M&T BANK CORPORATION ANNOUNCES SECOND QUARTER RESULTS

45 M&T BANK CORPORATION ANNOUNCES SECOND QUARTER RESULTS

BUFFALO, N.Y., July 19, 2023 /PRNewswire/ — M&T Bank Corporation (“M&T”) (NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2023.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) were $5.05 in the second quarter of 2023, up from $1.08 in the year-earlier quarter and $4.01 in the first quarter of 2023. GAAP-basis net income was $867 million in the recent quarter, $218 million in the second quarter of 2022 and $702 million in the initial 2023 quarter. GAAP-basis net income expressed as an annualized rate of return on average assets and average common shareholders’ equity increased to 1.70% and 14.27%, respectively, in the second quarter of 2023 from .42% and 3.21%, respectively, in the corresponding 2022 period and 1.40% and 11.74%, respectively, in the first quarter of 2023. Non-operating merger-related expenses associated with the April 1, 2022 acquisition of People’s United Financial, Inc. (“People’s United”) totaled $465 million ($346 million after-tax effect, or $1.94 of diluted earnings per common share) in 2022’s second quarter. No merger-related expenses were incurred in the first half of 2023.

In April 2023 M&T completed the divestiture of its Collective Investment Trust (“CIT”) business to a private equity firm. The sale of this business resulted in a pre-tax gain of $225 million ($157 million after tax, or $0.94 of diluted earnings per common share) in the second quarter of 2023 results of operations.

Daryl N. Bible, Chief Financial Officer, commenting on M&T’s results noted, “The strong performance of our second quarter exemplifies the commitment of M&T to our operating principles and our purpose. Bolstered by the successful sale of the CIT business and healthy growth in commercial loans, we have further fortified our capital levels. Our dedication to our customers is evident through the resilience of our core deposit and funding levels. Moreover, our credit costs in the first half of 2023 were consistent with our long-term historical averages. As we move forward into the second half of 2023, our primary focus remains on serving the evolving needs of our diverse customer base by offering an extensive array of innovative products and services. I am proud of how our colleagues continue to care for our customers and make a difference in people’s lives and in our communities.”

Earnings Highlights





























Change 2Q23 vs.


($ in millions, except per share data)


2Q23



2Q22



1Q23



2Q22



1Q23


















Net income


$

867



$

218



$

702




299

%



24

%

Net income available to common shareholders  ̶  diluted


$

841



$

192



$

676




337

%



24

%

Diluted earnings per common share


$

5.05



$

1.08



$

4.01




368

%



26

%

Annualized return on average assets



1.70

%



.42

%



1.40

%







Annualized return on average common equity



14.27

%



3.21

%



11.74

%







 

For the first six months of 2023, diluted earnings per common share rose 163% to $9.06 from $3.45 in the year-earlier period. GAAP-basis net income for the first half of 2023 increased to $1.57 billion from $580 million in the corresponding 2022 period. Expressed as an annualized rate of return on average assets and average common shareholders’ equity, GAAP-basis net income in the six-month period ended June 30, 2023 was 1.55% and 13.02%, respectively, improved from .65% and 5.34%, respectively, in the similar 2022 period.

Supplemental Reporting of Non-GAAP Results of Operations.  M&T consistently provides supplemental reporting of its results on a “net operating” or “tangible” basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill and core deposit and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T (when incurred), since such items are considered by management to be “nonoperating” in nature.

Merger-related expenses associated with the People’s United acquisition in 2022 generally consisted of professional services, temporary help fees and other costs associated with actual or planned conversions of systems and/or integration of operations and the introduction of M&T to its new customers, costs related to terminations of existing contractual arrangements to purchase various services, severance, travel costs and, in the second quarter of 2022, an initial provision for credit losses of $242 million on loans not deemed to be purchased credit deteriorated (“PCD”) on the April 1, 2022 acquisition date of People’s United. Given the requirement under GAAP to recognize such losses above and beyond the impact of forecasted losses used in determining the fair value of acquired loans, M&T considers that initial provision to be a merger-related expense. 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. The amounts of merger-related expenses in 2022 are presented in the tables that accompany this release. No merger-related expenses were incurred in the first half of 2023.

Diluted net operating earnings per common share were $5.12 in the second quarter of 2023, $3.10 in the year-earlier quarter and $4.09 in 2023’s first quarter. Net operating income was $879 million in the recent quarter, up from $578 million in the second quarter of 2022 and $715 million in the initial 2023 quarter. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity, net operating income was 1.80% and 22.73%, respectively, in the second quarter of 2023, compared with 1.16% and 14.41%, respectively, in the corresponding 2022 period and 1.49% and 19.00%, respectively, in the first quarter of 2023.

Diluted net operating earnings per common share in the first six months of 2023 were $9.21, improved from $5.88 in the similar 2022 period. Net operating income during the first half of 2023 was $1.59 billion, 67% higher than $954 million recorded in the six-month period ended June 30, 2022. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity was 1.65% and 20.90%, respectively, in the initial six months of 2023, improved from 1.11% and 13.57%, respectively, in the similar 2022 period.

Taxable-equivalent Net Interest Income.  Expressed on a taxable-equivalent basis, net interest income totaled $1.81 billion in the recent quarter, compared with $1.42 billion in the second quarter of 2022 and $1.83 billion in the initial 2023 quarter. The increase from the year-earlier quarter reflects a 90 basis point widening of the net interest margin to 3.91% in the second quarter of 2023, that was damped by higher levels of borrowings. The modestly lower taxable-equivalent net interest income in the recent quarter as compared with 2023’s first quarter reflects a 13 basis point narrowing of the net interest margin and a $7.09 billion rise in interest-bearing liabilities, partially offset by a $1.87 billion increase in average earning assets and by one additional day of taxable-equivalent net interest income. The decreased net interest margin predominantly resulted from higher rates paid on interest-bearing deposits.

















