UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 20212022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission File Number 1-9861
M&T BANK CORPORATION
(Exact name of registrant as specified in its charter)
New York |
| 16-0968385 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
|
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One M & T Plaza Buffalo, New York |
| 14203 |
(Address of principal executive offices) |
| (Zip Code) |
Registrant's telephone number, including area code:
(716) (716) 635-4000
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered |
Common Stock, $.50 par value | MTB | New York Stock Exchange |
Perpetual Fixed-to-Floating Rate | MTBPrH | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ ☒Yes Yes ☐ No No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ ☒Yes Yes ☐ No No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
| ☒ |
| Accelerated filer | ☐ |
Non-accelerated filer |
| ☐ |
| Smaller reporting company | ☐ |
Emerging growth company |
| ☐ |
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|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No No
Number of shares of the registrant's Common Stock, $0.50 par value, outstanding as of the close of business on October 29, 2021: 128,684,567November 1, 2022: 172,613,343 shares.
- 1 -
M&T BANK CORPORATION
FORM 10-Q
For the Quarterly Period Ended September 30, 20212022
Table of Contents of Information Required in Report |
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Item 1. |
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| CONSOLIDATED BALANCE SHEET – September 30, |
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| CONSOLIDATED STATEMENT OF INCOME – Three and nine months ended September 30, |
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| CONSOLIDATED STATEMENT OF CASH FLOWS – Nine months ended September 30, |
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Item 2. |
| Management's Discussion and Analysis of Financial Condition and Results of |
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Item 3. |
| Quantitative and Qualitative Disclosures About Market |
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Item 4. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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- 2 -
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Unaudited)
|
| September 30, |
|
| December 31, |
| ||
(Dollars in thousands, except per share) |
| 2021 |
|
| 2020 |
| ||
Assets |
|
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Cash and due from banks |
| $ | 1,479,712 |
|
| $ | 1,552,743 |
|
Interest-bearing deposits at banks |
|
| 38,445,788 |
|
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| 23,663,810 |
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Trading account |
|
| 624,556 |
|
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| 1,068,581 |
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Investment securities (includes pledged securities that can be sold or repledged of $118,178 at September 30, 2021; $105,136 at December 31, 2020) |
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Available for sale (cost: $3,473,923 at September 30, 2021; $4,621,027 at December 31, 2020 |
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| 3,618,106 |
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| 4,822,606 |
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Held to maturity (fair value: $2,413,938 at September 30, 2021; $1,842,281 at December 31, 2020) |
|
| 2,359,727 |
|
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| 1,748,989 |
|
Equity and other securities (cost: $467,349 at September 30, 2021; $449,008 at December 31, 2020) |
|
| 469,789 |
|
|
| 474,102 |
|
Total investment securities |
|
| 6,447,622 |
|
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| 7,045,697 |
|
Loans and leases |
|
| 93,872,912 |
|
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| 98,875,788 |
|
Unearned discount |
|
| (290,018 | ) |
|
| (339,921 | ) |
Loans and leases, net of unearned discount |
|
| 93,582,894 |
|
|
| 98,535,867 |
|
Allowance for credit losses |
|
| (1,515,024 | ) |
|
| (1,736,387 | ) |
Loans and leases, net |
|
| 92,067,870 |
|
|
| 96,799,480 |
|
Premises and equipment |
|
| 1,117,903 |
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| 1,161,558 |
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Goodwill |
|
| 4,593,112 |
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| 4,593,112 |
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Core deposit and other intangible assets |
|
| 5,952 |
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| 14,165 |
|
Accrued interest and other assets |
|
| 7,118,679 |
|
|
| 6,701,959 |
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Total assets |
| $ | 151,901,194 |
|
| $ | 142,601,105 |
|
Liabilities |
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Noninterest-bearing deposits |
| $ | 56,542,309 |
|
| $ | 47,572,884 |
|
Savings and interest-checking deposits |
|
| 69,195,960 |
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| 67,680,840 |
|
Time deposits |
|
| 2,963,027 |
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| 3,899,910 |
|
Deposits at Cayman Islands office |
|
| — |
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|
| 652,104 |
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Total deposits |
|
| 128,701,296 |
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| 119,805,738 |
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Short-term borrowings |
|
| 103,548 |
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| 59,482 |
|
Accrued interest and other liabilities |
|
| 2,067,188 |
|
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| 2,166,409 |
|
Long-term borrowings |
|
| 3,500,391 |
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| 4,382,193 |
|
Total liabilities |
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| 134,372,423 |
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| 126,413,822 |
|
Shareholders' equity |
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Preferred stock, $1.00 par, 1,000,000 shares authorized; Issued and outstanding: Liquidation preference of $1,000 per share: 350,000 shares at September 30, 2021 and December 31, 2020; Liquidation preference of $10,000 per share: 140,000 shares at September 30, 2021 and 90,000 shares at December 31, 2020 |
|
| 1,750,000 |
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| 1,250,000 |
|
Common stock, $.50 par, 250,000,000 shares authorized, 159,741,898 shares issued at September 30, 2021 and December 31, 2020 |
|
| 79,871 |
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| 79,871 |
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Common stock issuable, 15,683 shares at September 30, 2021; 18,113 shares at December 31, 2020 |
|
| 1,196 |
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| 1,344 |
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Additional paid-in capital |
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| 6,624,656 |
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| 6,617,404 |
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Retained earnings |
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| 14,365,913 |
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| 13,444,428 |
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Accumulated other comprehensive income (loss), net |
|
| (210,419 | ) |
|
| (63,032 | ) |
Treasury stock — common, at cost — 31,058,333 shares at September 30, 2021; 31,426,742 shares at December 31, 2020 |
|
| (5,082,446 | ) |
|
| (5,142,732 | ) |
Total shareholders’ equity |
|
| 17,528,771 |
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| 16,187,283 |
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Total liabilities and shareholders’ equity |
| $ | 151,901,194 |
|
| $ | 142,601,105 |
|
See accompanying notes to financial statements.
- 3 -
|
| September 30, |
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| December 31, |
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(Dollars in thousands, except per share) |
| 2022 |
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| 2021 |
| ||
Assets |
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Cash and due from banks |
| $ | 2,255,810 |
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| $ | 1,337,577 |
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Interest-bearing deposits at banks |
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| 25,391,528 |
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| 41,872,304 |
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Trading account |
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| 129,672 |
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| 49,745 |
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Investment securities |
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Available for sale (cost: $11,340,155 at September 30, 2022; |
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| 10,870,346 |
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| 3,955,804 |
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Held to maturity (fair value: $11,554,655 at September 30, 2022; |
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| 12,898,862 |
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| 2,734,674 |
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Equity and other securities (cost: $832,604 at September 30, 2022; |
|
| 834,557 |
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| 465,382 |
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Total investment securities |
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| 24,603,765 |
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| 7,155,860 |
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Loans and leases |
|
| 128,608,538 |
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| 93,136,678 |
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Unearned discount |
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| (382,951 | ) |
|
| (224,226 | ) |
Loans and leases, net of unearned discount |
|
| 128,225,587 |
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| 92,912,452 |
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Allowance for credit losses |
|
| (1,875,591 | ) |
|
| (1,469,226 | ) |
Loans and leases, net |
|
| 126,349,996 |
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| 91,443,226 |
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Premises and equipment |
|
| 1,620,339 |
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| 1,144,765 |
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Goodwill |
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| 8,501,357 |
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| 4,593,112 |
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Core deposit and other intangible assets |
|
| 226,974 |
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| 3,998 |
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Accrued interest and other assets |
|
| 8,876,038 |
|
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| 7,506,573 |
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Total assets |
| $ | 197,955,479 |
|
| $ | 155,107,160 |
|
Liabilities |
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Noninterest-bearing deposits |
| $ | 73,023,271 |
|
| $ | 60,131,480 |
|
Savings and interest-checking deposits |
|
| 86,015,700 |
|
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| 68,603,966 |
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Time deposits |
|
| 4,806,417 |
|
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| 2,807,963 |
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Total deposits |
|
| 163,845,388 |
|
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| 131,543,409 |
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Short-term borrowings |
|
| 917,806 |
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|
| 47,046 |
|
Accrued interest and other liabilities |
|
| 4,476,456 |
|
|
| 2,127,931 |
|
Long-term borrowings |
|
| 3,459,336 |
|
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| 3,485,369 |
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Total liabilities |
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| 172,698,986 |
|
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| 137,203,755 |
|
Shareholders' equity |
|
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Preferred stock, $1.00 par, 20,000,000 shares authorized; |
|
| 2,010,600 |
|
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| 1,750,000 |
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Common stock, $.50 par, 250,000,000 shares authorized, |
|
| 89,718 |
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| 79,871 |
|
Common stock issuable, 13,951 shares at September 30, 2022; |
|
| 1,098 |
|
|
| 1,212 |
|
Additional paid-in capital |
|
| 9,994,395 |
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| 6,635,000 |
|
Retained earnings |
|
| 15,219,828 |
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| 14,646,448 |
|
Accumulated other comprehensive income (loss), net |
|
| (899,993 | ) |
|
| (127,578 | ) |
Treasury stock — common, at cost — 6,551,133 shares at September 30, 2022; |
|
| (1,159,153 | ) |
|
| (5,081,548 | ) |
Total shareholders’ equity |
|
| 25,256,493 |
|
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| 17,903,405 |
|
Total liabilities and shareholders’ equity |
| $ | 197,955,479 |
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| $ | 155,107,160 |
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M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
|
| Three Months Ended September 30 |
|
| Nine Months Ended September 30 |
|
| ||||||||||
(In thousands, except per share) |
| 2021 |
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| 2020 |
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| 2021 |
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| 2020 |
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Interest income |
|
|
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|
|
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|
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Loans and leases, including fees |
| $ | 944,422 |
|
| $ | 956,594 |
|
| $ | 2,843,969 |
|
| $ | 2,983,787 |
|
|
Investment securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Fully taxable |
|
| 33,209 |
|
|
| 38,529 |
|
|
| 104,736 |
|
|
| 135,858 |
|
|
Exempt from federal taxes |
|
| 48 |
|
|
| 59 |
|
|
| 113 |
|
|
| 163 |
|
|
Deposits at banks |
|
| 14,923 |
|
|
| 4,163 |
|
|
| 30,507 |
|
|
| 27,308 |
|
|
Other |
|
| 344 |
|
|
| 1,816 |
|
|
| 941 |
|
|
| 6,706 |
|
|
Total interest income |
|
| 992,946 |
|
|
| 1,001,161 |
|
|
| 2,980,266 |
|
|
| 3,153,822 |
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and interest-checking deposits |
|
| 7,000 |
|
|
| 22,403 |
|
|
| 26,556 |
|
|
| 126,859 |
|
|
Time deposits |
|
| 3,573 |
|
|
| 14,519 |
|
|
| 15,667 |
|
|
| 56,274 |
|
|
Deposits at Cayman Islands office |
|
| — |
|
|
| 241 |
|
|
| 201 |
|
|
| 3,821 |
|
|
Short-term borrowings |
|
| 2 |
|
|
| 1 |
|
|
| 5 |
|
|
| 26 |
|
|
Long-term borrowings |
|
| 15,121 |
|
|
| 20,902 |
|
|
| 46,852 |
|
|
| 89,805 |
|
|
Total interest expense |
|
| 25,696 |
|
|
| 58,066 |
|
|
| 89,281 |
|
|
| 276,785 |
|
|
Net interest income |
|
| 967,250 |
|
|
| 943,095 |
|
|
| 2,890,985 |
|
|
| 2,877,037 |
|
|
Provision for credit losses |
|
| (20,000 | ) |
|
| 150,000 |
|
|
| (60,000 | ) |
|
| 725,000 |
|
|
Net interest income after provision for credit losses |
|
| 987,250 |
|
|
| 793,095 |
|
|
| 2,950,985 |
|
|
| 2,152,037 |
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Mortgage banking revenues |
|
| 159,995 |
|
|
| 153,267 |
|
|
| 432,062 |
|
|
| 426,200 |
|
|
Service charges on deposit accounts |
|
| 105,426 |
|
|
| 91,355 |
|
|
| 296,721 |
|
|
| 274,971 |
|
|
Trust income |
|
| 156,876 |
|
|
| 149,937 |
|
|
| 475,889 |
|
|
| 450,570 |
|
|
Brokerage services income |
|
| 20,490 |
|
|
| 11,602 |
|
|
| 43,868 |
|
|
| 35,194 |
|
|
Trading account and foreign exchange gains |
|
| 5,563 |
|
|
| 4,026 |
|
|
| 18,349 |
|
|
| 33,332 |
|
|
Gain (loss) on bank investment securities |
|
| 291 |
|
|
| 2,773 |
|
|
| (22,646 | ) |
|
| (11,040 | ) |
|
Other revenues from operations |
|
| 120,485 |
|
|
| 107,601 |
|
|
| 344,114 |
|
|
| 327,967 |
|
|
Total other income |
|
| 569,126 |
|
|
| 520,561 |
|
|
| 1,588,357 |
|
|
| 1,537,194 |
|
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Other expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Salaries and employee benefits |
|
| 510,422 |
|
|
| 478,897 |
|
|
| 1,530,634 |
|
|
| 1,474,582 |
|
|
Equipment and net occupancy |
|
| 80,738 |
|
|
| 81,080 |
|
|
| 244,057 |
|
|
| 237,809 |
|
|
Outside data processing and software |
|
| 72,782 |
|
|
| 64,660 |
|
|
| 213,025 |
|
|
| 190,446 |
|
|
FDIC assessments |
|
| 18,810 |
|
|
| 12,121 |
|
|
| 50,874 |
|
|
| 38,599 |
|
|
Advertising and marketing |
|
| 15,208 |
|
|
| 11,855 |
|
|
| 43,200 |
|
|
| 44,072 |
|
|
Printing, postage and supplies |
|
| 7,917 |
|
|
| 9,422 |
|
|
| 28,367 |
|
|
| 31,534 |
|
|
Amortization of core deposit and other intangible assets |
|
| 2,738 |
|
|
| 3,914 |
|
|
| 8,213 |
|
|
| 11,740 |
|
|
Other costs of operations |
|
| 190,719 |
|
|
| 164,825 |
|
|
| 565,753 |
|
|
| 511,450 |
|
|
Total other expense |
|
| 899,334 |
|
|
| 826,774 |
|
|
| 2,684,123 |
|
|
| 2,540,232 |
|
|
Income before taxes |
|
| 657,042 |
|
|
| 486,882 |
|
|
| 1,855,219 |
|
|
| 1,148,999 |
|
|
Income taxes |
|
| 161,582 |
|
|
| 114,746 |
|
|
| 454,441 |
|
|
| 266,987 |
|
|
Net income |
| $ | 495,460 |
|
| $ | 372,136 |
|
| $ | 1,400,778 |
|
| $ | 882,012 |
|
|
Net income available to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 475,958 |
|
| $ | 353,399 |
|
| $ | 1,342,805 |
|
| $ | 827,203 |
|
|
Diluted |
|
| 475,961 |
|
|
| 353,400 |
|
|
| 1,342,812 |
|
|
| 827,204 |
|
|
Net income per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 3.70 |
|
| $ | 2.75 |
|
| $ | 10.44 |
|
| $ | 6.42 |
|
|
Diluted |
|
| 3.69 |
|
|
| 2.75 |
|
|
| 10.43 |
|
|
| 6.42 |
|
|
Average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 128,689 |
|
|
| 128,285 |
|
|
| 128,632 |
|
|
| 128,750 |
|
|
Diluted |
|
| 128,844 |
|
|
| 128,355 |
|
|
| 128,786 |
|
|
| 128,813 |
|
|
See accompanying notes to financial statements.
- 43 -
M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
|
| Three Months Ended September 30 |
|
| Nine Months Ended September 30 |
| ||||||||||
(In thousands, except per share) |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Loans and leases, including fees |
| $ | 1,455,612 |
|
| $ | 944,422 |
|
| $ | 3,572,954 |
|
| $ | 2,843,969 |
|
Investment securities |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fully taxable |
|
| 135,766 |
|
|
| 33,209 |
|
|
| 294,290 |
|
|
| 104,736 |
|
Exempt from federal taxes |
|
| 16,555 |
|
|
| 48 |
|
|
| 34,388 |
|
|
| 113 |
|
Deposits at banks |
|
| 172,956 |
|
|
| 14,923 |
|
|
| 272,009 |
|
|
| 30,507 |
|
Other |
|
| 624 |
|
|
| 344 |
|
|
| 1,270 |
|
|
| 941 |
|
Total interest income |
|
| 1,781,513 |
|
|
| 992,946 |
|
|
| 4,174,911 |
|
|
| 2,980,266 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Savings and interest-checking deposits |
|
| 68,690 |
|
|
| 7,000 |
|
|
| 103,344 |
|
|
| 26,556 |
|
Time deposits |
|
| 1,124 |
|
|
| 3,573 |
|
|
| 3,748 |
|
|
| 15,667 |
|
Deposits at Cayman Islands office |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 201 |
|
Short-term borrowings |
|
| 2,670 |
|
|
| 2 |
|
|
| 6,090 |
|
|
| 5 |
|
Long-term borrowings |
|
| 30,338 |
|
|
| 15,121 |
|
|
| 67,147 |
|
|
| 46,852 |
|
Total interest expense |
|
| 102,822 |
|
|
| 25,696 |
|
|
| 180,329 |
|
|
| 89,281 |
|
Net interest income |
|
| 1,678,691 |
|
|
| 967,250 |
|
|
| 3,994,582 |
|
|
| 2,890,985 |
|
Provision for credit losses |
|
| 115,000 |
|
|
| (20,000 | ) |
|
| 427,000 |
|
|
| (60,000 | ) |
Net interest income after provision for credit losses |
|
| 1,563,691 |
|
|
| 987,250 |
|
|
| 3,567,582 |
|
|
| 2,950,985 |
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage banking revenues |
|
| 83,041 |
|
|
| 159,995 |
|
|
| 275,115 |
|
|
| 432,062 |
|
Service charges on deposit accounts |
|
| 115,213 |
|
|
| 105,426 |
|
|
| 340,890 |
|
|
| 296,721 |
|
Trust income |
|
| 186,577 |
|
|
| 156,876 |
|
|
| 545,874 |
|
|
| 475,889 |
|
Brokerage services income |
|
| 21,086 |
|
|
| 20,490 |
|
|
| 65,414 |
|
|
| 43,868 |
|
Trading account and non-hedging derivative gains |
|
| 5,081 |
|
|
| 5,563 |
|
|
| 12,743 |
|
|
| 18,349 |
|
Gain/(loss) on bank investment securities |
|
| (1,108 | ) |
|
| 291 |
|
|
| (1,913 | ) |
|
| (22,646 | ) |
Other revenues from operations |
|
| 153,189 |
|
|
| 120,485 |
|
|
| 436,943 |
|
|
| 344,114 |
|
Total other income |
|
| 563,079 |
|
|
| 569,126 |
|
|
| 1,675,066 |
|
|
| 1,588,357 |
|
Other expense |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Salaries and employee benefits |
|
| 736,354 |
|
|
| 510,422 |
|
|
| 2,090,075 |
|
|
| 1,530,634 |
|
Equipment and net occupancy |
|
| 127,117 |
|
|
| 80,738 |
|
|
| 337,584 |
|
|
| 244,057 |
|
Outside data processing and software |
|
| 95,068 |
|
|
| 72,782 |
|
|
| 268,607 |
|
|
| 213,025 |
|
FDIC assessments |
|
| 28,105 |
|
|
| 18,810 |
|
|
| 66,266 |
|
|
| 50,874 |
|
Advertising and marketing |
|
| 21,398 |
|
|
| 15,208 |
|
|
| 58,057 |
|
|
| 43,200 |
|
Printing, postage and supplies |
|
| 14,768 |
|
|
| 7,917 |
|
|
| 40,488 |
|
|
| 28,367 |
|
Amortization of core deposit and other intangible assets |
|
| 18,384 |
|
|
| 2,738 |
|
|
| 38,024 |
|
|
| 8,213 |
|
Other costs of operations |
|
| 238,059 |
|
|
| 190,719 |
|
|
| 743,047 |
|
|
| 565,753 |
|
Total other expense |
|
| 1,279,253 |
|
|
| 899,334 |
|
|
| 3,642,148 |
|
|
| 2,684,123 |
|
Income before taxes |
|
| 847,517 |
|
|
| 657,042 |
|
|
| 1,600,500 |
|
|
| 1,855,219 |
|
Income taxes |
|
| 200,921 |
|
|
| 161,582 |
|
|
| 374,208 |
|
|
| 454,441 |
|
Net income |
| $ | 646,596 |
|
| $ | 495,460 |
|
| $ | 1,226,292 |
|
| $ | 1,400,778 |
|
Net income available to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 620,549 |
|
| $ | 475,958 |
|
| $ | 1,152,400 |
|
| $ | 1,342,805 |
|
Diluted |
|
| 620,554 |
|
|
| 475,961 |
|
|
| 1,152,406 |
|
|
| 1,342,812 |
|
Net income per common share |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 3.55 |
|
| $ | 3.70 |
|
| $ | 7.18 |
|
| $ | 10.44 |
|
Diluted |
|
| 3.53 |
|
|
| 3.69 |
|
|
| 7.14 |
|
|
| 10.43 |
|
Average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic |
|
| 174,609 |
|
|
| 128,689 |
|
|
| 160,474 |
|
|
| 128,632 |
|
Diluted |
|
| 175,682 |
|
|
| 128,844 |
|
|
| 161,295 |
|
|
| 128,786 |
|
See accompanying notes to financial statements.
- 4 -
M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)
|
| Three Months Ended September 30 |
|
| Nine Months Ended September 30 |
|
| Three Months Ended September 30 |
|
| Nine Months Ended September 30 |
| ||||||||||||||||||||
(In thousands) |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net income |
| $ | 495,460 |
|
| $ | 372,136 |
|
| $ | 1,400,778 |
|
| $ | 882,012 |
|
| $ | 646,596 |
|
| $ | 495,460 |
|
| $ | 1,226,292 |
|
| $ | 1,400,778 |
|
Other comprehensive income (loss), net of tax and reclassification adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net unrealized gains (losses) on investment securities |
|
| (9,314 | ) |
|
| (17,948 | ) |
|
| (39,808 | ) |
|
| 114,451 |
| ||||||||||||||||
Net unrealized losses on investment securities |
|
| (218,852 | ) |
|
| (9,314 | ) |
|
| (425,770 | ) |
|
| (39,808 | ) | ||||||||||||||||
Cash flow hedges adjustments |
|
| (38,038 | ) |
|
| (63,199 | ) |
|
| (152,175 | ) |
|
| 240,562 |
|
|
| (172,285 | ) |
|
| (38,038 | ) |
|
| (344,534 | ) |
|
| (152,175 | ) |
Foreign currency translation adjustments |
|
| (1,579 | ) |
|
| 2,733 |
|
|
| (886 | ) |
|
| (261 | ) |
|
| (5,359 | ) |
|
| (1,579 | ) |
|
| (11,271 | ) |
|
| (886 | ) |
Defined benefit plans liability adjustments |
|
| 15,486 |
|
|
| 9,287 |
|
|
| 45,482 |
|
|
| 27,431 |
|
|
| 2,993 |
|
|
| 15,486 |
|
|
| 9,160 |
|
|
| 45,482 |
|
Total other comprehensive income (loss) |
|
| (33,445 | ) |
|
| (69,127 | ) |
|
| (147,387 | ) |
|
| 382,183 |
|
|
| (393,503 | ) |
|
| (33,445 | ) |
|
| (772,415 | ) |
|
| (147,387 | ) |
Total comprehensive income |
| $ | 462,015 |
|
| $ | 303,009 |
|
| $ | 1,253,391 |
|
| $ | 1,264,195 |
|
| $ | 253,093 |
|
| $ | 462,015 |
|
| $ | 453,877 |
|
| $ | 1,253,391 |
|
See accompanying notes to financial statements.
- 5 -
M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
|
| Nine Months Ended September 30 |
|
| Nine Months Ended September 30 |
| ||||||||||
(In thousands) |
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Net income |
| $ | 1,400,778 |
|
| $ | 882,012 |
|
| $ | 1,226,292 |
|
| $ | 1,400,778 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Provision for credit losses |
|
| (60,000 | ) |
|
| 725,000 |
|
|
| 427,000 |
|
|
| (60,000 | ) |
Depreciation and amortization of premises and equipment |
|
| 169,232 |
|
|
| 164,323 |
|
|
| 219,737 |
|
|
| 169,232 |
|
Amortization of capitalized servicing rights |
|
| 66,000 |
|
|
| 63,992 |
|
|
| 75,165 |
|
|
| 66,000 |
|
Amortization of core deposit and other intangible assets |
|
| 8,213 |
|
|
| 11,740 |
|
|
| 38,024 |
|
|
| 8,213 |
|
Provision for deferred income taxes |
|
| 70,190 |
|
|
| (119,913 | ) |
|
| (89,413 | ) |
|
| 70,190 |
|
Asset write-downs |
|
| 5,046 |
|
|
| 17,692 |
|
|
| 7,358 |
|
|
| 5,046 |
|
Net gain on sales of assets |
|
| (15,260 | ) |
|
| (14,736 | ) |
|
| (14,583 | ) |
|
| (15,260 | ) |
Net change in accrued interest receivable, payable |
|
| 20,395 |
|
|
| (135,825 | ) |
|
| (58,629 | ) |
|
| 20,395 |
|
Net change in other accrued income and expense |
|
| 50,804 |
|
|
| (344,085 | ) |
|
| (71,004 | ) |
|
| 50,804 |
|
Net change in loans originated for sale |
|
| (117,139 | ) |
|
| (422,773 | ) |
|
| 560,861 |
|
|
| (117,139 | ) |
Net change in trading account assets and liabilities |
|
| 419,772 |
|
|
| (702,362 | ) | ||||||||
Net change in trading account and non-hedging derivative assets and liabilities |
|
| 1,299,313 |
|
|
| 419,772 |
| ||||||||
Net cash provided by operating activities |
|
| 2,018,031 |
|
|
| 125,065 |
|
|
| 3,620,121 |
|
|
| 2,018,031 |
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Proceeds from sales of investment securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Equity and other securities |
|
| 8,937 |
|
|
| 55,499 |
|
|
| 42,999 |
|
|
| 8,937 |
|
Proceeds from maturities of investment securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Available for sale |
|
| 1,139,203 |
|
|
| 1,149,281 |
|
|
| 641,573 |
|
|
| 1,139,203 |
|
Held to maturity |
|
| 476,352 |
|
|
| 719,379 |
|
|
| 1,053,989 |
|
|
| 476,352 |
|
Purchases of investment securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Available for sale |
|
| (5,389 | ) |
|
| (5,860 | ) |
|
| (7,219,785 | ) |
|
| (5,389 | ) |
Held to maturity |
|
| (1,087,656 | ) |
|
| (8,995 | ) |
|
| (796,312 | ) |
|
| (1,087,656 | ) |
Equity and other securities |
|
| (27,270 | ) |
|
| (26,955 | ) |
|
| (155,290 | ) |
|
| (27,270 | ) |
Net (increase) decrease in loans and leases |
|
| 4,977,272 |
|
|
| (7,227,304 | ) |
|
| (58,942 | ) |
|
| 4,977,272 |
|
Net increase in interest-bearing deposits at banks |
|
| (14,781,978 | ) |
|
| (13,007,783 | ) | ||||||||
Net (increase) decrease in interest-bearing deposits at banks |
|
| 25,674,122 |
|
|
| (14,781,978 | ) | ||||||||
Capital expenditures, net |
|
| (87,165 | ) |
|
| (125,370 | ) |
|
| (126,810 | ) |
|
| (87,165 | ) |
Net (increase) decrease in loan servicing advances |
|
| (402,175 | ) |
|
| 149,838 |
|
|
| 1,324,912 |
|
|
| (402,175 | ) |
Acquisition, net of cash consideration |
|
|
|
|
|
| ||||||||||
Bank and bank holding company |
|
| 393,923 |
|
|
| — |
| ||||||||
Other, net |
|
| (388,305 | ) |
|
| 351,278 |
|
|
| (516,504 | ) |
|
| (388,305 | ) |
Net cash used by investing activities |
|
| (10,178,174 | ) |
|
| (17,976,992 | ) | ||||||||
Net cash provided (used) by investing activities |
|
| 20,257,875 |
|
|
| (10,178,174 | ) | ||||||||
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Net increase in deposits |
|
| 8,895,558 |
|
|
| 20,394,732 |
| ||||||||
Net increase (decrease) in deposits |
|
| (20,663,949 | ) |
|
| 8,895,558 |
| ||||||||
Net increase (decrease) in short-term borrowings |
|
| 44,066 |
|
|
| (16,240 | ) |
|
| (24,111 | ) |
|
| 44,066 |
|
Proceeds from long-term borrowings |
|
| 9,500 |
|
|
| — |
|
|
| 499,250 |
|
|
| 9,500 |
|
Payments on long-term borrowings |
|
| (853,041 | ) |
|
| (1,605,041 | ) |
|
| (907,191 | ) |
|
| (853,041 | ) |
Purchases of treasury stock |
|
| — |
|
|
| (373,750 | ) |
|
| (1,200,000 | ) |
|
| — |
|
Dividends paid — common |
|
| (425,541 | ) |
|
| (426,204 | ) |
|
| (578,968 | ) |
|
| (425,541 | ) |
Dividends paid — preferred |
|
| (55,388 | ) |
|
| (55,444 | ) |
|
| (80,600 | ) |
|
| (55,388 | ) |
Proceeds from issuance of Series I preferred stock |
|
| 495,000 |
|
|
| — |
|
|
| — |
|
|
| 495,000 |
|
Other, net |
|
| (23,042 | ) |
|
| (13,199 | ) |
|
| (4,194 | ) |
|
| (23,042 | ) |
Net cash provided by financing activities |
|
| 8,087,112 |
|
|
| 17,904,854 |
| ||||||||
Net cash provided (used) by financing activities |
|
| (22,959,763 | ) |
|
| 8,087,112 |
| ||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
| (73,031 | ) |
|
| 52,927 |
|
|
| 918,233 |
|
|
| (73,031 | ) |
Cash, cash equivalents and restricted cash at beginning of period |
|
| 1,552,743 |
|
|
| 1,436,305 |
|
|
| 1,337,577 |
|
|
| 1,552,743 |
|
Cash, cash equivalents and restricted cash at end of period |
| $ | 1,479,712 |
|
| $ | 1,489,232 |
|
| $ | 2,255,810 |
|
| $ | 1,479,712 |
|
Supplemental disclosure of cash flow information |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Interest received during the period |
| $ | 2,976,574 |
|
| $ | 3,121,917 |
|
| $ | 4,145,231 |
|
| $ | 2,976,574 |
|
Interest paid during the period |
|
| 116,402 |
|
|
| 319,079 |
|
|
| 214,552 |
|
|
| 116,402 |
|
Income taxes paid during the period |
|
| 278,783 |
|
|
| 254,471 |
|
|
| 362,866 |
|
|
| 278,783 |
|
Supplemental schedule of noncash investing and financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Real estate acquired in settlement of loans |
| $ | 6,822 |
|
| $ | 20,047 |
|
| $ | 21,017 |
|
| $ | 6,822 |
|
Additions to right-of-use assets under operating leases |
|
| 99,705 |
|
|
| 34,404 |
| ||||||||
Loans held for sale transferred to loans held for investment |
|
| 330,188 |
|
|
| — |
|
|
| — |
|
|
| 330,188 |
|
Additions to right-of-use assets under operating leases |
|
| 34,404 |
|
|
| 45,888 |
| ||||||||
Acquisition of bank and bank holding company |
|
|
|
|
|
| ||||||||||
Common stock issued |
|
| 8,286,515 |
|
|
| — |
| ||||||||
Common stock awards converted |
|
| 104,810 |
|
|
| — |
| ||||||||
Fair value of |
|
|
|
|
|
| ||||||||||
Assets acquired (noncash) |
|
| 63,757,316 |
|
|
| — |
| ||||||||
Liabilities assumed |
|
| 55,499,314 |
|
|
| — |
| ||||||||
Preferred stock converted |
|
| 260,600 |
|
|
| — |
| ||||||||
See accompanying notes to financial statements.
