BUFFALO, N.Y., Oct. 20, 2021 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2021.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") were $3.69 in the third quarter of 2021, up from $2.75 in the year-earlier quarter and $3.41 in the second quarter of 2021. GAAP-basis net income was $495 million in the recent quarter, $372 million in the third quarter of 2020 and $458 million in the second 2021 quarter. GAAP-basis net income for the third quarter of 2021 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.28% and 12.16%, respectively, improved from 1.06% and 9.53%, respectively, in the similar 2020 period and 1.22% and 11.55%, respectively, in the second quarter of 2021. Included in noninterest expenses in the recent quarter were merger-related expenses associated with M&T's proposed acquisition of People's United Financial, Inc. of $9 million ($7 million after tax-effect, or $.05 of diluted earnings per common share), compared with $4 million ($3 million after tax-effect, or $.02 of diluted earnings per common share) in the second quarter of 2021.  There were no merger-related expenses in the third quarter of 2020.

Darren J. King, Executive Vice President and Chief Financial Officer, commented on M&T's third quarter results, "Results in the recent quarter reflect the strength of M&T's diversified business model.  Fee income was robust, driven by strong mortgage banking, trust and brokerage, and other payments revenue relative to the year-earlier and immediately preceding quarters.  Higher expense levels, notably incentive compensation and other professional services costs, were largely associated with the increased revenue but also reflect a reversion to more normal levels.  Our balance sheet remains strong, as evidenced by a Common Equity Tier 1 Capital Ratio of 11.1% at September 30, 2021, improved from 10.7% at the end of the second quarter."

Earnings Highlights





































Change 3Q21 vs.


($ in millions, except per share data)


3Q21



3Q20



2Q21



3Q20



2Q21























Net income


$

495



$

372



$

458




33

%



8

%

Net income available to common shareholders  ̶  diluted


$

476



$

353



$

439




35

%



8

%

Diluted earnings per common share


$

3.69



$

2.75



$

3.41




34

%



8

%

Annualized return on average assets



1.28

%



1.06

%



1.22

%









Annualized return on average common equity



12.16

%



9.53

%



11.55

%









For the first nine-months of 2021, diluted earnings per common share rose 62% to $10.43 from $6.42 in the year-earlier period. GAAP-basis net income for the nine-month period ended September 30, 2021 increased to $1.40 billion from $882 million in the corresponding 2020 period.  Expressed as an annualized rate of return on average assets and average common shareholders' equity, GAAP-basis net income in the nine-month period ended September 30, 2021 was 1.24% and 11.76%, respectively, improved from .89% and 7.57%, respectively, in the corresponding 2020 period. Merger-related expenses for the first nine months of 2021 were $23 million ($17 million after tax-effect, or $.13 of diluted earnings per common share).  There were no merger-related expenses in the similar period of 2020.

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 $3.76 in the recent quarter, up from $2.77 and $3.45 in the third quarter of 2020 and the second quarter of 2021, respectively.  Net operating income totaled $504 million in 2021's third quarter, $375 million in the third quarter of 2020 and $463 million in the second quarter of 2021.  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 1.34% and 17.54%, respectively, 1.10% and 13.94%, respectively, in the year-earlier quarter and 1.27% and 16.68%, respectively, in the second quarter of 2021.

Diluted net operating earnings per common share during the first nine months of 2021 increased to $10.61 from $6.49 in the similar 2020 period.  Net operating income during the nine-month periods ended September 30, 2021 and 2020 was $1.42 billion and $891 million, respectively. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.30% and 17.10%, respectively, in the first nine months of 2021 and was .93% and 11.15%, respectively, in the corresponding 2020 period.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis totaled $971 million in the recent quarter, up from $947 million in the third quarter of 2020 and $946 million in the second 2021 quarter.  The recent quarter improvement as compared with the year-earlier quarter was largely due to lower rates paid on deposit accounts offset, in part, by the impact of lower average outstanding loan balances. As compared with the second quarter of 2021, the higher net interest income in the recent quarter was predominantly the result of increased yields on loans, reflecting fees received from payoffs of Paycheck Protection Program ("PPP") loans.  The net interest margin in the third quarter of 2021, the third quarter of 2020 and the second quarter of 2021 was 2.74%, 2.95% and 2.77%, respectively. The lower net interest margin in the two most recent quarters reflects higher amounts of low-yielding balances at the Federal Reserve Bank of New York.  Those balances add to net interest income, but lower the reported net interest margin. Interest income from PPP loans, including recognition of fees associated with repaid loans, was $71 million in the recent quarter, compared with $39 million in the third quarter of 2020 and $51 million in the second quarter of 2021.






















Taxable-equivalent Net Interest Income





































Change 3Q21 vs.


($ in millions)


3Q21



3Q20



2Q21



3Q20



2Q21























Average earning assets


$

140,420



$

127,689



$

136,951




10

%



3

%

Net interest income  ̶  taxable-equivalent


$

971



$

947



$

946




3

%



3

%

Net interest margin



2.74

%



2.95

%



2.77

%









Provision for Credit Losses/Asset Quality.  Recaptures of the provision for credit losses of $20 million and $15 million were recorded in the third and second quarters of 2021, respectively.  The provision for credit losses totaled $150 million in the third quarter of 2020. The provision in each quarter adjusts the allowance for credit losses to reflect expected losses that are based on economic forecasts as of each quarter-end date. Net loan charge-offs were $40 million during the recent quarter, compared with $30 million in the third quarter of 2020 and $46 million in the second quarter of 2021. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .17% and .12% in the third quarters of 2021 and 2020, respectively, and .19% in the second quarter of 2021.