Taxable-equivalent Net Interest Income





























Change 2Q23 vs.


($ in millions)


2Q23



2Q22



1Q23



2Q22



1Q23


















Average earning assets


$

185,936



$

189,755



$

184,069




-2

%



1

%

Net interest income  ̶  taxable-equivalent


$

1,813



$

1,422



$

1,832




27

%



-1

%

Net interest margin



3.91

%



3.01

%



4.04

%







 

Provision for Credit Losses/Asset Quality.  M&T recorded a provision for credit losses of $150 million in the second quarter of 2023, compared with $302 million in the year-earlier quarter and $120 million in the first quarter of 2023. The decline in provision as compared with the 2022’s second quarter is primarily due to the $242 million provision recorded in the year-earlier quarter for non-PCD loans obtained in the acquisition of People’s United, partially offset by lower forecasted commercial real estate values and other loan growth. The increase in provision in the recent quarter compared with the first quarter of 2023 also reflects a decline in forecasted commercial real estate values. Net loan charge-offs were $127 million in the second quarter of 2023, $50 million in the second quarter of 2022 and $70 million in 2023’s first quarter. The higher level of charge-offs in recent quarter as compared with earlier quarters reflects higher charge-offs of commercial real estate loans including office and healthcare facilities. Net loan charge-offs expressed as an annualized percentage of average loans outstanding were .38% and .16% in the second quarters of 2023 and 2022, respectively, compared with .22% in the initial 2023 quarter.

Nonaccrual loans were $2.44 billion or 1.83% of loans outstanding at June 30, 2023, compared with $2.56 billion or 1.92% at March 31, 2023 and $2.63 billion or 2.05% at June 30, 2022. The balance of nonaccrual loans at the end of the recent quarter as compared with March 31, 2023 and June 30, 2022 reflects lower levels of hospitality-related loans. Assets taken in foreclosure of defaulted loans were $43 million at June 30, 2023, $29 million at June 30, 2022 and $45 million at March 31, 2023.

Allowance for Credit Losses.  For purposes of determining the adequacy of the allowance for credit losses M&T regularly performs comprehensive analyses of its loan portfolios and assesses forecasted economic conditions. As a result of those procedures and reflecting the impact of loan growth, the allowance for credit losses totaled $2.00 billion or 1.50% of loans outstanding at June 30, 2023, compared with $1.82 billion or 1.42% of loans outstanding at June 30, 2022 and $1.98 billion or 1.49% at March 31, 2023. The acquisition of People’s United loans and leases resulted in a $341 million increase in the allowance for credit losses as of April 1, 2022, including $99 million related to PCD loans and $242 million related to non-PCD loans. Including the impact of the acquisition, M&T’s allowance for credit losses was $1.81 billion on April 1, 2022, or 1.42% of then outstanding loans.

Asset Quality Metrics













Change 2Q23 vs.


($ in millions)


2Q23



2Q22



1Q23



2Q22



1Q23


















At end of quarter
















Nonaccrual loans


$

2,435



$

2,633



$

2,557




-7

%



-5

%

Real estate and other foreclosed assets


$

43



$

29



$

44




49

%



-4

%

Total nonperforming assets


$

2,478



$

2,662



$

2,601




-7

%



-5

%

Accruing loans past due 90 days or more (1)


$

380



$

524



$

407




-27

%



-7

%

Nonaccrual loans as % of loans outstanding



1.83

%



2.05

%



1.92

%























Allowance for credit losses


$

1,998



$

1,824



$

1,975




10

%



1

%

Allowance for credit losses as % of loans outstanding



1.50

%



1.42

%



1.49

%























For the period
















Provision for credit losses


$

150



$

302



$

120




-50

%



25

%

Net charge-offs (2)



127



$

50



$

70




156

%



80

%

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



.38

%



.16

%



.22

%









(1)

Predominantly government-guaranteed residential real estate loans.

(2)

For the quarter-ended June 30, 2022, net charge-offs and related data do not reflect $33 million of charge-offs related to PCD acquired loans.

 

Noninterest Income and Expense.  Noninterest income totaled $803 million in the second quarter of 2023, improved from $571 million in the year-earlier quarter. The increase in the recent quarter is predominantly due to a $225 million gain on the sale of the CIT business, a rise in mortgage banking revenues of $24 million reflecting higher gains on sale of residential mortgages and favorable trading and non-hedging derivative gains. Those increases were partially offset by an $18 million decline in trust income reflecting the sale of the CIT business and a $9 million decrease in insurance revenues predominantly due to the sale of M&T Insurance Agency in 2022’s fourth quarter. Noninterest income was $587 million in 2023’s first quarter. The comparative increase in the recent quarter was driven by the gain recorded on the sale of the CIT business in the second quarter of 2023, a $22 million increase in mortgage banking revenues resulting largely from the bulk purchase of residential mortgage loan servicing rights at the end of the first quarter of 2023, higher service charges on deposit accounts and favorable trading and non-hedging derivative gains, partially offset by lower trust income of $21 million, reflecting the sale of the CIT business, and a $20 million distribution from Bayview Lending Group LLC received in the first quarter of 2023.

Noninterest Income





























Change 2Q23 vs.