- 6 -
M&T BANK CORPORATION AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
| Common |
|
| Additional |
|
|
|
|
| Comprehensive |
|
|
|
|
|
|
| ||||||||
|
| Preferred |
|
| Common |
|
| Stock |
|
| Paid-in |
|
| Retained |
|
| Income |
|
| Treasury |
|
|
|
| ||||||||
Dollars in thousands, except per share |
| Stock |
|
| Stock |
|
| Issuable |
|
| Capital |
|
| Earnings |
|
| (Loss), Net |
|
| Stock |
|
| Total |
| ||||||||
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Balance — July 1, 2022 |
| $ | 2,010,600 |
|
| $ | 89,718 |
|
| $ | 1,090 |
|
| $ | 9,986,881 |
|
| $ | 14,808,637 |
|
| $ | (506,490 | ) |
| $ | (595,905 | ) |
| $ | 25,794,531 |
|
Total comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 646,596 |
|
|
| (393,503 | ) |
|
| — |
|
|
| 253,093 |
|
Preferred stock cash dividends (a) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (24,941 | ) |
|
| — |
|
|
| — |
|
|
| (24,941 | ) |
Purchases of treasury stock |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (600,000 | ) |
|
| (600,000 | ) |
Stock-based compensation transactions, net |
|
| — |
|
|
| — |
|
|
| 8 |
|
|
| 7,514 |
|
|
| (327 | ) |
|
| — |
|
|
| 36,752 |
|
|
| 43,947 |
|
Common stock cash dividends — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (210,137 | ) |
|
| — |
|
|
| — |
|
|
| (210,137 | ) |
Balance — September 30, 2022 |
| $ | 2,010,600 |
|
| $ | 89,718 |
|
| $ | 1,098 |
|
| $ | 9,994,395 |
|
| $ | 15,219,828 |
|
| $ | (899,993 | ) |
| $ | (1,159,153 | ) |
| $ | 25,256,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Nine Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Balance — January 1, 2022 |
| $ | 1,750,000 |
|
| $ | 79,871 |
|
| $ | 1,212 |
|
| $ | 6,635,000 |
|
| $ | 14,646,448 |
|
| $ | (127,578 | ) |
| $ | (5,081,548 | ) |
| $ | 17,903,405 |
|
Total comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,226,292 |
|
|
| (772,415 | ) |
|
| — |
|
|
| 453,877 |
|
Acquisition of People's United Financial, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Common stock issued |
|
| — |
|
|
| 9,824 |
|
|
| — |
|
|
| 3,256,821 |
|
|
| — |
|
|
| — |
|
|
| 5,019,870 |
|
|
| 8,286,515 |
|
Common stock awards converted |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 104,810 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 104,810 |
|
Conversion of Series H preferred stock |
|
| 260,600 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 260,600 |
|
Preferred stock cash dividends (a) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (71,647 | ) |
|
| — |
|
|
| — |
|
|
| (71,647 | ) |
Purchases of treasury stock |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,200,000 | ) |
|
| (1,200,000 | ) |
Stock-based compensation transactions, net |
|
| — |
|
|
| 23 |
|
|
| (114 | ) |
|
| (2,236 | ) |
|
| (970 | ) |
|
| — |
|
|
| 102,525 |
|
|
| 99,228 |
|
Common stock cash dividends — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (580,295 | ) |
|
| — |
|
|
| — |
|
|
| (580,295 | ) |
Balance — September 30, 2022 |
| $ | 2,010,600 |
|
| $ | 89,718 |
|
| $ | 1,098 |
|
| $ | 9,994,395 |
|
| $ | 15,219,828 |
|
| $ | (899,993 | ) |
| $ | (1,159,153 | ) |
| $ | 25,256,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Balance — July 1, 2021 |
| $ | 1,250,000 |
|
| $ | 79,871 |
|
| $ | 1,179 |
|
| $ | 6,620,528 |
|
| $ | 14,030,215 |
|
| $ | (176,974 | ) |
| $ | (5,084,515 | ) |
| $ | 16,720,304 |
|
Total comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 495,460 |
|
|
| (33,445 | ) |
|
| — |
|
|
| 462,015 |
|
Preferred stock cash dividends (a) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (17,050 | ) |
|
| — |
|
|
| — |
|
|
| (17,050 | ) |
Issuance of Series I preferred stock |
|
| 500,000 |
|
|
| — |
|
|
| — |
|
|
| (5,000 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 495,000 |
|
Stock-based compensation transactions, net |
|
| — |
|
|
| — |
|
|
| 17 |
|
|
| 9,128 |
|
|
| (207 | ) |
|
| — |
|
|
| 2,069 |
|
|
| 11,007 |
|
Common stock cash dividends — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (142,505 | ) |
|
| — |
|
|
| — |
|
|
| (142,505 | ) |
Balance — September 30, 2021 |
| $ | 1,750,000 |
|
| $ | 79,871 |
|
| $ | 1,196 |
|
| $ | 6,624,656 |
|
| $ | 14,365,913 |
|
| $ | (210,419 | ) |
| $ | (5,082,446 | ) |
| $ | 17,528,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Balance — January 1, 2021 |
| $ | 1,250,000 |
|
| $ | 79,871 |
|
| $ | 1,344 |
|
| $ | 6,617,404 |
|
| $ | 13,444,428 |
|
| $ | (63,032 | ) |
| $ | (5,142,732 | ) |
| $ | 16,187,283 |
|
Total comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,400,778 |
|
|
| (147,387 | ) |
|
| — |
|
|
| 1,253,391 |
|
Preferred stock cash dividends (a) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (51,150 | ) |
|
| — |
|
|
| — |
|
|
| (51,150 | ) |
Issuance of Series I preferred stock |
|
| 500,000 |
|
|
| — |
|
|
| — |
|
|
| (5,000 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 495,000 |
|
Stock-based compensation transactions, net |
|
| — |
|
|
| — |
|
|
| (148 | ) |
|
| 12,252 |
|
|
| (616 | ) |
|
| — |
|
|
| 60,286 |
|
|
| 71,774 |
|
Common stock cash dividends — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (427,527 | ) |
|
| — |
|
|
| — |
|
|
| (427,527 | ) |
Balance — September 30, 2021 |
| $ | 1,750,000 |
|
| $ | 79,871 |
|
| $ | 1,196 |
|
| $ | 6,624,656 |
|
| $ | 14,365,913 |
|
| $ | (210,419 | ) |
| $ | (5,082,446 | ) |
| $ | 17,528,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Common |
|
| Additional |
|
|
|
|
|
| Comprehensive |
|
|
|
|
|
|
|
|
| |||
|
| Preferred |
|
| Common |
|
| Stock |
|
| Paid-in |
|
| Retained |
|
| Income |
|
| Treasury |
|
|
|
|
| |||||||
Dollars in thousands, except per share |
| Stock |
|
| Stock |
|
| Issuable |
|
| Capital |
|
| Earnings |
|
| (Loss), Net |
|
| Stock |
|
| Total |
| ||||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance — July 1, 2021 |
| $ | 1,250,000 |
|
| $ | 79,871 |
|
| $ | 1,179 |
|
| $ | 6,620,528 |
|
| $ | 14,030,215 |
|
| $ | (176,974 | ) |
| $ | (5,084,515 | ) |
| $ | 16,720,304 |
|
Total comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 495,460 |
|
|
| (33,445 | ) |
|
| — |
|
|
| 462,015 |
|
Preferred stock cash dividends (a) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (17,050 | ) |
|
| — |
|
|
| — |
|
|
| (17,050 | ) |
Issuance of Series I preferred stock |
|
| 500,000 |
|
|
| — |
|
|
| — |
|
|
| (5,000 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 495,000 |
|
Stock-based compensation transactions, net |
|
| — |
|
|
| — |
|
|
| 17 |
|
|
| 9,128 |
|
|
| (207 | ) |
|
| — |
|
|
| 2,069 |
|
|
| 11,007 |
|
Common stock cash dividends — $1.10 per share |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (142,505 | ) |
|
| — |
|
|
| — |
|
|
| (142,505 | ) |
Balance — September 30, 2021 |
| $ | 1,750,000 |
|
| $ | 79,871 |
|
| $ | 1,196 |
|
| $ | 6,624,656 |
|
| $ | 14,365,913 |
|
| $ | (210,419 | ) |
| $ | (5,082,446 | ) |
| $ | 17,528,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance — January 1, 2021 |
| $ | 1,250,000 |
|
| $ | 79,871 |
|
| $ | 1,344 |
|
| $ | 6,617,404 |
|
| $ | 13,444,428 |
|
| $ | (63,032 | ) |
| $ | (5,142,732 | ) |
| $ | 16,187,283 |
|
Total comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,400,778 |
|
|
| (147,387 | ) |
|
| — |
|
|
| 1,253,391 |
|
Preferred stock cash dividends (a) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (51,150 | ) |
|
| — |
|
|
| — |
|
|
| (51,150 | ) |
Issuance of Series I preferred stock |
|
| 500,000 |
|
|
| — |
|
|
| — |
|
|
| (5,000 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 495,000 |
|
Stock-based compensation transactions, net |
|
| — |
|
|
| — |
|
|
| (148 | ) |
|
| 12,252 |
|
|
| (616 | ) |
|
| — |
|
|
| 60,286 |
|
|
| 71,774 |
|
Common stock cash dividends — $3.30 per share |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (427,527 | ) |
|
| — |
|
|
| — |
|
|
| (427,527 | ) |
Balance — September 30, 2021 |
| $ | 1,750,000 |
|
| $ | 79,871 |
|
| $ | 1,196 |
|
| $ | 6,624,656 |
|
| $ | 14,365,913 |
|
| $ | (210,419 | ) |
| $ | (5,082,446 | ) |
| $ | 17,528,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance — July 1, 2020 |
| $ | 1,250,000 |
|
| $ | 79,871 |
|
| $ | 1,308 |
|
| $ | 6,599,069 |
|
| $ | 12,919,345 |
|
| $ | 244,630 |
|
| $ | (5,149,118 | ) |
| $ | 15,945,105 |
|
Total comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 372,136 |
|
|
| (69,127 | ) |
|
| — |
|
|
| 303,009 |
|
Preferred stock cash dividends (a) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (17,050 | ) |
|
| — |
|
|
| — |
|
|
| (17,050 | ) |
Stock-based compensation transactions, net |
|
| — |
|
|
| — |
|
|
| 19 |
|
|
| 10,504 |
|
|
| (104 | ) |
|
| — |
|
|
| 1,483 |
|
|
| 11,902 |
|
Common stock cash dividends — $1.10 per share |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (141,953 | ) |
|
| — |
|
|
| — |
|
|
| (141,953 | ) |
Balance — September 30, 2020 |
| $ | 1,250,000 |
|
| $ | 79,871 |
|
| $ | 1,327 |
|
| $ | 6,609,573 |
|
| $ | 13,132,374 |
|
| $ | 175,503 |
|
| $ | (5,147,635 | ) |
| $ | 16,101,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance — January 1, 2020 |
| $ | 1,250,000 |
|
| $ | 79,871 |
|
| $ | 1,566 |
|
| $ | 6,593,539 |
|
| $ | 12,820,916 |
|
| $ | (206,680 | ) |
| $ | (4,822,563 | ) |
| $ | 15,716,649 |
|
Adoption of new accounting standard for credit losses |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (91,925 | ) |
|
| — |
|
|
| — |
|
|
| (91,925 | ) |
Total comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 882,012 |
|
|
| 382,183 |
|
|
| — |
|
|
| 1,264,195 |
|
Preferred stock cash dividends (a) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (51,178 | ) |
|
| — |
|
|
| — |
|
|
| (51,178 | ) |
Purchases of treasury stock |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (373,750 | ) |
|
| (373,750 | ) |
Stock-based compensation transactions, net |
|
| — |
|
|
| — |
|
|
| (239 | ) |
|
| 16,034 |
|
|
| (310 | ) |
|
| — |
|
|
| 48,678 |
|
|
| 64,163 |
|
Common stock cash dividends — $3.30 per share |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (427,141 | ) |
|
| — |
|
|
| — |
|
|
| (427,141 | ) |
Balance — September 30, 2020 |
| $ | 1,250,000 |
|
| $ | 79,871 |
|
| $ | 1,327 |
|
| $ | 6,609,573 |
|
| $ | 13,132,374 |
|
| $ | 175,503 |
|
| $ | (5,147,635 | ) |
| $ | 16,101,013 |
|
|
|
See accompanying notes to financial statements.
- 7 -
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
The consolidated interim financial statements of M&T Bank Corporation (“M&T”) and subsidiaries (“the Company”) were compiled in accordance with generally accepted accounting principles (“GAAP”) using the accounting policies set forth in note 1 of Notes to Financial Statements included in Form 10-K for the year ended December 31, 20202021 (“20202021 Annual Report”). Following the acquisition of People's United Financial, Inc. ("People's United") on April 1, 2022 and conformance of financial statement presentation, certain reclassifications have been made to prior period amounts to conform with current period presentation. The reclassifications had no effect on previously reported total assets, total liabilities, shareholders' equity or net income. Specifically, the fair values of interest rate and foreign exchange derivative contracts not designated as hedging instruments as presented in note 11 have been included in other assets and other liabilities rather than in trading account assets and liabilities. The financial statements contain all adjustments which are, in the opinion of management, necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the interim periods presented.
2. Acquisition and divestiture
On February 22, 2021,April 1, 2022, M&T announced that it had enteredcompleted the acquisition of People's United. Through subsidiaries, People's United provided commercial banking, retail banking and wealth management services to individual, corporate and municipal customers through a network of branches located in Connecticut, southeastern New York, Massachusetts, Vermont, New Hampshire and Maine. Following the merger, People's United Bank, National Association, a national banking association and a wholly owned subsidiary of People's United, merged with and into a definitive agreementManufacturers and Traders Trust Company ("M&T Bank"), the principal banking subsidiary of M&T, with People’sM&T Bank as the surviving entity. The results of operations acquired from People's United Financial, Inc. ("People’s United"), headquarteredhave been included in Bridgeport, Connecticut, under which People’s United will be acquired by M&T in an all-stock transaction. the Company's financial results since April 1, 2022.
Pursuant to the terms of the merger agreement dated February 22, 2021, People’s United shareholders will receivereceived consideration valued at .118 of an M&T common share in the formexchange for each common share of M&T common stock. People’s United outstanding preferred stock will be converted into a new series of M&T preferred stock upon completion of the acquisition.United. The transaction is valued atpurchase price totaled approximately $7.6$8.4 billion (with the price based on M&T’s closing price of $149.34$164.66 per share as of September 30, 2021)April 1, 2022). M&T issued 50,325,004 common shares in completing the transaction. Additionally, People’s United outstanding preferred stock was converted into new shares of Series H Preferred Stock of M&T. The acquisition of People's United expanded the Company's geographical footprint and management expects the Company will benefit from greater geographical diversity and the advantages of scale associated with a larger company.
- 8 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. Acquisition and divestiture, continued
The mergerPeople’s United transaction has been approved byaccounted for using the boardsacquisition method of directorsaccounting and, shareholdersaccordingly, assets acquired, liabilities assumed and preferred stock converted were recorded at estimated fair value on the acquisition date. The consideration paid for People’s United common equity and the preliminary amounts of each company. The merger is expected to close promptly after the parties have satisfied customary closing conditions, including the approvalidentifiable assets acquired, liabilities assumed and preferred stock converted as of the Board of Governorsacquisition date follows.
|
| (In thousands) |
| |
Consideration: |
|
|
| |
Common stock issued (50,325,004 shares) |
| $ | 8,286,515 |
|
Common stock awards converted |
|
| 104,810 |
|
Cash |
|
| 1,824 |
|
Total consideration |
|
| 8,393,149 |
|
|
|
|
| |
Net assets acquired: |
|
|
| |
Identifiable assets |
|
|
| |
Cash and due from banks |
|
| 395,747 |
|
Interest-bearing deposits at banks |
|
| 9,193,346 |
|
Investment securities |
|
| 11,574,689 |
|
Loans and leases |
|
| 35,840,648 |
|
Core deposit and other intangible assets |
|
| 261,000 |
|
Other assets |
|
| 2,979,388 |
|
Total identifiable assets acquired |
|
| 60,244,818 |
|
Liabilities and preferred stock |
|
|
| |
Deposits |
|
| 52,967,915 |
|
Borrowings |
|
| 1,389,012 |
|
Other liabilities |
|
| 1,142,387 |
|
Total liabilities assumed |
|
| 55,499,314 |
|
Preferred stock |
|
| 260,600 |
|
Total liabilities and preferred stock |
|
| 55,759,914 |
|
Net assets acquired |
|
| 4,484,904 |
|
Goodwill |
| $ | 3,908,245 |
|
The following is a description of the Federal Reserve System. Asmethodologies used to estimate the fair values of September 30, 2021, People’s United disclosed that it had totalthe significant assets acquired, liabilities assumed and preferred stock converted at the acquisition date:
Cash and due from banks and interest-bearing deposits in banks: Given the short-term nature of $63.7 billion, including $39.5 billionthese assets, the carrying amount was determined to be a reasonable estimate of fair value.
Investment securities: Investment securities have been determined using quoted market prices, if available. If quoted market prices were not available, investment securities were valued by reference to quoted prices for similar securities or through model-based techniques.
Loans and leases: The fair values of loans $55.9 billionand leases were generally based on a discounted cash flow methodology that considered market interest rates, expected credit losses, prepayment assumptions and other market factors for loans with similar characteristics including loan type, collateral, fixed or variable interest rate and credit risk characteristics. Expected credit losses were determined based on credit characteristics and other factors such as default and recovery rates of liabilities, including $52.9 billionsimilar products.
Core deposit and other intangible assets: The core deposit intangible asset represents the value of certain customer deposit relationships. The fair value of the core deposit intangible asset was based on a discounted cash flow methodology that considered expected customer attrition rates, costs associated with maintaining the deposit relationships and alternative funding costs. Other intangible assets were also valued using expected and contractual cash flows.
Deposits: The fair value of deposits with no maturity date was determined to be the amount payable on demand at the acquisition date. The fair value of time deposits was determined by discounting contractual cash flows, that considered market interest rates in relation to contractual interest rates for instruments with like remaining maturities.
- 9 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. Acquisition and $7.8divestiture, continued
Borrowings: The fair value of borrowings was determined using quoted market prices for the instrument, if available. If quoted market prices for the instrument were not available, similar instruments with quoted market prices were referenced.
Preferred stock: The fair value of preferred stock converted was determined using quoted market prices.
GAAP requires loans and leases obtained through an acquisition that have experienced a more-than-insignificant deterioration in credit quality since origination be considered purchased credit deteriorated (“PCD”). The Company considered several factors in the determination of PCD loans, including loan grades assigned to acquired commercial loans and leases and commercial real estate loans utilizing the Company's loan grading system and delinquency status and history for acquired loans backed by residential real estate. Loans and leases acquired from People's United and identified as PCD totaled $3.4 billion at April 1, 2022. For those loans and leases, the initial estimate of stockholders’ equity.expected credit losses of $99 million was established through an adjustment to increase both the initial carrying value and allowance for credit losses. GAAP also provides that an allowance for credit losses on loans acquired, but not classified as PCD, also be recognized. Accordingly, the Company recorded $242 million of provision for credit losses for non-PCD acquired loans and leases at the acquisition date. The following table reconciles the unpaid principal balance to the fair value of PCD loans and leases at April 1, 2022:
| Total |
| |
|
|
| |
Unpaid principal balance (a) | $ | 3,410,506 |
|
Allowance for credit losses at acquisition (a) |
| (99,000 | ) |
Non-credit discount |
| (106,814 | ) |
Fair value | $ | 3,204,692 |
|
In connection with the acquisition, the Company recorded approximately $3.9 billion of goodwill, which represents the excess of the purchase price over the fair value of the net assets acquired, and $261 million of core deposit and other intangible assets. The core deposit and other intangible assets are being amortized over periods of three to seven years. The preliminary allocation of goodwill recorded as a result of the acquisition to the Company’s reportable segments is as follows:
| December 31, 2021 |
|
| Acquisition of People's United |
|
| September 30, 2022 |
| |||
| (In thousands) |
| |||||||||
|
|
|
|
|
|
|
|
| |||
Business Banking | $ | 864,366 |
|
| $ | 693,905 |
|
| $ | 1,558,271 |
|
Commercial Banking |
| 1,401,873 |
|
|
| 2,686,253 |
|
|
| 4,088,126 |
|
Commercial Real Estate |
| 654,389 |
|
|
| 291,217 |
|
|
| 945,606 |
|
Discretionary Portfolio |
| — |
|
|
| — |
|
|
| — |
|
Residential Mortgage Banking |
| — |
|
|
| — |
|
|
| — |
|
Retail Banking |
| 1,309,191 |
|
|
| 221,196 |
|
|
| 1,530,387 |
|
All Other |
| 363,293 |
|
|
| 15,674 |
|
|
| 378,967 |
|
Total | $ | 4,593,112 |
|
| $ | 3,908,245 |
|
| $ | 8,501,357 |
|
Due to the integration of People's United operating systems and activities with those of the Company, the Company's ability to report on the former operations of People's United is inherently limited. The Company estimates that included in the Consolidated Statement of Income from the acquisition date through September 30, 2022 are total revenues of approximately $1.0 billion and a net loss of approximately $13 million related to the acquisition of People's United.
- 10 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. Acquisition and divestiture, continued
The following table presents certain pro forma information as if People’s United had been acquired on January 1, 2021. These results combine the historical results of People’s United into the Company’s consolidated statement of income and, while adjustments were made for the estimated impact of certain fair valuation adjustments and other acquisition-related activity, they are not indicative of what would have occurred had the acquisition taken place as indicated. For example, merger-related expenses noted below are included in the periods where such expenses were incurred. Additionally, the Company expects to achieve operating cost savings and other business synergies as a result of the acquisition which are not reflected in the pro forma amounts that follow:
|
| Pro forma |
|
| Pro forma |
| |||||
|
| Nine Months Ended September 30, |
|
| Three Months Ended September 30 |
| |||||
|
| 2022 |
| 2021 |
|
| 2021 |
| |||
|
| (In thousands) |
|
| (In thousands) |
| |||||
Total revenues(a) |
| $ | 6,134,400 |
| $ | 6,056,364 |
|
| $ | 2,054,462 |
|
Net income |
|
| 1,399,913 |
|
| 1,769,781 |
|
|
| 664,820 |
|
In connection with the People’s United acquisition, the Company incurred merger-related expenses consisting predominantlyrelated to systems conversions and other costs of integrating and conforming acquired operations with and into the Company. Those expenses consisted largely of professional services and other temporary help fees associated with preparing for systems conversions and/or integration of operations; costs related to planned integration efforts associated withtermination of existing contractual arrangements for various services; initial marketing and promotion expenses designed to introduce M&T Bank to its new customers; severance (for former People’s United employees); travel costs; and other costs of completing the mergertransaction and commencing operations in new markets and offices. The Company expects that totaled approximately $9there will be additional merger-related expenses in 2022. A summary of merger-related expenses included in the consolidated statement of income follows.
|
| Three Months Ended September 30 |
|
| Nine Months Ended September 30 |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
| (In thousands) |
|
| (In thousands) |
| ||||||||||
Salaries and employee benefits |
| $ | 13,094 |
|
| $ | 60 |
|
| $ | 98,480 |
|
| $ | 64 |
|
Equipment and net occupancy |
|
| 2,106 |
|
|
| 1 |
|
|
| 4,415 |
|
|
| 1 |
|
Outside data processing software |
|
| 2,277 |
|
|
| 625 |
|
|
| 3,245 |
|
|
| 869 |
|
Advertising and marketing |
|
| 2,177 |
|
|
| 505 |
|
|
| 4,004 |
|
|
| 529 |
|
Printing, postage and supplies |
|
| 651 |
|
|
| 730 |
|
|
| 3,833 |
|
|
| 2,779 |
|
Other cost of operations |
|
| 32,722 |
|
|
| 6,905 |
|
|
| 179,231 |
|
|
| 18,428 |
|
Other expense |
| $ | 53,027 |
|
| $ | 8,826 |
|
| $ | 293,208 |
|
| $ | 22,670 |
|
The Company also recognized a $242 million provision for credit losses on acquired loans that were not deemed to be PCD on April 1, 2022. GAAP requires that acquired loans be recorded at estimated fair value, which includes the use of interest rate and $23expected credit loss assumptions to forecast estimated cash flows. GAAP also provides that an allowance for credit losses on loans acquired, but not classified as PCD also be recognized above and beyond the impact of forecasted losses used in determining the fair value of acquired loans. Accordingly, the Company recorded a $242 million duringprovision for credit losses related to such loans obtained in the People's United transaction in the three months ended June 30, 2022.
On September 29, 2022 M&T Bank announced it had entered into a definitive agreement to sell M&T Insurance Agency, Inc. ("MTIA"), a wholly owned insurance agency subsidiary of M&T Bank to Arthur J. Gallagher & Co. The transaction was completed on October 31, 2022. The Company expects to recognize a pre-tax gain on the sale of approximately $135 million. MTIA had assets of $25 million and shareholders' equity of $10 million at September 30, 2022. For the nine months ended September 30, 2022 and 2021, respectively. MTIA recorded revenues of $31 million and $29 million, respectively, and net income of $4 million and $1 million, respectively.
