BUFFALO, N.Y., Jan. 17, 2019 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for 2018.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") were $3.76 in the fourth quarter of 2018, 87% higher than $2.01 in the year-earlier quarter and 7% above $3.53 in the third quarter of 2018.  GAAP-basis net income in the recent quarter was $546 million, up from $322 million in the fourth quarter of 2017 and $526 million in the third 2018 quarter. GAAP-basis net income for the fourth quarter of 2018 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.84% and 14.80%, respectively, improved from 1.06% and 8.03%, respectively, in the corresponding 2017 period and 1.80% and 14.08%, respectively, in the third quarter of 2018. In December 2018, M&T received approval from the Internal Revenue Service to change its tax return treatment for certain loan fees retroactive to 2017. Given the reduction of the Federal income tax rate in 2018, that change in treatment resulted in a $15 million reduction of income tax expense in the recent quarter. The impact of that benefit on net income was offset by a $20 million contribution to The M&T Charitable Foundation in the fourth quarter that, after applicable tax effect, reduced net income by $15 million. As compared with 2017, income tax expense in all 2018 periods reflects the reduction of the corporate Federal income tax rate from 35% to 21%. M&T's results in 2017's final quarter were reduced by $98 million, or $.65 of diluted earnings per common share, predominantly reflecting the impact of that lower tax rate on the carrying values of M&T's net deferred tax assets and other items.

Commenting on M&T's financial performance, Darren J. King, Executive Vice President and Chief Financial Officer, noted, "We are extremely pleased with M&T's performance this past quarter and for 2018 as a whole.  Our results reflect a continuation of many positive factors including growth in interest and noninterest revenues, subdued credit costs and well-controlled expenses. Average balances of loans to commercial customers rose in the recent quarter and year-end commercial balances grew $2.2 billion from the end of the third quarter. We believe M&T is well positioned as we enter 2019."

Earnings Highlights





































Change 4Q18 vs.


($ in millions, except per share data)


4Q18



4Q17



3Q18



4Q17



3Q18























Net income


$

546



$

322



$

526




69

%



4

%

Net income available to common shareholders  ̶  diluted


$

525



$

302



$

505




74

%



4

%

Diluted earnings per common share


$

3.76



$

2.01



$

3.53




87

%



7

%

Annualized return on average assets



1.84

%



1.06

%



1.80

%









Annualized return on average common equity



14.80

%



8.03

%



14.08

%






























 

Diluted earnings per common share were $12.74 for the year ended December 31, 2018, 46% higher than $8.70 in 2017. GAAP-basis net income for 2018 aggregated $1.92 billion, up 36% from $1.41 billion in 2017. Expressed as a rate of return on average assets and average common shareholders' equity, GAAP-basis net income for 2018 was 1.64% and 12.82%, respectively, improved from 1.17% and 8.87%, respectively, in 2017.

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 $3.79 in the recent quarter, compared with $2.04 in the fourth quarter of 2017 and $3.56 in the third quarter of 2018.  Net operating income for the fourth quarter of 2018 was $550 million, compared with $327 million in the year-earlier period and $531 million in 2018's third 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 1.93% and 22.16%, respectively, compared with 1.12% and 11.77%, respectively, in the corresponding 2017 quarter and 1.89% and 21.00%, respectively, in the third quarter of 2018.

For the year ended December 31, 2018, diluted net operating earnings per common share were $12.86, compared with $8.82 in 2017. Net operating income in 2018 increased 36% to $1.94 billion from $1.43 billion in 2017. Net operating income expressed as a rate of return on average tangible assets and average tangible common shareholders' equity was 1.72% and 19.09%, respectively, in 2018, compared with 1.23% and 13.00%, respectively, in 2017.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis totaled $1.06 billion in 2018's fourth quarter, improved 9% from $980 million in the year-earlier quarter and 3% above $1.03 billion in the third quarter of 2018. That growth predominantly resulted from a widening of the net interest margin to 3.92% in the recent quarter from 3.56% in the fourth quarter of 2017 and 3.88% in the third quarter of 2018 that reflects generally higher interest rates. Taxable-equivalent net interest income for the full year of 2018 increased 7% to $4.09 billion from $3.82 billion in 2017. The net interest margin was 3.83% in 2018 and 3.47% in 2017.

 






















Taxable-equivalent Net Interest Income





































Change 4Q18 vs.