($ in millions)


2Q23



2Q22



1Q23



2Q22



1Q23


















Mortgage banking revenues


$

107



$

83



$

85




29

%



26

%

Service charges on deposit accounts



119




124




113




-4

%



5

%

Trust income



172




190




194




-9

%



-11

%

Brokerage services income



25




24




24




4

%



5

%

Trading account and non-hedging derivative gains



17




2




12




631

%



44

%

Gain (loss) on bank investment securities



1














Other revenues from operations



362




148




159




145

%



127

%

Total


$

803



$

571



$

587




41

%



37

%

 

Noninterest expense aggregated $1.29 billion in the second quarter of 2023, down from $1.40 billion in the similar quarter of 2022 and $1.36 billion in the first quarter of 2023. 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 $1.28 billion in the recent quarter, $1.16 billion in the second quarter of 2022 and $1.34 billion in 2023’s initial quarter. The higher level of operating expenses in the recent quarter as compared with the year-earlier quarter reflects increased salaries and employee benefits expense, resulting from higher staffing levels and annual merit increases, and increases in outside data processing and software costs, expenses related to the bulk purchase of residential mortgage loan servicing rights and check fraud losses. Those higher costs were partially offset by a decline in professional services expenses reflecting lower sub-advisory fees as a result of the sale of the CIT business. The decline of operating expenses in the recent quarter as compared with the first quarter of 2023 reflects a decrease in salaries and employee benefits expense, predominantly due to seasonal stock compensation and employee benefits expenses recorded in the first quarter of 2023, partially offset by higher average staffing levels and the full quarter impact of merit increases. In addition, a decline in professional services expenses in the recent quarter, reflecting lower sub-advisory fees as a result of the sale of the CIT business, was partially offset by an increase in expenses related to the bulk purchase of residential mortgage loan servicing rights.

Noninterest Expense





























Change 2Q23 vs.


($ in millions)


2Q23



2Q22



1Q23



2Q22



1Q23


















Salaries and employee benefits


$

738



$

776



$

808




-5

%



-9

%

Equipment and net occupancy



129




125




127




3

%



1

%

Outside data processing and software



106




94




106




13

%



1

%

FDIC assessments



28




22




30




24

%



-6

%

Advertising and marketing



28




21




31




37

%



-9

%

Printing, postage and supplies



14




16




14




-9

%




Amortization of core deposit and other intangible assets



15




18




17




-19

%



-13

%

Other costs of operations



235




331




226




-29

%



4

%

Total


$

1,293



$

1,403



$

1,359




-8

%



-5

%

















 

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 48.9% in the second quarter of 2023, 58.3% in the year-earlier quarter and 55.5% in the first quarter of 2023.

Balance Sheet.  M&T had total assets of $207.7 billion at June 30, 2023, compared with $204.0 billion and $203.0 billion at June 30, 2022 and March 31, 2023, respectively. Loans and leases, net of unearned discount, were $133.3 billion at June 30, 2023, compared with $128.5 billion at June 30, 2022 and $132.9 billion at March 31, 2023. The higher balance of loans and leases at June 30, 2023 as compared with June 30, 2022 and March 31, 2023 predominantly reflects higher outstanding balances of commercial loans, partially offset by lower commercial real estate loans. Total deposits were $162.1 billion at the recent quarter-end and $159.1 billion at March 31, 2023, compared with $170.4 billion at June 30, 2022. The increase in deposits in the recent quarter as compared with March 31, 2023 reflects an increase in time deposits and savings and interest-checking deposits, partially offset by a decline in noninterest-bearing deposits. The lower deposit levels at June 30, 2023 as compared with the June 30, 2022 reflect lower noninterest-bearing deposits and savings and interest-checking deposits, partially offset by higher time deposits as customers shifted funds to higher yielding deposit products.

Total shareholders’ equity was $25.8 billion or 12.42% of total assets at June 30, 2023, $25.8 billion or 12.64% at June 30, 2022 and $25.4 billion or 12.50% at March 31, 2023. Common shareholders’ equity was $23.8 billion, or $143.41 per share, at June 30, 2023, compared with $23.8 billion, or $135.16 per share, a year earlier and $23.4 billion, or $140.88 per share, at March 31, 2023. Tangible equity per common share was $91.58 at June 30, 2023, $85.78 at June 30, 2022 and $88.81 at March 31, 2023. 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 10.58% at June 30, 2023, compared with 10.16% three months earlier.

M&T repurchased 3,505,946 shares at an average cost per share of $171.14 resulting in a total cost of $600 million in 2022’s second quarter and 3,838,157 shares at an average cost per share of $154.76 resulting in a total cost, including the share repurchase excise tax, of $600 million in the first quarter of 2023. There were no share repurchases in the second quarter of 2023.

Conference Call.  Investors will have an opportunity to listen to M&T’s conference call to discuss second quarter financial results today at 8:00 a.m. Eastern Time. Those wishing to participate in the call may dial (800) 225-9448. International participants, using any applicable international calling codes, may dial (203) 518-9708. Callers should reference M&T Bank Corporation or the conference ID #MTBQ223. 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 July 26, 2023 by calling (800) 839-5642, or (402) 220-2564 for international participants. No conference ID or passcode 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, provides banking products and services in 12 states across the eastern U.S. from Maine to Virginia and Washington, D.C. Trust-related services are provided in select markets in the U.S. and abroad by M&T’s Wilmington Trust-affiliated companies and by M&T Bank. For more information on M&T Bank, visit www.mtb.com.

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, management’s beliefs and assumptions made by management.