Loans classified as nonaccrual totaled $2.24 billion at each of September 30, 2021 and June 30, 2021, compared with $1.24 billion at September 30, 2020. As a percentage of loans outstanding, nonaccrual loans were 2.40%, 2.31% and 1.26% at September 30, 2021, June 30, 2021 and September 30, 2020, respectively. The increase in nonaccrual loans from September 30, 2020 to the two most recent quarter-ends reflects the continuing impact of the pandemic on borrowers' ability to make contractual payments on their loans, most notably loans in the hospitality sector.  Assets taken in foreclosure of defaulted loans were $25 million at September 30, 2021, $50 million a year earlier and $28 million at June 30, 2021.

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 $1.52 billion or 1.62% of loans outstanding at September 30, 2021, compared with $1.76 billion or 1.79% at September 30, 2020 and $1.58 billion or 1.62% at June 30, 2021. The allowance at September 30, 2021, September 30, 2020, and June 30, 2021 represented 1.66%, 1.91%, and 1.69%, respectively, of total loans on those dates, excluding outstanding balances of PPP loans.

Asset Quality Metrics
















Change 3Q21 vs.


($ in millions)


3Q21



3Q20



2Q21



3Q20



2Q21























At end of quarter





















Nonaccrual loans


$

2,242



$

1,240



$

2,242




81

%




Real estate and other foreclosed assets


$

25



$

50



$

28




-50

%



-11

%

Total nonperforming assets


$

2,267



$

1,290



$

2,270




76

%




Accruing loans past due 90 days or more (1)


$

1,026



$

527



$

1,077




95

%



-5

%

Nonaccrual loans as % of loans outstanding



2.40

%



1.26

%



2.31

%






























Allowance for credit losses


$

1,515



$

1,759



$

1,575




-14

%



-4

%

Allowance for credit losses as % of loans outstanding



1.62

%



1.79

%



1.62

%






























For the period





















Provision for credit losses


$

(20)



$

150



$

(15)








Net charge-offs


$

40



$

30



$

46




35

%



-13

%

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



.17

%



.12

%



.19

%









____________

(1)

Predominantly government-guaranteed residential real estate loans.

Noninterest Income and Expense.  Noninterest income was $569 million in the third quarter of 2021, up from $521 million in the year-earlier quarter and $514 million in the second quarter of 2021. As compared with the third quarter of 2020, the higher level of noninterest income in the recent quarter resulted largely from higher service charges on deposit accounts, merchant discount and credit card fees, mortgage banking revenues and income from M&T's trust and brokerage services businesses. The recent quarter's improvement as compared with the second quarter of 2021 reflects increases in mortgage banking revenues, service charges on deposit accounts, brokerage services income, credit-related fees, and lower unrealized losses on investment securities. Brokerage services income in the recent quarter included approximately $10 million of revenues associated with the sale of select investment products of LPL Financial, an independent financial services broker.  Prior to the transition of M&T's retail brokerage and certain trust customer business to LPL Financial in mid-June 2021, those customers were provided proprietary trust products managed by M&T and revenues related thereto were reported as trust income.

Noninterest Income





































Change 3Q21 vs.


($ in millions)


3Q21



3Q20



2Q21



3Q20



2Q21























Mortgage banking revenues


$

160



$

153



$

133




4

%



20

%

Service charges on deposit accounts



105




91




99




15

%



7

%

Trust income



157




150




163




5

%



-4

%

Brokerage services income



20




12




10




77

%



100

%

Trading account and foreign exchange gains



6




4




7




38

%



-14

%

Gain (loss) on bank investment securities





3




(11)






Other revenues from operations



121




108




113




12

%



7

%

Total


$

569



$

521



$

514




9

%



11

%

Noninterest expense totaled $899 million in the third quarter of 2021, compared with $827 million in the corresponding quarter of 2020 and $865 million in the second quarter of 2021.  Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets and merger-related expenses, noninterest operating expenses were $888 million in the recent quarter, $823 million in the third quarter of 2020 and $859 million in 2021's second quarter. Factors contributing to the increase in noninterest operating expenses in the recent quarter as compared with the year-earlier quarter were higher costs for salaries and employee benefits (reflecting increased incentive compensation expenses), outside data processing and software, and professional services. As compared with the second quarter of 2021, the higher level of noninterest operating expenses in the recent quarter resulted largely from higher incentive compensation.

Noninterest Expense





































Change 3Q21 vs.


($ in millions)


3Q21



3Q20



2Q21



3Q20



2Q21























Salaries and employee benefits


$

510



$

479



$

479




7

%



7

%

Equipment and net occupancy



81




81




81






Outside data processing and software



73




65




74




13

%



-2

%

FDIC assessments



19




12




18




55

%



5

%

Advertising and marketing



15




12




13




28

%



14

%

Printing, postage and supplies



8




9




11




-16

%



-29

%

Amortization of core deposit and other intangible assets



3




4




3




-30

%



Other costs of operations



190




165




186




16

%



3

%

Total


$

899



$

827



$

865




9

%



4

%






















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 57.7% in the third quarter of 2021, 56.2% in the year-earlier quarter and 58.4% in the second quarter of 2021.