($ in millions)


4Q18



4Q17



3Q18



4Q17



3Q18























Average earning assets


$

107,785



$

109,412



$

105,835




-1

%



2

%

Net interest income  ̶  taxable-equivalent


$

1,065



$

980



$

1,035




9

%



3

%

Net interest margin



3.92

%



3.56

%



3.88

%









Provision for Credit Losses/Asset Quality.  The provision for credit losses was $38 million in the fourth quarter of 2018, compared with $31 million in the year-earlier quarter and $16 million in 2018's third quarter. Net loan charge-offs were $38 million during the recent quarter, compared with $27 million in the fourth quarter of 2017 and $16 million in the third quarter of 2018. The lower net charge-offs in 2018's third quarter reflected significantly higher recoveries of previously charged-off loans.  Expressed as an annualized percentage of average loans outstanding, net charge-offs were .17% and .12% in the final quarters of 2018 and 2017, respectively, and .07% in the third quarter of 2018. The provision for credit losses was $132 million for the year ended December 31, 2018, compared with $168 million in 2017. Net loan charge-offs during 2018 and 2017 aggregated $130 million and $140 million, respectively, or .15% and .16%, respectively, of average loans outstanding.

Loans classified as nonaccrual totaled $894 million or 1.01% of total loans outstanding at December 31, 2018, compared with $883 million or 1.00% a year earlier and $871 million or 1.00% at September 30, 2018. Assets taken in foreclosure of defaulted loans were $78 million at December 31, 2018, improved from $112 million at December 31, 2017 and $87 million at September 30, 2018.

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 $1.02 billion at each of December 31, 2018, December 31, 2017 and September 30, 2018. As a percentage of loans outstanding, the allowance was 1.15% and 1.16% at December 31, 2018 and 2017, respectively, and 1.18% at September 30, 2018.

Asset Quality Metrics





































Change 4Q18 vs.


($ in millions)


4Q18



4Q17



3Q18



4Q17



3Q18























At end of quarter





















Nonaccrual loans


$

894



$

883



$

871




1

%



3

%

Real estate and other foreclosed assets


$

78



$

112



$

87




-30

%



-10

%

Total nonperforming assets


$

972



$

995



$

958




-2

%



1

%

Accruing loans past due 90 days or more (1)


$

223



$

244



$

254




-9

%



-13

%

Nonaccrual loans as % of loans outstanding



1.01

%



1.00

%



1.00

%






























Allowance for credit losses


$

1,019



$

1,017



$

1,019








Allowance for credit losses as % of loans outstanding



1.15

%



1.16

%



1.18

%






























For the period





















Provision for credit losses


$

38



$

31



$

16




23

%



138

%

Net charge-offs


$

38



$

27



$

16




40

%



141

%

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



.17

%



.12

%



.07

%































(1)

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

Noninterest Income and Expense.  Noninterest income totaled $481 million in the recent quarter, little changed from $484 million in the fourth quarter of 2017, but up from $459 million in the third quarter of 2018. As compared with the fourth quarter of 2017, higher credit-related fees, trading account and foreign exchange gains, and trust income in the recent quarter were offset by a decline in residential mortgage banking revenues and lower gains on investment securities. Higher trading account and foreign exchange gains, valuation gains on equity securities and increased commercial mortgage banking revenues in the recent quarter contributed to the improvement from the third quarter of 2018.

 

Noninterest Income





































Change 4Q18 vs.


($ in millions)


4Q18



4Q17



3Q18



4Q17



3Q18























Mortgage banking revenues


$

92



$

96



$

88




-4

%



4

%

Service charges on deposit accounts



109




108




109




1

%




Trust income



135




130




133




4

%



1

%

Brokerage services income



13




13




12







4

%

Trading account and foreign exchange gains



17




10




6




58

%



173

%

Gain (loss) on bank investment securities



4




21




(3)




-80

%




Other revenues from operations



111




106




114




5

%



-2

%

Total other income


$

481



$

484



$

459




-1

%



5

%

Noninterest income aggregated $1.86 billion in 2018 and $1.85 billion in 2017. Higher trust income in 2018 was largely offset by the impact of investment securities gains in 2017.

Noninterest expense aggregated $802 million in the fourth quarter of 2018, $796 million in the year-earlier quarter and $776 million in the third quarter of 2018.  Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets, noninterest operating expenses were $797 million in the recent quarter, $789 million in the fourth quarter of 2017 and $770 million in the third quarter of 2018. Higher salaries and employee benefits expenses in the recent quarter were largely offset by lower charitable contributions and FDIC assessments as compared with the fourth quarter of 2017. The higher level of noninterest expense in the final 2018 quarter as compared with the third quarter of 2018 was attributable to increased charitable contributions and costs for professional services and salaries and employee benefits, that were partially offset by lower FDIC assessments.

 

Noninterest Expense





































Change 4Q18 vs.