- 811 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. Investment securities
The amortized cost and estimated fair value of investment securities were as follows:
|
| Amortized |
|
| Gross |
|
| Gross |
|
| Estimated |
| ||||
|
| (In thousands) |
| |||||||||||||
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury and federal agencies |
| $ | 7,908,153 |
|
| $ | 413 |
|
| $ | 249,838 |
|
| $ | 7,658,728 |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Government issued or guaranteed |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commercial |
|
| 613,752 |
|
|
| — |
|
|
| 7,181 |
|
|
| 606,571 |
|
Residential |
|
| 2,635,976 |
|
|
| 127 |
|
|
| 205,157 |
|
|
| 2,430,946 |
|
Other debt securities |
|
| 182,274 |
|
|
| 311 |
|
|
| 8,484 |
|
|
| 174,101 |
|
|
|
| 11,340,155 |
|
|
| 851 |
|
|
| 470,660 |
|
|
| 10,870,346 |
|
Investment securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury and federal agencies |
|
| 1,199,539 |
|
|
| — |
|
|
| 49,633 |
|
|
| 1,149,906 |
|
Obligations of states and political subdivisions |
|
| 2,663,917 |
|
|
| 6 |
|
|
| 221,631 |
|
|
| 2,442,292 |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Government issued or guaranteed |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commercial |
|
| 927,503 |
|
|
| — |
|
|
| 106,215 |
|
|
| 821,288 |
|
Residential |
|
| 8,053,619 |
|
|
| — |
|
|
| 967,653 |
|
|
| 7,085,966 |
|
Privately issued |
|
| 52,479 |
|
|
| 9,260 |
|
|
| 8,341 |
|
|
| 53,398 |
|
Other debt securities |
|
| 1,805 |
|
|
| — |
|
|
| — |
|
|
| 1,805 |
|
|
|
| 12,898,862 |
|
|
| 9,266 |
|
|
| 1,353,473 |
|
|
| 11,554,655 |
|
Total debt securities |
| $ | 24,239,017 |
|
| $ | 10,117 |
|
| $ | 1,824,133 |
|
| $ | 22,425,001 |
|
Equity and other securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Readily marketable equity — at fair value |
| $ | 192,584 |
|
| $ | 4,943 |
|
| $ | 2,990 |
|
| $ | 194,537 |
|
Other — at cost |
|
| 640,020 |
|
|
| — |
|
|
| — |
|
|
| 640,020 |
|
Total equity and other securities |
| $ | 832,604 |
|
| $ | 4,943 |
|
| $ | 2,990 |
|
| $ | 834,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury and federal agencies |
| $ | 682,267 |
|
| $ | 229 |
|
| $ | 3,806 |
|
| $ | 678,690 |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Government issued or guaranteed |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Residential |
|
| 3,042,771 |
|
|
| 113,102 |
|
|
| 561 |
|
|
| 3,155,312 |
|
Other debt securities |
|
| 124,309 |
|
|
| 1,974 |
|
|
| 4,481 |
|
|
| 121,802 |
|
|
|
| 3,849,347 |
|
|
| 115,305 |
|
|
| 8,848 |
|
|
| 3,955,804 |
|
Investment securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury and federal agencies |
|
| 3,052 |
|
|
| — |
|
|
| 9 |
|
|
| 3,043 |
|
Obligations of states and political subdivisions |
|
| 177 |
|
|
| 2 |
|
|
| — |
|
|
| 179 |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Government issued or guaranteed |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Residential |
|
| 2,667,328 |
|
|
| 49,221 |
|
|
| 8,376 |
|
|
| 2,708,173 |
|
Privately issued |
|
| 61,555 |
|
|
| 10,520 |
|
|
| 14,742 |
|
|
| 57,333 |
|
Other debt securities |
|
| 2,562 |
|
|
| — |
|
|
| — |
|
|
| 2,562 |
|
|
|
| 2,734,674 |
|
|
| 59,743 |
|
|
| 23,127 |
|
|
| 2,771,290 |
|
Total debt securities |
| $ | 6,584,021 |
|
| $ | 175,048 |
|
| $ | 31,975 |
|
| $ | 6,727,094 |
|
Equity and other securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Readily marketable equity — at fair value |
| $ | 73,774 |
|
| $ | 4,460 |
|
| $ | 594 |
|
| $ | 77,640 |
|
Other — at cost |
|
| 387,742 |
|
|
| — |
|
|
| — |
|
|
| 387,742 |
|
Total equity and other securities |
| $ | 461,516 |
|
| $ | 4,460 |
|
| $ | 594 |
|
| $ | 465,382 |
|
|
| Amortized Cost |
|
| Gross Unrealized Gains |
|
| Gross Unrealized Losses |
|
| Estimated Fair Value |
| ||||
|
| (In thousands) |
| |||||||||||||
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and federal agencies |
| $ | 9,621 |
|
| $ | 124 |
|
| $ | 1 |
|
| $ | 9,744 |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government issued or guaranteed |
|
| 3,328,080 |
|
|
| 147,942 |
|
|
| 543 |
|
|
| 3,475,479 |
|
Other debt securities |
|
| 136,222 |
|
|
| 2,905 |
|
|
| 6,244 |
|
|
| 132,883 |
|
|
|
| 3,473,923 |
|
|
| 150,971 |
|
|
| 6,788 |
|
|
| 3,618,106 |
|
Investment securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and federal agencies |
|
| 3,065 |
|
|
| — |
|
|
| — |
|
|
| 3,065 |
|
Obligations of states and political subdivisions |
|
| 177 |
|
|
| — |
|
|
| — |
|
|
| 177 |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government issued or guaranteed |
|
| 2,288,934 |
|
|
| 63,523 |
|
|
| 6,312 |
|
|
| 2,346,145 |
|
Privately issued |
|
| 64,929 |
|
|
| 10,901 |
|
|
| 13,901 |
|
|
| 61,929 |
|
Other debt securities |
|
| 2,622 |
|
|
| — |
|
|
| — |
|
|
| 2,622 |
|
|
|
| 2,359,727 |
|
|
| 74,424 |
|
|
| 20,213 |
|
|
| 2,413,938 |
|
Total debt securities |
| $ | 5,833,650 |
|
| $ | 225,395 |
|
| $ | 27,001 |
|
| $ | 6,032,044 |
|
Equity and other securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Readily marketable equity — at fair value |
| $ | 80,016 |
|
| $ | 3,341 |
|
| $ | 901 |
|
| $ | 82,456 |
|
Other — at cost |
|
| 387,333 |
|
|
| — |
|
|
| — |
|
|
| 387,333 |
|
Total equity and other securities |
| $ | 467,349 |
|
| $ | 3,341 |
|
| $ | 901 |
|
| $ | 469,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and federal agencies |
| $ | 9,154 |
|
| $ | 198 |
|
| $ | 14 |
|
| $ | 9,338 |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government issued or guaranteed |
|
| 4,475,406 |
|
|
| 208,787 |
|
|
| 755 |
|
|
| 4,683,438 |
|
Privately issued |
|
| 16 |
|
|
| — |
|
|
| — |
|
|
| 16 |
|
Other debt securities |
|
| 136,451 |
|
|
| 1,664 |
|
|
| 8,301 |
|
|
| 129,814 |
|
|
|
| 4,621,027 |
|
|
| 210,649 |
|
|
| 9,070 |
|
|
| 4,822,606 |
|
Investment securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and federal agencies |
|
| 2,999 |
|
|
| — |
|
|
| — |
|
|
| 2,999 |
|
Obligations of states and political subdivisions |
|
| 1,531 |
|
|
| 9 |
|
|
| — |
|
|
| 1,540 |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government issued or guaranteed |
|
| 1,664,443 |
|
|
| 100,176 |
|
|
| 11 |
|
|
| 1,764,608 |
|
Privately issued |
|
| 77,155 |
|
|
| 11,056 |
|
|
| 17,938 |
|
|
| 70,273 |
|
Other debt securities |
|
| 2,861 |
|
|
| — |
|
|
| — |
|
|
| 2,861 |
|
|
|
| 1,748,989 |
|
|
| 111,241 |
|
|
| 17,949 |
|
|
| 1,842,281 |
|
Total debt securities |
| $ | 6,370,016 |
|
| $ | 321,890 |
|
| $ | 27,019 |
|
| $ | 6,664,887 |
|
Equity and other securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Readily marketable equity — at fair value |
| $ | 67,891 |
|
| $ | 25,094 |
|
| $ | — |
|
| $ | 92,985 |
|
Other — at cost |
|
| 381,117 |
|
|
| — |
|
|
| — |
|
|
| 381,117 |
|
Total equity and other securities |
| $ | 449,008 |
|
| $ | 25,094 |
|
| $ | — |
|
| $ | 474,102 |
|
- 912 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. Investment securities, continued
There were 0no significant gross realized gains or losses from sales of investment securities for the three-month and nine-month periods ended September 30, 20212022 and 2020.2021. Unrealized gainslosses on equity securities during the three months ended September 30, 2021 were less than $1$1 million and unrealized losses during the nine months ended September 30, 2021 were $23 million, compared with unrealized gains of $3 million and unrealized losses of $11$2 million during the three months and nine months ended September 30, 2020,2022, respectively, compared with unrealized gains on equity securities of less than $1 million and unrealized losses of $23 million during the three months and nine months ended September 30, 2021, respectively.
At September 30, 2021,2022, the amortized cost and estimated fair value of debt securities by contractual maturity were as follows:
|
| Amortized Cost |
|
| Estimated Fair Value |
|
| Amortized |
|
| Estimated |
| ||||
|
| (In thousands) |
|
| (In thousands) |
| ||||||||||
Debt securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Due in one year or less |
| $ | 4,291 |
|
|
| 4,351 |
|
| $ | 6,886 |
|
| $ | 6,813 |
|
Due after one year through five years |
|
| 13,974 |
|
|
| 14,616 |
|
|
| 7,979,072 |
|
|
| 7,727,233 |
|
Due after five years through ten years |
|
| 97,578 |
|
|
| 98,981 |
|
|
| 74,469 |
|
|
| 71,558 |
|
Due after ten years |
|
| 30,000 |
|
|
| 24,679 |
|
|
| 30,000 |
|
|
| 27,225 |
|
|
|
| 145,843 |
|
|
| 142,627 |
|
|
| 8,090,427 |
|
|
| 7,832,829 |
|
Mortgage-backed securities available for sale |
|
| 3,328,080 |
|
|
| 3,475,479 |
|
|
| 3,249,728 |
|
|
| 3,037,517 |
|
|
| $ | 3,473,923 |
|
|
| 3,618,106 |
|
| $ | 11,340,155 |
|
| $ | 10,870,346 |
|
Debt securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Due in one year or less |
| $ | 176 |
|
|
| 177 |
|
| $ | 292,223 |
|
| $ | 290,088 |
|
Due after one year through five years |
|
| 3,066 |
|
|
| 3,065 |
|
|
| 1,096,658 |
|
|
| 1,045,997 |
|
Due after five years through ten years |
|
| 1,045,507 |
|
|
| 992,244 |
| ||||||||
Due after ten years |
|
| 2,622 |
|
|
| 2,622 |
|
|
| 1,430,873 |
|
|
| 1,265,674 |
|
|
|
| 5,864 |
|
|
| 5,864 |
|
|
| 3,865,261 |
|
|
| 3,594,003 |
|
Mortgage-backed securities held to maturity |
|
| 2,353,863 |
|
|
| 2,408,074 |
|
|
| 9,033,601 |
|
|
| 7,960,652 |
|
|
| $ | 2,359,727 |
|
|
| 2,413,938 |
|
| $ | 12,898,862 |
|
| $ | 11,554,655 |
|
- 1013 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. Investment securities, continued
A summary of investment securities that as of September 30, 20212022 and December 31, 20202021 had been in a continuous unrealized loss position for less than twelve months and those that had been in a continuous unrealized loss position for twelve months or longer follows:
|
| Less Than 12 Months |
|
| 12 Months or More |
| ||||||||||
|
| Fair |
|
| Unrealized |
|
| Fair |
|
| Unrealized |
| ||||
|
| (In thousands) |
| |||||||||||||
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury and federal agencies |
| $ | 7,159,893 |
|
| $ | 224,986 |
|
| $ | 253,585 |
|
| $ | 24,852 |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Government issued or guaranteed |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commercial |
|
| 606,571 |
|
|
| 7,181 |
|
|
| — |
|
|
| — |
|
Residential |
|
| 2,401,907 |
|
|
| 204,279 |
|
|
| 18,668 |
|
|
| 878 |
|
Other debt securities |
|
| 99,347 |
|
|
| 2,827 |
|
|
| 68,872 |
|
|
| 5,657 |
|
|
|
| 10,267,718 |
|
|
| 439,273 |
|
|
| 341,125 |
|
|
| 31,387 |
|
Investment securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury and federal agencies |
|
| 1,146,912 |
|
|
| 49,618 |
|
|
| 2,994 |
|
|
| 15 |
|
Obligations of states and political subdivisions |
|
| 2,426,287 |
|
|
| 221,631 |
|
|
| — |
|
|
| — |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Government issued or guaranteed |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commercial |
|
| 821,288 |
|
|
| 106,215 |
|
|
| — |
|
|
| — |
|
Residential |
|
| 6,416,154 |
|
|
| 819,363 |
|
|
| 669,812 |
|
|
| 148,290 |
|
Privately issued |
|
| — |
|
|
| — |
|
|
| 37,642 |
|
|
| 8,341 |
|
|
|
| 10,810,641 |
|
|
| 1,196,827 |
|
|
| 710,448 |
|
|
| 156,646 |
|
Total |
| $ | 21,078,359 |
|
| $ | 1,636,100 |
|
| $ | 1,051,573 |
|
| $ | 188,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury and federal agencies |
| $ | 598,566 |
|
| $ | 3,806 |
|
| $ | — |
|
| $ | — |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Government issued or guaranteed |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Residential |
|
| 10,111 |
|
|
| 54 |
|
|
| 20,824 |
|
|
| 507 |
|
Other debt securities |
|
| 3,760 |
|
|
| 74 |
|
|
| 66,419 |
|
|
| 4,407 |
|
|
|
| 612,437 |
|
|
| 3,934 |
|
|
| 87,243 |
|
|
| 4,914 |
|
Investment securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury and federal agencies |
|
| 3,043 |
|
|
| 9 |
|
|
| — |
|
|
| — |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Government issued or guaranteed |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Residential |
|
| 1,372,236 |
|
|
| 8,356 |
|
|
| 1,251 |
|
|
| 20 |
|
Privately issued |
|
| — |
|
|
| — |
|
|
| 43,692 |
|
|
| 14,742 |
|
|
|
| 1,375,279 |
|
|
| 8,365 |
|
|
| 44,943 |
|
|
| 14,762 |
|
Total |
| $ | 1,987,716 |
|
| $ | 12,299 |
|
| $ | 132,186 |
|
| $ | 19,676 |
|
|
| Less Than 12 Months |
|
| 12 Months or More |
| ||||||||||
|
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
| ||||
|
| (In thousands) |
| |||||||||||||
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and federal agencies |
| $ | 1,424 |
|
|
| (1 | ) |
|
| — |
|
|
| — |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government issued or guaranteed |
|
| 981 |
|
|
| (5 | ) |
|
| 22,517 |
|
|
| (538 | ) |
Other debt securities |
|
| 3,498 |
|
|
| (37 | ) |
|
| 64,437 |
|
|
| (6,207 | ) |
|
|
| 5,903 |
|
|
| (43 | ) |
|
| 86,954 |
|
|
| (6,745 | ) |
Investment securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government issued or guaranteed |
|
| 1,019,537 |
|
|
| (6,301 | ) |
|
| 1,400 |
|
|
| (11 | ) |
Privately issued |
|
| — |
|
|
| — |
|
|
| 47,467 |
|
|
| (13,901 | ) |
|
|
| 1,019,537 |
|
|
| (6,301 | ) |
|
| 48,867 |
|
|
| (13,912 | ) |
Total |
| $ | 1,025,440 |
|
|
| (6,344 | ) |
|
| 135,821 |
|
|
| (20,657 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and federal agencies |
| $ | 985 |
|
|
| (14 | ) |
|
| — |
|
|
| — |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government issued or guaranteed |
|
| 18,687 |
|
|
| (356 | ) |
|
| 16,556 |
|
|
| (399 | ) |
Other debt securities |
|
| 16,055 |
|
|
| (181 | ) |
|
| 63,462 |
|
|
| (8,120 | ) |
|
|
| 35,727 |
|
|
| (551 | ) |
|
| 80,018 |
|
|
| (8,519 | ) |
Investment securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government issued or guaranteed |
|
| 2,039 |
|
|
| (11 | ) |
|
| — |
|
|
| — |
|
Privately issued |
|
| — |
|
|
| — |
|
|
| 52,418 |
|
|
| (17,938 | ) |
|
|
| 2,039 |
|
|
| (11 | ) |
|
| 52,418 |
|
|
| (17,938 | ) |
Total |
| $ | 37,766 |
|
|
| (562 | ) |
|
| 132,436 |
|
|
| (26,457 | ) |
The Company owned 2864,330 individual debt securities with aggregate gross unrealized losses of $27 million$1.8 billion at September 30, 2021.2022. Based on a review of each of the securities in the investment securities portfolio at September 30, 2021,2022, the Company concluded that it expected to recover the amortized cost basis of its investment. As of September 30, 2021,2022, the Company does not intend to sell nor is it anticipated that it would be required to sell any of its impaired investment securities at a loss. At September 30, 2021,2022, the Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of the $387$640 million of cost method equity securities.
- 14 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. Investment securities, continued
The Company estimated 0no material allowance for credit losses for its investment securities classified as held-to-maturity at September 30, 20212022 or December 31, 2020, as the substantial majority of such2021.
At September 30, 2022 and December 31, 2021 investment securities are obligations backed by the U.S. government or its agencies.with carrying values of $10.3 billion (including $581 million related to repurchase transactions) and $5.1 billion (including $96 million related to repurchase transactions), respectively, were pledged to secure borrowings, lines of credit and governmental deposits.
- 11 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses
A summary of current, past due and nonaccrual loans as of September 30, 20212022 and December 31, 20202021 follows:
|
| Current |
|
| 30-89 Days |
|
| Accruing |
|
| Nonaccrual |
|
| Total |
| |||||
|
| (In thousands) |
| |||||||||||||||||
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Commercial, financial, leasing, etc. |
| $ | 37,938,053 |
|
|
| 481,091 |
|
|
| 20,639 |
|
|
| 368,166 |
|
| $ | 38,807,949 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Commercial |
|
| 35,880,425 |
|
|
| 227,399 |
|
|
| 38,470 |
|
|
| 1,406,200 |
|
|
| 37,552,494 |
|
Residential builder and developer |
|
| 1,377,505 |
|
|
| 62 |
|
|
| — |
|
|
| 1,930 |
|
|
| 1,379,497 |
|
Other commercial construction |
|
| 6,981,412 |
|
|
| 157,175 |
|
|
| 1,900 |
|
|
| 66,187 |
|
|
| 7,206,674 |
|
Residential |
|
| 20,709,362 |
|
|
| 580,357 |
|
|
| 411,731 |
|
|
| 285,395 |
|
|
| 21,986,845 |
|
Residential — limited documentation |
|
| 974,779 |
|
|
| 17,274 |
|
|
| — |
|
|
| 95,382 |
|
|
| 1,087,435 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Home equity lines and loans |
|
| 4,959,845 |
|
|
| 25,370 |
|
|
| — |
|
|
| 78,208 |
|
|
| 5,063,423 |
|
Recreational finance |
|
| 8,738,849 |
|
|
| 41,758 |
|
|
| — |
|
|
| 38,718 |
|
|
| 8,819,325 |
|
Automobile |
|
| 4,282,895 |
|
|
| 35,550 |
|
|
| — |
|
|
| 40,318 |
|
|
| 4,358,763 |
|
Other |
|
| 1,897,867 |
|
|
| 12,730 |
|
|
| 3,763 |
|
|
| 48,822 |
|
|
| 1,963,182 |
|
Total |
| $ | 123,740,992 |
|
|
| 1,578,766 |
|
|
| 476,503 |
|
|
| 2,429,326 |
|
| $ | 128,225,587 |
|
December 31, 2021 |
|
|
| |||||||||||||||||
Commercial, financial, leasing, etc. |
| $ | 23,101,810 |
|
|
| 142,208 |
|
|
| 8,284 |
|
|
| 221,022 |
|
| $ | 23,473,324 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Commercial |
|
| 24,712,643 |
|
|
| 319,099 |
|
|
| 31,733 |
|
|
| 1,069,280 |
|
|
| 26,132,755 |
|
Residential builder and developer |
|
| 1,400,437 |
|
|
| 2,904 |
|
|
| — |
|
|
| 3,005 |
|
|
| 1,406,346 |
|
Other commercial construction |
|
| 7,722,049 |
|
|
| 17,175 |
|
|
| — |
|
|
| 111,405 |
|
|
| 7,850,629 |
|
Residential |
|
| 13,294,872 |
|
|
| 239,561 |
|
|
| 920,080 |
|
|
| 355,858 |
|
|
| 14,810,371 |
|
Residential — limited documentation |
|
| 1,124,520 |
|
|
| 16,666 |
|
|
| — |
|
|
| 122,888 |
|
|
| 1,264,074 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Home equity lines and loans |
|
| 3,476,617 |
|
|
| 15,486 |
|
|
| — |
|
|
| 70,488 |
|
|
| 3,562,591 |
|
Recreational finance |
|
| 7,985,173 |
|
|
| 40,544 |
|
|
| — |
|
|
| 27,811 |
|
|
| 8,053,528 |
|
Automobile |
|
| 4,604,772 |
|
|
| 40,064 |
|
|
| — |
|
|
| 34,037 |
|
|
| 4,678,873 |
|
Other |
|
| 1,620,147 |
|
|
| 12,223 |
|
|
| 3,302 |
|
|
| 44,289 |
|
|
| 1,679,961 |
|
Total |
| $ | 89,043,040 |
|
|
| 845,930 |
|
|
| 963,399 |
|
|
| 2,060,083 |
|
| $ | 92,912,452 |
|
|
| Current |
|
| 30-89 Days Past Due |
|
| Accruing Loans Past Due 90 Days or More |
|
| Nonaccrual |
|
| Total |
| |||||
|
| (In thousands) |
| |||||||||||||||||
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, leasing, etc. |
| $ | 22,100,813 |
|
|
| 121,993 |
|
|
| 11,945 |
|
|
| 280,189 |
|
| $ | 22,514,940 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
| 25,524,405 |
|
|
| 245,157 |
|
|
| 63,368 |
|
|
| 1,152,870 |
|
|
| 26,985,800 |
|
Residential builder and developer |
|
| 1,336,884 |
|
|
| 16,453 |
|
|
| 2,392 |
|
|
| 594 |
|
|
| 1,356,323 |
|
Other commercial construction |
|
| 8,429,031 |
|
|
| 93,978 |
|
|
| 121 |
|
|
| 158,699 |
|
|
| 8,681,829 |
|
Residential |
|
| 13,314,202 |
|
|
| 255,187 |
|
|
| 945,148 |
|
|
| 353,426 |
|
|
| 14,867,963 |
|
Residential — limited documentation |
|
| 1,199,172 |
|
|
| 15,690 |
|
|
| — |
|
|
| 126,529 |
|
|
| 1,341,391 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity lines and loans |
|
| 3,548,820 |
|
|
| 14,712 |
|
|
| — |
|
|
| 71,474 |
|
|
| 3,635,006 |
|
Recreational finance |
|
| 7,972,125 |
|
|
| 29,656 |
|
|
| — |
|
|
| 23,907 |
|
|
| 8,025,688 |
|
Automobile |
|
| 4,553,306 |
|
|
| 34,349 |
|
|
| — |
|
|
| 31,002 |
|
|
| 4,618,657 |
|
Other |
|
| 1,499,219 |
|
|
| 9,399 |
|
|
| 3,106 |
|
|
| 43,573 |
|
|
| 1,555,297 |
|
Total |
| $ | 89,477,977 |
|
|
| 836,574 |
|
|
| 1,026,080 |
|
|
| 2,242,263 |
|
| $ | 93,582,894 |
|
December 31, 2020 |
|
|
| |||||||||||||||||
Commercial, financial, leasing, etc. |
| $ | 27,196,862 |
|
|
| 60,822 |
|
|
| 10,053 |
|
|
| 306,827 |
|
| $ | 27,574,564 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
| 26,688,515 |
|
|
| 168,917 |
|
|
| 47,014 |
|
|
| 775,894 |
|
|
| 27,680,340 |
|
Residential builder and developer |
|
| 1,246,095 |
|
|
| 1,693 |
|
|
| 856 |
|
|
| 1,094 |
|
|
| 1,249,738 |
|
Other commercial construction |
|
| 8,523,591 |
|
|
| 66,365 |
|
|
| 3,816 |
|
|
| 114,039 |
|
|
| 8,707,811 |
|
Residential |
|
| 13,764,836 |
|
|
| 200,406 |
|
|
| 792,888 |
|
|
| 365,729 |
|
|
| 15,123,859 |
|
Residential — limited documentation |
|
| 1,462,277 |
|
|
| 19,687 |
|
|
| — |
|
|
| 147,170 |
|
|
| 1,629,134 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity lines and loans |
|
| 3,881,885 |
|
|
| 24,329 |
|
|
| — |
|
|
| 79,392 |
|
|
| 3,985,606 |
|
Recreational finance |
|
| 7,002,643 |
|
|
| 47,161 |
|
|
| — |
|
|
| 25,519 |
|
|
| 7,075,323 |
|
Automobile |
|
| 4,007,349 |
|
|
| 55,498 |
|
|
| — |
|
|
| 39,404 |
|
|
| 4,102,251 |
|
Other |
|
| 1,346,868 |
|
|
| 17,561 |
|
|
| 4,581 |
|
|
| 38,231 |
|
|
| 1,407,241 |
|
Total |
| $ | 95,120,921 |
|
|
| 662,439 |
|
|
| 859,208 |
|
|
| 1,893,299 |
|
| $ | 98,535,867 |
|
- 12 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. LoansAt September 30, 2022 and leasesDecember 31, 2021, the Company had $39 million and the allowance for credit losses, continued
A summary$1.2 billion, respectively, of outstanding loan balances, consisting predominantly of residential real estate loans, for which COVID-19 related modificationspayment deferrals were granted as of September 30, 2021 is presented below. Thesegranted. Those loans meetmet the criteria described in note 1 of Notes to Financial Statements in the 20202021 Annual Report and, accordingly, are not considered past due or otherwise in default of loan terms as of the date presented. The vast majorityIncluded in those loan balances were $20 million and $974 million of government-guaranteed loans at September 30, 2022 and December 31, 2021, respectively. Payment deferrals are generally scheduled to expire in 2022 and/or are in the modifications noted below expire during 2021.process of formal modification of repayment terms for previously deferred payments.
|
| COVID-19 Related Modifications |
| |||||||||
September 30, 2021 |
| Payment Deferrals(1) |
|
| Other Forbearances(2) |
|
| Total |
| |||
|
| (In thousands) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, leasing, etc. |
| $ | — |
|
| $ | 53,876 |
|
| $ | 53,876 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
| — |
|
|
| 225,807 |
|
|
| 225,807 |
|
Other commercial construction |
|
| — |
|
|
| 21,330 |
|
|
| 21,330 |
|
Residential |
|
| 1,925,639 |
| (3) |
| — |
|
|
| 1,925,639 |
|
Residential — limited documentation |
|
| 177,200 |
|
|
| — |
|
|
| 177,200 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
Home equity lines and loans |
|
| 6,188 |
|
|
| — |
|
|
| 6,188 |
|
Recreational finance |
|
| 2,252 |
|
|
| — |
|
|
| 2,252 |
|
Automobile |
|
| 4,314 |
|
|
| — |
|
|
| 4,314 |
|
Other |
|
| 197 |
|
|
| — |
|
|
| 197 |
|
Total |
| $ | 2,115,790 |
|
| $ | 301,013 |
|
| $ | 2,416,803 |
|
|
|
|
|
|
|
One-to-four family residential mortgage loans held for sale were $279$43 million and $777$474 million at September 30, 20212022 and December 31, 2020,2021, respectively. Commercial real estate loans held for sale were $559$300 million at September 30, 20212022 and $278$425 million at December 31, 2020.2021.