Statements regarding the potential effects of events or factors specific to M&T and/or the financial industry as a whole, as well as national and global events generally, including economic conditions, on M&T’s business, financial condition, liquidity and results of operations may constitute forward-looking statements. Such statements 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.

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.

Examples of Future Factors include: the impact of M&T’s acquisition of People’s United (as described in the next paragraph); events and developments in the financial services industry, including legislation, regulations and other governmental actions as well as business conditions affecting the industry and/or M&T and its subsidiaries, individually or collectively; economic conditions, including inflation and market volatility; 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; regulatory supervision and oversight, including monetary policy and capital requirements; domestic or international political developments and other geopolitical events, including international conflicts; governmental and public policy changes, including tax policy; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; 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; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; 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, divestment 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 acquisition of People’s United include, among others: the possibility that the anticipated benefits of the transaction will not be realized when expected or at all; potential adverse reactions or changes to business, customer or employee relationships; M&T’s success in executing its business plans and strategies and managing the risks involved in the foregoing; the results and costs of integration efforts; the business, economic and political conditions in the markets in which M&T and its subsidiaries operate; the outcome of any legal proceedings that may be instituted against M&T or its subsidiaries; and other factors related to the acquisition that may affect future results of M&T.

These are representative of the Future Factors that could affect the outcome of the forward-looking statements. In addition, as noted, 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 Form 10-K for the year ended December 31, 2022, 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.

 

INVESTOR CONTACT:


Brian Klock





(716) 842-5138








MEDIA CONTACT:


Maya Dillon





(646) 735-1958



 

Financial Highlights

























Three months ended






Six months ended






June 30






June 30





Amounts in thousands, except per share

2023



2022



Change



2023



2022



Change


Performance


















Net income

$

867,034




217,522




299

%


$

1,568,658




579,696




171

%

Net income available to common shareholders


840,524




192,236




337

%



1,516,052




531,916




185

%

Per common share:


















Basic earnings

$

5.07




1.08




369

%


$

9.09




3.47




162

%

Diluted earnings


5.05




1.08




368

%



9.06




3.45




163

%

Cash dividends

$

1.30




1.20




8

%


$

2.60




2.40




8

%

Common shares outstanding:


















Average – diluted (1)


166,320




178,277




-7

%



167,359




153,981




9

%

Period end (2)


165,894




175,969




-6

%



165,894




175,969




-6

%

Return on (annualized):


















Average total assets


1.70

%



.42

%






1.55

%



.65

%




Average common shareholders’ equity


14.27

%



3.21

%






13.02

%



5.34

%




Taxable-equivalent net interest income

$

1,813,015




1,422,443




27

%


$

3,644,741




2,329,851




56

%

Yield on average earning assets


5.46

%



3.12

%






5.31

%



2.96

%




Cost of interest-bearing liabilities


2.43

%



.20

%






2.15

%



.18

%




Net interest spread


3.03

%



2.92

%






3.16

%



2.78

%




Contribution of interest-free funds


.88

%



.09

%






.81

%



.08

%




Net interest margin


3.91

%



3.01

%






3.97

%



2.86

%




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


.38

%



.16

%






.30

%



.10

%




Net operating results (3)


















Net operating income

$

878,661




577,622




52

%


$

1,593,596




953,621




67

%

Diluted net operating earnings per common share


5.12




3.10




65

%



9.21




5.88




57

%

Return on (annualized):


















Average tangible assets


1.80

%



1.16

%






1.65

%



1.11

%




Average tangible common equity


22.73

%



14.41

%






20.90

%



13.57

%




Efficiency ratio


48.9

%



58.3

%






52.0

%



61.1

%























At June 30












Loan quality

2023



2022



Change











Nonaccrual loans

$

2,435,581




2,633,005




-7

%










Real estate and other foreclosed assets


42,720




28,692




49

%










Total nonperforming assets

$

2,478,301




2,661,697




-7

%










Accruing loans past due 90 days or more (4)

$

380,079




523,662




-27

%










Government guaranteed loans included in totals above:


















Nonaccrual loans

$

39,846




46,937




-15

%










Accruing loans past due 90 days or more


294,184




467,834




-37

%










Nonaccrual loans to total net loans


1.83

%



2.05

%













Allowance for credit losses to total loans


1.50

%



1.42

%















(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



June 30,



March 31,



December 31,



September 30,



June 30,


Amounts in thousands, except per share

2023



2023



2022



2022



2022


Performance















Net income

$

867,034




701,624




765,371




646,596




217,522


Net income available to common shareholders


840,524




675,511




739,126




620,554




192,236


Per common share:















Basic earnings

$

5.07




4.03




4.32




3.55




1.08


Diluted earnings


5.05




4.01




4.29




3.53




1.08


Cash dividends

$

1.30




1.30




1.20




1.20




1.20


Common shares outstanding:















Average – diluted (1)


166,320




168,410




172,149




175,682




178,277


Period end (2)


165,894




165,865




169,285




172,900




175,969


Return on (annualized):















Average total assets


1.70

%



1.40

%



1.53

%



1.28

%



.42

%

Average common shareholders’ equity


14.27

%



11.74

%



12.59

%



10.43

%



3.21

%

Taxable-equivalent net interest income

$

1,813,015




1,831,726




1,840,759




1,690,518




1,422,443


Yield on average earning assets


5.46

%



5.16

%



4.60

%



3.90

%



3.12

%

Cost of interest-bearing liabilities


2.43

%



1.86

%



.98

%



.41

%



.20

%

Net interest spread


3.03

%



3.30

%



3.62

%



3.49

%



2.92

%

Contribution of interest-free funds


.88

%



.74

%



.44

%



.19

%



.09

%

Net interest margin


3.91

%



4.04

%



4.06

%



3.68

%



3.01

%

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


.38

%



.22

%



.12

%



.20

%



.16

%

Net operating results (3)