($ in millions)


4Q18



4Q17



3Q18



4Q17



3Q18























Salaries and employee benefits


$

439



$

402



$

431




9

%



2

%

Equipment and net occupancy



74




71




77




3

%



-5

%

Outside data processing and software



50




50




51







-1

%

FDIC assessments



10




24




19




-59

%



-48

%

Advertising and marketing



26




19




22




34

%



19

%

Printing, postage and supplies



9




9




9




2

%



-1

%

Amortization of core deposit and other intangible assets



5




7




6




-24

%



-13

%

Other costs of operations



189




214




161




-11

%



18

%

Total other expense


$

802



$

796



$

776




1

%



3

%






















For the year ended December 31, 2018, noninterest expense aggregated $3.29 billion, compared with $3.14 billion in 2017. Noninterest operating expenses were $3.26 billion and $3.11 billion in 2018 and 2017, respectively. The higher level of such expenses in 2018 resulted largely from increased costs for salaries and employee benefits, professional services and legal-related matters.

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 51.7% in the fourth quarter of 2018, 54.7% in the corresponding 2017 quarter and 51.4% in the third quarter of 2018. The efficiency ratio for the full year 2018 was 54.8%, improved from 55.1% in 2017.

Balance Sheet.  M&T had total assets of $120.1 billion at December 31, 2018, compared with $118.6 billion and $116.8 billion at December 31, 2017 and September 30, 2018, respectively. Loans and leases, net of unearned discount, were $88.5 billion at December 31, 2018, $88.0 billion at December 31, 2017 and $86.7 billion at September 30, 2018. Contributing to the higher outstanding balances of loans and leases at the recent quarter-end as compared with September 30, 2018 were growth in commercial loans and commercial real estate loans that was partially offset by acquired residential mortgage loan repayments. Total deposits were $90.2 billion at the recent year-end, compared with $92.4 billion at December 31, 2017 and $89.1 billion at September 30, 2018.

Total shareholders' equity was $15.5 billion at December 31, 2018 and $16.3 billion a year earlier, representing 12.87% and 13.70%, respectively, of total assets. Total shareholders' equity was $15.4 billion, or 13.21% of total assets at September 30, 2018. Common shareholders' equity was $14.2 billion, or $102.69 per share, at December 31, 2018, compared with $15.0 billion, or $100.03 per share, a year-earlier and $14.2 billion, or $100.38 per share, at September 30, 2018.  Tangible equity per common share was $69.28 at December 31, 2018, compared with $69.08 at December 31, 2017 and $67.64 at September 30, 2018. In the calculation of tangible equity per common share, common shareholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances.  M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under regulatory capital rules was approximately 10.13% at December 31, 2018.

In accordance with its 2018 capital plan, M&T repurchased 3,060,000 shares of its common stock during the recent quarter at an average cost per share of $163.34, for a total cost of $500 million. In the aggregate, during the 2018, M&T repurchased 12,295,817 shares of common stock at a total cost of $2.2 billion.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss fourth quarter financial results today at 11:00 a.m. Eastern Time.  Those wishing to participate in the call may dial (877) 780-2276.  International participants, using any applicable international calling codes, may dial (973) 582-2700.  Callers should reference M&T Bank Corporation or the conference ID #8982419.  The conference call will be webcast live through M&T's website at https://ir.mtb.com/events.cfm. A replay of the call will be available through Thursday, January 24, 2019 by calling (800) 585-8367, or (404) 537-3406 for international participants, and by making reference to ID #8982419.  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.cfm.

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







Year ended








December 31







December 31






Amounts in thousands, except per share


2018



2017



Change



2018



2017



Change


Performance

























Net income


$

546,219




322,403




69

%


$

1,918,080




1,408,306




36

%

Net income available to common shareholders



525,328




302,486




74

%



1,836,035




1,327,517




38

%

Per common share:

























Basic earnings


$

3.76




2.01




87

%


$

12.75




8.72




46

%

Diluted earnings



3.76




2.01




87

%



12.74




8.70




46

%

Cash dividends


$

1.00




.75




33

%


$

3.55




3.00




18

%

Common shares outstanding:

























Average - diluted (1)



139,838




150,348




-7

%



144,151




152,551




-6

%

Period end (2)



138,534




150,112




-8

%



138,534




150,112




-8

%

Return on (annualized):

























Average total assets



1.84

%



1.06

%







1.64

%



1.17

%





Average common shareholders' equity



14.80

%



8.03

%







12.82

%



8.87

%





Taxable-equivalent net interest income


$

1,064,918




980,457




9

%


$

4,094,199




3,815,614




7

%

Yield on average earning assets



4.51

%



3.93

%







4.33

%



3.82

%





Cost of interest-bearing liabilities



.94

%



.59

%







.78

%



.55

%





Net interest spread



3.57

%



3.34

%







3.55

%



3.27

%





Contribution of interest-free funds



.35

%



.22

%







.28

%



.20

%





Net interest margin



3.92

%



3.56

%







3.83

%



3.47

%





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



.17

%



.12

%







.15

%



.16

%





Net operating results (3)

