Balance Sheet.  M&T had total assets of $151.9 billion at September 30, 2021, compared with $138.6 billion and $150.6 billion at September 30, 2020 and June 30, 2021, respectively. Loans and leases, net of unearned discount, were $93.6 billion at September 30, 2021, compared with $98.4 billion at September 30, 2020 and $97.1 billion at June 30, 2021. The lower level of loans and leases at the recent quarter-end as compared with September 30, 2020 reflects a $5.4 billion decline in commercial loans, partially offset by growth in consumer loans of $1.5 billion.  The lower commercial loan balances reflect declines in PPP and dealer floor plan loans.  The rise in consumer loans resulted from higher balances of recreational finance and automobile loans. The decline in total loans and leases at the recent quarter-end as compared with June 30, 2021 resulted largely from lower commercial loans of $2.9 billion. The decrease in commercial loans reflects lower balances of PPP loans. Those loans totaled $2.2 billion at September 30, 2021, compared with $6.5 billion at September 30, 2020 and $4.3 billion at June 30, 2021. Total deposits were $128.7 billion at the recent quarter-end, $115.2 billion at September 30, 2020 and $128.3 billion at June 30, 2021. The increased levels of deposits at the two most recent quarter-ends as compared with September 30, 2020 reflect higher levels of liquidity being maintained by many commercial and consumer customers. 

Total shareholders' equity was $17.5 billion, or 11.54% of total assets at September 30, 2021, $16.1 billion, or 11.61% at September 30, 2020 and $16.7 billion, or 11.10% at June 30, 2021. Common shareholders' equity was $15.8 billion, or $122.60 per share, at September 30, 2021, compared with $14.9 billion, or $115.75 per share, a year-earlier and $15.5 billion, or $120.22 per share, at June 30, 2021. Tangible equity per common share was $86.88 at September 30, 2021, $79.85 at September 30, 2020 and $84.47 at June 30, 2021. 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 11.1% at September 30, 2021, up from 10.7% 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) 876-9173.  International participants, using any applicable international calling codes, may dial (785) 424-1667.  Callers should reference M&T Bank Corporation or the conference ID #MTBQ321.  The conference call will be webcast live through M&T's website at https://ir.mtb.com/events-presentations. A replay of the call will be available through Wednesday, October 27, 2021 by calling (800) 727-6189, or (402) 220-2671 for international participants. No conference ID is required.  The event will also be archived and available by 3:00 p.m. today on M&T's website at https://ir.mtb.com/events-presentations.

About M&T.  M&T is a financial holding company headquartered in Buffalo, New York.  M&T's principal banking subsidiary, M&T Bank, 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.

Who We Are.  We are a bank for communities – bringing the capabilities of a large bank with the care of a locally focused institution. Our purpose is to make a difference in people's lives serving all our stakeholders. The keys to our approach are characterized by responsible lending based on the advantages of local knowledge and scale, and our long history of being prudent stewards of our shareholders' capital. For more on our approach as a bank for communities, please review our latest ESG report available on M&T's website.

Earlier this month it was announced that M&T Bank again ranked in the nation's top 10 for U.S. Small Business Administration lending.  For 13 consecutive years, M&T Bank has remained one of the top 10 SBA lenders in the country.  Additionally in the quarter, M&T Bank continued to focus on its multicultural customers in its diverse communities by establishing several multicultural banking centers across its footprint to enhance local branch experience by offering services in English and other languages.  Customers can also now complete cash transactions at M&T Bank ATMs in four languages.

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

Statements regarding the potential effects of 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.

Also as described further below, statements regarding M&T's expectations or predictions regarding the proposed transaction between M&T and People's United Financial, Inc. ("People's United") are forward-looking statements, including statements regarding the expected timing, completion and effects of the proposed transaction as well as M&T's and People's United's expected financial results, prospects, targets, goals and outlook.  

Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," or "potential," by future conditional verbs such as "will," "would," "should," "could," or "may," or by variations of such words or by similar expressions.  These statements are not guarantees of future performance and involve 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 risks, predictions and uncertainties relating to the impact of the People's United transaction (as described in the next paragraph); the impact of the COVID-19 pandemic; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; legislation or regulations affecting the financial services industry and/or M&T and its subsidiaries individually or collectively, including tax policy; 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, product and service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products and services; containing costs and expenses; 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.

In addition, future factors related to the proposed transaction between M&T and People's United include, among others: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between M&T and People's United; the outcome of any legal proceedings that may be instituted against M&T or People's United; the possibility that the proposed transaction will not close when expected or at all because required regulatory or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated; the risk that any announcements relating to the proposed combination could have adverse effects on the market price of the common stock of either or both parties to the combination; the possibility that the anticipated benefits of the transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where M&T and People's United do business; certain restrictions during the pendency of the merger that may impact the parties' ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; M&T's and People's United's success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the business, economic and political conditions in the markets in which the parties operate; and other factors that may affect future results of M&T and People's United.  