Net operating income

$

878,661




714,935




812,359




700,030




577,622


Diluted net operating earnings per common share


5.12




4.09




4.57




3.83




3.10


Return on (annualized):















Average tangible assets


1.80

%



1.49

%



1.70

%



1.44

%



1.16

%

Average tangible common equity


22.73

%



19.00

%



21.29

%



17.89

%



14.41

%

Efficiency ratio


48.9

%



55.5

%



53.3

%



53.6

%



58.3

%

















June 30,



March 31,



December 31,



September 30,



June 30,


Loan quality

2023



2023



2022



2022



2022


Nonaccrual loans

$

2,435,581




2,556,799




2,438,435




2,429,326




2,633,005


Real estate and other foreclosed assets


42,720




44,567




41,375




37,031




28,692


Total nonperforming assets

$

2,478,301




2,601,366




2,479,810




2,466,357




2,661,697


Accruing loans past due 90 days or more (4)

$

380,079




407,457




491,018




476,503




523,662


Government guaranteed loans included in totals above:















Nonaccrual loans

$

39,846




42,102




43,536




44,797




46,937


Accruing loans past due 90 days or more


294,184




306,049




363,409




423,371




467,834


Nonaccrual loans to total net loans


1.83

%



1.92

%



1.85

%



1.89

%



2.05

%

Allowance for credit losses to total loans


1.50

%



1.49

%



1.46

%



1.46

%



1.42

%



(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






Six months ended







June 30






June 30





Dollars in thousands


2023



2022



Change



2023



2022



Change


Interest income


$

2,515,625




1,465,142




72

%


$

4,842,610




2,393,398




102

%

Interest expense



716,496




53,425







1,225,217




77,507





Net interest income



1,799,129




1,411,717




27




3,617,393




2,315,891




56


Provision for credit losses



150,000




302,000




-50




270,000




312,000




-13


Net interest income after provision for credit losses



1,649,129




1,109,717




49




3,347,393




2,003,891




67


Other income



















Mortgage banking revenues



107,112




82,926




29




192,097




192,074





Service charges on deposit accounts



118,697




124,170




-4




232,243




225,677




3


Trust income



172,463




190,084




-9




366,265




359,297




2


Brokerage services income



25,126




24,138




4




49,167




44,328




11


Trading account and non-hedging

     derivative gains



16,754




2,293




631




28,429




7,662




271


Gain (loss) on bank investment securities



1,004




(62)







588




(805)





Other revenues from operations



362,015




147,551




145




521,515




283,754




84


Total other income



803,171




571,100




41




1,390,304




1,111,987




25


Other expense



















Salaries and employee benefits



737,665




776,201




-5




1,545,607




1,353,721




14


Equipment and net occupancy



128,689




124,655




3




255,593




210,467




21


Outside data processing and software



106,438




93,820




13




212,218




173,539




22


FDIC assessments



27,932




22,585




24




57,690




38,161




51


Advertising and marketing



28,353




20,635




37




59,416




36,659




62


Printing, postage and supplies



14,199




15,570




-9




28,382




25,720




10


Amortization of core deposit and other

     intangible assets



14,945




18,384




-19




32,153




19,640




64


Other costs of operations



234,338




331,304




-29




460,730




504,988




-9


Total other expense



1,292,559




1,403,154




-8




2,651,789




2,362,895




12


Income before income taxes



1,159,741




277,663




318




2,085,908




752,983




177


Applicable income taxes



292,707




60,141




387




517,250




173,287




198


Net income


$

867,034




217,522




299

%


$

1,568,658




579,696




171

%

 

Condensed Consolidated Statement of Income, Five Quarter Trend








Three months ended




June 30,



March 31,



December 31,



September 30,



June 30,


Dollars in thousands


2023



2023



2022



2022



2022


Interest income


$

2,515,625




2,326,985




2,072,209




1,781,513




1,465,142


Interest expense



716,496




508,721




244,835




102,822




53,425


Net interest income



1,799,129




1,818,264




1,827,374




1,678,691




1,411,717


Provision for credit losses



150,000




120,000




90,000




115,000




302,000


Net interest income after provision for credit losses



1,649,129




1,698,264




1,737,374




1,563,691




1,109,717


Other income
















Mortgage banking revenues



107,112




84,985




81,521




83,041




82,926


Service charges on deposit accounts



118,697




113,546




105,714




115,213




124,170


Trust income



172,463




193,802




194,843




186,577




190,084


Brokerage services income



25,126




24,041




22,463




21,086




24,138


Trading account and non-hedging

     derivative gains



16,754




11,675




14,043




5,081




2,293


Gain (loss) on bank investment securities



1,004




(416)




(3,773)




(1,108)




(62)


Other revenues from operations



362,015




159,500




266,726




153,189




147,551


Total other income



803,171




587,133




681,537




563,079




571,100


Other expense
















Salaries and employee benefits



737,665




807,942




697,276




736,354




776,201


Equipment and net occupancy



128,689




126,904




136,732




127,117




124,655


Outside data processing and software



106,438




105,780




107,886




95,068




93,820


FDIC assessments



27,932




29,758




24,008




28,105




22,585


Advertising and marketing



28,353




31,063




32,691




21,398




20,635


Printing, postage and supplies



14,199




14,183




15,082




14,768




15,570


Amortization of core deposit and other

     intangible assets



14,945




17,208




17,600




18,384




18,384


Other costs of operations



234,338




226,392




377,013




238,059




331,304


Total other expense



1,292,559




1,359,230




1,408,288




1,279,253




1,403,154


Income before income taxes



1,159,741




926,167




1,010,623




847,517




277,663


Applicable income taxes



292,707




224,543




245,252




200,921




60,141


Net income


$

867,034




701,624




765,371




646,596




217,522


 