Net operating income


$

550,169




326,664




68

%


$

1,936,155




1,427,331




36

%

Diluted net operating earnings per common share



3.79




2.04




86

%



12.86




8.82




46

%

Return on (annualized):

























Average tangible assets



1.93

%



1.12

%







1.72

%



1.23

%





Average tangible common equity



22.16

%



11.77

%







19.09

%



13.00

%





Efficiency ratio



51.70

%



54.65

%







54.79

%



55.07

%
































At December 31
















Loan quality


2018



2017



Change














Nonaccrual loans


$

893,608




882,598




1

%













Real estate and other foreclosed assets



78,375




111,910




-30

%













Total nonperforming assets


$

971,983




994,508




-2

%













Accruing loans past due 90 days or more (4)


$

222,527




244,405




-9

%













Government guaranteed loans included in totals above:

























Nonaccrual loans


$

34,667




35,677




-3

%













Accruing loans past due 90 days or more



192,443




235,489




-18

%













Renegotiated loans


$

245,367




221,513




11

%













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


$

39,750




47,418




-16

%













Purchased impaired loans (6):

























Outstanding customer balance


$

529,520




688,091




-23

%













Carrying amount



303,305




410,015




-26

%













Nonaccrual loans to total net loans



1.01

%



1.00

%

















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




December 31,



September 30,



June 30,



March 31,



December 31,


Amounts in thousands, except per share


2018



2018



2018



2018



2017


Performance





















Net income


$

546,219




526,091




493,160




352,610




322,403


Net income available to common shareholders



525,328




505,365




472,600




332,749




302,486


Per common share:





















Basic earnings


$

3.76




3.54




3.26




2.24




2.01


Diluted earnings



3.76




3.53




3.26




2.23




2.01


Cash dividends


$

1.00




1.00




.80




.75




.75


Common shares outstanding:





















Average - diluted (1)



139,838




142,976




144,998




148,905




150,348


Period end (2)



138,534




141,479




144,261




146,799




150,112


Return on (annualized):





















Average total assets



1.84

%



1.80

%



1.70

%



1.22

%



1.06

%

Average common shareholders' equity



14.80

%



14.08

%



13.32

%



9.15

%



8.03

%

Taxable-equivalent net interest income


$

1,064,918




1,034,771




1,014,184




980,326




980,457


Yield on average earning assets



4.51

%



4.40

%



4.28

%



4.11

%



3.93

%

Cost of interest-bearing liabilities



.94

%



.82

%



.71

%



.64

%



.59

%

Net interest spread



3.57

%



3.58

%



3.57

%



3.47

%



3.34

%

Contribution of interest-free funds



.35

%



.30

%



.26

%



.24

%



.22

%

Net interest margin



3.92

%



3.88

%



3.83

%



3.71

%



3.56

%

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



.17

%



.07

%



.16

%



.19

%



.12

%

Net operating results (3)





















Net operating income


$

550,169




530,619




497,869




357,498




326,664


Diluted net operating earnings per common share



3.79




3.56




3.29




2.26




2.04


Return on (annualized):





















Average tangible assets



1.93

%



1.89

%



1.79

%



1.28

%



1.12

%

Average tangible common equity



22.16

%



21.00

%



19.91

%



13.51

%



11.77

%

Efficiency ratio



51.70

%



51.41

%



52.42

%



63.98

%



54.65

%
























December 31,



September 30,



June 30,



March 31,



December 31,


Loan quality


2018



2018



2018



2018



2017


Nonaccrual loans


$

893,608




870,832




819,984




864,671




882,598


Real estate and other foreclosed assets



78,375




87,333




98,062




101,514




111,910


Total nonperforming assets


$

971,983




958,165




918,046




966,185




994,508


Accruing loans past due 90 days or more (4)


$

222,527




254,360




223,026




235,325




244,405


Government guaranteed loans included in totals above:





















Nonaccrual loans


$

34,667




33,570




34,870




36,618




35,677


Accruing loans past due 90 days or more



192,443




195,450




202,394




223,611




235,489


Renegotiated loans


$

245,367




242,892




242,528




226,829




221,513


Accruing loans acquired at a discount past due 90 days or

        more (5)


$

39,750




44,223




47,405




49,349




47,418


Purchased impaired loans (6):





















Outstanding customer balance


$

529,520




572,979




606,683




643,124




688,091


Carrying amount



303,305




325,980




352,465




378,000




410,015


Nonaccrual loans to total net loans



1.01

%



1.00

%



.93

%



.99

%



1.00

%

Allowance for credit losses to total loans



1.15

%



1.18

%



1.16

%



1.16

%



1.16

%























(1)

Includes common stock equivalents.

(2)

Includes common stock issuable under deferred compensation plans.

