



5,077




5,020




5,359




6,143




6,388


Other costs of operations



233,692




218,808




189,626




160,830




178,862


Total other expense



873,032




894,348




802,162




775,979




776,577


Income before income taxes



625,544




634,477




699,394




696,353




654,624


Applicable income taxes



152,284




151,735




153,175




170,262




161,464


Net income


$

473,260




482,742




546,219




526,091




493,160


 

Condensed Consolidated Balance Sheet



June 30







Dollars in thousands


2019



2018



Change



ASSETS














Cash and due from banks


$

1,271,611




1,367,594




-7


%

Interest-bearing deposits at banks



8,791,753




6,669,985




32



Federal funds sold






1,500






Trading account



479,403




148,303




223



Investment securities



11,580,249




13,283,002




-13



Loans and leases:














Commercial, financial, etc.



23,431,408




21,894,857




7



Real estate - commercial



35,194,375




34,137,937




3



Real estate - consumer



16,693,737




18,310,712




-9



Consumer



14,558,538




13,453,944




8



Total loans and leases, net of unearned discount



89,878,058




87,797,450




2



Less: allowance for credit losses



1,029,867




1,019,248




1



Net loans and leases



88,848,191




86,778,202




2



Goodwill



4,593,112




4,593,112






Core deposit and other intangible assets



38,428




58,569




-34



Other assets



5,952,148




5,525,786




8



Total assets


$

121,554,895




118,426,053




3


%















LIABILITIES AND SHAREHOLDERS' EQUITY














Noninterest-bearing deposits


$

30,747,946




32,086,191




-4


%

Interest-bearing deposits



59,568,223




56,924,970




5



Deposits at Cayman Islands office



1,364,855




261,427




422



Total deposits



91,681,024




89,272,588




3



Short-term borrowings



4,611,390




3,239,416




42



Accrued interest and other liabilities



1,915,147




1,953,848




-2



Long-term borrowings



7,655,507




8,382,316




-9



Total liabilities



105,863,068




102,848,168




3



Shareholders' equity:














Preferred



1,231,500




1,231,500






Common



14,460,327




14,346,385




1



Total shareholders' equity



15,691,827




15,577,885




1



Total liabilities and shareholders' equity


$

121,554,895




118,426,053




3


%

 

Condensed Consolidated Balance Sheet, Five Quarter Trend







June 30,



March 31,



December 31,



September 30,



June 30,


Dollars in thousands


2019



2019



2018



2018



2018


ASSETS





















Cash and due from banks


$

1,271,611




1,267,260




1,605,439




1,311,611




1,367,594


Interest-bearing deposits at banks



8,791,753




7,602,897




8,105,197




6,523,746




6,669,985


Federal funds sold















1,500


Trading account



479,403




276,322




185,584




125,038




148,303


Investment securities



11,580,249




12,536,840




12,692,813




13,073,881




13,283,002


Loans and leases:





















Commercial, financial, etc.



23,431,408




23,090,204




22,977,976




21,635,394




21,894,857


Real estate - commercial



35,194,375




34,690,930




34,363,556




33,518,375




34,137,937


Real estate - consumer



16,693,737




16,769,933




17,154,446




17,721,399




18,310,712


Consumer



14,558,538




14,088,816




13,970,499




13,805,317




13,453,944


Total loans and leases, net of unearned discount



89,878,058




88,639,883




88,466,477




86,680,485




87,797,450


Less: allowance for credit losses



1,029,867




1,019,337




1,019,444




1,019,488




1,019,248


Net loans and leases



88,848,191




87,620,546




87,447,033




85,660,997




86,778,202


Goodwill



4,593,112




4,593,112




4,593,112




4,593,112




4,593,112


Core deposit and other intangible assets



38,428




43,947




47,067




52,426




58,569


Other assets



5,952,148




6,084,281




5,421,158




5,486,826




5,525,786


Total assets


$

121,554,895




120,025,205




120,097,403




116,827,637




118,426,053























LIABILITIES AND SHAREHOLDERS' EQUITY





















Noninterest-bearing deposits


$

30,747,946




29,966,753




32,256,668




31,773,560




32,086,191


Interest-bearing deposits



59,568,223




59,433,806




57,087,998




56,919,549




56,924,970


Deposits at Cayman Islands office



1,364,855




1,069,191




811,906




447,287




261,427


Total deposits



91,681,024




90,469,750




90,156,572




89,140,396




89,272,588


Short-term borrowings



4,611,390




3,602,566




4,398,378




1,310,110




3,239,416


Accrued interest and other liabilities



1,915,147




1,889,336




1,637,348




1,800,778




1,953,848


Long-term borrowings



7,655,507




8,476,024




8,444,914




9,140,268




8,382,316


Total liabilities



105,863,068




104,437,676




104,637,212




101,391,552




102,848,168


Shareholders' equity:





