Future factors related to the proposed transaction also include risks, such as, among others: that the proposed combination and its announcement could have an adverse effect on either or both parties' ability to retain customers and retain or hire key personnel and maintain relationships with customers; that the proposed combination may be more difficult or time-consuming than anticipated, including in areas such as sales force, cost containment, asset realization, systems integration and other key strategies; and that revenues following the proposed combination may be lower than expected, including for possible reasons such as unexpected costs, charges or expenses resulting from the transactions; as well as the unforeseen risks relating to liabilities of M&T or People's United that may exist, and uncertainty as to the extent of the duration, scope, and impacts of the COVID-19 pandemic on People's United, M&T and the proposed combination.

These are representative of the future factors that could affect the outcome of the forward-looking statements.  In addition, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other future factors.

M&T provides further detail regarding these risks and uncertainties in its 2020 Form 10-K, including in the Risk Factors section of such report, as well as in other SEC filings. Forward-looking statements speak only as of the date made, and M&T does not assume any duty and does not undertake to update forward-looking statements.    

 

Financial Highlights
































Three months ended







Nine months ended








September 30







September 30






Amounts in thousands, except per share


2021



2020



Change



2021



2020



Change


Performance

























Net income


$

495,460




372,136




33

%


$

1,400,778




882,012




59

%

Net income available to common shareholders



475,961




353,400




35

%



1,342,812




827,204




62

%

Per common share:

























Basic earnings


$

3.70




2.75




35

%


$

10.44




6.42




63

%

Diluted earnings



3.69




2.75




34

%



10.43




6.42




62

%

Cash dividends


$

1.10




1.10






$

3.30




3.30




Common shares outstanding:

























Average - diluted (1)



128,844




128,355







128,786




128,813




Period end (2)



128,699




128,303






128,699




128,303




Return on (annualized):

























Average total assets



1.28

%



1.06

%







1.24

%



.89

%





Average common shareholders' equity



12.16

%



9.53

%







11.76

%



7.57

%





Taxable-equivalent net interest income


$

970,953




947,114




3

%


$

2,902,154




2,890,353




Yield on average earning assets



2.82

%



3.13

%







2.91

%



3.53

%





Cost of interest-bearing liabilities



.14

%



.30

%







.15

%



.50

%





Net interest spread



2.68

%



2.83

%







2.76

%



3.03

%





Contribution of interest-free funds



.06

%



.12

%







.07

%



.19

%





Net interest margin



2.74

%



2.95

%







2.83

%



3.22

%





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



.17

%



.12

%







.22

%



.21

%





Net operating results (3)

























Net operating income


$

504,030




375,029




34

%


$

1,424,361




890,692




60

%

Diluted net operating earnings per common share



3.76




2.77




36

%



10.61




6.49




63

%

Return on (annualized):

























Average tangible assets



1.34

%



1.10

%







1.30

%



.93

%





Average tangible common equity



17.54

%



13.94

%







17.10

%



11.15

%





Efficiency ratio



57.7

%



56.2

%







58.8

%



57.0

%
































At September 30
















Loan quality


2021



2020



Change














Nonaccrual loans


$

2,242,263




1,239,972




81

%













Real estate and other foreclosed assets



24,786




49,872




-50

%













Total nonperforming assets


$

2,267,049




1,289,844




76

%













Accruing loans past due 90 days or more (4)


$

1,026,080




527,258




95

%













Government guaranteed loans included in totals above:

























Nonaccrual loans


$

47,358




45,975




3

%













Accruing loans past due 90 days or more



947,091




505,446




87

%













Renegotiated loans


$

242,955




242,581
















Nonaccrual loans to total net loans



2.40

%



1.26

%

















Allowance for credit losses to total loans



1.62

%



1.79

%

















______________

(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)

Predominantly residential real estate loans.

 

Financial Highlights, Five Quarter Trend




Three months ended




September 30,



June 30,



March 31,



December 31,



September 30,


Amounts in thousands, except per share


2021



2021



2021



2020



2020


Performance





















Net income


$

495,460




458,069




447,249




471,140




372,136


Net income available to common shareholders



475,961




438,759




428,093




451,869




353,400


Per common share:





















Basic earnings


$

3.70




3.41




3.33




3.52




2.75


Diluted earnings



3.69




3.41




3.33




3.52




2.75


Cash dividends


$

1.10




1.10




1.10




1.10




1.10


Common shares outstanding:





















Average - diluted (1)



128,844




128,842




128,669




128,379




128,355


Period end (2)



128,699




128,686




128,658




128,333




128,303


Return on (annualized):





















Average total assets



1.28

%



1.22

%



1.22

%



1.30

%



1.06

%

Average common shareholders' equity



12.16

%



11.55

%



11.57

%



12.07

%



9.53

%

Taxable-equivalent net interest income


$

970,953




946,072




985,128




993,252




947,114


Yield on average earning assets



2.82

%



2.85

%



3.08

%



3.15

%



3.13

%

Cost of interest-bearing liabilities



.14

%



.14

%



.18

%



.25

%



.30

%

Net interest spread



2.68

%



2.71

%



2.90

%



2.90

%



2.83

%

Contribution of interest-free funds



.06

%



.06

%



.07

%



.10

%



.12

%

Net interest margin



2.74

%



2.77

%



2.97

%



3.00

%



2.95

%

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



.17

%



.19

%



.31

%



.39

%



.12

%

Net operating results (3)





