(3)

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







Year ended








December 31







December 31






Dollars in thousands


2018



2017



Change



2018



2017



Change


Interest income


$

1,220,281




1,074,139




14

%


$

4,598,711




4,167,795




10

%

Interest expense



161,321




102,689




57




526,409




386,751




36


Net interest income



1,058,960




971,450




9




4,072,302




3,781,044




8


Provision for credit losses



38,000




31,000




23




132,000




168,000




-21


Net interest income after provision for credit losses



1,020,960




940,450




9




3,940,302




3,613,044




9


Other income

























Mortgage banking revenues



92,229




96,235




-4




360,442




363,827




-1


Service charges on deposit accounts



108,791




107,783




1




429,337




427,372





Trust income



135,024




129,669




4




537,585




501,381




7


Brokerage services income



12,781




12,768







51,069




61,445




-17


Trading account and foreign exchange gains



16,582




10,468




58




32,547




35,301




-8


Gain (loss) on bank investment securities



4,219




21,296




-80




(6,301)




21,279




-130


Other revenues from operations



110,970




105,834




5




451,321




440,538




2


Total other income



480,596




484,053




-1




1,856,000




1,851,143





Other expense

























Salaries and employee benefits



438,928




402,394




9




1,752,264




1,648,794




6


Equipment and net occupancy



73,519




71,363




3




298,828




295,084




1


Outside data processing and software



50,206




50,033







199,025




184,670




8


FDIC assessments



9,837




23,722




-59




68,526




101,871




-33


Advertising and marketing



25,910




19,366




34




85,710




69,203




24


Printing, postage and supplies



8,777




8,563




2




35,658




35,960




-1


Amortization of core deposit and other
   intangible assets



5,359




7,025




-24




24,522




31,366




-22


Other costs of operations



189,626




213,347




-11




823,529




773,377




6


Total other expense



802,162




795,813




1




3,288,062




3,140,325




5


Income before income taxes



699,394




628,690




11




2,508,240




2,323,862




8


Applicable income taxes



153,175




306,287




-50




590,160




915,556




-36


Net income


$

546,219




322,403




69

%


$

1,918,080




1,408,306




36

%

 

Condensed Consolidated Statement of Income, Five Quarter Trend







Three months ended




December 31,



September 30,



June 30,



March 31,



December 31,


Dollars in thousands


2018



2018



2018



2018



2017


Interest income


$

1,220,281




1,167,375




1,128,905




1,082,150




1,074,139


Interest expense



161,321




138,337




120,118




106,633




102,689


Net interest income



1,058,960




1,029,038




1,008,787




975,517




971,450


Provision for credit losses



38,000




16,000




35,000




43,000




31,000


Net interest income after provision for credit losses



1,020,960




1,013,038




973,787




932,517




940,450


Other income





















Mortgage banking revenues



92,229




88,408




92,499




87,306




96,235


Service charges on deposit accounts



108,791




108,647




106,784




105,115




107,783


Trust income



135,024




133,545




137,641




131,375




129,669


Brokerage services income



12,781




12,267




12,629




13,392




12,768


Trading account and foreign exchange gains



16,582




6,073




5,255




4,637




10,468


Gain (loss) on bank investment securities



4,219




(3,415)




2,326




(9,431)




21,296


Other revenues from operations



110,970




113,769




100,280




126,302




105,834


Total other income



480,596




459,294




457,414




458,696




484,053


Other expense





















Salaries and employee benefits



438,928




431,371




418,537




463,428




402,394


Equipment and net occupancy



73,519




77,481




73,031




74,797




71,363


Outside data processing and software



50,206




50,678




49,712




48,429




50,033


FDIC assessments



9,837




18,849




19,560




20,280




23,722


Advertising and marketing



25,910




21,784




21,768




16,248




19,366


Printing, postage and supplies



8,777




8,843




8,719




9,319




8,563


Amortization of core deposit and other
      intangible assets



5,359




6,143




6,388




6,632




7,025


Other costs of operations



189,626




160,830




178,862




294,211




213,347


Total other expense



802,162




775,979




776,577




933,344




795,813


Income before income taxes



699,394




696,353




654,624




457,869




628,690


Applicable income taxes



153,175




170,262




161,464




105,259




306,287


Net income


$

546,219




526,091




493,160




352,610




322,403


 

 

Condensed Consolidated Balance Sheet












December 31







Dollars in thousands


2018



2017



Change



ASSETS














Cash and due from banks


$

1,605,439




1,420,888




13


%

Interest-bearing deposits at banks



8,105,197




5,078,903




60



Trading account



185,584




132,909




40



Investment securities



12,692,813




14,664,525




-13



Loans and leases:














Commercial, financial, etc.