Preferred



1,231,500




1,231,500




1,231,500




1,231,500




1,231,500


Common



14,460,327




14,356,029




14,228,691




14,204,585




14,346,385


Total shareholders' equity



15,691,827




15,587,529




15,460,191




15,436,085




15,577,885


Total liabilities and shareholders' equity


$

121,554,895




120,025,205




120,097,403




116,827,637




118,426,053


 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates



Three months ended



Change in balance



Six months ended






June 30,



June 30,



March 31,



June 30, 2019 from



June 30,


Change


Dollars in millions


2019



2018



2019



June 30,


March 31,



2019


2018


in




Balance


Rate



Balance


Rate



Balance


Rate



2018


2019



Balance


Rate


Balance


Rate


balance


ASSETS


































Interest-bearing deposits at banks


$

6,122


2.38

%


4,890


1.79

%


4,605


2.41

%


25

%

33

%


$

5,368


2.39

%

4,916


1.66

%

9

%

Federal funds sold



1


2.83



1


2.23










1


2.83


2


1.91


-69


Trading account



68


2.20



57


2.92



65


3.40



19


4




66


2.79


55


2.96


20


Investment securities



12,170


2.49



13,856


2.38



12,949


2.52



-12


-6




12,557


2.51


14,164


2.35


-11


Loans and leases, net of unearned discount


































Commercial, financial, etc.



23,335


4.97



21,709


4.49



23,010


5.07



7


1




23,173


5.02


21,628


4.39


7


Real estate - commercial



34,768


5.30



33,687


4.95



34,524


5.34



3


1




34,647


5.32


33,670


4.84


3


Real estate - consumer



16,723


4.29



18,644


4.15



16,939


4.37



-10


-1




16,830


4.33


18,957


4.11


-11


Consumer



14,324


5.53



13,366


5.14



14,004


5.51



7


2




14,165


5.52


13,330


5.07


6


Total loans and leases, net



89,150


5.09



87,406


4.73



88,477


5.15



2


1




88,815


5.12


87,585


4.64


1


Total earning assets



107,511


4.64



106,210


4.28



106,096


4.71



1


1




106,807


4.68


106,722


4.20



Goodwill



4,593





4,593





4,593









4,593




4,593





Core deposit and other intangible assets



41





62





45





-33


-8




43




65




-34


Other assets



6,342





5,548





6,105





14


4




6,224




5,641




10


Total assets


$

118,487





116,413





116,839





2

%

1

%


$

117,667




117,021




1

%



































LIABILITIES AND SHAREHOLDERS'
EQUITY


































Interest-bearing deposits


































Savings and interest-checking deposits


$

53,495


.69



52,547


.37



52,095


.59



2

%

3

%


$

52,799


.64


52,526


.34


1

%

Time deposits



6,530


1.53



5,997


.76



6,351


1.35



9


3




6,441


1.44


6,158


.73


5


Deposits at Cayman Islands office



1,247


1.94



225


.97



972


1.98



454


28




1,110


1.96


236


.79


370


Total interest-bearing deposits



61,272


.80



58,769


.41



59,418


.70



4


3




60,350


.75


58,920


.38


2


Short-term borrowings



1,263


2.51



353


1.57



1,091


2.49



257


16




1,177


2.50


317


1.44


272


Long-term borrowings



8,278


3.20



8,480


2.75



8,494


3.23



-2


-3




8,386


3.21


8,543


2.64


-2


Total interest-bearing liabilities



70,813


1.11



67,602


.71



69,003


1.04



5


3




69,913


1.08


67,780


.68


3


Noninterest-bearing deposits



30,099





31,426





30,315





-4


-1




30,207




31,734




-5


Other liabilities



1,945





1,852





1,952





5





1,948




1,713




14


Total liabilities



102,857





100,880





101,270





2


2




102,068




101,227




1


Shareholders' equity



15,630





15,533





15,569





1





15,599




15,794




-1


Total liabilities and shareholders' equity


$

118,487





116,413





116,839





2

%

1

%


$

117,667




117,021




1

%



































Net interest spread





3.53





3.57





3.67











3.60




3.52




Contribution of interest-free funds





.38





.26





.37











.37




.25




Net interest margin





3.91

%




3.83

%




4.04

%










3.97

%



3.77

%



 

Reconciliation of Quarterly GAAP to Non-GAAP Measures



Three months ended



Six months ended




June 30



June 30




2019



2018



2019



2018


Income statement data

















In thousands, except per share

















Net income

















Net income


$

473,260




493,160




956,002




845,770


Amortization of core deposit and other intangible assets (1)



3,741




4,709




7,439




9,597


Net operating income


$

477,001




497,869




963,441




855,367



















Earnings per common share

















Diluted earnings per common share


$

3.34




3.26




6.69




5.48


Amortization of core deposit and other intangible assets (1)



.03




.03




.05




.06


Diluted net operating earnings per common share


$

3.37




3.29




6.74




5.54



















Other expense

















Other expense


$

873,032




776,577




1,767,380




1,709,921


Amortization of core deposit and other intangible assets



(5,077)




(6,388)




(10,097)