Net operating income


$

504,030




462,959




457,372




473,453




375,029


Diluted net operating earnings per common share



3.76




3.45




3.41




3.54




2.77


Return on (annualized):





















Average tangible assets



1.34

%



1.27

%



1.29

%



1.35

%



1.10

%

Average tangible common equity



17.54

%



16.68

%



17.05

%



17.53

%



13.94

%

Efficiency ratio



57.7

%



58.4

%



60.3

%



54.6

%



56.2

%
























September 30,



June 30,



March 31,



December 31,



September 30,


Loan quality


2021



2021



2021



2020



2020


Nonaccrual loans


$

2,242,263




2,242,057




1,957,106




1,893,299




1,239,972


Real estate and other foreclosed assets



24,786




27,902




29,797




34,668




49,872


Total nonperforming assets


$

2,267,049




2,269,959




1,986,903




1,927,967




1,289,844


Accruing loans past due 90 days or more (4)


$

1,026,080




1,077,227




1,084,553




859,208




527,258


Government guaranteed loans included in totals above:





















Nonaccrual loans


$

47,358




49,796




51,668




48,820




45,975


Accruing loans past due 90 days or more



947,091




1,029,331




1,044,599




798,121




505,446


Renegotiated loans


$

242,955




236,377




242,121




238,994




242,581


Nonaccrual loans to total net loans



2.40

%



2.31

%



1.97

%



1.92

%



1.26

%

Allowance for credit losses to total loans



1.62

%



1.62

%



1.65

%



1.76

%



1.79

%

______________

(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)

Predominantly residential real estate loans.

 

Condensed Consolidated Statement of Income




Three months ended







Nine months ended








September 30







September 30






Dollars in thousands


2021



2020



Change



2021



2020



Change


Interest income


$

992,946




1,001,161




-1

%


$

2,980,266




3,153,822




-6

%

Interest expense



25,696




58,066




-56




89,281




276,785




-68


Net interest income



967,250




943,095




3




2,890,985




2,877,037




Provision for credit losses



(20,000)




150,000







(60,000)




725,000





Net interest income after provision for credit losses



987,250




793,095




24




2,950,985




2,152,037




37


Other income

























Mortgage banking revenues



159,995




153,267




4




432,062




426,200




1


Service charges on deposit accounts



105,426




91,355




15




296,721




274,971




8


Trust income



156,876




149,937




5




475,889




450,570




6


Brokerage services income



20,490




11,602




77




43,868




35,194




25


Trading account and foreign exchange gains



5,563




4,026




38




18,349




33,332




-45


Gain (loss) on bank investment securities



291




2,773






(22,646)




(11,040)





Other revenues from operations



120,485




107,601




12




344,114




327,967




5


Total other income



569,126




520,561




9




1,588,357




1,537,194




3


Other expense

























Salaries and employee benefits



510,422




478,897




7




1,530,634




1,474,582




4


Equipment and net occupancy



80,738




81,080






244,057




237,809




3


Outside data processing and software



72,782




64,660




13




213,025




190,446




12


FDIC assessments



18,810




12,121




55




50,874




38,599




32


Advertising and marketing



15,208




11,855




28




43,200




44,072




-2


Printing, postage and supplies



7,917




9,422




-16




28,367




31,534




-10


Amortization of core deposit and other

   intangible assets



2,738




3,914




-30




8,213




11,740




-30


Other costs of operations



190,719




164,825




16




565,753




511,450




11


Total other expense



899,334




826,774




9




2,684,123




2,540,232




6


Income before income taxes



657,042




486,882




35




1,855,219




1,148,999




61


Applicable income taxes



161,582




114,746




41




454,441




266,987




70


Net income


$

495,460




372,136




33

%


$

1,400,778




882,012




59

%

 

Condensed Consolidated Statement of Income, Five Quarter Trend




Three months ended




September 30,



June 30,



March 31,



December 31,



September 30,


Dollars in thousands


2021



2021



2021



2020



2020


Interest income


$

992,946




970,358




1,016,962




1,038,890




1,001,161


Interest expense



25,696




28,018




35,567




49,610




58,066


Net interest income



967,250




942,340




981,395




989,280




943,095


Provision for credit losses



(20,000)




(15,000)




(25,000)




75,000




150,000


Net interest income after provision for credit losses



987,250




957,340




1,006,395




914,280




793,095


Other income





















Mortgage banking revenues



159,995




133,313




138,754




140,441




153,267


Service charges on deposit accounts



105,426




98,518




92,777




95,817




91,355


Trust income



156,876




162,991




156,022




151,314




149,937


Brokerage services income



20,490




10,265




13,113




12,234




11,602


Trading account and foreign exchange gains



5,563




6,502




6,284




7,204




4,026


Gain (loss) on bank investment securities



291




(10,655)




(12,282)