- 15 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
Credit quality indicators
The Company utilizes a loan grading system to differentiate risk amongst its commercial loans and commercial real estate loans. Loans with a lower expectation of default are assigned one of ten possible “pass” loan grades and are generally ascribed lower loss factors when determining the allowance for credit losses. Loans with an elevated level of credit risk are classified as “criticized” and are ascribed a higher loss factor when determining the allowance for credit losses. Criticized loans may be classified as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more.
- 13 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
Loan officersLine of business personnel in different geographic locations with the support offrom and review by the Company’s credit departmentrisk personnel review and reassign loan grades based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. Factors considered in assigning loan grades include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information. The Company’s policy is that at least annually, updated financial information be obtained from commercial borrowers associated with pass grade loans and additional analysis performed. On a quarterly basis, the Company’s centralized credit risk department reviews all criticized commercial loans and commercial real estate loans greater than $1$1 million to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing.
The following table summarizes the loan grades applied at September 30, 20212022 to the various classes of the Company’s commercial loans and commercial real estate loans by origination year.
|
| Term Loans by Origination Year |
|
| Revolving |
|
| Revolving Loans Converted to Term |
|
|
|
|
|
| Term Loans by Origination Year |
|
| Revolving |
|
| Revolving Loans Converted to Term |
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2017 |
|
| Prior |
|
| Loans |
|
| Loans |
|
| Total |
|
| 2022 |
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| Prior |
|
| Loans |
|
| Loans |
|
| Total |
| ||||||||||||||||||
|
| (In thousands) |
|
| (In thousands) |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial, financial, leasing, etc.: | Commercial, financial, leasing, etc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial, financial, leasing, etc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Pass |
| $ | 3,966,960 |
|
|
| 2,312,034 |
|
|
| 1,700,134 |
|
|
| 1,149,584 |
|
|
| 586,185 |
|
|
| 1,635,559 |
|
|
| 9,725,075 |
|
|
| 16,195 |
|
| $ | 21,091,726 |
|
| $ | 5,781,789 |
|
|
| 5,344,496 |
|
|
| 2,395,097 |
|
|
| 2,002,268 |
|
|
| 984,260 |
|
|
| 2,170,726 |
|
|
| 17,905,476 |
|
|
| 33,403 |
|
| $ | 36,617,515 |
|
Criticized accrual |
|
| 210,621 |
|
|
| 137,816 |
|
|
| 105,118 |
|
|
| 91,922 |
|
|
| 47,157 |
|
|
| 142,670 |
|
|
| 393,348 |
|
|
| 14,373 |
|
|
| 1,143,025 |
|
|
| 183,126 |
|
|
| 255,935 |
|
|
| 159,898 |
|
|
| 119,906 |
|
|
| 67,885 |
|
|
| 302,787 |
|
|
| 715,190 |
|
|
| 17,541 |
|
|
| 1,822,268 |
|
Criticized nonaccrual |
|
| 5,615 |
|
|
| 20,345 |
|
|
| 30,067 |
|
|
| 52,890 |
|
|
| 25,688 |
|
|
| 39,674 |
|
|
| 98,241 |
|
|
| 7,669 |
|
|
| 280,189 |
|
|
| 15,954 |
|
|
| 47,840 |
|
|
| 42,491 |
|
|
| 43,953 |
|
|
| 37,789 |
|
|
| 64,076 |
|
|
| 110,414 |
|
|
| 5,649 |
|
|
| 368,166 |
|
Total commercial, financial, leasing, etc. |
| $ | 4,183,196 |
|
|
| 2,470,195 |
|
|
| 1,835,319 |
|
|
| 1,294,396 |
|
|
| 659,030 |
|
|
| 1,817,903 |
|
|
| 10,216,664 |
|
|
| 38,237 |
|
| $ | 22,514,940 |
|
| $ | 5,980,869 |
|
|
| 5,648,271 |
|
|
| 2,597,486 |
|
|
| 2,166,127 |
|
|
| 1,089,934 |
|
|
| 2,537,589 |
|
|
| 18,731,080 |
|
|
| 56,593 |
|
| $ | 38,807,949 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Pass |
| $ | 2,259,468 |
|
|
| 2,835,919 |
|
|
| 4,069,520 |
|
|
| 2,765,720 |
|
|
| 2,176,210 |
|
|
| 6,007,272 |
|
|
| 729,377 |
|
|
| — |
|
| $ | 20,843,486 |
|
| $ | 3,169,811 |
|
|
| 3,566,811 |
|
|
| 3,480,606 |
|
|
| 4,628,815 |
|
|
| 3,534,628 |
|
|
| 11,778,026 |
|
|
| 852,233 |
|
|
| 45,264 |
|
| $ | 31,056,194 |
|
Criticized accrual |
|
| 22,831 |
|
|
| 553,477 |
|
|
| 661,516 |
|
|
| 1,042,329 |
|
|
| 566,644 |
|
|
| 2,092,456 |
|
|
| 50,191 |
|
|
| — |
|
|
| 4,989,444 |
|
|
| 116,303 |
|
|
| 325,114 |
|
|
| 532,354 |
|
|
| 1,028,855 |
|
|
| 1,040,898 |
|
|
| 1,987,906 |
|
|
| 58,670 |
|
|
| — |
|
|
| 5,090,100 |
|
Criticized nonaccrual |
|
| 28,577 |
|
|
| 140,023 |
|
|
| 236,842 |
|
|
| 47,741 |
|
|
| 116,463 |
|
|
| 546,042 |
|
|
| 37,182 |
|
|
| — |
|
|
| 1,152,870 |
|
|
| 9,313 |
|
|
| 9,119 |
|
|
| 199,654 |
|
|
| 185,468 |
|
|
| 187,115 |
|
|
| 791,882 |
|
|
| 23,649 |
|
|
| — |
|
|
| 1,406,200 |
|
Total commercial real estate |
| $ | 2,310,876 |
|
|
| 3,529,419 |
|
|
| 4,967,878 |
|
|
| 3,855,790 |
|
|
| 2,859,317 |
|
|
| 8,645,770 |
|
|
| 816,750 |
|
|
| — |
|
| $ | 26,985,800 |
|
| $ | 3,295,427 |
|
|
| 3,901,044 |
|
|
| 4,212,614 |
|
|
| 5,843,138 |
|
|
| 4,762,641 |
|
|
| 14,557,814 |
|
|
| 934,552 |
|
|
| 45,264 |
|
| $ | 37,552,494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Residential builder and developer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Pass |
| $ | 647,863 |
|
|
| 166,832 |
|
|
| 94,758 |
|
|
| 44,419 |
|
|
| 5,573 |
|
|
| 11,731 |
|
|
| 243,749 |
|
|
| — |
|
| $ | 1,214,925 |
|
| $ | 561,314 |
|
|
| 367,867 |
|
|
| 33,935 |
|
|
| 31,596 |
|
|
| 18,574 |
|
|
| 9,878 |
|
|
| 169,941 |
|
|
| — |
|
| $ | 1,193,105 |
|
Criticized accrual |
|
| 2,199 |
|
|
| 3,307 |
|
|
| 119,009 |
|
|
| 14,168 |
|
|
| 630 |
|
|
| 3 |
|
|
| 1,488 |
|
|
| — |
|
|
| 140,804 |
|
|
| — |
|
|
| 23,263 |
|
|
| 11,294 |
|
|
| 107,408 |
|
|
| 14,514 |
|
|
| 62 |
|
|
| 27,921 |
|
|
| — |
|
|
| 184,462 |
|
Criticized nonaccrual |
|
| — |
|
|
| — |
|
|
| 518 |
|
|
| — |
|
|
| — |
|
|
| 76 |
|
|
| — |
|
|
| — |
|
|
| 594 |
|
|
| — |
|
|
| 654 |
|
|
| — |
|
|
| 518 |
|
|
| — |
|
|
| 758 |
|
|
| — |
|
|
| — |
|
|
| 1,930 |
|
Total residential builder and developer |
| $ | 650,062 |
|
|
| 170,139 |
|
|
| 214,285 |
|
|
| 58,587 |
|
|
| 6,203 |
|
|
| 11,810 |
|
|
| 245,237 |
|
|
| — |
|
| $ | 1,356,323 |
|
| $ | 561,314 |
|
|
| 391,784 |
|
|
| 45,229 |
|
|
| 139,522 |
|
|
| 33,088 |
|
|
| 10,698 |
|
|
| 197,862 |
|
|
| — |
|
| $ | 1,379,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Other commercial construction: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Pass |
| $ | 661,068 |
|
|
| 1,817,753 |
|
|
| 2,445,555 |
|
|
| 1,108,676 |
|
|
| 270,054 |
|
|
| 407,500 |
|
|
| 38,391 |
|
|
| — |
|
| $ | 6,748,997 |
|
| $ | 526,338 |
|
|
| 1,079,329 |
|
|
| 1,388,737 |
|
|
| 1,431,834 |
|
|
| 401,870 |
|
|
| 327,992 |
|
|
| 23,584 |
|
|
| 618 |
|
| $ | 5,180,302 |
|
Criticized accrual |
|
| 655 |
|
|
| 42,578 |
|
|
| 589,790 |
|
|
| 700,577 |
|
|
| 320,718 |
|
|
| 119,815 |
|
|
| — |
|
|
| — |
|
|
| 1,774,133 |
|
|
| 46,282 |
|
|
| 163,004 |
|
|
| 249,622 |
|
|
| 971,447 |
|
|
| 386,480 |
|
|
| 136,358 |
|
|
| 6,992 |
|
|
| — |
|
|
| 1,960,185 |
|
Criticized nonaccrual |
|
| — |
|
|
| — |
|
|
| 83,829 |
|
|
| 35,125 |
|
|
| 12,406 |
|
|
| 23,068 |
|
|
| 4,271 |
|
|
| — |
|
|
| 158,699 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 25,352 |
|
|
| 10,588 |
|
|
| 27,814 |
|
|
| 2,433 |
|
|
| — |
|
|
| 66,187 |
|
Total other commercial construction |
| $ | 661,723 |
|
|
| 1,860,331 |
|
|
| 3,119,174 |
|
|
| 1,844,378 |
|
|
| 603,178 |
|
|
| 550,383 |
|
|
| 42,662 |
|
|
| — |
|
| $ | 8,681,829 |
|
| $ | 572,620 |
|
|
| 1,242,333 |
|
|
| 1,638,359 |
|
|
| 2,428,633 |
|
|
| 798,938 |
|
|
| 492,164 |
|
|
| 33,009 |
|
|
| 618 |
|
| $ | 7,206,674 |
|
Increases to criticized loans as compared with December 31, 2020 were predominantly attributable to the continued effects of the COVID-19 pandemic and the related re-grading of loans.
- 1416 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
The Company considers repayment performance a significant indicator of credit quality for its residential real estate loan and consumer loan portfolios. A summary of loans in accrual and nonaccrual status at September 30, 2022 for the various classes of the Company’s residential real estate loans and consumer loans by origination year follows.
|
| Term Loans by Origination Year |
|
| Revolving |
|
| Revolving Loans Converted to Term |
|
|
|
| ||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| Prior |
|
| Loans |
|
| Loans |
|
| Total |
| |||||||||
|
| (In thousands) |
| |||||||||||||||||||||||||||||||||
Residential: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Current |
| $ | 4,057,196 |
|
|
| 4,049,835 |
|
|
| 2,734,863 |
|
|
| 1,345,076 |
|
|
| 760,442 |
|
|
| 7,731,831 |
|
|
| 30,119 |
|
|
| — |
|
| $ | 20,709,362 |
|
30-89 days past due |
|
| 35,387 |
|
|
| 53,249 |
|
|
| 28,996 |
|
|
| 76,049 |
|
|
| 15,744 |
|
|
| 363,807 |
|
|
| 7,125 |
|
|
| — |
|
|
| 580,357 |
|
Accruing loans past due |
|
| 6,137 |
|
|
| 39,753 |
|
|
| 27,044 |
|
|
| 12,697 |
|
|
| 17,304 |
|
|
| 308,796 |
|
|
| — |
|
|
| — |
|
|
| 411,731 |
|
Nonaccrual |
|
| 2,741 |
|
|
| 7,978 |
|
|
| 2,831 |
|
|
| 7,899 |
|
|
| 2,954 |
|
|
| 260,243 |
|
|
| 749 |
|
|
| — |
|
|
| 285,395 |
|
Total residential |
| $ | 4,101,461 |
|
|
| 4,150,815 |
|
|
| 2,793,734 |
|
|
| 1,441,721 |
|
|
| 796,444 |
|
|
| 8,664,677 |
|
|
| 37,993 |
|
|
| — |
|
| $ | 21,986,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Residential - limited documentation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Current |
| $ | — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 974,779 |
|
|
| — |
|
|
| — |
|
| $ | 974,779 |
|
30-89 days past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 17,274 |
|
|
| — |
|
|
| — |
|
|
| 17,274 |
|
Accruing loans past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 95,382 |
|
|
| — |
|
|
| — |
|
|
| 95,382 |
|
Total residential - limited |
| $ | — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,087,435 |
|
|
| — |
|
|
| — |
|
| $ | 1,087,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Home equity lines and loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Current |
| $ | 179 |
|
|
| 2,205 |
|
|
| 2,506 |
|
|
| 16,700 |
|
|
| 25,043 |
|
|
| 104,764 |
|
|
| 3,323,628 |
|
|
| 1,484,820 |
|
| $ | 4,959,845 |
|
30-89 days past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 27 |
|
|
| — |
|
|
| 993 |
|
|
| 1,376 |
|
|
| 22,974 |
|
|
| 25,370 |
|
Accruing loans past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| 3 |
|
|
| 15 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 6,311 |
|
|
| 8,748 |
|
|
| 63,131 |
|
|
| 78,208 |
|
Total home equity lines and loans |
| $ | 182 |
|
|
| 2,220 |
|
|
| 2,506 |
|
|
| 16,727 |
|
|
| 25,043 |
|
|
| 112,068 |
|
|
| 3,333,752 |
|
|
| 1,570,925 |
|
| $ | 5,063,423 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Recreational finance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Current |
| $ | 2,270,380 |
|
|
| 2,397,260 |
|
|
| 1,673,217 |
|
|
| 1,016,693 |
|
|
| 517,571 |
|
|
| 863,728 |
|
|
| — |
|
|
| — |
|
| $ | 8,738,849 |
|
30-89 days past due |
|
| 3,636 |
|
|
| 7,922 |
|
|
| 9,136 |
|
|
| 6,797 |
|
|
| 4,199 |
|
|
| 10,068 |
|
|
| — |
|
|
| — |
|
|
| 41,758 |
|
Accruing loans past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| 862 |
|
|
| 5,310 |
|
|
| 7,946 |
|
|
| 6,905 |
|
|
| 5,821 |
|
|
| 11,874 |
|
|
| — |
|
|
| — |
|
|
| 38,718 |
|
Total recreational finance |
| $ | 2,274,878 |
|
|
| 2,410,492 |
|
|
| 1,690,299 |
|
|
| 1,030,395 |
|
|
| 527,591 |
|
|
| 885,670 |
|
|
| — |
|
|
| — |
|
| $ | 8,819,325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Automobile: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Current |
| $ | 1,040,034 |
|
|
| 1,698,621 |
|
|
| 780,755 |
|
|
| 433,718 |
|
|
| 202,662 |
|
|
| 127,105 |
|
|
| — |
|
|
| — |
|
| $ | 4,282,895 |
|
30-89 days past due |
|
| 3,753 |
|
|
| 9,992 |
|
|
| 6,091 |
|
|
| 6,354 |
|
|
| 4,641 |
|
|
| 4,719 |
|
|
| — |
|
|
| — |
|
|
| 35,550 |
|
Accruing loans past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| 557 |
|
|
| 8,573 |
|
|
| 7,837 |
|
|
| 8,418 |
|
|
| 6,710 |
|
|
| 8,223 |
|
|
| — |
|
|
| — |
|
|
| 40,318 |
|
Total automobile |
| $ | 1,044,344 |
|
|
| 1,717,186 |
|
|
| 794,683 |
|
|
| 448,490 |
|
|
| 214,013 |
|
|
| 140,047 |
|
|
| — |
|
|
| — |
|
| $ | 4,358,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Current |
| $ | 210,244 |
|
|
| 192,316 |
|
|
| 66,148 |
|
|
| 42,643 |
|
|
| 11,594 |
|
|
| 25,864 |
|
|
| 1,338,436 |
|
|
| 10,622 |
|
| $ | 1,897,867 |
|
30-89 days past due |
|
| 2,558 |
|
|
| 1,083 |
|
|
| 338 |
|
|
| 441 |
|
|
| 161 |
|
|
| 114 |
|
|
| 7,598 |
|
|
| 437 |
|
|
| 12,730 |
|
Accruing loans past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 8 |
|
|
| 3,755 |
|
|
| — |
|
|
| 3,763 |
|
Nonaccrual |
|
| 1,405 |
|
|
| 742 |
|
|
| 304 |
|
|
| 277 |
|
|
| 79 |
|
|
| 245 |
|
|
| 45,668 |
|
|
| 102 |
|
|
| 48,822 |
|
Total other |
| $ | 214,207 |
|
|
| 194,141 |
|
|
| 66,790 |
|
|
| 43,361 |
|
|
| 11,834 |
|
|
| 26,231 |
|
|
| 1,395,457 |
|
|
| 11,161 |
|
| $ | 1,963,182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Total loans and leases at |
| $ | 18,045,302 |
|
|
| 19,658,286 |
|
|
| 13,841,700 |
|
|
| 13,558,114 |
|
|
| 8,259,526 |
|
|
| 28,514,393 |
|
|
| 24,663,705 |
|
|
| 1,684,561 |
|
| $ | 128,225,587 |
|
- 17 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
The following table summarizes the loan grades applied at December 31, 2021 to the various classes of the Company’s commercial loans and commercial real estate loans by origination year.
|
| Term Loans by Origination Year |
|
| Revolving |
|
| Revolving Loans Converted to Term |
|
|
|
| ||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2017 |
|
| Prior |
|
| Loans |
|
| Loans |
|
| Total |
| |||||||||
|
| (In thousands) |
| |||||||||||||||||||||||||||||||||
Commercial, financial, leasing, etc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Pass |
| $ | 4,798,052 |
|
|
| 1,916,072 |
|
|
| 1,476,786 |
|
|
| 951,881 |
|
|
| 500,615 |
|
|
| 1,398,775 |
|
|
| 10,993,461 |
|
|
| 18,699 |
|
| $ | 22,054,341 |
|
Criticized accrual |
|
| 196,680 |
|
|
| 98,595 |
|
|
| 107,010 |
|
|
| 73,126 |
|
|
| 36,232 |
|
|
| 185,935 |
|
|
| 484,755 |
|
|
| 15,628 |
|
|
| 1,197,961 |
|
Criticized nonaccrual |
|
| 19,462 |
|
|
| 23,229 |
|
|
| 17,114 |
|
|
| 39,908 |
|
|
| 20,927 |
|
|
| 33,698 |
|
|
| 60,175 |
|
|
| 6,509 |
|
|
| 221,022 |
|
Total commercial, |
| $ | 5,014,194 |
|
|
| 2,037,896 |
|
|
| 1,600,910 |
|
|
| 1,064,915 |
|
|
| 557,774 |
|
|
| 1,618,408 |
|
|
| 11,538,391 |
|
|
| 40,836 |
|
| $ | 23,473,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Pass |
| $ | 3,413,587 |
|
|
| 2,662,999 |
|
|
| 3,682,178 |
|
|
| 2,648,388 |
|
|
| 2,076,155 |
|
|
| 5,232,790 |
|
|
| 728,948 |
|
|
| — |
|
| $ | 20,445,045 |
|
Criticized accrual |
|
| 133,133 |
|
|
| 480,146 |
|
|
| 685,701 |
|
|
| 1,068,552 |
|
|
| 468,530 |
|
|
| 1,743,798 |
|
|
| 38,570 |
|
|
| — |
|
|
| 4,618,430 |
|
Criticized nonaccrual |
|
| 21,587 |
|
|
| 133,560 |
|
|
| 195,084 |
|
|
| 83,857 |
|
|
| 76,628 |
|
|
| 520,473 |
|
|
| 38,091 |
|
|
| — |
|
|
| 1,069,280 |
|
Total commercial real |
| $ | 3,568,307 |
|
|
| 3,276,705 |
|
|
| 4,562,963 |
|
|
| 3,800,797 |
|
|
| 2,621,313 |
|
|
| 7,497,061 |
|
|
| 805,609 |
|
|
| — |
|
| $ | 26,132,755 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Residential builder and developer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Pass |
| $ | 786,983 |
|
|
| 106,510 |
|
|
| 75,287 |
|
|
| 47,587 |
|
|
| 4,680 |
|
|
| 12,450 |
|
|
| 230,017 |
|
|
| — |
|
| $ | 1,263,514 |
|
Criticized accrual |
|
| 2,055 |
|
|
| 5,356 |
|
|
| 117,258 |
|
|
| 13,637 |
|
|
| 630 |
|
|
| — |
|
|
| 891 |
|
|
| — |
|
|
| 139,827 |
|
Criticized nonaccrual |
|
| — |
|
|
| — |
|
|
| 2,910 |
|
|
| — |
|
|
| — |
|
|
| 95 |
|
|
| — |
|
|
| — |
|
|
| 3,005 |
|
Total residential builder |
| $ | 789,038 |
|
|
| 111,866 |
|
|
| 195,455 |
|
|
| 61,224 |
|
|
| 5,310 |
|
|
| 12,545 |
|
|
| 230,908 |
|
|
| — |
|
| $ | 1,406,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Other commercial construction: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Pass |
| $ | 957,947 |
|
|
| 1,781,603 |
|
|
| 2,022,276 |
|
|
| 832,547 |
|
|
| 152,669 |
|
|
| 273,556 |
|
|
| 38,781 |
|
|
| — |
|
| $ | 6,059,379 |
|
Criticized accrual |
|
| 24,103 |
|
|
| 54,191 |
|
|
| 675,226 |
|
|
| 583,428 |
|
|
| 228,739 |
|
|
| 114,158 |
|
|
| — |
|
|
| — |
|
|
| 1,679,845 |
|
Criticized nonaccrual |
|
| — |
|
|
| — |
|
|
| 71,613 |
|
|
| 3,303 |
|
|
| 12,263 |
|
|
| 19,970 |
|
|
| 4,256 |
|
|
| — |
|
|
| 111,405 |
|
Total other commercial |
| $ | 982,050 |
|
|
| 1,835,794 |
|
|
| 2,769,115 |
|
|
| 1,419,278 |
|
|
| 393,671 |
|
|
| 407,684 |
|
|
| 43,037 |
|
|
| — |
|
| $ | 7,850,629 |
|
- 18 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
A summary of loans in accrual and nonaccrual status at December 31, 2021 for the various classes of the Company’s residential real estate loans and consumer loans by origination year follows.