22,977,976




21,742,651




6



Real estate - commercial



34,363,556




33,366,373




3



Real estate - consumer



17,154,446




19,613,344




-13



Consumer



13,970,499




13,266,615




5



Total loans and leases, net of unearned discount



88,466,477




87,988,983




1



Less: allowance for credit losses



1,019,444




1,017,198






Net loans and leases



87,447,033




86,971,785




1



Goodwill



4,593,112




4,593,112






Core deposit and other intangible assets



47,067




71,589




-34



Other assets



5,421,158




5,659,776




-4



Total assets


$

120,097,403




118,593,487




1


%















LIABILITIES AND SHAREHOLDERS' EQUITY














Noninterest-bearing deposits


$

32,256,668




33,975,180




-5


%

Interest-bearing deposits



57,087,998




58,278,970




-2



Deposits at Cayman Islands office



811,906




177,996




356



Total deposits



90,156,572




92,432,146




-2



Short-term borrowings



4,398,378




175,099






Accrued interest and other liabilities



1,637,348




1,593,993




3



Long-term borrowings



8,444,914




8,141,430




4



Total liabilities



104,637,212




102,342,668




2



Shareholders' equity:














Preferred



1,231,500




1,231,500






Common



14,228,691




15,019,319




-5



Total shareholders' equity



15,460,191




16,250,819




-5



Total liabilities and shareholders' equity


$

120,097,403




118,593,487




1


%

 

 

Condensed Consolidated Balance Sheet, Five Quarter Trend











December 31,



September 30,



June 30,



March 31,



December 31,


Dollars in thousands


2018



2018



2018



2018



2017


ASSETS





















Cash and due from banks


$

1,605,439




1,311,611




1,367,594




1,291,664




1,420,888


Interest-bearing deposits at banks



8,105,197




6,523,746




6,669,985




6,135,434




5,078,903


Federal funds sold









1,500




1,000





Trading account



185,584




125,038




148,303




141,134




132,909


Investment securities



12,692,813




13,073,881




13,283,002




14,066,564




14,664,525


Loans and leases:





















Commercial, financial, etc.



22,977,976




21,635,394




21,894,857




21,697,522




21,742,651


Real estate - commercial



34,363,556




33,518,375




34,137,937




33,753,506




33,366,373


Real estate - consumer



17,154,446




17,721,399




18,310,712




18,960,946




19,613,344


Consumer



13,970,499




13,805,317




13,453,944




13,298,775




13,266,615


Total loans and leases, net of unearned discount



88,466,477




86,680,485




87,797,450




87,710,749




87,988,983


Less: allowance for credit losses



1,019,444




1,019,488




1,019,248




1,019,671




1,017,198


Net loans and leases



87,447,033




85,660,997




86,778,202




86,691,078




86,971,785


Goodwill



4,593,112




4,593,112




4,593,112




4,593,112




4,593,112


Core deposit and other intangible assets



47,067




52,426




58,569




64,957




71,589


Other assets



5,421,158




5,486,826




5,525,786




5,637,881




5,659,776


Total assets


$

120,097,403




116,827,637




118,426,053




118,622,824




118,593,487























LIABILITIES AND SHAREHOLDERS' EQUITY





















Noninterest-bearing deposits


$

32,256,668




31,773,560




32,086,191




31,817,516




33,975,180


Interest-bearing deposits



57,087,998




56,919,549




56,924,970




58,851,050




58,278,970


Deposits at Cayman Islands office



811,906




447,287




261,427




278,064




177,996


Total deposits



90,156,572




89,140,396




89,272,588




90,946,630




92,432,146


Short-term borrowings



4,398,378




1,310,110




3,239,416




1,626,129




175,099


Accrued interest and other liabilities



1,637,348




1,800,778




1,953,848




1,749,320




1,593,993


Long-term borrowings



8,444,914




9,140,268




8,382,316




8,591,051




8,141,430


Total liabilities



104,637,212




101,391,552




102,848,168




102,913,130




102,342,668


Shareholders' equity:





















Preferred



1,231,500




1,231,500




1,231,500




1,231,500




1,231,500


Common



14,228,691




14,204,585




14,346,385




14,478,194




15,019,319


Total shareholders' equity



15,460,191




15,436,085




15,577,885




15,709,694




16,250,819


Total liabilities and shareholders' equity


$

120,097,403




116,827,637




118,426,053




118,622,824




118,593,487


 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates





Three months ended



Change in balance




Year ended







December 31,


December 31,



September 30,



December 31, 2018 from




December 31,



Change

Dollars in millions


2018


2017



2018



December 31,



September 30,




2018



2017



in



Balance



Rate


Balance



Rate



Balance



Rate



2017



2018




Balance



Rate



Balance



Rate



balance

ASSETS
















































Interest-bearing deposits at banks


$

7,394



2.23

%


6,680



1.31

%



5,207



1.98

%



11

%



42

%



$

5,614



1.93

%



5,578



1.10

%



1

%

Federal funds sold
























1



1.95










Trading account



56



2.65



87



1.31




65



1.78




-35




-14





58



2.55




71



1.70




-18


Investment securities



13,034



2.41



14,808



2.30




13,431



2.37




-12




-3





13,694



2.37




15,538



2.34




-12


Loans and leases, net of unearned

    discount
















































Commercial, financial, etc.