Condensed Consolidated Balance Sheet




June 30






Dollars in thousands


2023



2022



Change



ASSETS











Cash and due from banks


$

1,848,386




1,688,274




9


%

Interest-bearing deposits at banks



27,106,899




33,437,454




-19



Federal funds sold and agreements to resell securities






250,250




-100



Trading account



137,240




133,855




3



Investment securities



27,916,455




22,801,717




22



Loans and leases:











Commercial, financial, etc.



44,683,549




39,108,676




14



Real estate – commercial



44,648,711




46,795,139




-5



Real estate – consumer



23,762,217




22,767,107




4



Consumer



20,249,252




19,815,198




2



Total loans and leases, net of unearned discount



133,343,729




128,486,120




4



Less: allowance for credit losses



1,998,366




1,823,790




10



Net loans and leases



131,345,363




126,662,330




4



Goodwill



8,465,089




8,501,357






Core deposit and other intangible assets



177,221




245,358




-28



Other assets



10,675,076




10,312,294




4



Total assets


$

207,671,729




204,032,889




2


%












LIABILITIES AND SHAREHOLDERS’ EQUITY











Noninterest-bearing deposits


$

54,937,913




72,375,515




-24


%

Interest-bearing deposits



107,120,467




97,982,881




9



Total deposits



162,058,380




170,358,396




-5



Short-term borrowings



7,907,884




1,119,321




606



Accrued interest and other liabilities



4,487,894




3,743,278




20



Long-term borrowings



7,416,638




3,017,363




146



Total liabilities



181,870,796




178,238,358




2



Shareholders’ equity:











Preferred



2,010,600




2,010,600






Common



23,790,333




23,783,931






Total shareholders’ equity



25,800,933




25,794,531






Total liabilities and shareholders’ equity


$

207,671,729




204,032,889




2


%

 

Condensed Consolidated Balance Sheet, Five Quarter Trend






June 30,



March 31,



December 31,



September 30,



June 30,


Dollars in thousands

2023



2023



2022



2022



2022


ASSETS















Cash and due from banks

$

1,848,386




1,817,740




1,517,244




2,255,810




1,688,274


Interest-bearing deposits at banks


27,106,899




22,306,425




24,958,719




25,391,528




33,437,454


Federal funds sold and agreements to resell

     securities








3,000







250,250


Trading account


137,240




165,216




117,847




129,672




133,855


Investment securities


27,916,455




28,443,209




25,210,871




24,603,765




22,801,717


Loans and leases:















Commercial, financial, etc.


44,683,549




43,758,361




41,850,566




38,807,949




39,108,676


Real estate – commercial


44,648,711




45,072,541




45,364,571




46,138,665




46,795,139


Real estate – consumer


23,762,217




23,789,945




23,755,947




23,074,280




22,767,107


Consumer


20,249,252




20,316,845




20,593,079




20,204,693




19,815,198


Total loans and leases, net of unearned discount


133,343,729




132,937,692




131,564,163




128,225,587




128,486,120


Less: allowance for credit losses


1,998,366




1,975,110




1,925,331




1,875,591




1,823,790


Net loans and leases


131,345,363




130,962,582




129,638,832




126,349,996




126,662,330


Goodwill


8,465,089




8,490,089




8,490,089




8,501,357




8,501,357


Core deposit and other intangible assets


177,221




192,166




209,374




226,974




245,358


Other assets


10,675,076




10,578,980




10,583,865




10,496,377




10,312,294


Total assets

$

207,671,729




202,956,407




200,729,841




197,955,479




204,032,889

















LIABILITIES AND SHAREHOLDERS’ EQUITY















Noninterest-bearing deposits

$

54,937,913




59,955,033




65,501,860




73,023,271




72,375,515


Interest-bearing deposits


107,120,467




99,120,207




98,013,008




90,822,117




97,982,881


Total deposits


162,058,380




159,075,240




163,514,868




163,845,388




170,358,396


Short-term borrowings


7,907,884




6,995,302




3,554,951




917,806




1,119,321


Accrued interest and other liabilities


4,487,894




4,045,804




4,377,495




4,476,456




3,743,278


Long-term borrowings


7,416,638




7,462,890




3,964,537




3,459,336




3,017,363


Total liabilities


181,870,796




177,579,236




175,411,851




172,698,986




178,238,358


Shareholders’ equity:















Preferred


2,010,600




2,010,600




2,010,600




2,010,600




2,010,600


Common


23,790,333




23,366,571




23,307,390




23,245,893




23,783,931


Total shareholders’ equity


25,800,933




25,377,171




25,317,990




25,256,493




25,794,531


Total liabilities and shareholders’ equity

$

207,671,729




202,956,407




200,729,841




197,955,479




204,032,889


 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates





Three months ended



Change in balance




Six months ended








June 30,



June 30,



March 31,



June 30, 2023 from




June 30



Change


Dollars in millions



2023



2022



2023



June 30,



March 31,




2023



2022



in





Balance



Rate



Balance



Rate



Balance



Rate



2022



2023




Balance



Rate



Balance



Rate



balance


ASSETS




















































































Interest-bearing deposits at banks


$

23,617



5.14

%


39,386



.82

%


24,312



4.64

%


-40

%


-3

%


$

23,963



4.89

%


39,041



.51

%


-39

%

Federal funds sold and agreements to resell

      securities





5.53



250



.41





4.89



-100



125






5.34



126



.41



-100


Trading account



151



2.66



136



.59



123



2.32



10



22




136



2.50



92



.85



48


Investment securities



28,623



3.09



22,384



2.55



27,622



3.00



28



4




28,126



3.04



15,095



2.42



86


Loans and leases, net of unearned discount





























Commercial, financial, etc.