1,619




2,773


Other revenues from operations



120,485




112,699




110,930




142,621




107,601


Total other income



569,126




513,633




505,598




551,250




520,561


Other expense





















Salaries and employee benefits



510,422




479,134




541,078




476,110




478,897


Equipment and net occupancy



80,738




80,848




82,471




84,228




81,080


Outside data processing and software



72,782




74,492




65,751




68,034




64,660


FDIC assessments



18,810




17,876




14,188




15,204




12,121


Advertising and marketing



15,208




13,364




14,628




17,832




11,855


Printing, postage and supplies



7,917




11,133




9,317




8,335




9,422


Amortization of core deposit and other
   intangible assets



2,738




2,737




2,738




3,129




3,914


Other costs of operations



190,719




185,761




189,273




172,136




164,825


Total other expense



899,334




865,345




919,444




845,008




826,774


Income before income taxes



657,042




605,628




592,549




620,522




486,882


Applicable income taxes



161,582




147,559




145,300




149,382




114,746


Net income


$

495,460




458,069




447,249




471,140




372,136


 

Condensed Consolidated Balance Sheet




September 30







Dollars in thousands


2021



2020



Change



ASSETS














Cash and due from banks


$

1,479,712




1,489,232




-1


%

Interest-bearing deposits at banks



38,445,788




20,197,937




90



Trading account



624,556




1,215,573




-49



Investment securities



6,447,622




7,723,004




-17



Loans and leases:














Commercial, financial, etc.



22,514,940




27,891,648




-19



Real estate - commercial



37,023,952




37,582,084




-1



Real estate - consumer



16,209,354




16,663,708




-3



Consumer



17,834,648




16,309,608




9



Total loans and leases, net of unearned discount



93,582,894




98,447,048




-5



Less: allowance for credit losses



1,515,024




1,758,505




-14



Net loans and leases



92,067,870




96,688,543




-5



Goodwill



4,593,112




4,593,112






Core deposit and other intangible assets



5,952




17,294




-66



Other assets



8,236,582




6,702,048




23



Total assets


$

151,901,194




138,626,743




10


%















LIABILITIES AND SHAREHOLDERS' EQUITY














Noninterest-bearing deposits


$

56,542,309




44,201,670




28


%

Interest-bearing deposits



72,158,987




70,061,680




3



Deposits at Cayman Islands office






899,989




-100



Total deposits



128,701,296




115,163,339




12



Short-term borrowings



103,548




46,123




125



Accrued interest and other liabilities



2,067,188




1,857,383




11



Long-term borrowings



3,500,391




5,458,885




-36



Total liabilities



134,372,423




122,525,730




10



Shareholders' equity:














Preferred



1,750,000




1,250,000




40



Common



15,778,771




14,851,013




6



Total shareholders' equity



17,528,771




16,101,013




9



Total liabilities and shareholders' equity


$

151,901,194




138,626,743




10


%

 

Condensed Consolidated Balance Sheet, Five Quarter Trend






September 30,



June 30,



March 31,



December 31,



September 30,


Dollars in thousands


2021



2021



2021



2020



2020


ASSETS





















Cash and due from banks


$

1,479,712




1,410,468




1,258,989




1,552,743




1,489,232


Interest-bearing deposits at banks



38,445,788




33,864,824




31,407,227




23,663,810




20,197,937


Federal funds sold









1,000








Trading account



624,556




712,558




687,359




1,068,581




1,215,573


Investment securities



6,447,622




6,143,177




6,610,667




7,045,697




7,723,004


Loans and leases:





















Commercial, financial, etc.



22,514,940




25,409,291




27,811,190




27,574,564




27,891,648


Real estate - commercial



37,023,952




37,558,775




37,425,974




37,637,889




37,582,084


Real estate - consumer



16,209,354




16,704,951




17,349,683




16,752,993




16,663,708


Consumer



17,834,648




17,440,415




16,712,233




16,570,421




16,309,608


Total loans and leases, net of unearned discount



93,582,894




97,113,432




99,299,080




98,535,867




98,447,048


Less: allowance for credit losses



1,515,024




1,575,128




1,636,206




1,736,387




1,758,505


Net loans and leases



92,067,870




95,538,304




97,662,874




96,799,480




96,688,543


Goodwill



4,593,112




4,593,112




4,593,112




4,593,112




4,593,112


Core deposit and other intangible assets



5,952




8,690




11,427




14,165




17,294


Other assets



8,236,582




8,351,574




8,248,405




7,863,517




6,702,048


Total assets


$

151,901,194




150,622,707




150,481,060




142,601,105




138,626,743























LIABILITIES AND SHAREHOLDERS' EQUITY





















Noninterest-bearing deposits


$

56,542,309




55,621,230




53,641,419




47,572,884




44,201,670


Interest-bearing deposits



72,158,987




72,647,542




74,193,255




71,580,750




70,061,680


Deposits at Cayman Islands office









641,691




652,104




899,989


Total deposits



128,701,296




128,268,772




128,476,365




119,805,738




115,163,339


Short-term borrowings



103,548




91,235




58,957




59,482




46,123


Accrued interest and other liabilities



2,067,188




2,042,948




2,000,727




2,166,409




1,857,383


Long-term borrowings



3,500,391




3,499,448




3,498,503




4,382,193




5,458,885


Total liabilities



134,372,423




133,902,403




134,034,552




126,413,822




122,525,730


Shareholders' equity:





















Preferred



1,750,000




1,250,000




1,250,000




1,250,000




1,250,000


Common



15,778,771




15,470,304




15,196,508




14,937,283




14,851,013


Total shareholders' equity



17,528,771




16,720,304




16,446,508




16,187,283




16,101,013


Total liabilities and shareholders' equity


$

151,901,194




150,622,707




150,481,060




142,601,105




138,626,743


 