|
| Term Loans by Origination Year |
|
| Revolving |
|
| Revolving Loans Converted to Term |
|
|
|
| ||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2017 |
|
| Prior |
|
| Loans |
|
| Loans |
|
| Total |
| |||||||||
|
| (In thousands) |
| |||||||||||||||||||||||||||||||||
Residential: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Current |
| $ | 3,057,118 |
|
|
| 1,672,090 |
|
|
| 1,075,896 |
|
|
| 466,040 |
|
|
| 1,037,958 |
|
|
| 5,913,461 |
|
|
| 72,309 |
|
|
| — |
|
| $ | 13,294,872 |
|
30-89 days past due |
|
| 15,245 |
|
|
| 12,535 |
|
|
| 9,886 |
|
|
| 6,132 |
|
|
| 33,097 |
|
|
| 162,666 |
|
|
| — |
|
|
| — |
|
|
| 239,561 |
|
Accruing loans past due |
|
| 10,924 |
|
|
| 100,581 |
|
|
| 28,512 |
|
|
| 31,996 |
|
|
| 205,318 |
|
|
| 542,749 |
|
|
| — |
|
|
| — |
|
|
| 920,080 |
|
Nonaccrual |
|
| 3,359 |
|
|
| 19,858 |
|
|
| 7,119 |
|
|
| 4,577 |
|
|
| 5,890 |
|
|
| 314,792 |
|
|
| 263 |
|
|
| — |
|
|
| 355,858 |
|
Total residential |
| $ | 3,086,646 |
|
|
| 1,805,064 |
|
|
| 1,121,413 |
|
|
| 508,745 |
|
|
| 1,282,263 |
|
|
| 6,933,668 |
|
|
| 72,572 |
|
|
| — |
|
| $ | 14,810,371 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Residential - limited documentation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Current |
| $ | — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,124,520 |
|
|
| — |
|
|
| — |
|
| $ | 1,124,520 |
|
30-89 days past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 16,666 |
|
|
| — |
|
|
| — |
|
|
| 16,666 |
|
Accruing loans past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 122,888 |
|
|
| — |
|
|
| — |
|
|
| 122,888 |
|
Total residential - limited |
| $ | — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,264,074 |
|
|
| — |
|
|
| — |
|
| $ | 1,264,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Home equity lines and loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Current |
| $ | 304 |
|
|
| 777 |
|
|
| 2,793 |
|
|
| 1,730 |
|
|
| 1,944 |
|
|
| 38,015 |
|
|
| 2,348,279 |
|
|
| 1,082,775 |
|
| $ | 3,476,617 |
|
30-89 days past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 21 |
|
|
| — |
|
|
| 698 |
|
|
| 346 |
|
|
| 14,421 |
|
|
| 15,486 |
|
Accruing loans past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 5,750 |
|
|
| 4,951 |
|
|
| 59,787 |
|
|
| 70,488 |
|
Total home equity lines and loans |
| $ | 304 |
|
|
| 777 |
|
|
| 2,793 |
|
|
| 1,751 |
|
|
| 1,944 |
|
|
| 44,463 |
|
|
| 2,353,576 |
|
|
| 1,156,983 |
|
| $ | 3,562,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Recreational finance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Current |
| $ | 2,890,111 |
|
|
| 2,088,342 |
|
|
| 1,267,929 |
|
|
| 646,883 |
|
|
| 445,868 |
|
|
| 646,040 |
|
|
| — |
|
|
| — |
|
| $ | 7,985,173 |
|
30-89 days past due |
|
| 5,929 |
|
|
| 8,912 |
|
|
| 8,317 |
|
|
| 5,074 |
|
|
| 5,189 |
|
|
| 7,123 |
|
|
| — |
|
|
| — |
|
|
| 40,544 |
|
Accruing loans past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| 1,341 |
|
|
| 4,646 |
|
|
| 4,871 |
|
|
| 4,918 |
|
|
| 4,039 |
|
|
| 7,996 |
|
|
| — |
|
|
| — |
|
|
| 27,811 |
|
Total recreational finance |
| $ | 2,897,381 |
|
|
| 2,101,900 |
|
|
| 1,281,117 |
|
|
| 656,875 |
|
|
| 455,096 |
|
|
| 661,159 |
|
|
| — |
|
|
| — |
|
| $ | 8,053,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Automobile: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Current |
| $ | 2,220,061 |
|
|
| 1,097,684 |
|
|
| 662,000 |
|
|
| 341,655 |
|
|
| 211,774 |
|
|
| 71,598 |
|
|
| — |
|
|
| — |
|
| $ | 4,604,772 |
|
30-89 days past due |
|
| 8,508 |
|
|
| 6,615 |
|
|
| 8,936 |
|
|
| 7,161 |
|
|
| 5,715 |
|
|
| 3,129 |
|
|
| — |
|
|
| — |
|
|
| 40,064 |
|
Accruing loans past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| 1,588 |
|
|
| 4,390 |
|
|
| 7,847 |
|
|
| 7,867 |
|
|
| 6,882 |
|
|
| 5,463 |
|
|
| — |
|
|
| — |
|
|
| 34,037 |
|
Total automobile |
| $ | 2,230,157 |
|
|
| 1,108,689 |
|
|
| 678,783 |
|
|
| 356,683 |
|
|
| 224,371 |
|
|
| 80,190 |
|
|
| — |
|
|
| — |
|
| $ | 4,678,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Current |
| $ | 244,346 |
|
|
| 96,945 |
|
|
| 73,586 |
|
|
| 24,424 |
|
|
| 16,924 |
|
|
| 14,321 |
|
|
| 1,148,096 |
|
|
| 1,505 |
|
| $ | 1,620,147 |
|
30-89 days past due |
|
| 2,937 |
|
|
| 404 |
|
|
| 472 |
|
|
| 255 |
|
|
| 101 |
|
|
| 5,712 |
|
|
| 1,908 |
|
|
| 434 |
|
|
| 12,223 |
|
Accruing loans past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,302 |
|
|
| — |
|
|
| — |
|
|
| 3,302 |
|
Nonaccrual |
|
| 2,051 |
|
|
| 326 |
|
|
| 326 |
|
|
| 193 |
|
|
| 104 |
|
|
| 353 |
|
|
| 40,807 |
|
|
| 129 |
|
|
| 44,289 |
|
Total other |
| $ | 249,334 |
|
|
| 97,675 |
|
|
| 74,384 |
|
|
| 24,872 |
|
|
| 17,129 |
|
|
| 23,688 |
|
|
| 1,190,811 |
|
|
| 2,068 |
|
| $ | 1,679,961 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Total loans and leases at |
| $ | 18,817,411 |
|
|
| 12,376,366 |
|
|
| 12,286,933 |
|
|
| 7,895,140 |
|
|
| 5,558,871 |
|
|
| 18,542,940 |
|
|
| 16,234,904 |
|
|
| 1,199,887 |
|
| $ | 92,912,452 |
|
|
| Term Loans by Origination Year |
|
| Revolving |
|
| Revolving Loans Converted to Term |
|
|
|
|
| |||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2017 |
|
| Prior |
|
| Loans |
|
| Loans |
|
| Total |
| |||||||||
|
| (In thousands) |
| |||||||||||||||||||||||||||||||||
Residential: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
| $ | 2,027,514 |
|
|
| 1,742,731 |
|
|
| 1,158,831 |
|
|
| 520,113 |
|
|
| 1,258,200 |
|
|
| 6,544,178 |
|
|
| 62,635 |
|
|
| — |
|
| $ | 13,314,202 |
|
30-89 days past due |
|
| 16,352 |
|
|
| 10,434 |
|
|
| 7,322 |
|
|
| 5,529 |
|
|
| 30,337 |
|
|
| 185,213 |
|
|
| — |
|
|
| — |
|
|
| 255,187 |
|
Accruing loans past due 90 days or more |
|
| 3,204 |
|
|
| 104,612 |
|
|
| 28,394 |
|
|
| 35,993 |
|
|
| 211,521 |
|
|
| 561,424 |
|
|
| — |
|
|
| — |
|
|
| 945,148 |
|
Nonaccrual |
|
| 1,831 |
|
|
| 21,837 |
|
|
| 5,988 |
|
|
| 4,488 |
|
|
| 4,184 |
|
|
| 314,825 |
|
|
| 273 |
|
|
| — |
|
|
| 353,426 |
|
Total residential |
| $ | 2,048,901 |
|
|
| 1,879,614 |
|
|
| 1,200,535 |
|
|
| 566,123 |
|
|
| 1,504,242 |
|
|
| 7,605,640 |
|
|
| 62,908 |
|
|
| — |
|
| $ | 14,867,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential - limited documentation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
| $ | — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,199,172 |
|
|
| — |
|
|
| — |
|
| $ | 1,199,172 |
|
30-89 days past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 15,690 |
|
|
| — |
|
|
| — |
|
|
| 15,690 |
|
Accruing loans past due 90 days or more |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 126,529 |
|
|
| — |
|
|
| — |
|
|
| 126,529 |
|
Total residential - limited documentation |
| $ | — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,341,391 |
|
|
| — |
|
|
| — |
|
| $ | 1,341,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity lines and loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
| $ | 354 |
|
|
| 863 |
|
|
| 3,087 |
|
|
| 1,935 |
|
|
| 2,055 |
|
|
| 41,791 |
|
|
| 2,384,309 |
|
|
| 1,114,426 |
|
| $ | 3,548,820 |
|
30-89 days past due |
|
| 16 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 681 |
|
|
| — |
|
|
| 14,015 |
|
|
| 14,712 |
|
Accruing loans past due 90 days or more |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 6,126 |
|
|
| 768 |
|
|
| 64,580 |
|
|
| 71,474 |
|
Total home equity lines and loans |
| $ | 370 |
|
|
| 863 |
|
|
| 3,087 |
|
|
| 1,935 |
|
|
| 2,055 |
|
|
| 48,598 |
|
|
| 2,385,077 |
|
|
| 1,193,021 |
|
| $ | 3,635,006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 1519 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
|
| Term Loans by Origination Year |
|
| Revolving |
|
| Revolving Loans Converted to Term |
|
|
|
|
| |||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2017 |
|
| Prior |
|
| Loans |
|
| Loans |
|
| Total |
| |||||||||
|
| (In thousands) |
| |||||||||||||||||||||||||||||||||
Recreational finance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Current |
| $ | 2,468,197 |
|
|
| 2,248,066 |
|
|
| 1,369,098 |
|
|
| 699,577 |
|
|
| 486,354 |
|
|
| 700,833 |
|
|
| — |
|
|
| — |
|
| $ | 7,972,125 |
|
30-89 days past due |
|
| 3,062 |
|
|
| 7,028 |
|
|
| 6,669 |
|
|
| 4,090 |
|
|
| 3,657 |
|
|
| 5,150 |
|
|
| — |
|
|
| — |
|
|
| 29,656 |
|
Accruing loans past due 90 days or more |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| 549 |
|
|
| 3,125 |
|
|
| 4,371 |
|
|
| 4,771 |
|
|
| 3,679 |
|
|
| 7,412 |
|
|
| — |
|
|
| — |
|
|
| 23,907 |
|
Total recreational finance |
| $ | 2,471,808 |
|
|
| 2,258,219 |
|
|
| 1,380,138 |
|
|
| 708,438 |
|
|
| 493,690 |
|
|
| 713,395 |
|
|
| — |
|
|
| — |
|
| $ | 8,025,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automobile: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
| $ | 1,803,922 |
|
|
| 1,224,901 |
|
|
| 762,820 |
|
|
| 402,919 |
|
|
| 258,317 |
|
|
| 100,427 |
|
|
| — |
|
|
| — |
|
| $ | 4,553,306 |
|
30-89 days past due |
|
| 4,356 |
|
|
| 5,700 |
|
|
| 7,755 |
|
|
| 6,921 |
|
|
| 5,954 |
|
|
| 3,663 |
|
|
| — |
|
|
| — |
|
|
| 34,349 |
|
Accruing loans past due 90 days or more |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| 1,182 |
|
|
| 2,673 |
|
|
| 6,036 |
|
|
| 8,289 |
|
|
| 7,046 |
|
|
| 5,776 |
|
|
| — |
|
|
| — |
|
|
| 31,002 |
|
Total automobile |
| $ | 1,809,460 |
|
|
| 1,233,274 |
|
|
| 776,611 |
|
|
| 418,129 |
|
|
| 271,317 |
|
|
| 109,866 |
|
|
| — |
|
|
| — |
|
| $ | 4,618,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
| $ | 185,095 |
|
|
| 113,060 |
|
|
| 86,349 |
|
|
| 30,414 |
|
|
| 19,825 |
|
|
| 24,780 |
|
|
| 1,038,160 |
|
|
| 1,536 |
|
| $ | 1,499,219 |
|
30-89 days past due |
|
| 2,201 |
|
|
| 393 |
|
|
| 640 |
|
|
| 204 |
|
|
| 85 |
|
|
| 459 |
|
|
| 5,028 |
|
|
| 389 |
|
|
| 9,399 |
|
Accruing loans past due 90 days or more |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 228 |
|
|
| 2,878 |
|
|
| — |
|
|
| 3,106 |
|
Nonaccrual |
|
| 1,625 |
|
|
| 241 |
|
|
| 236 |
|
|
| 206 |
|
|
| 111 |
|
|
| 229 |
|
|
| 40,811 |
|
|
| 114 |
|
|
| 43,573 |
|
Total other |
| $ | 188,921 |
|
|
| 113,694 |
|
|
| 87,225 |
|
|
| 30,824 |
|
|
| 20,021 |
|
|
| 25,696 |
|
|
| 1,086,877 |
|
|
| 2,039 |
|
| $ | 1,555,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and leases at September 30, 2021 |
| $ | 14,325,317 |
|
|
| 13,515,748 |
|
|
| 13,584,252 |
|
|
| 8,778,600 |
|
|
| 6,419,053 |
|
|
| 20,870,452 |
|
|
| 14,856,175 |
|
|
| 1,233,297 |
|
| $ | 93,582,894 |
|
- 16 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
The following table summarizes the loan grades applied at December 31, 2020 to the various classes of the Company’s commercial loans and commercial real estate loans by origination year.
|
| Term Loans by Origination Year |
|
| Revolving |
|
| Revolving Loans Converted to Term |
|
|
|
|
| |||||||||||||||||||||||
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2017 |
|
| 2016 |
|
| Prior |
|
| Loans |
|
| Loans |
|
| Total |
| |||||||||
|
| (In thousands) |
| |||||||||||||||||||||||||||||||||
Commercial, financial, leasing, etc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
| $ | 7,732,728 |
|
|
| 2,277,233 |
|
|
| 1,505,486 |
|
|
| 930,834 |
|
|
| 719,796 |
|
|
| 1,387,695 |
|
|
| 11,352,416 |
|
|
| 21,286 |
|
| $ | 25,927,474 |
|
Criticized accrual |
|
| 388,326 |
|
|
| 84,358 |
|
|
| 113,940 |
|
|
| 41,587 |
|
|
| 39,930 |
|
|
| 73,401 |
|
|
| 584,751 |
|
|
| 13,970 |
|
|
| 1,340,263 |
|
Criticized nonaccrual |
|
| 7,720 |
|
|
| 27,309 |
|
|
| 56,227 |
|
|
| 16,808 |
|
|
| 19,681 |
|
|
| 45,471 |
|
|
| 125,893 |
|
|
| 7,718 |
|
|
| 306,827 |
|
Total commercial, financial, leasing, etc. |
| $ | 8,128,774 |
|
|
| 2,388,900 |
|
|
| 1,675,653 |
|
|
| 989,229 |
|
|
| 779,407 |
|
|
| 1,506,567 |
|
|
| 12,063,060 |
|
|
| 42,974 |
|
| $ | 27,574,564 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
| $ | 3,353,450 |
|
|
| 4,681,834 |
|
|
| 3,299,095 |
|
|
| 2,628,061 |
|
|
| 2,746,165 |
|
|
| 5,698,834 |
|
|
| 875,348 |
|
|
| — |
|
| $ | 23,282,787 |
|
Criticized accrual |
|
| 526,037 |
|
|
| 400,154 |
|
|
| 579,507 |
|
|
| 290,885 |
|
|
| 568,144 |
|
|
| 1,212,672 |
|
|
| 44,260 |
|
|
| — |
|
|
| 3,621,659 |
|
Criticized nonaccrual |
|
| 26,876 |
|
|
| 121,899 |
|
|
| 47,144 |
|
|
| 99,293 |
|
|
| 197,319 |
|
|
| 248,949 |
|
|
| 34,414 |
|
|
| — |
|
|
| 775,894 |
|
Total commercial real estate |
| $ | 3,906,363 |
|
|
| 5,203,887 |
|
|
| 3,925,746 |
|
|
| 3,018,239 |
|
|
| 3,511,628 |
|
|
| 7,160,455 |
|
|
| 954,022 |
|
|
| — |
|
| $ | 27,680,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential builder and developer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
| $ | 506,295 |
|
|
| 223,880 |
|
|
| 109,453 |
|
|
| 15,048 |
|
|
| 10,976 |
|
|
| 11,320 |
|
|
| 236,943 |
|
|
| — |
|
| $ | 1,113,915 |
|
Criticized accrual |
|
| 3,690 |
|
|
| 106,847 |
|
|
| 14,836 |
|
|
| 3,421 |
|
|
| — |
|
|
| 1,885 |
|
|
| 4,050 |
|
|
| — |
|
|
| 134,729 |
|
Criticized nonaccrual |
|
| — |
|
|
| 518 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 576 |
|
|
| — |
|
|
| — |
|
|
| 1,094 |
|
Total residential builder and developer |
| $ | 509,985 |
|
|
| 331,245 |
|
|
| 124,289 |
|
|
| 18,469 |
|
|
| 10,976 |
|
|
| 13,781 |
|
|
| 240,993 |
|
|
| — |
|
| $ | 1,249,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other commercial construction: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Loan grades: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
| $ | 1,050,258 |
|
|
| 2,998,921 |
|
|
| 2,048,063 |
|
|
| 945,339 |
|
|
| 233,127 |
|
|
| 294,030 |
|
|
| 74,611 |
|
|
| — |
|
| $ | 7,644,349 |
|
Criticized accrual |
|
| 37,192 |
|
|
| 148,492 |
|
|
| 381,091 |
|
|
| 225,949 |
|
|
| 144,665 |
|
|
| 12,034 |
|
|
| — |
|
|
| — |
|
|
| 949,423 |
|
Criticized nonaccrual |
|
| 335 |
|
|
| 65,592 |
|
|
| 13,522 |
|
|
| 4,213 |
|
|
| 12,097 |
|
|
| 12,873 |
|
|
| 5,407 |
|
|
| — |
|
|
| 114,039 |
|
Total other commercial construction |
| $ | 1,087,785 |
|
|
| 3,213,005 |
|
|
| 2,442,676 |
|
|
| 1,175,501 |
|
|
| 389,889 |
|
|
| 318,937 |
|
|
| 80,018 |
|
|
| — |
|
| $ | 8,707,811 |
|
- 17 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
A summary of loans in accrual and nonaccrual status at December 31, 2020 for the various classes of the Company’s residential real estate loans and consumer loans by origination year follows.
|
| Term Loans by Origination Year |
|
| Revolving |
|
| Revolving Loans Converted to Term |
|
|
|
|
| |||||||||||||||||||||||
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2017 |
|
| 2016 |
|
| Prior |
|
| Loans |
|
| Loans |
|
| Total |
| |||||||||
|
| (In thousands) |
| |||||||||||||||||||||||||||||||||
Residential: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
| $ | 2,722,862 |
|
|
| 1,416,259 |
|
|
| 618,736 |
|
|
| 1,318,094 |
|
|
| 718,235 |
|
|
| 6,898,756 |
|
|
| 71,894 |
|
|
| — |
|
| $ | 13,764,836 |
|
30-89 days past due |
|
| 13,496 |
|
|
| 7,781 |
|
|
| 7,258 |
|
|
| 13,477 |
|
|
| 7,947 |
|
|
| 150,447 |
|
|
| — |
|
|
| — |
|
|
| 200,406 |
|
Accruing loans past due 90 days or more |
|
| 579 |
|
|
| 15,234 |
|
|
| 38,145 |
|
|
| 212,818 |
|
|
| 45,804 |
|
|
| 480,308 |
|
|
| — |
|
|
| — |
|
|
| 792,888 |
|
Nonaccrual |
|
| 3,133 |
|
|
| 14,439 |
|
|
| 5,183 |
|
|
| 6,408 |
|
|
| 2,900 |
|
|
| 333,466 |
|
|
| 200 |
|
|
| — |
|
|
| 365,729 |
|
Total residential |
| $ | 2,740,070 |
|
|
| 1,453,713 |
|
|
| 669,322 |
|
|
| 1,550,797 |
|
|
| 774,886 |
|
|
| 7,862,977 |
|
|
| 72,094 |
|
|
| — |
|
| $ | 15,123,859 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential - limited documentation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Current |
| $ | — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,462,277 |
|
|
| — |
|
|
| — |
|
| $ | 1,462,277 |
|
30-89 days past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 19,687 |
|
|
| — |
|
|
| — |
|
|
| 19,687 |
|
Accruing loans past due 90 days or more |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 147,170 |
|
|
| — |
|
|
| — |
|
|
| 147,170 |
|
Total residential - limited documentation |
| $ | — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,629,134 |
|
|
| — |
|
|
| — |
|
| $ | 1,629,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity lines and loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
| $ | 773 |
|
|
| 3,983 |
|
|
| 1,591 |
|
|
| 2,016 |
|
|
| 162 |
|
|
| 51,554 |
|
|
| 2,569,621 |
|
|
| 1,252,185 |
|
| $ | 3,881,885 |
|
30-89 days past due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,148 |
|
|
| 939 |
|
|
| 22,242 |
|
|
| 24,329 |
|
Accruing loans past due 90 days or more |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 6,148 |
|
|
| 5,752 |
|
|
| 67,492 |
|
|
| 79,392 |
|
Total home equity lines and loans |
| $ | 773 |
|
|
| 3,983 |
|
|
| 1,591 |
|
|
| 2,016 |
|
|
| 162 |
|
|
| 58,850 |
|
|
| 2,576,312 |
|
|
| 1,341,919 |
|
| $ | 3,985,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 18 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
|
| Term Loans by Origination Year |
|
| Revolving |
|
| Revolving Loans Converted to Term |
|
|
|
|
| |||||||||||||||||||||||
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2017 |
|
| 2016 |
|
| Prior |
|
| Loans |
|
| Loans |
|
| Total |
| |||||||||
|
| (In thousands) |
| |||||||||||||||||||||||||||||||||
Recreational finance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Current |
| $ | 2,796,359 |
|
|
| 1,751,766 |
|
|
| 907,595 |
|
|
| 630,151 |
|
|
| 352,414 |
|
|
| 564,358 |
|
|
| — |
|
|
| — |
|
| $ | 7,002,643 |
|
30-89 days past due |
|
| 9,548 |
|
|
| 11,255 |
|
|
| 8,519 |
|
|
| 6,638 |
|
|
| 2,938 |
|
|
| 8,263 |
|
|
| — |
|
|
| — |
|
|
| 47,161 |
|
Accruing loans past due 90 days or more |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| 1,854 |
|
|
| 3,883 |
|
|
| 4,072 |
|
|
| 4,194 |
|
|
| 2,733 |
|
|
| 8,783 |
|
|
| — |
|
|
| — |
|
|
| 25,519 |
|
Total recreational finance |
| $ | 2,807,761 |
|
|
| 1,766,904 |
|
|
| 920,186 |
|
|
| 640,983 |
|
|
| 358,085 |
|
|
| 581,404 |
|
|
| — |
|
|
| — |
|
| $ | 7,075,323 |
|
Automobile: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Current |
| $ | 1,595,636 |
|
|
| 1,106,782 |
|
|
| 629,338 |
|
|
| 440,604 |
|
|
| 171,017 |
|
|
| 63,972 |
|
|
| — |
|
|
| — |
|
| $ | 4,007,349 |
|
30-89 days past due |
|
| 6,461 |
|
|
| 14,140 |
|
|
| 12,542 |
|
|
| 12,899 |
|
|
| 6,373 |
|
|
| 3,083 |
|
|
| — |
|
|
| — |
|
|
| 55,498 |
|
Accruing loans past due 90 days or more |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Nonaccrual |
|
| 1,615 |
|
|
| 7,144 |
|
|
| 10,788 |
|
|
| 10,061 |
|
|
| 5,991 |
|
|
| 3,805 |
|
|
| — |
|
|
| — |
|
|
| 39,404 |
|
Total automobile |
| $ | 1,603,712 |
|
|
| 1,128,066 |
|
|
| 652,668 |
|
|
| 463,564 |
|
|
| 183,381 |
|
|
| 70,860 |
|
|
| — |
|
|
| — |
|
| $ | 4,102,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Current |
| $ | 160,424 |
|
|
| 137,617 |
|
|
| 53,702 |
|
|
| 32,556 |
|
|
| 4,526 |
|
|
| 28,970 |
|
|
| 927,217 |
|
|
| 1,856 |
|
| $ | 1,346,868 |
|
30-89 days past due |
|
| 1,879 |
|
|
| 1,130 |
|
|
| 577 |
|
|
| 2,301 |
|
|
| 42 |
|
|
| 557 |
|
|
| 10,594 |
|
|
| 481 |
|
|
| 17,561 |
|
Accruing loans past due 90 days or more |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 374 |
|
|
| 4,207 |
|
|
| — |
|
|
| 4,581 |
|
Nonaccrual |
|
| 1,493 |
|
|
| 492 |
|
|
| 339 |
|
|
| 183 |
|
|
| 31 |
|
|
| 501 |
|
|
| 35,044 |
|
|
| 148 |
|
|
| 38,231 |
|
Total other |
| $ | 163,796 |
|
|
| 139,239 |
|
|
| 54,618 |
|
|
| 35,040 |
|
|
| 4,599 |
|
|
| 30,402 |
|
|
| 977,062 |
|
|
| 2,485 |
|
| $ | 1,407,241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and leases at December 31, 2020 |
| $ | 20,949,019 |
|
|
| 15,628,942 |
|
|
| 10,466,749 |
|
|
| 7,893,838 |
|
|
| 6,013,013 |
|
|
| 19,233,367 |
|
|
| 16,963,561 |
|
|
| 1,387,378 |
|
| $ | 98,535,867 |
|
Allowance for credit losses
For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by type. Changes in the allowance for credit losses for the three months ended September 30, 2022 and 2021 were as follows:
|
| Commercial, Financial, |
|
| Real Estate |
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
|
| Leasing, etc. |
|
| Commercial |
|
| Residential |
|
| Consumer |
|
| Total |
|
| Commercial, |
|
| Real Estate |
|
|
|
|
|
|
| |||||||||||||
|
| (In thousands) |
|
| Leasing, etc. |
|
| Commercial |
|
| Residential |
|
| Consumer |
|
| Total |
| ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (In thousands) |
| |||||||||||||||||
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Beginning balance |
| $ | 314,852 |
|
|
| 679,963 |
|
|
| 77,869 |
|
|
| 502,444 |
|
| $ | 1,575,128 |
|
| $ | 414,473 |
|
|
| 708,393 |
|
|
| 124,326 |
|
|
| 576,598 |
|
| $ | 1,823,790 |
|
Provision for credit losses |
|
| (292 | ) |
|
| (42,016 | ) |
|
| (3,522 | ) |
|
| 25,830 |
|
|
| (20,000 | ) |
|
| 43,343 |
|
|
| 26,949 |
|
|
| (11,169 | ) |
|
| 55,877 |
|
|
| 115,000 |
|
Net charge-offs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Charge-offs |
|
| (26,598 | ) |
|
| (14,242 | ) |
|
| (1,925 | ) |
|
| (21,508 | ) |
|
| (64,273 | ) |
|
| (37,396 | ) |
|
| (35,213 | ) |
|
| (2,572 | ) |
|
| (26,086 | ) |
|
| (101,267 | ) |
Recoveries |
|
| 3,785 |
|
|
| 2,362 |
|
|
| 1,903 |
|
|
| 16,119 |
|
|
| 24,169 |
|
|
| 22,022 |
|
|
| 401 |
|
|
| 2,234 |
|
|
| 13,411 |
|
|
| 38,068 |
|
Net charge-offs |
|
| (22,813 | ) |
|
| (11,880 | ) |
|
| (22 | ) |
|
| (5,389 | ) |
|
| (40,104 | ) |
|
| (15,374 | ) |
|
| (34,812 | ) |
|
| (338 | ) |
|
| (12,675 | ) |
|
| (63,199 | ) |
Ending balance |
| $ | 291,747 |
|
|
| 626,067 |
|
|
| 74,325 |
|
|
| 522,885 |
|
| $ | 1,515,024 |
|
| $ | 442,442 |
|
|
| 700,530 |
|
|
| 112,819 |
|
|
| 619,800 |
|
| $ | 1,875,591 |
|
- 19 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
|
| Commercial, Financial, |
|
| Real Estate |
|
|
|
|
|
|
| ||||||||
|
| Leasing, etc. |
|
| Commercial |
|
| Residential |
|
| Consumer |
|
| Total |
| |||||
|
| (In thousands) |
| |||||||||||||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Beginning balance |
| $ | 314,852 |
|
|
| 679,963 |
|
|
| 77,869 |
|
|
| 502,444 |
|
| $ | 1,575,128 |
|
Provision for credit losses |
|
| (292 | ) |
|
| (42,016 | ) |
|
| (3,522 | ) |
|
| 25,830 |
|
|
| (20,000 | ) |
Net charge-offs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Charge-offs |
|
| (26,598 | ) |
|
| (14,242 | ) |
|
| (1,925 | ) |
|
| (21,508 | ) |
|
| (64,273 | ) |
Recoveries |
|
| 3,785 |
|
|
| 2,362 |
|
|
| 1,903 |
|
|
| 16,119 |
|
|
| 24,169 |
|
Net charge-offs |
|
| (22,813 | ) |
|
| (11,880 | ) |
|
| (22 | ) |
|
| (5,389 | ) |
|
| (40,104 | ) |
Ending balance |
| $ | 291,747 |
|
|
| 626,067 |
|
|
| 74,325 |
|
|
| 522,885 |
|
| $ | 1,515,024 |
|
Changes in the allowance for credit losses for the three months ended September 30, 2020 were as follows:
|
| Commercial, Financial, |
|
| Real Estate |
|
|
|
|
|
|
|
|
| ||||||
|
| Leasing, etc. |
|
| Commercial |
|
| Residential |
|
| Consumer |
|
| Total |
| |||||
|
| (In thousands) |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | 398,257 |
|
|
| 576,321 |
|
|
| 118,921 |
|
|
| 544,737 |
|
| $ | 1,638,236 |
|
Provision for credit losses |
|
| 25,450 |
|
|
| 87,403 |
|
|
| (683 | ) |
|
| 37,830 |
|
|
| 150,000 |
|
Net charge-offs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge-offs |
|
| (14,434 | ) |
|
| (4,522 | ) |
|
| (1,516 | ) |
|
| (31,754 | ) |
|
| (52,226 | ) |
Recoveries |
|
| 4,475 |
|
|
| 2,578 |
|
|
| 960 |
|
|
| 14,482 |
|
|
| 22,495 |
|
Net charge-offs |
|
| (9,959 | ) |
|
| (1,944 | ) |
|
| (556 | ) |
|
| (17,272 | ) |
|
| (29,731 | ) |
Ending balance |
| $ | 413,748 |
|
|
| 661,780 |
|
|
| 117,682 |
|
|
| 565,295 |
|
| $ | 1,758,505 |
|
Changes in the allowance for credit losses for the nine months ended September 30, 2022 and 2021 were as follows:
|
| Commercial, Financial, |
|
| Real Estate |
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
|
| Leasing, etc. |
|
| Commercial |
|
| Residential |
|
| Consumer |
|
| Total |
|
| Commercial, Financial, |
|
| Real Estate |
|
|
|
|
|
|
| |||||||||||||
|
| (In thousands) |
|
| Leasing, etc. |
|
| Commercial |
|
| Residential |
|
| Consumer |
|
| Total |
| ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (In thousands) |
| |||||||||||||||||
Nine Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Beginning balance |
| $ | 405,846 |
|
|
| 670,719 |
|
|
| 103,590 |
|
|
| 556,232 |
|
| $ | 1,736,387 |
|
| $ | 283,899 |
|
|
| 557,239 |
|
|
| 71,726 |
|
|
| 556,362 |
|
| $ | 1,469,226 |
|
Provision for credit losses |
|
| (57,610 | ) |
|
| 32,650 |
|
|
| (29,026 | ) |
|
| (6,014 | ) |
|
| (60,000 | ) | ||||||||||||||||||||
Allowance on acquired PCD loans |
|
| 41,003 |
|
|
| 55,812 |
|
|
| 1,833 |
|
|
| 352 |
|
|
| 99,000 |
| ||||||||||||||||||||
Provision for credit losses (a) |
|
| 167,985 |
|
|
| 116,288 |
|
|
| 40,719 |
|
|
| 102,008 |
|
|
| 427,000 |
| ||||||||||||||||||||
Net charge-offs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Charge-offs |
|
| (93,638 | ) |
|
| (87,417 | ) |
|
| (6,586 | ) |
|
| (79,926 | ) |
|
| (267,567 | ) | ||||||||||||||||||||
Charge-offs (b) |
|
| (94,555 | ) |
|
| (45,809 | ) |
|
| (9,407 | ) |
|
| (78,148 | ) |
|
| (227,919 | ) | ||||||||||||||||||||
Recoveries |
|
| 37,149 |
|
|
| 10,115 |
|
|
| 6,347 |
|
|
| 52,593 |
|
|
| 106,204 |
|
|
| 44,110 |
|
|
| 17,000 |
|
|
| 7,948 |
|
|
| 39,226 |
|
|
| 108,284 |
|
Net charge-offs |
|
| (56,489 | ) |
|
| (77,302 | ) |
|
| (239 | ) |
|
| (27,333 | ) |
|
| (161,363 | ) |
|
| (50,445 | ) |
|
| (28,809 | ) |
|
| (1,459 | ) |
|
| (38,922 | ) |
|
| (119,635 | ) |
Ending balance |
| $ | 291,747 |
|
|
| 626,067 |
|
|
| 74,325 |
|
|
| 522,885 |
|
| $ | 1,515,024 |
|
| $ | 442,442 |
|
|
| 700,530 |
|
|
| 112,819 |
|
|
| 619,800 |
|
| $ | 1,875,591 |
|
Changes in the allowance for credit losses for the nine months ended September 30, 2020 were as follows:
|
| Commercial, Financial, |
|
| Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| Leasing, etc. |
|
| Commercial |
|
| Residential |
|
| Consumer |
|
| Unallocated |
|
| Total |
| ||||||
|
| (In thousands) |
| |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | 366,094 |
|
|
| 322,201 |
|
|
| 56,033 |
|
|
| 229,118 |
|
|
| 77,625 |
|
| $ | 1,051,071 |
|
Adoption of new accounting standard |
|
| (61,474 | ) |
|
| 23,656 |
|
|
| 53,896 |
|
|
| 194,004 |
|
|
| (77,625 | ) |
|
| 132,457 |
|
Provision for credit losses |
|
| 161,444 |
|
|
| 335,159 |
|
|
| 11,458 |
|
|
| 216,939 |
|
|
| — |
|
|
| 725,000 |
|
Net charge-offs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge-offs |
|
| (63,425 | ) |
|
| (23,266 | ) |
|
| (8,227 | ) |
|
| (116,409 | ) |
|
| — |
|
|
| (211,327 | ) |
Recoveries |
|
| 11,109 |
|
|
| 4,030 |
|
|
| 4,522 |
|
|
| 41,643 |
|
|
| — |
|
|
| 61,304 |
|
Net charge-offs |
|
| (52,316 | ) |
|
| (19,236 | ) |
|
| (3,705 | ) |
|
| (74,766 | ) |
|
| — |
|
|
| (150,023 | ) |
Ending balance |
| $ | 413,748 |
|
|
| 661,780 |
|
|
| 117,682 |
|
|
| 565,295 |
|
|
| — |
|
| $ | 1,758,505 |
|
- 20 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
|
| Commercial, Financial, |
|
| Real Estate |
|
|
|
|
|
|
| ||||||||
|
| Leasing, etc. |
|
| Commercial |
|
| Residential |
|
| Consumer |
|
| Total |
| |||||
|
| (In thousands) |
| |||||||||||||||||
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Beginning balance |
| $ | 405,846 |
|
|
| 670,719 |
|
|
| 103,590 |
|
|
| 556,232 |
|
| $ | 1,736,387 |
|
Provision for credit losses |
|
| (57,610 | ) |
|
| 32,650 |
|
|
| (29,026 | ) |
|
| (6,014 | ) |
|
| (60,000 | ) |
Net charge-offs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Charge-offs |
|
| (93,638 | ) |
|
| (87,417 | ) |
|
| (6,586 | ) |
|
| (79,926 | ) |
|
| (267,567 | ) |
Recoveries |
|
| 37,149 |
|
|
| 10,115 |
|
|
| 6,347 |
|
|
| 52,593 |
|
|
| 106,204 |
|
Net charge-offs |
|
| (56,489 | ) |
|
| (77,302 | ) |
|
| (239 | ) |
|
| (27,333 | ) |
|
| (161,363 | ) |
Ending balance |
| $ | 291,747 |
|
|
| 626,067 |
|
|
| 74,325 |
|
|
| 522,885 |
|
| $ | 1,515,024 |
|
Despite the allocation in the preceding tables, the allowance for credit losses is general in nature and is available to absorb losses from any loan or lease type. In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. The Company utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators including loan grade and borrower repayment performance can inform the models, which have been statistically developed based on historical correlations of credit losses with prevailing economic metrics, including unemployment, gross domestic product and real estate prices. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. At botheach of September 30, 20212022 and December 31, 2020,2021, the Company utilized a reasonable and supportable forecast period of two years. Subsequent to this forecast period the Company reverted, ratably over a one-year period, to historical loss experience to inform its estimate of losses for the remaining contractual life of each portfolio. The Company also estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes. The amounts of specific loss components in the Company’s loan and lease portfolios are determined through a loan-by-loan analysis of larger balance commercial loans and commercial real estate loans that are in nonaccrual status. Such loss estimates are typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to pay. To the extent that those loans are collateral-dependent, they are evaluated based on the fair value of the loan’s collateral as estimated at or near the financial statement date. As the quality of a loan deteriorates to the point of classifying the loan as “criticized,” the process of obtaining updated collateral valuation information is usually initiated, unless it is not considered warranted given factors such as the relative size of the loan, the characteristics of the collateral or the age of the last valuation. In those cases where current appraisals may not yet be available, prior appraisals are utilized with adjustments, as deemed necessary, for estimates of subsequent declines in values as determined by line of business and/or loan workout personnel. Those adjustments are reviewed and assessed for reasonableness by the Company’s credit department.risk personnel. Accordingly, for real estate collateral securing larger nonaccrual commercial loans and commercial real estate loans, estimated collateral values are based on current appraisals and estimates of value. For non-real estate loans, collateral is assigned a discounted estimated liquidation value and, depending on the nature of the collateral, is verified through field exams or other procedures. In assessing collateral, real estate and non-real estate values are reduced by an estimate of selling costs.