22,376



4.92



21,562



4.06




21,689



4.68




4




3





21,832



4.60




21,981



3.88




-1


Real estate - commercial



33,586



5.27



33,138



4.61




33,800



5.10




1




-1





33,682



5.01




33,196



4.40




1


Real estate - consumer



17,421



4.31



19,974



4.03




18,006



4.21




-13




-3





18,330



4.18




21,013



3.96




-13


Consumer



13,918



5.35



13,163



4.91




13,637



5.26




6




2





13,555



5.19




12,625



4.82




7


Total loans and leases, net



87,301



5.02



87,837



4.40




87,132



4.86




-1








87,399



4.79




88,815



4.25




-2


Total earning assets



107,785



4.51



109,412



3.93




105,835



4.40




-1




2





106,766



4.33




110,002



3.82




-3


Goodwill



4,593






4,593







4,593














4,593







4,593








Core deposit and other intangible

    assets



50






75







55







-34




-11





59







86







-32


Other assets



5,371






6,146







5,514







-13




-3





5,541







6,179







-10


Total assets


$

117,799






120,226







115,997







-2

%



2

%



$

116,959







120,860







-3

%

















































LIABILITIES AND
SHAREHOLDERS' EQUITY
















































Interest-bearing deposits
















































Savings and interest-checking
     
deposits


$

51,820



.54



53,436



.29




51,552



.43




-3

%



1

%



$

52,102



.41




53,399



.25




-2

%

Time deposits



5,960



1.07



6,888



.70




5,826



.88




-13




2





6,025



.85




8,161



.75




-26


Deposits at Cayman Islands
     
office



693



1.81



215



.61




407



1.52




223




70





394



1.43




185



.64




114


Total interest-bearing
     deposits



58,473



.61



60,539



.34




57,785



.49




-3




1





58,521



.47




61,745



.32




-5


Short-term borrowings



315



1.91



178



.81




374



1.70




77




-16





331



1.63




205



.74




62


Long-term borrowings



9,239



3.03



8,464



2.37




9,047



2.90




9




2





8,845



2.81




8,302



2.28




7


Total interest-bearing liabilities



68,027



.94



69,181



.59




67,206



.82




-2




1





67,697



.78




70,252



.55




-4


Noninterest-bearing deposits



32,631






32,930







31,467







-1




4





31,893







32,520







-2


Other liabilities



1,752






1,844







1,775







-5




-1





1,739







1,793







-3


Total liabilities



102,410






103,955







100,448







-1




2





101,329







104,565







-3


Shareholders' equity



15,389






16,271







15,549







-5




-1





15,630







16,295







-4


Total liabilities and

    shareholders' equity


$

117,799






120,226







115,997







-2

%



2

%



$

116,959







120,860







-3

%

















































Net interest spread






3.57






3.34







3.58
















3.55







3.27






Contribution of interest-free funds






.35






.22







.30
















.28







.20






Net interest margin






3.92

%





3.56

%






3.88

%















3.83

%






3.47

%





 

 

Reconciliation of GAAP to Non-GAAP Measures











Three months ended



Year ended




December 31



December 31




2018



2017



2018



2017


Income statement data

















In thousands, except per share

















Net income

















Net income


$

546,219




322,403




1,918,080




1,408,306


Amortization of core deposit and other intangible assets (1)



3,950




4,261




18,075




19,025


Net operating income


$

550,169




326,664




1,936,155




1,427,331



















Earnings per common share

















Diluted earnings per common share


$

3.76




2.01




12.74




8.70


Amortization of core deposit and other intangible assets (1)



.03




.03




.12




.12


Diluted net operating earnings per common share


$

3.79




2.04




12.86




8.82



















Other expense

















Other expense


$

802,162




795,813




3,288,062




3,140,325


Amortization of core deposit and other intangible assets



(5,359)




(7,025)




(24,522)




(31,366)


Noninterest operating expense


$

796,803




788,788




3,263,540




3,108,959


Efficiency ratio

















Noninterest operating expense (numerator)


$

796,803




788,788




3,263,540




3,108,959


Taxable-equivalent net interest income



1,064,918




980,457




4,094,199




3,815,614


Other income



480,596




484,053




1,856,000




1,851,143


Less:  Gain (loss) on bank investment securities



4,219




21,296




(6,301)