44,531



6.79



37,818



3.96



42,428



6.46



18



5




43,486



6.63



30,602



3.83



42


Real estate – commercial



44,944



6.25



47,227



3.87



45,327



5.82



-5



-1




45,134



6.03



41,126



3.86



10


Real estate – consumer



23,781



4.10



22,761



3.64



23,770



3.96



4






23,775



4.03



19,334



3.60



23


Consumer



20,289



5.88



19,793



4.26



20,487



5.67



3



-1




20,388



5.77



18,915



4.25



8


Total loans and leases, net



133,545



6.02



127,599



3.94



132,012



5.70



5



1




132,783



5.87



109,977



3.90



21


Total earning assets



185,936



5.46



189,755



3.12



184,069



5.16



-2



1




185,008



5.31



164,331



2.96



13


Goodwill



8,473





8,501





8,490










8,482





6,560





29


Core deposit and other intangible assets



185





254





201





-27



-8




192





130





49


Other assets



9,782





10,355





9,839





-6



-1




9,810





9,393





4


Total assets


$

204,376





208,865





202,599





-2

%


1

%


$

203,492





180,414





13

%






























LIABILITIES AND SHAREHOLDERS’

EQUITY





























Interest-bearing deposits





























Savings and interest-checking deposits


$

87,210



1.69



95,149



.12



88,053



1.28



-8

%


-1

%


$

87,629



1.49



81,285



.09



8

%

Time deposits



16,009



3.77



5,480



.09



11,630



3.11



192



38




13,832



3.49



4,071



.13



240


Total interest-bearing deposits



103,219



2.02



100,629



.12



99,683



1.49



3



4




101,461



1.76



85,356



.09



19


Short-term borrowings



7,539



5.11



1,126



1.22



4,994



4.69



570



51




6,273



4.94



594



1.16



957


Long-term borrowings



7,516



5.43



3,282



2.55



6,511



5.27



129



15




7,017



5.36



3,362



2.21



109


Total interest-bearing liabilities



118,274



2.43



105,037



.20



111,188



1.86



13



6




114,751



2.15



89,312



.18



28


Noninterest-bearing deposits



56,180





74,054





61,854





-24



-9




59,001





66,141





-11


Other liabilities



4,237





3,684





4,180





15



1




4,208





2,946





43


Total liabilities



178,691





182,775





177,222





-2



1




177,960





158,399





12


Shareholders’ equity



25,685





26,090





25,377





-2



1




25,532





22,015





16


Total liabilities and shareholders’ equity


$

204,376





208,865





202,599





-2

%


1

%


$

203,492





180,414





13

%






























Net interest spread





3.03





2.92





3.30










3.16





2.78




Contribution of interest-free funds





.88





.09





.74










.81





.08




Net interest margin





3.91

%




3.01

%




4.04

%









3.97

%




2.86

%



 

Reconciliation of Quarterly GAAP to Non-GAAP Measures




Three months ended



Six months ended




June 30



June 30




2023



2022



2023



2022


Income statement data













In thousands, except per share













Net income













Net income


$

867,034




217,522




1,568,658




579,696


Amortization of core deposit and other intangible assets (1)



11,627




14,138




24,938




15,071


Merger-related expenses (1)






345,962







358,854


Net operating income


$

878,661




577,622




1,593,596




953,621















Earnings per common share













Diluted earnings per common share


$

5.05




1.08




9.06




3.45


Amortization of core deposit and other intangible assets (1)



.07




.08




.15




.10


Merger-related expenses (1)






1.94







2.33


Diluted net operating earnings per common share


$

5.12




3.10




9.21




5.88















Other expense













Other expense


$

1,292,559




1,403,154




2,651,789




2,362,895


Amortization of core deposit and other intangible assets



(14,945)




(18,384)




(32,153)




(19,640)


Merger-related expenses






(222,809)







(240,181)


Noninterest operating expense


$

1,277,614




1,161,961




2,619,636




2,103,074


Merger-related expenses













Salaries and employee benefits


$




85,299







85,386


Equipment and net occupancy






502







2,309


Outside data processing and software






716







968


Advertising and marketing






1,199







1,827


Printing, postage and supplies






2,460







3,182


Other costs of operations






132,633







146,509


Other expense






222,809







240,181


Provision for credit losses






242,000







242,000


Total


$




464,809







482,181


Efficiency ratio













Noninterest operating expense (numerator)


$

1,277,614




1,161,961




2,619,636




2,103,074


Taxable-equivalent net interest income


$

1,813,015




1,422,443




3,644,741




2,329,851


Other income



803,171




571,100




1,390,304




1,111,987


Less:  Gain (loss) on bank investment securities



1,004




(62)




588




(805)


Denominator


$

2,615,182




1,993,605




5,034,457




3,442,643


Efficiency ratio



48.9

%



58.3

%



52.0

%



61.1

%

Balance sheet data













In millions













Average assets













Average assets


$

204,376




208,865




203,492




180,414


Goodwill



(8,473)