- 21 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
For residential real estate loans, including home equity loans and lines of credit, the excess of the loan balance over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. That charge-off is based on recent indications of value from external parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that file for bankruptcy are generally charged-off to estimated net collateral value shortly after the Company is notified of such filings. When evaluating individual home equity loans and lines of credit for charge off and for purposes of estimating losses in determining the allowance for credit losses, the Company gives consideration to the required repayment of any first lien positions related to collateral property. Modified loans, including smaller balance homogenous loans, that are considered to be troubled debt restructurings are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows.
Changes in the amount of the allowance for credit losses reflect the outcome of the procedures described herein. Improvementherein, including the impact of changes in the economic outlook at September 30, 2021 contributed to a reduced estimate of expected credit losses. Other factors considered includedmacroeconomic forecasts as compared with previous forecasts, as well as the impact of portfolio concentrations, changes in underwriting practices, product expansions into new markets, imprecision in economic forecasts, geopolitical conditions and other risk factors that might influence the loss estimation process.
The Company’s reserve for off-balance sheet credit exposures was not material at September 30, 20212022 and December 31, 2020.2021.
- 21 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
Information with respect to loans and leases that were considered nonaccrual at the beginning and end of the reporting period and the interest income recognized on such loans for the three-monththree months and nine-month periodsnine months ended September 30, 2022 and 2021 and 2020 follows.
|
| September 30, 2021 |
|
| June 30, 2021 |
|
| January 1, 2021 |
|
| Three Months Ended September 30, 2021 |
|
| Nine Months Ended September 30, 2021 |
|
| September 30, 2022 |
|
| June 30, 2022 |
|
| January 1, 2022 |
|
| Three Months Ended September 30, 2022 |
|
| Nine Months Ended September 30, 2022 |
| ||||||||||||||||||||||||||
|
| Amortized Cost with Allowance |
|
| Amortized Cost without Allowance |
|
| Total |
|
| Amortized Cost |
|
| Amortized Cost |
|
| Interest Income Recognized |
|
| Interest Income Recognized |
|
| Amortized Cost with Allowance |
|
| Amortized Cost without Allowance |
|
| Total |
|
| Amortized Cost |
|
| Amortized Cost |
|
| Interest Income Recognized |
|
| Interest Income Recognized |
| ||||||||||||||
|
| (In thousands) |
|
| (In thousands) |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Commercial, financial, leasing, etc. |
| $ | 171,040 |
|
| $ | 109,149 |
|
| $ | 280,189 |
|
| $ | 330,040 |
|
| $ | 306,827 |
|
| $ | 4,646 |
|
| $ | 10,661 |
|
| $ | 207,841 |
|
| $ | 160,325 |
|
| $ | 368,166 |
|
| $ | 442,496 |
|
| $ | 221,022 |
|
| $ | 4,708 |
|
| $ | 20,423 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Commercial |
|
| 332,014 |
|
|
| 820,856 |
|
|
| 1,152,870 |
|
|
| 1,081,546 |
|
|
| 775,894 |
|
|
| 2,256 |
|
|
| 4,518 |
|
|
| 394,502 |
|
|
| 1,011,698 |
|
|
| 1,406,200 |
|
|
| 1,476,658 |
|
|
| 1,069,280 |
|
|
| 7,059 |
|
|
| 14,944 |
|
Residential builder and developer |
|
| 594 |
|
|
| - |
|
|
| 594 |
|
|
| 14,552 |
|
|
| 1,094 |
|
|
| 206 |
|
|
| 239 |
|
|
| 1,930 |
|
|
| — |
|
|
| 1,930 |
|
|
| 518 |
|
|
| 3,005 |
|
|
| — |
|
|
| 1,687 |
|
Other commercial construction |
|
| 36,750 |
|
|
| 121,949 |
|
|
| 158,699 |
|
|
| 133,758 |
|
|
| 114,039 |
|
|
| 255 |
|
|
| 570 |
|
|
| 25,235 |
|
|
| 40,952 |
|
|
| 66,187 |
|
|
| 73,046 |
|
|
| 111,405 |
|
|
| 22 |
|
|
| 3,398 |
|
Residential |
|
| 196,918 |
|
|
| 156,508 |
|
|
| 353,426 |
|
|
| 372,144 |
|
|
| 365,729 |
|
|
| 6,809 |
|
|
| 17,603 |
|
|
| 160,704 |
|
|
| 124,691 |
|
|
| 285,395 |
|
|
| 331,376 |
|
|
| 355,858 |
|
|
| 8,059 |
|
|
| 21,397 |
|
Residential — limited documentation |
|
| 81,538 |
|
|
| 44,991 |
|
|
| 126,529 |
|
|
| 136,683 |
|
|
| 147,170 |
|
|
| 100 |
|
|
| 336 |
|
|
| 61,297 |
|
|
| 34,085 |
|
|
| 95,382 |
|
|
| 112,608 |
|
|
| 122,888 |
|
|
| 229 |
|
|
| 456 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Home equity lines and loans |
|
| 38,582 |
|
|
| 32,892 |
|
|
| 71,474 |
|
|
| 76,711 |
|
|
| 79,392 |
|
|
| 979 |
|
|
| 2,924 |
|
|
| 38,324 |
|
|
| 39,884 |
|
|
| 78,208 |
|
|
| 79,445 |
|
|
| 70,488 |
|
|
| 669 |
|
|
| 3,291 |
|
Recreational finance |
|
| 18,428 |
|
|
| 5,479 |
|
|
| 23,907 |
|
|
| 23,276 |
|
|
| 25,519 |
|
|
| 164 |
|
|
| 478 |
|
|
| 31,295 |
|
|
| 7,423 |
|
|
| 38,718 |
|
|
| 33,414 |
|
|
| 27,811 |
|
|
| 166 |
|
|
| 488 |
|
Automobile |
|
| 27,258 |
|
|
| 3,744 |
|
|
| 31,002 |
|
|
| 31,090 |
|
|
| 39,404 |
|
|
| 46 |
|
|
| 143 |
|
|
| 36,075 |
|
|
| 4,243 |
|
|
| 40,318 |
|
|
| 36,266 |
|
|
| 34,037 |
|
|
| 35 |
|
|
| 110 |
|
Other |
|
| 43,330 |
|
|
| 243 |
|
|
| 43,573 |
|
|
| 42,257 |
|
|
| 38,231 |
|
|
| 110 |
|
|
| 433 |
|
|
| 48,741 |
|
|
| 81 |
|
|
| 48,822 |
|
|
| 47,178 |
|
|
| 44,289 |
|
|
| 84 |
|
|
| 268 |
|
Total |
| $ | 946,452 |
|
| $ | 1,295,811 |
|
| $ | 2,242,263 |
|
| $ | 2,242,057 |
|
| $ | 1,893,299 |
|
| $ | 15,571 |
|
| $ | 37,905 |
|
| $ | 1,005,944 |
|
| $ | 1,423,382 |
|
| $ | 2,429,326 |
|
| $ | 2,633,005 |
|
| $ | 2,060,083 |
|
| $ | 21,031 |
|
| $ | 66,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| September 30, 2020 |
|
| June 30, 2020 |
|
| January 1, 2020 |
|
| Three Months Ended September 30, 2020 |
|
| Nine Months Ended September 31, 2020 |
| ||||||||||||||
|
| Amortized Cost with Allowance |
|
| Amortized Cost without Allowance |
|
| Total |
|
| Amortized Cost |
|
| Amortized Cost |
|
| Interest Income Recognized |
|
| Interest Income Recognized |
| |||||||
|
| (In thousands) |
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, leasing, etc. |
| $ | 264,515 |
|
| $ | 86,113 |
|
| $ | 350,628 |
|
| $ | 284,654 |
|
| $ | 346,743 |
|
| $ | 5,999 |
|
| $ | 9,035 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
| 86,199 |
|
|
| 166,316 |
|
|
| 252,515 |
|
|
| 172,488 |
|
|
| 173,796 |
|
|
| 993 |
|
|
| 6,782 |
|
Residential builder and developer |
|
| 1,833 |
|
|
| — |
|
|
| 1,833 |
|
|
| 1,748 |
|
|
| 4,708 |
|
|
| 114 |
|
|
| 173 |
|
Other commercial construction |
|
| 15,441 |
|
|
| 22,186 |
|
|
| 37,627 |
|
|
| 85,426 |
|
|
| 35,881 |
|
|
| 232 |
|
|
| 6,809 |
|
Residential |
|
| 66,302 |
|
|
| 231,334 |
|
|
| 297,636 |
|
|
| 306,907 |
|
|
| 322,504 |
|
|
| 3,410 |
|
|
| 15,258 |
|
Residential — limited documentation |
|
| 29,824 |
|
|
| 85,959 |
|
|
| 115,783 |
|
|
| 118,695 |
|
|
| 114,667 |
|
|
| 114 |
|
|
| 571 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity lines and loans |
|
| 36,134 |
|
|
| 42,686 |
|
|
| 78,820 |
|
|
| 77,094 |
|
|
| 65,039 |
|
|
| 1,017 |
|
|
| 3,236 |
|
Recreational finance |
|
| 17,637 |
|
|
| 6,554 |
|
|
| 24,191 |
|
|
| 24,152 |
|
|
| 14,308 |
|
|
| 155 |
|
|
| 461 |
|
Automobile |
|
| 37,355 |
|
|
| 5,019 |
|
|
| 42,374 |
|
|
| 42,736 |
|
|
| 21,293 |
|
|
| 47 |
|
|
| 139 |
|
Other |
|
| 3,567 |
|
|
| 34,998 |
|
|
| 38,565 |
|
|
| 42,750 |
|
|
| 35,394 |
|
|
| 174 |
|
|
| 489 |
|
Total |
| $ | 558,807 |
|
| $ | 681,165 |
|
| $ | 1,239,972 |
|
| $ | 1,156,650 |
|
| $ | 1,134,333 |
|
| $ | 12,255 |
|
| $ | 42,953 |
|
- 22 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
| September 30, 2021 |
|
| June 30, 2021 |
|
| January 1, 2021 |
|
| Three Months Ended September 30, 2021 |
|
| Nine Months Ended September 30, 2021 |
| ||||||||||||||
|
| Amortized Cost with Allowance |
|
| Amortized Cost without Allowance |
|
| Total |
|
| Amortized Cost |
|
| Amortized Cost |
|
| Interest Income Recognized |
|
| Interest Income Recognized |
| |||||||
|
| (In thousands) |
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Commercial, financial, leasing, etc. |
| $ | 171,040 |
|
| $ | 109,149 |
|
| $ | 280,189 |
|
| $ | 330,040 |
|
| $ | 306,827 |
|
| $ | 4,646 |
|
| $ | 10,661 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Commercial |
|
| 332,014 |
|
|
| 820,856 |
|
|
| 1,152,870 |
|
|
| 1,081,546 |
|
|
| 775,894 |
|
|
| 2,256 |
|
|
| 4,518 |
|
Residential builder and developer |
|
| 594 |
|
|
| — |
|
|
| 594 |
|
|
| 14,552 |
|
|
| 1,094 |
|
|
| 206 |
|
|
| 239 |
|
Other commercial construction |
|
| 36,750 |
|
|
| 121,949 |
|
|
| 158,699 |
|
|
| 133,758 |
|
|
| 114,039 |
|
|
| 255 |
|
|
| 570 |
|
Residential |
|
| 196,918 |
|
|
| 156,508 |
|
|
| 353,426 |
|
|
| 372,144 |
|
|
| 365,729 |
|
|
| 6,809 |
|
|
| 17,603 |
|
Residential — limited documentation |
|
| 81,538 |
|
|
| 44,991 |
|
|
| 126,529 |
|
|
| 136,683 |
|
|
| 147,170 |
|
|
| 100 |
|
|
| 336 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Home equity lines and loans |
|
| 38,582 |
|
|
| 32,892 |
|
|
| 71,474 |
|
|
| 76,711 |
|
|
| 79,392 |
|
|
| 979 |
|
|
| 2,924 |
|
Recreational finance |
|
| 18,428 |
|
|
| 5,479 |
|
|
| 23,907 |
|
|
| 23,276 |
|
|
| 25,519 |
|
|
| 164 |
|
|
| 478 |
|
Automobile |
|
| 27,258 |
|
|
| 3,744 |
|
|
| 31,002 |
|
|
| 31,090 |
|
|
| 39,404 |
|
|
| 46 |
|
|
| 143 |
|
Other |
|
| 43,330 |
|
|
| 243 |
|
|
| 43,573 |
|
|
| 42,257 |
|
|
| 38,231 |
|
|
| 110 |
|
|
| 433 |
|
Total |
| $ | 946,452 |
|
| $ | 1,295,811 |
|
| $ | 2,242,263 |
|
| $ | 2,242,057 |
|
| $ | 1,893,299 |
|
| $ | 15,571 |
|
| $ | 37,905 |
|
- 23 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
Loan modifications
During the normal course of business, the Company modifies loans to maximize recovery efforts. If the borrower is experiencing financial difficulty and a concession is granted, the Company considers such modifications as troubled debt restructurings and classifies those loans as either nonaccrual loans or renegotiated loans. The types of concessions that the Company grants typically include principal deferrals and interest rate concessions, but may also include other types of concessions.
The tabletables that follows summarizesfollow summarize the Company’s loan modification activities that were considered troubled debt restructurings for the three-month and nine-month periods ended September 30, 20212022 and 2020:2021:
|
|
|
|
|
|
|
| Post-modification (a) |
| |||||||||||||||||||
|
| Number |
|
| Pre- |
|
| Principal Deferral |
|
| Interest Rate Reduction |
|
| Other |
|
| Combination of Concession Types |
|
| Total |
| |||||||
Three Months Ended September 30, 2022 |
| (Dollars in thousands) |
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Commercial, financial, leasing, etc. |
|
| 70 |
|
| $ | 32,451 |
|
| $ | 11,237 |
|
| $ | 446 |
|
| $ | 229 |
|
| $ | 21,519 |
|
| $ | 33,431 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Commercial |
|
| 14 |
|
|
| 22,951 |
|
|
| 7,222 |
|
|
| — |
|
|
| 122 |
|
|
| 15,543 |
|
|
| 22,887 |
|
Residential |
|
| 57 |
|
|
| 14,380 |
|
|
| 11,094 |
|
|
| — |
|
|
| — |
|
|
| 3,470 |
|
|
| 14,564 |
|
Residential — limited documentation |
|
| 2 |
|
|
| 155 |
|
|
| 155 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 155 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Home equity lines and loans |
|
| 25 |
|
|
| 1,700 |
|
|
| 1,504 |
|
|
| — |
|
|
| — |
|
|
| 196 |
|
|
| 1,700 |
|
Recreational finance |
|
| 167 |
|
|
| 6,937 |
|
|
| 6,937 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 6,937 |
|
Automobile |
|
| 474 |
|
|
| 9,755 |
|
|
| 9,755 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 9,755 |
|
Other |
|
| 30 |
|
|
| 371 |
|
|
| 371 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 371 |
|
Total |
|
| 839 |
|
| $ | 88,700 |
|
| $ | 48,275 |
|
| $ | 446 |
|
| $ | 351 |
|
| $ | 40,728 |
|
| $ | 89,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Commercial, financial, leasing, etc. |
|
| 62 |
|
| $ | 49,884 |
|
| $ | 6,051 |
|
| $ | — |
|
| $ | 40,242 |
|
| $ | 3,479 |
|
| $ | 49,772 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Commercial |
|
| 15 |
|
|
| 53,198 |
|
|
| 30,311 |
|
|
| — |
|
|
| 262 |
|
|
| 22,599 |
|
|
| 53,172 |
|
Residential |
|
| 64 |
|
|
| 14,443 |
|
|
| 12,281 |
|
|
| — |
|
|
| — |
|
|
| 1,984 |
|
|
| 14,265 |
|
Residential — limited documentation |
|
| 4 |
|
|
| 828 |
|
|
| 828 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 828 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Home equity lines and loans |
|
| 22 |
|
|
| 1,349 |
|
|
| 1,246 |
|
|
| — |
|
|
| — |
|
|
| 103 |
|
|
| 1,349 |
|
Recreational finance |
|
| 67 |
|
|
| 2,565 |
|
|
| 2,565 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,565 |
|
Automobile |
|
| 146 |
|
|
| 2,711 |
|
|
| 2,711 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,711 |
|
Other |
|
| 15 |
|
|
| 123 |
|
|
| 123 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 123 |
|
Total |
|
| 395 |
|
| $ | 125,101 |
|
| $ | 56,116 |
|
| $ | — |
|
| $ | 40,504 |
|
| $ | 28,165 |
|
| $ | 124,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
| Post-modification (a) |
| |||||||||||||||||
|
| Number |
|
| Pre- modification Recorded Investment |
|
| Principal Deferral |
|
| Interest Rate Reduction |
|
| Other |
|
| Combination of Concession Types |
|
| Total |
| |||||||
Three Months Ended September 30, 2021 |
| (Dollars in thousands) |
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, leasing, etc. |
|
| 62 |
|
| $ | 49,884 |
|
| $ | 6,051 |
|
| $ | — |
|
| $ | 40,242 |
|
| $ | 3,479 |
|
| $ | 49,772 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
| 15 |
|
|
| 53,198 |
|
|
| 30,311 |
|
|
| — |
|
|
| 262 |
|
|
| 22,599 |
|
|
| 53,172 |
|
Residential |
|
| 64 |
|
|
| 14,443 |
|
|
| 12,281 |
|
|
| — |
|
|
| — |
|
|
| 1,984 |
|
|
| 14,265 |
|
Residential — limited documentation |
|
| 4 |
|
|
| 828 |
|
|
| 828 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 828 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity lines and loans |
|
| 22 |
|
|
| 1,349 |
|
|
| 1,246 |
|
|
| — |
|
|
| — |
|
|
| 103 |
|
|
| 1,349 |
|
Recreational finance |
|
| 67 |
|
|
| 2,565 |
|
|
| 2,565 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,565 |
|
Automobile |
|
| 146 |
|
|
| 2,711 |
|
|
| 2,711 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,711 |
|
Other |
|
| 15 |
|
|
| 123 |
|
|
| 123 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 123 |
|
Total |
|
| 395 |
|
| $ | 125,101 |
|
| $ | 56,116 |
|
| $ | — |
|
| $ | 40,504 |
|
| $ | 28,165 |
|
| $ | 124,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, leasing, etc. |
|
| 112 |
|
| $ | 35,037 |
|
| $ | 7,145 |
|
| $ | 298 |
|
| $ | — |
|
| $ | 27,512 |
|
| $ | 34,955 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
| 50 |
|
|
| 13,293 |
|
|
| 12,506 |
|
|
| 172 |
|
|
| 30 |
|
|
| 600 |
|
|
| 13,308 |
|
Residential |
|
| 30 |
|
|
| 8,544 |
|
|
| 5,517 |
|
|
| — |
|
|
| — |
|
|
| 3,616 |
|
|
| 9,133 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity lines and loans |
|
| 33 |
|
|
| 3,410 |
|
|
| 129 |
|
|
| — |
|
|
| — |
|
|
| 3,286 |
|
|
| 3,415 |
|
Recreational finance |
|
| 74 |
|
|
| 2,734 |
|
|
| 2,734 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,734 |
|
Automobile |
|
| 403 |
|
|
| 7,007 |
|
|
| 7,005 |
|
|
| — |
|
|
| — |
|
|
| 2 |
|
|
| 7,007 |
|
Other |
|
| 383 |
|
|
| 3,046 |
|
|
| 142 |
|
|
| — |
|
|
| — |
|
|
| 2,904 |
|
|
| 3,046 |
|
Total |
|
| 1,085 |
|
| $ | 73,071 |
|
| $ | 35,178 |
|
| $ | 470 |
|
| $ | 30 |
|
| $ | 37,920 |
|
| $ | 73,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 2324 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans and leases and the allowance for credit losses, continued
|
|
|
|
|
|
|
| Post-modification (a) |
| |||||||||||||||||||
|
| Number |
|
| Pre- |
|
| Principal Deferral |
|
| Interest Rate Reduction |
|
| Other |
|
| Combination of Concession Types |
|
| Total |
| |||||||
Nine Months Ended September 30, 2022 |
| (Dollars in thousands) |
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Commercial, financial, leasing, etc. |
|
| 147 |
|
| $ | 79,437 |
|
| $ | 49,671 |
|
| $ | 455 |
|
| $ | 983 |
|
| $ | 30,262 |
|
| $ | 81,371 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Commercial |
|
| 44 |
|
|
| 33,349 |
|
|
| 13,052 |
|
|
| — |
|
|
| 2,223 |
|
|
| 17,728 |
|
|
| 33,003 |
|
Residential |
|
| 221 |
|
|
| 56,912 |
|
|
| 40,821 |
|
|
| — |
|
|
| — |
|
|
| 18,469 |
|
|
| 59,290 |
|
Residential — limited documentation |
|
| 7 |
|
|
| 1,231 |
|
|
| 1,049 |
|
|
| — |
|
|
| — |
|
|
| 193 |
|
|
| 1,242 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Home equity lines and loans |
|
| 93 |
|
|
| 6,483 |
|
|
| 6,089 |
|
|
| — |
|
|
| — |
|
|
| 461 |
|
|
| 6,550 |
|
Recreational finance |
|
| 514 |
|
|
| 19,138 |
|
|
| 19,131 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 19,131 |
|
Automobile |
|
| 1,537 |
|
|
| 29,789 |
|
|
| 29,759 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 29,759 |
|
Other |
|
| 128 |
|
|
| 1,170 |
|
|
| 1,170 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,170 |
|
Total |
|
| 2,691 |
|
| $ | 227,509 |
|
| $ | 160,742 |
|
| $ | 455 |
|
| $ | 3,206 |
|
| $ | 67,113 |
|
| $ | 231,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Nine Months Ended September 30, 2021 |
|
|
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Commercial, financial, leasing, etc. |
|
| 244 |
|
| $ | 174,366 |
|
| $ | 42,143 |
|
| $ | — |
|
| $ | 40,464 |
|
| $ | 90,770 |
|
| $ | 173,377 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Commercial |
|
| 83 |
|
|
| 223,209 |
|
|
| 48,841 |
|
|
| — |
|
|
| 30,832 |
|
|
| 141,456 |
|
|
| 221,129 |
|
Other commercial construction |
|
| 3 |
|
|
| 542 |
|
|
| 532 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 532 |
|
Residential |
|
| 304 |
|
|
| 88,067 |
|
|
| 80,411 |
|
|
| — |
|
|
| — |
|
|
| 7,391 |
|
|
| 87,802 |
|
Residential — limited documentation |
|
| 17 |
|
|
| 2,349 |
|
|
| 2,292 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,292 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Home equity lines and loans |
|
| 64 |
|
|
| 5,034 |
|
|
| 4,702 |
|
|
| — |
|
|
| — |
|
|
| 277 |
|
|
| 4,979 |
|
Recreational finance |
|
| 173 |
|
|
| 5,896 |
|
|
| 5,896 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 5,896 |
|
Automobile |
|
| 516 |
|
|
| 9,182 |
|
|
| 9,168 |
|
|
| — |
|
|
| — |
|
|
| 14 |
|
|
| 9,182 |
|
Other |
|
| 338 |
|
|
| 2,393 |
|
|
| 2,393 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,393 |
|
Total |
|
| 1,742 |
|
| $ | 511,038 |
|
| $ | 196,378 |
|
| $ | — |
|
| $ | 71,296 |
|
| $ | 239,908 |
|
| $ | 507,582 |
|
|
|
|
|
|
|
|
|
|
| Post-modification (a) |
| |||||||||||||||||
|
| Number |
|
| Pre- modification Recorded Investment |
|
| Principal Deferral |
|
| Interest Rate Reduction |
|
| Other |
|
| Combination of Concession Types |
|
| Total |
| |||||||
Nine Months Ended September 30, 2021 |
| (Dollars in thousands) |
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, leasing, etc. |
|
| 244 |
|
| $ | 174,366 |
|
| $ | 42,143 |
|
| $ | — |
|
| $ | 40,464 |
|
| $ | 90,770 |
|
| $ | 173,377 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
| 83 |
|
|
| 223,209 |
|
|
| 48,841 |
|
|
| — |
|
|
| 30,832 |
|
|
| 141,456 |
|
|
| 221,129 |
|
Other commercial construction |
|
| 3 |
|
|
| 542 |
|
|
| 532 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 532 |
|
Residential |
|
| 304 |
|
|
| 88,067 |
|
|
| 80,411 |
|
|
| — |
|
|
| — |
|
|
| 7,391 |
|
|
| 87,802 |
|
Residential — limited documentation |
|
| 17 |
|
|
| 2,349 |
|
|
| 2,292 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,292 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity lines and loans |
|
| 64 |
|
|
| 5,034 |
|
|
| 4,702 |
|
|
| — |
|
|
| — |
|
|
| 277 |
|
|
| 4,979 |
|
Recreational finance |
|
| 173 |
|
|
| 5,896 |
|
|
| 5,896 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 5,896 |
|
Automobile |
|
| 516 |
|
|
| 9,182 |
|
|
| 9,168 |
|
|
| — |
|
|
| — |
|
|
| 14 |
|
|
| 9,182 |
|
Other |
|
| 338 |
|
|
| 2,393 |
|
|
| 2,393 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,393 |
|
Total |
|
| 1,742 |
|
| $ | 511,038 |
|
| $ | 196,378 |
|
| $ | — |
|
| $ | 71,296 |
|
| $ | 239,908 |
|
| $ | 507,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, leasing, etc. |
|
| 279 |
|
| $ | 102,865 |
|
| $ | 29,762 |
|
| $ | 298 |
|
| $ | 31,605 |
|
| $ | 40,013 |
|
| $ | 101,678 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
| 106 |
|
|
| 94,807 |
|
|
| 24,372 |
|
|
| 505 |
|
|
| 4,830 |
|
|
| 52,916 |
|
|
| 82,623 |
|
Residential builder and developer |
|
| 1 |
|
|
| 91 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 90 |
|
|
| 90 |
|
Residential |
|
| 82 |
|
|
| 27,594 |
|
|
| 11,865 |
|
|
| — |
|
|
| — |
|
|
| 19,126 |
|
|
| 30,991 |
|
Residential — limited documentation |
|
| 9 |
|
|
| 2,980 |
|
|
| 2,667 |
|
|
| — |
|
|
| — |
|
|
| 1,232 |
|
|
| 3,899 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity lines and loans |
|
| 159 |
|
|
| 11,719 |
|
|
| 688 |
|
|
| — |
|
|
| — |
|
|
| 11,057 |
|
|
| 11,745 |
|
Recreational finance |
|
| 348 |
|
|
| 13,619 |
|
|
| 13,619 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 13,619 |
|
Automobile |
|
| 1,873 |
|
|
| 33,541 |
|
|
| 33,539 |
|
|
| — |
|
|
| — |
|
|
| 2 |
|
|
| 33,541 |
|
Other |
|
| 718 |
|
|
| 5,229 |
|
|
| 824 |
|
|
| — |
|
|
| — |
|
|
| 4,405 |
|
|
| 5,229 |
|
Total |
|
| 3,575 |
|
| $ | 292,445 |
|
| $ | 117,336 |
|
| $ | 803 |
|
| $ | 36,435 |
|
| $ | 128,841 |
|
| $ | 283,415 |
|
|
|
Troubled debt restructurings are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows. Impairment of troubled debt restructurings that have subsequently defaulted may also be measured based on the loan’s observable market price or the fair value of collateral if the loan is collateral-dependent. Charge-offs may also be recognized on troubled debt restructurings that have subsequently defaulted. Loans that were modified as troubled debt restructurings during the twelve months ended September 30, 20212022 and 20202021 and for which there was a subsequent payment default during the nine-month periods ended September 30, 20212022 and 2020,2021, respectively, were not material.