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, 2021 from




September 30,


Change


Dollars in millions


2021


2020


2021


September 30,


June 30,




2021


2020


in




Balance



Rate


Balance



Rate


Balance



Rate


2020


2021




Balance



Rate


Balance



Rate


balance


ASSETS
















































Interest-bearing deposits at banks


$

39,036




.15

%


16,440




.10

%


32,081




.11

%


137

%


22

%



$

32,969




.12

%


13,021




.28

%


153

%

Federal funds sold and agreements to
resell securities






.47



5,113




.13






.48



-100



40





223




.12



2,353




.33




Trading account



51




2.71



50




1.62



49




1.76



2



3





50




1.97



54




2.15



-7


Investment securities



6,019




2.19



7,876




1.95



6,211




2.23



-24



-3





6,276




2.23



8,490




2.14



-26


Loans and leases, net of unearned
discount
















































Commercial, financial, etc.



23,730




3.96



28,333




3.05



27,055




3.26



-16



-12





26,155




3.57



27,455




3.37



-5


Real estate - commercial



37,547




3.87



37,243




4.19



37,419




3.92



1







37,525




3.98



36,743




4.47



2


Real estate - consumer



16,379




3.59



16,558




3.69



17,022




3.54



-1



-4





16,932




3.56



16,032




3.90



6


Consumer



17,658




4.34



16,076




4.76



17,114




4.44



10



3





17,134




4.47



15,683




4.96



9


Total loans and leases, net



95,314




3.95



98,210




3.89



98,610




3.79



-3



-3





97,746




3.91



95,913




4.17



2


Total earning assets



140,420




2.82



127,689




3.13



136,951




2.85



10



3





137,264




2.91



119,831




3.53



15


Goodwill



4,593







4,593







4,593













4,593







4,593








Core deposit and other intangible assets



7







19







10







-62



-27





10







23







-57


Other assets



9,017







7,880







9,087







14



-1





9,100







7,983







14


Total assets


$

154,037







140,181







150,641







10

%


2

%



$

150,967







132,430







14

%

















































LIABILITIES AND SHAREHOLDERS'
EQUITY
















































Interest-bearing deposits
















































Savings and interest-checking
deposits


$

70,976




.04



65,848




.14



71,561




.05



8

%


-1

%



$

71,000




.05



61,729




.27



15

%

Time deposits



3,061




.46



4,715




1.22



3,358




.61



-35



-9





3,381




.62



5,245




1.43



-36


Deposits at Cayman Islands office








957




.10



50




.12



-100



-100





242




.11



1,214




.42



-80


Total interest-bearing deposits



74,037




.06



71,520




.21



74,969




.07



4



-1





74,623




.08



68,188




.37



9


Short-term borrowings



91




.01



62




.01



61




.01



48



50





72




.01



61




.06



18


Long-term borrowings



3,431




1.75



5,499




1.51



3,429




1.74



-38







3,569




1.76



5,974




2.01



-40


Total interest-bearing liabilities



77,559




.14



77,081




.30



78,459




.14



1



-1





78,264




.15



74,223




.50



5


Noninterest-bearing deposits



57,218







44,786







53,444







28



7





53,864







39,931







35


Other liabilities



2,151







2,241







2,167







-4



-1





2,167







2,360







-8


Total liabilities



136,928







124,108







134,070







10



2





134,295







116,514







15


Shareholders' equity



17,109







16,073







16,571







6



3





16,672







15,916







5


Total liabilities and shareholders'
equity


$

154,037







140,181







150,641







10

%


2

%



$

150,967







132,430







14

%

















































Net interest spread







2.68







2.83







2.71















2.76







3.03





Contribution of interest-free funds







.06







.12







.06















.07







.19





Net interest margin







2.74

%






2.95

%






2.77

%














2.83

%






3.22

%




 

Reconciliation of Quarterly GAAP to Non-GAAP Measures




Three months ended



Nine months ended




September 30



September 30




2021



2020



2021



2020


Income statement data

















In thousands, except per share

















Net income

















Net income


$

495,460




372,136




1,400,778




882,012


Amortization of core deposit and other intangible assets (1)



2,028




2,893




6,085




8,680


Merger-related expenses (1)



6,542







17,498





Net operating income


$

504,030




375,029




1,424,361




890,692



















Earnings per common share

















Diluted earnings per common share


$

3.69




2.75




10.43




6.42


Amortization of core deposit and other intangible assets (1)



.02




.02




.05




.07


Merger-related expenses (1)



.05







.13





Diluted net operating earnings per common share


$

3.76




2.77




10.61




6.49



















Other expense

















Other expense


$

899,334




826,774




2,684,123




2,540,232


Amortization of core deposit and other intangible assets



(2,738)




(3,914)




(8,213)




(11,740)


Merger-related expenses



(8,826)







(22,670)





Noninterest operating expense


$

887,770




822,860




2,653,240




2,528,492


Merger-related expenses

















Salaries and employee benefits


$

60







64





Equipment and net occupancy



1







1





Outside data processing and software



625







869





Advertising and marketing



505







529





Printing, postage and supplies



730







2,779





Other costs of operations



6,905







18,428





Other expense


$

8,826







22,670





Efficiency ratio

















Noninterest operating expense (numerator)