21,279


Denominator


$

1,541,295




1,443,214




5,956,500




5,645,478


Efficiency ratio



51.70

%



54.65

%



54.79

%



55.07

%

Balance sheet data

















In millions

















Average assets

















Average assets


$

117,799




120,226




116,959




120,860


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(50)




(75)




(59)




(86)


Deferred taxes



13




26




16




33


Average tangible assets


$

113,169




115,584




112,323




116,214


Average common equity

















Average total equity


$

15,389




16,271




15,630




16,295


Preferred stock



(1,232)




(1,232)




(1,232)




(1,232)


Average common equity



14,157




15,039




14,398




15,063


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(50)




(75)




(59)




(86)


Deferred taxes



13




26




16




33


Average tangible common equity


$

9,527




10,397




9,762




10,417


At end of quarter

















Total assets

















Total assets


$

120,097




118,593










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(47)




(72)










Deferred taxes



13




19










Total tangible assets


$

115,470




113,947










Total common equity

















Total equity


$

15,460




16,251










Preferred stock



(1,232)




(1,232)










Undeclared dividends - cumulative preferred stock



(3)




(3)










Common equity, net of undeclared cumulative preferred dividends



14,225




15,016










Goodwill



(4,593)




(4,593)










Core deposit and other intangible assets



(47)




(72)










Deferred taxes



13




19










Total tangible common equity


$

9,598




10,370










 

(1)

     After any related tax effect.

 

 

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







Three months ended




December 31,



September 30,



June 30,



March 31,



December 31,




2018



2018



2018



2018



2017


Income statement data





















In thousands, except per share





















Net income





















Net income


$

546,219




526,091




493,160




352,610




322,403


Amortization of core deposit and other intangible assets (1)



3,950




4,528




4,709




4,888




4,261


Net operating income


$

550,169




530,619




497,869




357,498




326,664























Earnings per common share





















Diluted earnings per common share


$

3.76




3.53




3.26




2.23




2.01


Amortization of core deposit and other intangible assets (1)



.03




.03




.03




.03




.03


Diluted net operating earnings per common share


$

3.79




3.56




3.29




2.26




2.04























Other expense





















Other expense


$

802,162




775,979




776,577




933,344




795,813


Amortization of core deposit and other intangible assets



(5,359)




(6,143)




(6,388)




(6,632)




(7,025)


Noninterest operating expense


$

796,803




769,836




770,189




926,712




788,788


Efficiency ratio





















Noninterest operating expense (numerator)


$

796,803




769,836




770,189




926,712




788,788


Taxable-equivalent net interest income



1,064,918




1,034,771




1,014,184




980,326




980,457


Other income



480,596




459,294




457,414




458,696




484,053


Less:  Gain (loss) on bank investment securities



4,219




(3,415)




2,326




(9,431)




21,296


Denominator


$

1,541,295




1,497,480




1,469,272




1,448,453




1,443,214


Efficiency ratio



51.70

%



51.41

%



52.42

%



63.98

%



54.65

%

Balance sheet data





















In millions





















Average assets





















Average assets


$

117,799




115,997




116,413




117,684




120,226


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(50)




(55)




(62)




(68)




(75)


Deferred taxes



13




14




17




18




26


Average tangible assets


$

113,169




111,363




111,775




113,041




115,584


Average common equity





















Average total equity


$

15,389




15,549




15,533




16,059




16,271


Preferred stock



(1,232)




(1,232)




(1,232)




(1,232)




(1,232)


Average common equity



14,157




14,317




14,301




14,827




15,039


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(50)




(55)




(62)




(68)




(75)


Deferred taxes



13




14




17




18




26


Average tangible common equity


$

9,527




9,683




9,663




10,184




10,397


At end of quarter





















Total assets





















Total assets


$

120,097




116,828




118,426




118,623




118,593


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(47)




(52)




(59)




(65)




(72)


Deferred taxes



13




14




16




17




19


Total tangible assets


$

115,470




112,197




113,790




113,982




113,947


Total common equity





















Total equity


$

15,460




15,436




15,578




15,710




16,251


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



14,225




14,201




14,343




14,475




15,016


Goodwill



(4,593)




(4,593)




(4,593)




(4,593)




(4,593)


Core deposit and other intangible assets



(47)




(52)




(59)




(65)




(72)


Deferred taxes



13




14




16




17




19


Total tangible common equity


$

9,598




9,570




9,707




9,834




10,370


(1)

After any related tax effect.

 

 

INVESTOR CONTACT:

Donald J. MacLeod


(716) 842-5138



MEDIA CONTACT:

C. Michael Zabel


(716) 842-5385

 

 

M&T Bank Corporation

 

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/mt-bank-corporation-announces-2018-fourth-quarter-and-full-year-results-300780143.html

SOURCE M&T Bank Corporation

Copyright 2019 PR Newswire

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