The amount of foreclosed residential real estate property held by the Company was $25$36 million and $28$24 million at September 30, 20212022 and December 31, 2020,2021, respectively. There were $156$187 million and $214$151 million at September 30, 20212022 and December 31, 2020,2021, respectively, of loans secured by residential real estate that were in the process of foreclosure. Of all loans in the process of foreclosure at September 30, 2021,2022, approximately 42%46% were government guaranteed.
The Company pledged certain loans to secure outstanding borrowings and available lines of credit. At September 30, 2022, the Company pledged approximately $9.9 billion of commercial loans and leases, $13.9 billion of commercial real estate loans, $18.7 billion of one-to-four family residential real estate loans, $3.1 billion of home equity loans and lines of credit and $10.4 billion of other consumer loans. At December 31, 2021, the Company pledged approximately $9.5 billion of commercial loans and leases, $11.9 billion of commercial real estate loans, $11.5 billion of one-to-four family residential real estate loans, $1.9 billion of homes equity loans and lines of credit and $10.2 billion of other consumer loans.
- 2425 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
5. Borrowings
M&T had $531$535 million of fixed and variable rate junior subordinated deferrable interest debentures ("Junior Subordinated Debentures") outstanding at September 30, 20212022 that are held by various trusts that were issued in connection with the issuance by those trusts of preferred capital securities ("Capital Securities") and common securities ("Common Securities"). The proceeds from the issuances of the Capital Securities and the Common Securities were used by the trusts to purchase the Junior Subordinated Debentures. The Common Securities of each of those trusts are wholly owned by M&T and are the only class of each trust's securities possessing general voting powers. The Capital Securities represent preferred undivided interests in the assets of the corresponding trust. Under the Federal Reserve Board’s risk-based capital guidelines, the securities are includable in M&T’s Tier 2 regulatory capital.
Holders of the Capital Securities receive preferential cumulative cash distributions unless M&T exercises its right to extend the payment of interest on the Junior Subordinated Debentures as allowed by the terms of each such debenture, in which case payment of distributions on the respective Capital Securities will be deferred for comparable periods. During an extended interest period, M&T may not pay dividends or distributions on, or repurchase, redeem or acquire any shares of its capital stock. In general, the agreements governing the Capital Securities, in the aggregate, provide a full, irrevocable and unconditional guarantee by M&T of the payment of distributions on, the redemption of, and any liquidation distribution with respect to the Capital Securities. The obligations under such guarantee and the Capital Securities are subordinate and junior in right of payment to all senior indebtedness of M&T.
The Capital Securities will remain outstanding until the Junior Subordinated Debentures are repaid at maturity, are redeemed prior to maturity or are distributed in liquidation to the trusts. The Capital Securities are mandatorily redeemable in whole, but not in part, upon repayment at the stated maturity dates (ranging from 2027 to 2033)2033) of the Junior Subordinated Debentures or the earlier redemption of the Junior Subordinated Debentures in whole upon the occurrence of one or more events set forth in the indentures relating to the Capital Securities, and in whole or in part at any time after an optional redemption prior to contractual maturity contemporaneously with the optional redemption of the related Junior Subordinated Debentures in whole or in part, subject to possible regulatory approval.
On January 25, 2021, $350April 18, 2022, M&T Bank, the principal subsidiary of M&T, redeemed $650 million of fixed rate senior notes that were due to mature on May 18, 2022. In addition, $250 million of variable rate senior notes of M&T Bank the principal bank subsidiary ofmatured on May 18, 2022. On August 16, 2022, M&T matured. In addition, on March 1, 2021, M&T Bank redeemed $500issued $500 million of subordinated4.553% fixed rate senior notes that weremature in August 2028.
Short-term borrowings assumed in the People's United acquisition totaled $895 million and included $503 million of 3.65% fixed-rate unsecured senior notes due to mature onin December 1, 2021.2022, $390 million of agreements to repurchase securities which consisted of secured overnight transactions with commercial and municipal customers that subsequently matured and $2 million of Federal Home Loan Bank secured advances accruing interest at fixed-rates ranging from .01% to .75% and maturing at various dates through January 2023. On October 6, 2022, M&T redeemed the fixed rate senior notes assumed in the People's United acquisition.
Long-term borrowings assumed in the People's United acquisition totaled $494 million and included $405 million of 4.0% fixed-rate subordinated notes due to mature in July 2024, $78 million of 5.75% fixed-rate subordinated notes due to mature in October 2024 and $11 million of Federal Home Loan Bank secured advances accruing interest at fixed-rates ranging from .01% to 3.00% and maturing at various dates through 2039.
- 2526 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
6. Shareholders’ equityEquity
M&T is authorized to issue 1,000,00020,000,000 shares of preferred stock with a $1.00$1.00 par value per share. Preferred shares outstanding rank senior to common shares both as to dividends and liquidation preference, but have no general voting rights.
Issued and outstanding preferred stock of M&T as of September 30, 20212022 and December 31, 20202021 is presented below:
|
| September 30, 2022 |
|
| December 31, 2021 |
| ||||||||||
|
| Shares |
|
| Carrying Value |
|
| Shares |
|
| Carrying Value |
| ||||
|
| (Dollars in thousands) |
| |||||||||||||
Series E (a) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock |
|
| 350,000 |
|
| $ | 350,000 |
|
|
| 350,000 |
|
| $ | 350,000 |
|
Series F (b) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock |
|
| 50,000 |
|
| $ | 500,000 |
|
|
| 50,000 |
|
| $ | 500,000 |
|
Series G (c) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed-Rate Reset Non-cumulative Perpetual Preferred Stock |
|
| 40,000 |
|
| $ | 400,000 |
|
|
| 40,000 |
|
| $ | 400,000 |
|
Series H (d) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock |
|
| 10,000,000 |
|
| $ | 260,600 |
|
|
| — |
|
|
| — |
|
Series I (e) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed-Rate Reset Non-cumulative Perpetual Preferred Stock |
|
| 50,000 |
|
| $ | 500,000 |
|
|
| 50,000 |
|
| $ | 500,000 |
|
|
| September 30, 2021 |
|
| December 31, 2020 |
| ||||||||||
|
| Shares Issued and Outstanding |
|
| Carrying Value |
|
| Shares Issued and Outstanding |
|
| Carrying Value |
| ||||
|
| (Dollars in thousands) |
| |||||||||||||
Series E (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock, $1,000 liquidation preference per share |
|
| 350,000 |
|
| $ | 350,000 |
|
|
| 350,000 |
|
| $ | 350,000 |
|
Series F (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock, $10,000 liquidation preference per share |
|
| 50,000 |
|
| $ | 500,000 |
|
|
| 50,000 |
|
| $ | 500,000 |
|
Series G (c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed-Rate Reset Non-cumulative Perpetual Preferred Stock, $10,000 liquidation preference per share |
|
| 40,000 |
|
| $ | 400,000 |
|
|
| 40,000 |
|
| $ | 400,000 |
|
Series I (d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed-Rate Reset Non-cumulative Perpetual Preferred Stock, $10,000 liquidation preference per share |
|
| 50,000 |
|
| $ | 500,000 |
|
|
| — |
|
| $ | — |
|
|
|
|
|
|
|
|
|
7. Revenue from contracts with customers
A significant amount of the Company’s revenuesthree-month LIBOR plus 361 basis points. The shares are derived from net interest incomeredeemable in whole or in part on financial assetsor after February 15, 2024. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 90 days following that occurrence.
For noninterest income revenue streams, the Company recognizes the expected amount of consideration as revenue when the performance obligations related to the services under the terms of a contract are satisfied. The Company’s contracts generally do not contain termsshares within
- 2627 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
7. Revenue from contracts with customers continued
The Company generally charges customer accounts or otherwise bills customers upon completion of its services. Typically the Company’s contracts with customers have a duration of one year or less and payment for services is received at least annually, but oftentimes more frequently as services are provided. At September 30, 20212022 and December 31, 2020,2021, the Company had $65$70 million and $67$68 million, respectively, of amounts receivable related to recognized revenue from the sources in the accompanying tables. Such amounts are classified in accrued interest and other assets in the Company’s consolidated balance sheet. In certain situations the Company is paid in advance of providing services and defers the recognition of revenue until its service obligation is satisfied. At September 30, 20212022 and December 31, 2020,2021, the Company had deferred revenue of $41$46 million and $42$45 million, respectively, related to the sources in the accompanying tables recorded in accrued interest and other liabilities in the consolidated balance sheet.
The following tables summarize sources of the Company’s noninterest income during the three-month and nine-month periods ended September 30, 20212022 and 20202021 that are subject to the notedrevenue recognition accounting guidance.
|
| Business Banking |
|
| Commercial Banking |
|
| Commercial Real Estate |
|
| Discretionary Portfolio |
|
| Residential Mortgage Banking |
|
| Retail Banking |
|
| All Other |
|
| Total |
| ||||||||
Three Months Ended September 30, 2021 |
| (In thousands) |
| |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Classification in consolidated statement of income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
| $ | 14,205 |
|
|
| 25,054 |
|
|
| 2,977 |
|
|
| — |
|
|
| — |
|
|
| 61,696 |
|
|
| 1,494 |
|
| $ | 105,426 |
|
Trust income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 156,876 |
|
|
| 156,876 |
|
Brokerage services income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (20 | ) |
|
| 20,510 |
|
|
| 20,490 |
|
Other revenues from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchant discount and credit card fees |
|
| 14,376 |
|
|
| 14,970 |
|
|
| 878 |
|
|
| — |
|
|
| — |
|
|
| 5,912 |
|
|
| 138 |
|
|
| 36,274 |
|
Other |
|
| — |
|
|
| 1,879 |
|
|
| 2,180 |
|
|
| 283 |
|
|
| 1,501 |
|
|
| 5,674 |
|
|
| 8,311 |
|
|
| 19,828 |
|
|
| $ | 28,581 |
|
|
| 41,903 |
|
|
| 6,035 |
|
|
| 283 |
|
|
| 1,501 |
|
|
| 73,262 |
|
|
| 187,329 |
|
| $ | 338,894 |
|
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Classification in consolidated statement of income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
| $ | 11,527 |
|
|
| 22,816 |
|
|
| 2,347 |
|
|
| — |
|
|
| — |
|
|
| 53,379 |
|
|
| 1,286 |
|
| $ | 91,355 |
|
Trust income |
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 149,936 |
|
|
| 149,937 |
|
Brokerage services income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 11,602 |
|
|
| 11,602 |
|
Other revenues from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchant discount and credit card fees |
|
| 10,533 |
|
|
| 10,785 |
|
|
| 492 |
|
|
| — |
|
|
| — |
|
|
| 4,159 |
|
|
| (315 | ) |
|
| 25,654 |
|
Other |
|
| — |
|
|
| 2,940 |
|
|
| 929 |
|
|
| 205 |
|
|
| 1,127 |
|
|
| 5,994 |
|
|
| 10,212 |
|
|
| 21,407 |
|
|
| $ | 22,060 |
|
|
| 36,542 |
|
|
| 3,768 |
|
|
| 205 |
|
|
| 1,127 |
|
|
| 63,532 |
|
|
| 172,721 |
|
| $ | 299,955 |
|
|
| Business Banking |
|
| Commercial Banking |
|
| Commercial Real Estate |
|
| Discretionary Portfolio |
|
| Residential Mortgage Banking |
|
| Retail Banking |
|
| All Other |
|
| Total |
| ||||||||
Three Months Ended September 30, 2022 | (In thousands) |
| ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Classification in consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Service charges on deposit |
| $ | 19,277 |
|
|
| 30,406 |
|
|
| 3,683 |
|
|
| — |
|
|
| — |
|
|
| 61,223 |
|
|
| 624 |
|
| $ | 115,213 |
|
Trust income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 186,577 |
|
|
| 186,577 |
|
Brokerage services income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 21,086 |
|
|
| 21,086 |
|
Other revenues from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Merchant discount and credit |
|
| 16,234 |
|
|
| 17,731 |
|
|
| 1,104 |
|
|
| — |
|
|
| — |
|
|
| 6,874 |
|
|
| 561 |
|
|
| 42,504 |
|
Other |
|
| — |
|
|
| 9,878 |
|
|
| 1,961 |
|
|
| 904 |
|
|
| 558 |
|
|
| 3,980 |
|
|
| 8,767 |
|
|
| 26,048 |
|
|
| $ | 35,511 |
|
|
| 58,015 |
|
|
| 6,748 |
|
|
| 904 |
|
|
| 558 |
|
|
| 72,077 |
|
|
| 217,615 |
|
| $ | 391,428 |
|
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Classification in consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Service charges on deposit |
| $ | 14,205 |
|
|
| 25,054 |
|
|
| 2,977 |
|
|
| — |
|
|
| — |
|
|
| 61,696 |
|
|
| 1,494 |
|
| $ | 105,426 |
|
Trust income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 156,876 |
|
|
| 156,876 |
|
Brokerage services income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (20 | ) |
|
| 20,510 |
|
|
| 20,490 |
|
Other revenues from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Merchant discount and credit |
|
| 14,376 |
|
|
| 14,970 |
|
|
| 878 |
|
|
| — |
|
|
| — |
|
|
| 5,912 |
|
|
| 138 |
|
|
| 36,274 |
|
Other |
|
| — |
|
|
| 1,879 |
|
|
| 2,180 |
|
|
| 283 |
|
|
| 1,501 |
|
|
| 5,674 |
|
|
| 8,311 |
|
|
| 19,828 |
|
|
| $ | 28,581 |
|
|
| 41,903 |
|
|
| 6,035 |
|
|
| 283 |
|
|
| 1,501 |
|
|
| 73,262 |
|
|
| 187,329 |
|
| $ | 338,894 |
|
- 2728 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
7. Revenue from contracts with customers, continued
|
| Business Banking |
|
| Commercial Banking |
|
| Commercial Real Estate |
|
| Discretionary Portfolio |
|
| Residential Mortgage Banking |
|
| Retail Banking |
|
| All Other |
|
| Total |
| ||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | (In thousands) |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Classification in consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Service charges on deposit |
| $ | 53,581 |
|
|
| 85,806 |
|
|
| 10,903 |
|
|
| — |
|
|
| — |
|
|
| 185,990 |
|
|
| 4,610 |
|
| $ | 340,890 |
| ||||||||||||||||||||||||||||||||
Trust income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 545,874 |
|
|
| 545,874 |
| ||||||||||||||||||||||||||||||||
Brokerage services income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 65,414 |
|
|
| 65,414 |
| ||||||||||||||||||||||||||||||||
Other revenues from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Merchant discount and credit |
|
| 45,874 |
|
|
| 48,044 |
|
|
| 2,836 |
|
|
| — |
|
|
| — |
|
|
| 19,408 |
|
|
| 946 |
|
|
| 117,108 |
| ||||||||||||||||||||||||||||||||
Other |
|
| — |
|
|
| 13,040 |
|
|
| 8,228 |
|
|
| 2,468 |
|
|
| 3,413 |
|
|
| 16,752 |
|
|
| 33,416 |
|
|
| 77,317 |
| ||||||||||||||||||||||||||||||||
|
| Business Banking |
|
| Commercial Banking |
|
| Commercial Real Estate |
|
| Discretionary Portfolio |
|
| Residential Mortgage Banking |
|
| Retail Banking |
|
| All Other |
|
| Total |
|
| $ | 99,455 |
|
|
| 146,890 |
|
|
| 21,967 |
|
|
| 2,468 |
|
|
| 3,413 |
|
|
| 222,150 |
|
|
| 650,260 |
|
| $ | 1,146,603 |
| ||||||||
Nine Months Ended September 30, 2021 |
| (In thousands) |
| Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Classification in consolidated statement of income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Service charges on deposit accounts |
| $ | 39,644 |
|
|
| 74,304 |
|
|
| 8,768 |
|
|
| — |
|
|
| — |
|
|
| 169,734 |
|
|
| 4,271 |
|
| $ | 296,721 |
|
| $ | 39,644 |
|
|
| 74,304 |
|
|
| 8,768 |
|
|
| — |
|
|
| — |
|
|
| 169,734 |
|
|
| 4,271 |
|
| $ | 296,721 |
|
Trust income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 475,889 |
|
|
| 475,889 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 475,889 |
|
|
| 475,889 |
|
Brokerage services income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 43,868 |
|
|
| 43,868 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 43,868 |
|
|
| 43,868 |
|
Other revenues from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Merchant discount and credit card fees |
|
| 37,570 |
|
|
| 39,812 |
|
|
| 1,823 |
|
|
| — |
|
|
| — |
|
|
| 15,741 |
|
|
| (207 | ) |
|
| 94,739 |
|
|
| 37,570 |
|
|
| 39,812 |
|
|
| 1,823 |
|
|
| — |
|
|
| — |
|
|
| 15,741 |
|
|
| (207 | ) |
|
| 94,739 |
|
Other |
|
| — |
|
|
| 3,890 |
|
|
| 5,197 |
|
|
| 1,043 |
|
|
| 4,670 |
|
|
| 17,493 |
|
|
| 30,456 |
|
|
| 62,749 |
|
|
| — |
|
|
| 3,890 |
|
|
| 5,197 |
|
|
| 1,043 |
|
|
| 4,670 |
|
|
| 17,493 |
|
|
| 30,456 |
|
|
| 62,749 |
|
|
| $ | 77,214 |
|
|
| 118,006 |
|
|
| 15,788 |
|
|
| 1,043 |
|
|
| 4,670 |
|
|
| 202,968 |
|
|
| 554,277 |
|
| $ | 973,966 |
|
| $ | 77,214 |
|
|
| 118,006 |
|
|
| 15,788 |
|
|
| 1,043 |
|
|
| 4,670 |
|
|
| 202,968 |
|
|
| 554,277 |
|
| $ | 973,966 |
|
Nine Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Classification in consolidated statement of income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Service charges on deposit accounts |
| $ | 38,048 |
|
|
| 69,487 |
|
|
| 7,724 |
|
|
| — |
|
|
| — |
|
|
| 155,073 |
|
|
| 4,639 |
|
| $ | 274,971 |
| ||||||||||||||||||||||||||||||||
Trust income |
|
| 18 |
|
|
| 442 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 450,110 |
|
|
| 450,570 |
| ||||||||||||||||||||||||||||||||
Brokerage services income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 35,194 |
|
|
| 35,194 |
| ||||||||||||||||||||||||||||||||
Other revenues from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Merchant discount and credit card fees |
|
| 29,023 |
|
|
| 32,992 |
|
|
| 1,720 |
|
|
| — |
|
|
| — |
|
|
| 9,880 |
|
|
| 261 |
|
|
| 73,876 |
| ||||||||||||||||||||||||||||||||
Other |
|
| — |
|
|
| 5,913 |
|
|
| 2,960 |
|
|
| 1,212 |
|
|
| 3,101 |
|
|
| 15,142 |
|
|
| 32,149 |
|
|
| 60,477 |
| ||||||||||||||||||||||||||||||||
|
| $ | 67,089 |
|
|
| 108,834 |
|
|
| 12,404 |
|
|
| 1,212 |
|
|
| 3,101 |
|
|
| 180,095 |
|
|
| 522,353 |
|
| $ | 895,088 |
| ||||||||||||||||||||||||||||||||
- 2829 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
8. Pension plans and other postretirement benefits
The Company provides defined benefit pension and other postretirement benefits (including health care and life insurance benefits) to qualified retired employees. Net periodic defined benefit cost for defined benefit plans consisted of the following:
|
| Pension |
|
| Other |
| ||||||||||
|
| Three Months Ended September 30 |
| |||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
| (In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Service cost |
| $ | 4,423 |
|
| $ | 5,128 |
|
| $ | 689 |
|
| $ | 254 |
|
Interest cost on projected benefit obligation |
|
| 22,060 |
|
|
| 15,468 |
|
|
| 581 |
|
|
| 328 |
|
Expected return on plan assets |
|
| (50,188 | ) |
|
| (35,862 | ) |
|
| — |
|
|
| — |
|
Amortization of prior service cost (credit) |
|
| 129 |
|
|
| 139 |
|
|
| (693 | ) |
|
| (1,185 | ) |
Amortization of net actuarial loss (gain) |
|
| 4,974 |
|
|
| 22,254 |
|
|
| (370 | ) |
|
| (324 | ) |
Net periodic cost (benefit) |
| $ | (18,602 | ) |
| $ | 7,127 |
|
| $ | 207 |
|
| $ | (927 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| Pension |
|
| Other |
| ||||||||||
|
| Nine Months Ended September 30 |
| |||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
| (In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Service cost |
| $ | 13,237 |
|
| $ | 15,385 |
|
| $ | 1,914 |
|
| $ | 760 |
|
Interest cost on projected benefit obligation |
|
| 60,407 |
|
|
| 46,404 |
|
|
| 1,607 |
|
|
| 984 |
|
Expected return on plan assets |
|
| (137,421 | ) |
|
| (107,586 | ) |
|
| — |
|
|
| — |
|
Amortization of prior service cost (credit) |
|
| 387 |
|
|
| 415 |
|
|
| (2,079 | ) |
|
| (3,554 | ) |
Amortization of net actuarial loss (gain) |
|
| 14,921 |
|
|
| 66,763 |
|
|
| (1,111 | ) |
|
| (971 | ) |
Net periodic cost (benefit) |
| $ | (48,469 | ) |
| $ | 21,381 |
|
| $ | 331 |
|
| $ | (2,781 | ) |
|
| Pension Benefits |
|
| Other Postretirement Benefits |
| ||||||||||
|
| Three Months Ended September 30 |
| |||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
| (In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
| $ | 5,128 |
|
|
| 4,986 |
|
|
| 254 |
|
|
| 242 |
|
Interest cost on projected benefit obligation |
|
| 15,468 |
|
|
| 17,855 |
|
|
| 328 |
|
|
| 436 |
|
Expected return on plan assets |
|
| (35,862 | ) |
|
| (31,378 | ) |
|
| — |
|
| �� | — |
|
Amortization of prior service cost (credit) |
|
| 139 |
|
|
| 125 |
|
|
| (1,185 | ) |
|
| (1,175 | ) |
Amortization of net actuarial loss (gain) |
|
| 22,254 |
|
|
| 13,950 |
|
|
| (324 | ) |
|
| (300 | ) |
Net periodic cost (benefit) |
| $ | 7,127 |
|
|
| 5,538 |
|
|
| (927 | ) |
|
| (797 | ) |
|
| Pension Benefits |
|
| Other Postretirement Benefits |
| ||||||||||
|
| Nine Months Ended September 30 |
| |||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
| (In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
| $ | 15,385 |
|
|
| 14,958 |
|
|
| 760 |
|
|
| 727 |
|
Interest cost on projected benefit obligation |
|
| 46,404 |
|
|
| 53,565 |
|
|
| 984 |
|
|
| 1,306 |
|
Expected return on plan assets |
|
| (107,586 | ) |
|
| (94,134 | ) |
|
| — |
|
|
| — |
|
Amortization of prior service cost (credit) |
|
| 415 |
|
|
| 404 |
|
|
| (3,554 | ) |
|
| (3,544 | ) |
Amortization of net actuarial loss (gain) |
|
| 66,763 |
|
|
| 42,998 |
|
|
| (971 | ) |
|
| (918 | ) |
Net periodic cost (benefit) |
| $ | 21,381 |
|
|
| 17,791 |
|
|
| (2,781 | ) |
|
| (2,429 | ) |
Service cost is reflected in salaries and employee benefits expense in the consolidated statement of income. The other components of net periodic benefit cost are reflected in other costs of operations. Expenses incurred in connection with the Company's defined contribution pension and retirement savings plans totaled $23$32 million and $23 million for each of the three-month periodsthree months ended September 30, 2022 and 2021, respectively, and 2020 and $81$98 million and $73$81 million for the nine-month periodsnine months ended September 30, 20212022 and 2020,2021, respectively, and are included in salaries and employee benefits expense.
Prior to 2022, net actuarial losses were generally amortized over the average remaining service periods of active participants in the Company’s defined benefit pension plan. If substantially all of the plan’s participants are inactive, GAAP provides for the average remaining life expectancy of the participants to be used instead of average remaining service period in determining such amortization. Substantially all of the participants in the Company’s defined benefit pension plan were inactive and beginning in 2022 the average remaining life expectancy is now utilized prospectively to amortize the net unrecognized losses. The change increased the amortization period by approximately sixteen years and reduced the amount of amortization of unrecognized losses recorded for the three and nine months ended September 30, 2022 from what would have been recorded without such change in amortization period by $9 million and $27 million, respectively.