$

887,770




822,860




2,653,240




2,528,492


Taxable-equivalent net interest income


$

970,953




947,114




2,902,154




2,890,353


Other income



569,126




520,561




1,588,357




1,537,194


Less:  Gain (loss) on bank investment securities



291




2,773




(22,646)




(11,040)


Denominator


$

1,539,788




1,464,902




4,513,157




4,438,587


Efficiency ratio



57.7

%



56.2

%



58.8

%



57.0

%

Balance sheet data

















In millions

















Average assets

















Average assets


$

154,037




140,181




150,967




132,430


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(7)




(19)




(10)




(23)


Deferred taxes



2




5




2




6


Average tangible assets


$

149,439




135,574




146,366




127,820


Average common equity

















Average total equity


$

17,109




16,073




16,672




15,916


Preferred stock



(1,495)




(1,250)




(1,332)




(1,250)


Average common equity



15,614




14,823




15,340




14,666


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(7)




(19)




(10)




(23)


Deferred taxes



2




5




2




6


Average tangible common equity


$

11,016




10,216




10,739




10,056


At end of quarter

















Total assets

















Total assets


$

151,901




138,627










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(6)




(17)










Deferred taxes



2




4










Total tangible assets


$

147,304




134,021










Total common equity

















Total equity


$

17,529




16,101










Preferred stock



(1,750)




(1,250)










Common equity



15,779




14,851










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(6)




(17)










Deferred taxes



2




4










Total tangible common equity


$

11,182




10,245










__________________

(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,




2021



2021



2021



2020



2020


Income statement data





















In thousands, except per share





















Net income





















Net income


$

495,460




458,069




447,249




471,140




372,136


Amortization of core deposit and other intangible assets (1)



2,028




2,023




2,034




2,313




2,893


Merger-related expenses (1)



6,542




2,867




8,089








Net operating income


$

504,030




462,959




457,372




473,453




375,029























Earnings per common share





















Diluted earnings per common share


$

3.69




3.41




3.33




3.52




2.75


Amortization of core deposit and other intangible assets (1)



.02




.02




.02




.02




.02


Merger-related expenses (1)



.05




.02




.06








Diluted net operating earnings per common share


$

3.76




3.45




3.41




3.54




2.77























Other expense





















Other expense


$

899,334




865,345




919,444




845,008




826,774


Amortization of core deposit and other intangible assets



(2,738)




(2,737)




(2,738)




(3,129)




(3,914)


Merger-related expenses



(8,826)




(3,893)




(9,951)








Noninterest operating expense


$

887,770




858,715




906,755




841,879




822,860


Merger-related expenses





















Salaries and employee benefits


$

60




4











Equipment and net occupancy



1














Outside data processing and software



625




244











Advertising and marketing



505




24











Printing, postage and supplies



730




2,049











Other costs of operations



6,905




1,572




9,951








Other expense


$

8,826




3,893




9,951








Efficiency ratio





















Noninterest operating expense (numerator)


$

887,770




858,715




906,755




841,879




822,860


Taxable-equivalent net interest income


$

970,953




946,072




985,128




993,252




947,114


Other income



569,126




513,633




505,598




551,250




520,561


Less:  Gain (loss) on bank investment securities



291




(10,655)




(12,282)




1,619




2,773


Denominator


$

1,539,788




1,470,360




1,503,008




1,542,883




1,464,902


Efficiency ratio



57.7

%



58.4

%



60.3

%



54.6

%



56.2

%

Balance sheet data





















In millions





















Average assets





















Average assets


$

154,037




150,641




148,157




144,563




140,181


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(7)




(10)




(13)




(16)




(19)


Deferred taxes



2




3




3




4




5


Average tangible assets


$

149,439




146,041




143,554




139,958




135,574


Average common equity





















Average total equity


$

17,109




16,571




16,327




16,213




16,073


Preferred stock



(1,495)




(1,250)




(1,250)




(1,250)




(1,250)


Average common equity



15,614




15,321




15,077




14,963




14,823


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(7)




(10)




(13)




(16)




(19)


Deferred taxes



2




3




3




4




5


Average tangible common equity


$

11,016




10,721




10,474




10,358




10,216


At end of quarter





















Total assets





















Total assets


$

151,901




150,623




150,481




142,601




138,627


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(6)




(9)




(12)




(14)




(17)


Deferred taxes



2




2




3




4




4


Total tangible assets


$

147,304




146,023




145,879




137,998




134,021


Total common equity





















Total equity


$

17,529




16,720




16,447




16,187




16,101


Preferred stock



(1,750)




(1,250)




(1,250)




(1,250)




(1,250)


Common equity



15,779




15,470




15,197




14,937




14,851


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(6)




(9)




(12)




(14)




(17)


Deferred taxes



2




2




3




4




4


Total tangible common equity


$

11,182




10,870




10,595




10,334




10,245


__________________

(1)

After any related tax effect.

 

INVESTOR CONTACT:


Donald J. MacLeod



(716) 842-5138




MEDIA CONTACT:


Maya Dillon



(212) 415-0557

 

M&T Bank Corporation

 

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SOURCE M&T Bank Corporation

Copyright 2021 PR Newswire

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