(13,020)


Noninterest operating expense


$

867,955




770,189




1,757,283




1,696,901


Efficiency ratio

















Noninterest operating expense (numerator)


$

867,955




770,189




1,757,283




1,696,901


Taxable-equivalent net interest income



1,047,406




1,014,184




2,103,433




1,994,510


Other income



512,095




457,414




1,012,860




916,110


Less:  Gain (loss) on bank investment securities



8,911




2,326




20,752




(7,105)


Denominator


$

1,550,590




1,469,272




3,095,541




2,917,725


Efficiency ratio



55.98

%



52.42

%



56.77

%



58.16

%

Balance sheet data

















In millions

















Average assets

















Average assets


$

118,487




116,413




117,667




117,021


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(41)




(62)




(43)




(65)


Deferred taxes



11




17




11




17


Average tangible assets


$

113,864




111,775




113,042




112,380


Average common equity

















Average total equity


$

15,630




15,533




15,599




15,794


Preferred stock



(1,232)




(1,232)




(1,232)




(1,232)


Average common equity



14,398




14,301




14,367




14,562


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(41)




(62)




(43)




(65)


Deferred taxes



11




17




11




17


Average tangible common equity


$

9,775




9,663




9,742




9,921


At end of quarter

















Total assets

















Total assets


$

121,555




118,426










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(38)




(59)










Deferred taxes



10




16










Total tangible assets


$

116,934




113,790










Total common equity

















Total equity


$

15,692




15,578










Preferred stock



(1,232)




(1,232)










Undeclared dividends - cumulative preferred stock



(3)




(3)










Common equity, net of undeclared cumulative preferred dividends



14,457




14,343










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(38)




(59)










Deferred taxes



10




16










Total tangible common equity


$

9,836




9,707










____________________

(1)

After any related tax effect.

 

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



Three months ended




June 30,



March 31,



December 31,



September 30,



June 30,




2019



2019



2018



2018



2018


Income statement data





















In thousands, except per share





















Net income





















Net income


$

473,260




482,742




546,219




526,091




493,160


Amortization of core deposit and other intangible assets (1)



3,741




3,698




3,950




4,528




4,709


Net operating income


$

477,001




486,440




550,169




530,619




497,869























Earnings per common share





















Diluted earnings per common share


$

3.34




3.35




3.76




3.53




3.26


Amortization of core deposit and other intangible assets (1)



.03




.03




.03




.03




.03


Diluted net operating earnings per common share


$

3.37




3.38




3.79




3.56




3.29























Other expense





















Other expense


$

873,032




894,348




802,162




775,979




776,577


Amortization of core deposit and other intangible assets



(5,077)




(5,020)




(5,359)




(6,143)




(6,388)


Noninterest operating expense


$

867,955




889,328




796,803




769,836




770,189


Efficiency ratio





















Noninterest operating expense (numerator)


$

867,955




889,328




796,803




769,836




770,189


Taxable-equivalent net interest income



1,047,406




1,056,027




1,064,918




1,034,771




1,014,184


Other income



512,095




500,765




480,596




459,294




457,414


Less:  Gain (loss) on bank investment securities



8,911




11,841




4,219




(3,415)




2,326


Denominator


$

1,550,590




1,544,951




1,541,295




1,497,480




1,469,272


Efficiency ratio



55.98

%



57.56

%



51.70

%



51.41

%



52.42

%

Balance sheet data





















In millions





















Average assets





















Average assets


$

118,487




116,839




117,799




115,997




116,413


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(41)




(45)




(50)




(55)




(62)


Deferred taxes



11




12




13




14




17


Average tangible assets


$

113,864




112,213




113,169




111,363




111,775


Average common equity





















Average total equity


$

15,630




15,569




15,389




15,549




15,533


Preferred stock



(1,232)




(1,232)




(1,232)




(1,232)




(1,232)


Average common equity



14,398




14,337




14,157




14,317




14,301


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(41)




(45)




(50)




(55)




(62)


Deferred taxes



11




12




13




14




17


Average tangible common equity


$

9,775




9,711




9,527




9,683




9,663


At end of quarter





















Total assets





















Total assets


$

121,555




120,025




120,097




116,828




118,426


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(38)




(44)




(47)




(52)




(59)


Deferred taxes



10




12




13




14




16


Total tangible assets


$

116,934




115,400




115,470




112,197




113,790


Total common equity





















Total equity


$

15,692




15,588




15,460




15,436




15,578


Preferred stock



(1,232)




(1,232)




(1,232)




(1,232)




(1,232)


Undeclared dividends - cumulative preferred stock



(3)




(3)




(3)




(3)




(3)


Common equity, net of undeclared cumulative preferred

       dividends



14,457




14,353




14,225




14,201




14,343


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(38)




(44)




(47)




(52)




(59)


Deferred taxes



10




12




13




14




16


Total tangible common equity


$

9,836




9,728




9,598




9,570




9,707


________________

(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

 

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SOURCE M&T Bank Corporation