(8,501)




(8,482)




(6,560)


Core deposit and other intangible assets



(185)




(254)




(192)




(130)


Deferred taxes



46




60




47




31


Average tangible assets


$

195,764




200,170




194,865




173,755


Average common equity













Average total equity


$

25,685




26,090




25,532




22,015


Preferred stock



(2,011)




(2,011)




(2,011)




(1,881)


Average common equity



23,674




24,079




23,521




20,134


Goodwill



(8,473)




(8,501)




(8,482)




(6,560)


Core deposit and other intangible assets



(185)




(254)




(192)




(130)


Deferred taxes



46




60




47




31


Average tangible common equity


$

15,062




15,384



$

14,894




13,475


At end of quarter













Total assets













Total assets


$

207,672




204,033








Goodwill



(8,465)




(8,501)








Core deposit and other intangible assets



(177)




(245)








Deferred taxes



44




57








Total tangible assets


$

199,074




195,344








Total common equity













Total equity


$

25,801




25,795








Preferred stock



(2,011)




(2,011)








Common equity



23,790




23,784








Goodwill



(8,465)




(8,501)








Core deposit and other intangible assets



(177)




(245)








Deferred taxes



44




57








Total tangible common equity


$

15,192




15,095










(1)

After any related tax effect.

 

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






Three months ended




June 30,



March 31,



December 31,



September 30,



June 30,




2023



2023



2022



2022



2022


Income statement data
















In thousands, except per share
















Net income
















Net income


$

867,034




701,624




765,371




646,596




217,522


Amortization of core deposit and other intangible assets (1)



11,627




13,311




13,559




14,141




14,138


Merger-related expenses (1)









33,429




39,293




345,962


Net operating income


$

878,661




714,935




812,359




700,030




577,622


















Earnings per common share
















Diluted earnings per common share


$

5.05




4.01




4.29




3.53




1.08


Amortization of core deposit and other intangible assets (1)



.07




.08




.08




.08




.08


Merger-related expenses (1)









.20




.22




1.94


Diluted net operating earnings per common share


$

5.12




4.09




4.57




3.83




3.10


















Other expense
















Other expense


$

1,292,559




1,359,230




1,408,288




1,279,253




1,403,154


Amortization of core deposit and other intangible assets



(14,945)




(17,208)




(17,600)




(18,384)




(18,384)


Merger-related expenses









(45,113)




(53,027)




(222,809)


Noninterest operating expense


$

1,277,614




1,342,022




1,345,575




1,207,842




1,161,961


Merger-related expenses
















Salaries and employee benefits


$







3,670




13,094




85,299


Equipment and net occupancy









2,294




2,106




502


Outside data processing and software









2,193




2,277




716


Advertising and marketing









5,258




2,177




1,199


Printing, postage and supplies









2,953




651




2,460


Other costs of operations









28,745




32,722




132,633


Other expense









45,113




53,027




222,809


Provision for credit losses















242,000


Total


$







45,113




53,027




464,809


Efficiency ratio
















Noninterest operating expense (numerator)


$

1,277,614




1,342,022




1,345,575




1,207,842




1,161,961


Taxable-equivalent net interest income


$

1,813,015




1,831,726




1,840,759




1,690,518




1,422,443


Other income



803,171




587,133




681,537




563,079




571,100


Less:  Gain (loss) on bank investment securities



1,004




(416)




(3,773)




(1,108)




(62)


Denominator


$

2,615,182




2,419,275




2,526,069




2,254,705




1,993,605


Efficiency ratio



48.9

%



55.5

%



53.3

%



53.6

%



58.3

%

Balance sheet data
















In millions
















Average assets
















Average assets


$

204,376




202,599




198,592




201,131




208,865


Goodwill



(8,473)




(8,490)




(8,494)




(8,501)




(8,501)


Core deposit and other intangible assets



(185)




(201)




(218)




(236)




(254)


Deferred taxes



46




49




54




56




60


Average tangible assets


$

195,764




193,957




189,934




192,450




200,170


Average common equity
















Average total equity


$

25,685




25,377




25,346




25,665




26,090


Preferred stock



(2,011)




(2,011)




(2,011)




(2,011)




(2,011)


Average common equity



23,674




23,366




23,335




23,654




24,079


Goodwill



(8,473)




(8,490)




(8,494)




(8,501)




(8,501)


Core deposit and other intangible assets



(185)




(201)




(218)




(236)




(254)


Deferred taxes



46




49




54




56




60


Average tangible common equity


$

15,062




14,724




14,677




14,973




15,384


At end of quarter
















Total assets
















Total assets


$

207,672




202,956




200,730




197,955




204,033


Goodwill



(8,465)




(8,490)




(8,490)




(8,501)




(8,501)


Core deposit and other intangible assets



(177)




(192)




(209)




(227)




(245)


Deferred taxes



44




47




51




54




57


Total tangible assets


$

199,074




194,321




192,082




189,281




195,344


Total common equity
















Total equity


$

25,801




25,377




25,318




25,256




25,795


Preferred stock



(2,011)




(2,011)




(2,011)




(2,011)




(2,011)


Common equity



23,790




23,366




23,307




23,245




23,784


Goodwill



(8,465)




(8,490)




(8,490)




(8,501)




(8,501)


Core deposit and other intangible assets



(177)




(192)




(209)




(227)




(245)


Deferred taxes



44




47




51




54




57


Total tangible common equity


$

15,192




14,731




14,659




14,571




15,095




(1)

After any related tax effect.

 

M&T Bank Corporation

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