- 2930 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
9. Earnings per common share
The computations of basic earnings per common share follow:
|
| Three Months Ended September 30 |
|
| Nine Months Ended September 30 |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
| (In thousands, except per share) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income available to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 646,596 |
|
| $ | 495,460 |
|
| $ | 1,226,292 |
|
| $ | 1,400,778 |
|
Less: Preferred stock dividends |
|
| (24,941 | ) |
|
| (17,050 | ) |
|
| (71,647 | ) |
|
| (51,150 | ) |
Net income available to common equity |
|
| 621,655 |
|
|
| 478,410 |
|
|
| 1,154,645 |
|
|
| 1,349,628 |
|
Less: Income attributable to unvested stock-based |
|
| (1,106 | ) |
|
| (2,452 | ) |
|
| (2,245 | ) |
|
| (6,823 | ) |
Net income available to common shareholders |
| $ | 620,549 |
|
| $ | 475,958 |
|
| $ | 1,152,400 |
|
| $ | 1,342,805 |
|
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Common shares outstanding (including common |
|
| 174,921 |
|
|
| 129,580 |
|
|
| 160,793 |
|
|
| 129,529 |
|
Less: Unvested stock-based compensation awards |
|
| (312 | ) |
|
| (891 | ) |
|
| (319 | ) |
|
| (897 | ) |
Weighted-average shares outstanding |
|
| 174,609 |
|
|
| 128,689 |
|
|
| 160,474 |
|
|
| 128,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per common share |
| $ | 3.55 |
|
| $ | 3.70 |
|
| $ | 7.18 |
|
| $ | 10.44 |
|
|
| Three Months Ended September 30 |
|
| Nine Months Ended September 30 |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
| (In thousands, except per share) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income available to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ | 495,460 |
|
|
| 372,136 |
|
|
| 1,400,778 |
|
|
| 882,012 |
|
Less: Preferred stock dividends |
|
| (17,050 | ) |
|
| (17,050 | ) |
|
| (51,150 | ) |
|
| (51,178 | ) |
Net income available to common equity |
|
| 478,410 |
|
|
| 355,086 |
|
|
| 1,349,628 |
|
|
| 830,834 |
|
Less: Income attributable to unvested stock-based compensation awards |
|
| (2,452 | ) |
|
| (1,687 | ) |
|
| (6,823 | ) |
|
| (3,631 | ) |
Net income available to common shareholders |
| $ | 475,958 |
|
|
| 353,399 |
|
|
| 1,342,805 |
|
|
| 827,203 |
|
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding (including common stock issuable) and unvested stock-based compensation awards |
|
| 129,580 |
|
|
| 129,061 |
|
|
| 129,529 |
|
|
| 129,518 |
|
Less: Unvested stock-based compensation awards |
|
| (891 | ) |
|
| (776 | ) |
|
| (897 | ) |
|
| (768 | ) |
Weighted-average shares outstanding |
|
| 128,689 |
|
|
| 128,285 |
|
|
| 128,632 |
|
|
| 128,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
| $ | 3.70 |
|
|
| 2.75 |
|
|
| 10.44 |
|
| $ | 6.42 |
|
The computations of diluted earnings per common share follow:
|
| Three Months Ended September 30 |
|
| Nine Months Ended September 30 |
|
| Three Months Ended September 30 |
| Nine Months Ended September 30 |
| |||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||||
|
| (In thousands, except per share) |
|
| (In thousands, except per share) |
| ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income available to common equity |
| $ | 478,410 |
|
|
| 355,086 |
|
|
| 1,349,628 |
|
|
| 830,834 |
|
| $ | 621,655 |
|
| $ | 478,410 |
|
| $ | 1,154,645 |
|
| $ | 1,349,628 |
|
Less: Income attributable to unvested stock-based compensation awards |
|
| (2,449 | ) |
|
| (1,686 | ) |
|
| (6,816 | ) |
|
| (3,630 | ) |
|
| (1,101 | ) |
|
| (2,449 | ) |
|
| (2,239 | ) |
|
| (6,816 | ) |
Net income available to common shareholders |
| $ | 475,961 |
|
|
| 353,400 |
|
|
| 1,342,812 |
|
|
| 827,204 |
|
| $ | 620,554 |
|
| $ | 475,961 |
|
| $ | 1,152,406 |
|
| $ | 1,342,812 |
|
Adjusted weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Common and unvested stock-based compensation awards |
|
| 129,580 |
|
|
| 129,061 |
|
|
| 129,529 |
|
|
| 129,518 |
|
|
| 174,921 |
|
|
| 129,580 |
|
|
| 160,793 |
|
|
| 129,529 |
|
Less: Unvested stock-based compensation awards |
|
| (891 | ) |
|
| (776 | ) |
|
| (897 | ) |
|
| (768 | ) |
|
| (312 | ) |
|
| (891 | ) |
|
| (319 | ) |
|
| (897 | ) |
Plus: Incremental shares from assumed conversion of stock-based compensation awards and warrants to purchase common stock |
|
| 155 |
|
|
| 70 |
|
|
| 154 |
|
|
| 63 |
|
|
| 1,073 |
|
|
| 155 |
|
|
| 821 |
|
|
| 154 |
|
Adjusted weighted-average shares outstanding |
|
| 128,844 |
|
|
| 128,355 |
|
|
| 128,786 |
|
|
| 128,813 |
|
|
| 175,682 |
|
|
| 128,844 |
|
|
| 161,295 |
|
|
| 128,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings per common share |
| $ | 3.69 |
|
|
| 2.75 |
|
|
| 10.43 |
|
| $ | 6.42 |
|
| $ | 3.53 |
|
| $ | 3.69 |
|
| $ | 7.14 |
|
| $ | 10.43 |
|
GAAP defines unvested share-based awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities that shall be included in the computation of earnings per common share pursuant to the two-class method. The Company has issued stock-based compensation awards in the form of restricted stock and restricted stock units which, in accordance with GAAP, are considered participating securities.
Stock-based compensation awards to purchase common stock of M&T representing 460,710252,793 common shares and 483,182314,155 common shares during the three-month periods ended September 30, 2021 and 2020, respectively, and 461,792 and 477,144 common shares during the nine-month periods ended September 30, 20212022, respectively, and 2020,460,710 common shares and 461,792 common shares during the three-month and nine-month periods ended September 30, 2021, respectively, were not included in the computations of diluted earnings per common share because the effect on those periods would have been antidilutive.
- 3031 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
10. Comprehensive income
The following tables display the components of other comprehensive income (loss) and amounts reclassified from accumulated other comprehensive income (loss) to net income:
|
| Investment |
|
| Defined Benefit |
|
|
|
|
| Total |
|
|
| Income |
|
|
|
| ||||||
|
| Securities |
|
| Plans |
|
| Other |
|
| Before Tax |
|
|
| Tax |
|
| Net |
| ||||||
|
| (In thousands) |
| ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance — January 1, 2022 |
| $ | 104,691 |
|
|
| (360,276 | ) |
|
| 83,531 |
|
| $ | (172,054 | ) |
|
|
| 44,476 |
|
| $ | (127,578 | ) |
Other comprehensive income (loss) before reclassifications: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Unrealized holding losses, net |
|
| (576,266 | ) |
|
| — |
|
|
| — |
|
|
| (576,266 | ) |
|
|
| 149,186 |
|
|
| (427,080 | ) |
Foreign currency translation adjustment |
|
| — |
|
|
| — |
|
|
| (14,564 | ) |
|
| (14,564 | ) |
|
|
| 3,293 |
|
|
| (11,271 | ) |
Unrealized losses on cash flow hedges |
|
| — |
|
|
| — |
|
|
| (429,310 | ) |
|
| (429,310 | ) |
|
|
| 111,150 |
|
|
| (318,160 | ) |
Total other comprehensive income (loss) before |
|
| (576,266 | ) |
|
| — |
|
|
| (443,874 | ) |
|
| (1,020,140 | ) |
|
|
| 263,629 |
|
|
| (756,511 | ) |
Amounts reclassified from accumulated other comprehensive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Amortization of unrealized holding losses on |
|
| 1,766 |
|
|
| — |
|
|
| — |
|
|
| 1,766 |
| (a) |
|
| (456 | ) |
|
| 1,310 |
|
Accretion of net gain on terminated cash flow hedges |
|
| — |
|
|
| — |
|
|
| (90 | ) |
|
| (90 | ) | (c) |
|
| 24 |
|
|
| (66 | ) |
Net yield adjustment from cash flow hedges |
|
| — |
|
|
| — |
|
|
| (35,500 | ) |
|
| (35,500 | ) | (a) |
|
| 9,192 |
|
|
| (26,308 | ) |
Amortization of prior service credit |
|
| — |
|
|
| (1,692 | ) |
|
| — |
|
|
| (1,692 | ) | (d) |
|
| 413 |
|
|
| (1,279 | ) |
Amortization of actuarial losses |
|
| — |
|
|
| 13,810 |
|
|
| — |
|
|
| 13,810 |
| (d) |
|
| (3,371 | ) |
|
| 10,439 |
|
Total other comprehensive income (loss) |
|
| (574,500 | ) |
|
| 12,118 |
|
|
| (479,464 | ) |
|
| (1,041,846 | ) |
|
|
| 269,431 |
|
|
| (772,415 | ) |
Balance — September 30, 2022 |
| $ | (469,809 | ) |
|
| (348,158 | ) |
|
| (395,933 | ) |
| $ | (1,213,900 | ) |
|
|
| 313,907 |
|
| $ | (899,993 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance — January 1, 2021 |
| $ | 195,386 |
|
|
| (650,087 | ) |
|
| 369,558 |
|
| $ | (85,143 | ) |
|
|
| 22,111 |
|
| $ | (63,032 | ) |
Other comprehensive income (loss) before reclassifications: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Unrealized holding losses, net |
|
| (57,388 | ) |
|
| — |
|
|
| — |
|
|
| (57,388 | ) |
|
|
| 15,124 |
|
|
| (42,264 | ) |
Foreign currency translation adjustment |
|
| — |
|
|
| — |
|
|
| (1,246 | ) |
|
| (1,246 | ) |
|
|
| 360 |
|
|
| (886 | ) |
Unrealized gains on cash flow hedges |
|
| — |
|
|
| — |
|
|
| 821 |
|
|
| 821 |
|
|
|
| (214 | ) |
|
| 607 |
|
Total other comprehensive income (loss) before |
|
| (57,388 | ) |
|
| — |
|
|
| (425 | ) |
|
| (57,813 | ) |
|
|
| 15,270 |
|
|
| (42,543 | ) |
Amounts reclassified from accumulated other comprehensive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Amortization of unrealized holding losses on |
|
| 3,333 |
|
|
| — |
|
|
| — |
|
|
| 3,333 |
| (a) |
|
| (871 | ) |
|
| 2,462 |
|
Gains realized in net income |
|
| (8 | ) |
|
| — |
|
|
| — |
|
|
| (8 | ) | (b) |
|
| 2 |
|
|
| (6 | ) |
Accretion of net gain on terminated cash flow hedges |
|
| — |
|
|
| — |
|
|
| (90 | ) |
|
| (90 | ) | (c) |
|
| 24 |
|
|
| (66 | ) |
Net yield adjustment from cash flow hedges |
|
| — |
|
|
| — |
|
|
| (206,713 | ) |
|
| (206,713 | ) | (a) |
|
| 53,997 |
|
|
| (152,716 | ) |
Amortization of prior service credit |
|
| — |
|
|
| (3,139 | ) |
|
| — |
|
|
| (3,139 | ) | (d) |
|
| 860 |
|
|
| (2,279 | ) |
Amortization of actuarial losses |
|
| — |
|
|
| 65,792 |
|
|
| — |
|
|
| 65,792 |
| (d) |
|
| (18,031 | ) |
|
| 47,761 |
|
Total other comprehensive income (loss) |
|
| (54,063 | ) |
|
| 62,653 |
|
|
| (207,228 | ) |
|
| (198,638 | ) |
|
|
| 51,251 |
|
|
| (147,387 | ) |
Balance — September 30, 2021 |
| $ | 141,323 |
|
|
| (587,434 | ) |
|
| 162,330 |
|
| $ | (283,781 | ) |
|
|
| 73,362 |
|
| $ | (210,419 | ) |
|
| Investment |
|
| Defined Benefit |
|
|
|
|
|
| Total Amount |
|
|
| Income |
|
|
|
|
| ||||
|
| Securities |
|
| Plans |
|
| Other |
|
| Before Tax |
|
|
| Tax |
|
| Net |
| ||||||
|
| (In thousands) |
| ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance — January 1, 2021 |
| $ | 195,386 |
|
|
| (650,087 | ) |
|
| 369,558 |
|
| $ | (85,143 | ) |
|
|
| 22,111 |
|
| $ | (63,032 | ) |
Other comprehensive income before reclassifications: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding losses, net |
|
| (57,388 | ) |
|
| — |
|
|
| — |
|
|
| (57,388 | ) |
|
|
| 15,124 |
|
|
| (42,264 | ) |
Foreign currency translation adjustment |
|
| — |
|
|
| — |
|
|
| (1,246 | ) |
|
| (1,246 | ) |
|
|
| 360 |
|
|
| (886 | ) |
Unrealized gains on cash flow hedges |
|
| — |
|
|
| — |
|
|
| 821 |
|
|
| 821 |
|
|
|
| (214 | ) |
|
| 607 |
|
Total other comprehensive income (loss) before reclassifications |
|
| (57,388 | ) |
|
| — |
|
|
| (425 | ) |
|
| (57,813 | ) |
|
|
| 15,270 |
|
|
| (42,543 | ) |
Amounts reclassified from accumulated other comprehensive income that (increase) decrease net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of unrealized holding losses on held-to-maturity (“HTM”) securities |
|
| 3,333 |
|
|
| — |
|
|
| — |
|
|
| 3,333 |
| (a) |
|
| (871 | ) |
|
| 2,462 |
|
Gains realized in net income |
|
| (8 | ) |
|
| — |
|
|
| — |
|
|
| (8 | ) | (b) |
|
| 2 |
|
|
| (6 | ) |
Accretion of net gain on terminated cash flow hedges |
|
|
|
|
|
| — |
|
|
| (90 | ) |
|
| (90 | ) | (c) |
|
| 24 |
|
|
| (66 | ) |
Net yield adjustment from cash flow hedges currently in effect |
|
|
|
|
|
| — |
|
|
| (206,713 | ) |
|
| (206,713 | ) | (a) |
|
| 53,997 |
|
|
| (152,716 | ) |
Amortization of prior service credit |
|
| — |
|
|
| (3,139 | ) |
|
| — |
|
|
| (3,139 | ) | (d) |
|
| 860 |
|
|
| (2,279 | ) |
Amortization of actuarial losses |
|
| — |
|
|
| 65,792 |
|
|
| — |
|
|
| 65,792 |
| (d) |
|
| (18,031 | ) |
|
| 47,761 |
|
Total other comprehensive income (loss) |
|
| (54,063 | ) |
|
| 62,653 |
|
|
| (207,228 | ) |
|
| (198,638 | ) |
|
|
| 51,251 |
|
|
| (147,387 | ) |
Balance — September 30, 2021 |
| $ | 141,323 |
|
|
| (587,434 | ) |
|
| 162,330 |
|
| $ | (283,781 | ) |
|
|
| 73,362 |
|
| $ | (210,419 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance — January 1, 2020 |
| $ | 50,701 |
|
|
| (464,548 | ) |
|
| 133,888 |
|
| $ | (279,959 | ) |
|
|
| 73,279 |
|
| $ | (206,680 | ) |
Other comprehensive income before reclassifications: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding gains, net |
|
| 151,777 |
|
|
| — |
|
|
| — |
|
|
| 151,777 |
|
|
|
| (39,277 | ) |
|
| 112,500 |
|
Foreign currency translation adjustment |
|
| — |
|
|
| — |
|
|
| (222 | ) |
|
| (222 | ) |
|
|
| (39 | ) |
|
| (261 | ) |
Unrealized gains on cash flow hedges |
|
| — |
|
|
| — |
|
|
| 508,226 |
|
|
| 508,226 |
|
|
|
| (131,504 | ) |
|
| 376,722 |
|
Total other comprehensive income before reclassifications |
|
| 151,777 |
|
|
| — |
|
|
| 508,004 |
|
|
| 659,781 |
|
|
|
| (170,820 | ) |
|
| 488,961 |
|
Amounts reclassified from accumulated other comprehensive income that (increase) decrease net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of unrealized holding losses on HTM securities |
|
| 2,678 |
|
|
| — |
|
|
| — |
|
|
| 2,678 |
| (a) |
|
| (725 | ) |
|
| 1,953 |
|
Gains realized in net income |
|
| (3 | ) |
|
| — |
|
|
| — |
|
|
| (3 | ) | (b) |
|
| 1 |
|
|
| (2 | ) |
Accretion of net gain on terminated cash flow hedges |
|
| — |
|
|
| — |
|
|
| (94 | ) |
|
| (94 | ) | (c) |
|
| 26 |
|
|
| (68 | ) |
Net yield adjustment from cash flow hedges currently in effect |
|
| — |
|
|
| — |
|
|
| (183,598 | ) |
|
| (183,598 | ) | (a) |
|
| 47,506 |
|
|
| (136,092 | ) |
Amortization of prior service credit |
|
| — |
|
|
| (3,140 | ) |
|
| — |
|
|
| (3,140 | ) | (d) |
|
| 927 |
|
|
| (2,213 | ) |
Amortization of actuarial losses |
|
| — |
|
|
| 42,080 |
|
|
| — |
|
|
| 42,080 |
| (d) |
|
| (12,436 | ) |
|
| 29,644 |
|
Total other comprehensive income |
|
| 154,452 |
|
|
| 38,940 |
|
|
| 324,312 |
|
|
| 517,704 |
|
|
|
| (135,521 | ) |
|
| 382,183 |
|
Balance — September 30, 2020 |
| $ | 205,153 |
|
|
| (425,608 | ) |
|
| 458,200 |
|
| $ | 237,745 |
|
|
|
| (62,242 | ) |
| $ | 175,503 |
|
| (b) Included in gain (loss) on bank investment securities. (c) Included in interest expense. (d) Included in other costs of operations.
|
|
|
|
|
|
|
|
- 31 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
10. Comprehensive income, continued
Accumulated other comprehensive income (loss), net consisted of the following:
|
|
|
|
| Defined |
|
|
|
|
|
|
| ||||
|
| Investment |
|
| Benefit |
|
|
|
|
|
|
| ||||
|
| Securities |
|
| Plans |
|
| Other |
|
| Total |
| ||||
|
| (In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Balance — December 31, 2021 |
| $ | 77,625 |
|
| $ | (267,145 | ) |
| $ | 61,942 |
|
| $ | (127,578 | ) |
Net gain (loss) during period |
|
| (425,770 | ) |
|
| 9,160 |
|
|
| (355,805 | ) |
|
| (772,415 | ) |
Balance — September 30, 2022 |
| $ | (348,145 | ) |
| $ | (257,985 | ) |
| $ | (293,863 | ) |
| $ | (899,993 | ) |
- 32 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
|
|
|
|
|
| Defined |
|
|
|
|
|
|
|
|
| |
|
| Investment |
|
| Benefit |
|
|
|
|
|
|
|
|
| ||
|
| Securities |
|
| Plans |
|
| Other |
|
| Total |
| ||||
|
| (In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance — December 31, 2020 |
| $ | 144,602 |
|
| $ | (481,064 | ) |
| $ | 273,430 |
|
| $ | (63,032 | ) |
Net gain (loss) during period |
|
| (39,808 | ) |
|
| 45,482 |
|
|
| (153,061 | ) |
|
| (147,387 | ) |
Balance — September 30, 2021 |
| $ | 104,794 |
|
| $ | (435,582 | ) |
| $ | 120,369 |
|
| $ | (210,419 | ) |
11. Derivative financial instruments
As part of managing interest rate risk, the Company enters into interest rate swap agreements to modify the repricing characteristics of certain portions of the Company’s portfolios of earning assets and interest-bearing liabilities. The Company designates interest rate swap agreements utilized in the management of interest rate risk as either fair value hedges or cash flow hedges. Interest rate swap agreements are generally entered into with counterparties that meet established credit standards and most contain master netting, collateral and/or settlement provisions protecting the at-risk party. Based on adherence to the Company’s credit standards and the presence of the netting, collateral or settlement provisions, the Company believes that the credit risk inherent in these contracts was not material as of September 30, 2021.2022.
The net effect of interest rate swap agreements was to decrease net interest income by $22 million and to increase net interest income by $67 million and $233 million during three-month and the nine-month periods ended September 30, 2021, respectively, and by $95 million and $212$50 million during the three-month and nine-month periods ended September 30, 2020,2022, respectively, and to increase net interest income by $67 million and $233 million during the three-month and nine-month periods ended September 30, 2021, respectively.
Information about interest rate swap agreements entered into for interest rate risk management purposes summarized by type of financial instrument the swap agreements were intended to hedge follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
| Weighted- |
|
| Estimated |
| ||||||||
|
| Notional |
|
| Average |
|
| Average Rate |
|
| Fair Value |
| ||||||||
|
| Amount |
|
| Maturity |
|
| Fixed |
|
| Variable |
|
| Gain (Loss) (a) |
| |||||
|
| (In thousands) |
|
| (In years) |
|
|
|
|
|
|
|
| (In thousands) |
| |||||
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Fair value hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Fixed rate long-term borrowings (b) |
| $ | 1,500,000 |
|
|
| 3.5 |
|
|
| 2.98 | % |
|
| 3.59 | % |
| $ | (2,765 | ) |
Cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest payments on variable rate |
|
| 19,900,000 |
|
|
| 1.3 |
|
|
| 1.80 | % |
|
| 3.09 | % |
|
| (8,730 | ) |
Total |
| $ | 21,400,000 |
|
|
| 1.5 |
|
|
|
|
|
|
|
| $ | (11,495 | ) | ||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Fair value hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Fixed rate long-term borrowings (b) |
| $ | 1,650,000 |
|
|
| 2.3 |
|
|
| 2.86 | % |
|
| 0.74 | % |
| $ | 41 |
|
Cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest payments on variable rate |
|
| 21,700,000 |
|
|
| 0.6 |
|
|
| 1.24 | % |
|
| 0.09 | % |
|
| (248 | ) |
Total |
| $ | 23,350,000 |
|
|
| 0.7 |
|
|
|
|
|
|
|
| $ | (207 | ) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted- |
|
| Estimated |
| ||||||
|
| Notional |
|
| Average |
|
| Average Rate |
|
| Fair Value |
| ||||||||
|
| Amount |
|
| Maturity |
|
| Fixed |
|
| Variable |
|
| Gain (Loss) (a) |
| |||||
|
| (In thousands) |
|
| (In years) |
|
|
|
|
|
|
|
|
|
| (In thousands) |
| |||
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate long-term borrowings (b) |
| $ | 1,650,000 |
|
|
| 2.6 |
|
|
| 2.86 | % |
|
| 0.73 | % |
| $ | 728 |
|
Cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest payments on variable rate commercial real estate loans (b)(c) |
|
| 25,700,000 |
|
|
| 0.7 |
|
|
| 1.28 | % |
|
| 0.08 | % |
|
| 656 |
|
Total |
| $ | 27,350,000 |
|
|
| 0.8 |
|
|
|
|
|
|
|
|
|
| $ | 1,384 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate long-term borrowings (b) |
| $ | 1,650,000 |
|
|
| 3.3 |
|
|
| 2.86 | % |
|
| 0.79 | % |
| $ | 651 |
|
Cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest payments on variable rate commercial real estate loans (b)(d) |
|
| 49,400,000 |
|
|
| 0.9 |
|
|
| 2.22 | % |
|
| 0.15 | % |
|
| 425 |
|
Total |
| $ | 51,050,000 |
|
|
| 1.0 |
|
|
|
|
|
|
|
|
|
| $ | 1,076 |
|
|
|
|
|
|
|
|
|
- 32 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
11. Derivative financial instruments, continued
The Company utilizes commitments to sell residential and commercial real estate loans to hedge the exposure to changes in the fair value of real estate loans held for sale. Such commitments have generally been designated as fair value hedges. The Company also utilizes commitments to sell real estate loans to offset the exposure to changes in fair value of certain commitments to originate real estate loans for sale.
Derivative financial instruments used for trading account purposesnot designated as hedging instruments included interest rate contracts, foreign exchange and other option contracts, foreign exchange forward and spot contracts, and financial futures.futures contracts. Interest rate contracts entered into for trading account purposesnot designated as hedging instruments had notional values of $34.5$45.6 billion and $37.8$32.6 billion at September 30, 20212022 and December 31, 2020,2021, respectively. The notional amounts of foreign currencyexchange and other option and futures contracts entered into for trading account purposesnot designated as hedging instruments aggregated $815 million$1.9 billion and $776 million$1.1 billion at September 30, 20212022 and December 31, 2020,2021, respectively.
- 33 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
11. Derivative financial instruments, continued
Information about the fair values of derivative instruments in the Company’s consolidated balance sheet and consolidated statement of income follows:
|
| Asset Derivatives |
|
| Liability Derivatives |
| ||||||||||
|
| Fair Value |
|
| Fair Value |
| ||||||||||
|
| September 30, |
|
| December 31, |
|
| September 30, |
|
| December 31, |
| ||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
| (In thousands) |
| |||||||||||||
Derivatives designated and qualifying as hedging instruments (a) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest rate swap agreements |
| $ | 228 |
|
| $ | 258 |
|
| $ | 11,723 |
|
| $ | 465 |
|
Commitments to sell real estate loans |
|
| 18,364 |
|
|
| 4,044 |
|
|
| 4 |
|
|
| 548 |
|
|
|
| 18,592 |
|
|
| 4,302 |
|
|
| 11,727 |
|
|
| 1,013 |
|
Derivatives not designated and qualifying as hedging instruments (a) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage banking: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mortgage-related commitments to originate real estate loans for sale |
|
| 843 |
|
|
| 11,728 |
|
|
| 49,149 |
|
|
| 5,288 |
|
Commitments to sell real estate loans |
|
| 56,167 |
|
|
| 8,137 |
|
|
| — |
|
|
| 4,108 |
|
Other: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest rate contracts (b) |
|
| 371,834 |
|
|
| 410,056 |
|
|
| 1,378,145 |
|
|
| 76,278 |
|
Foreign exchange and other option and futures contracts |
|
| 44,431 |
|
|
| 8,230 |
|
|
| 42,343 |
|
|
| 7,156 |
|
|
|
| 473,275 |
|
|
| 438,151 |
|
|
| 1,469,637 |
|
|
| 92,830 |
|
Total derivatives |
| $ | 491,867 |
|
| $ | 442,453 |
|
| $ | 1,481,364 |
|
| $ | 93,843 |
|
|
| Asset Derivatives |
|
| Liability Derivatives |
| ||||||||||
|
| Fair Value |
|
| Fair Value |
| ||||||||||
|
| September 30, |
|
| December 31, |
|
| September 30, |
|
| December 31, |
| ||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
| (In thousands) |
| |||||||||||||
Derivatives designated and qualifying as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap agreements (a) |
| $ | 1,608 |
|
| $ | 1,968 |
|
| $ | 224 |
|
| $ | 892 |
|
Commitments to sell real estate loans (a) |
|
| 6,712 |
|
|
| 1,488 |
|
|
| 769 |
|
|
| 8,458 |
|
|
|
| 8,320 |
|
|
| 3,456 |
|
|
| 993 |
|
|
| 9,350 |
|
Derivatives not designated and qualifying as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-related commitments to originate real estate loans for sale (a) |
|
| 24,459 |
|
|
| 43,599 |
|
|
| 4,314 |
|
|
| 365 |
|
Commitments to sell real estate loans (a) |
|
| 11,604 |
|
|
| 2,409 |
|
|
| 7,813 |
|
|
| 13,868 |
|
Trading: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts (b) |
|
| 565,332 |
|
|
| 1,008,913 |
|
|
| 84,909 |
|
|
| 105,768 |
|
Foreign exchange and other option and futures contracts (b) |
|
| 8,304 |
|
|
| 9,608 |
|
|
| 7,740 |
|
|
| 11,134 |
|
|
|
| 609,699 |
|
|
| 1,064,529 |
|
|
| 104,776 |
|
|
| 131,135 |
|
Total derivatives |
| $ | 618,019 |
|
| $ | 1,067,985 |
|
| $ | 105,769 |
|
| $ | 140,485 |
|
|
|
|
| Amount of Gain (Loss) Recognized |
| |||||||||||||
|
| Three Months Ended September 30 |
| |||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||
|
| Derivative |
|
| Hedged Item |
|
| Derivative |
|
| Hedged Item |
| ||||
|
| (In thousands) |
| |||||||||||||
Derivatives in fair value hedging relationships |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest rate swap agreements: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed rate long-term borrowings (a) |
| $ | (50,976 | ) |
|
| 50,821 |
|
| $ | (9,713 | ) |
|
| 9,636 |
|
Derivatives not designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest rate contracts (b) |
| $ | 6,946 |
|
|
|
|
| $ | 2,068 |
|
|
|
| ||
Foreign exchange and other option and futures contracts (b) |
|
| 4,462 |
|
|
|
|
|
| 3,060 |
|
|
|
| ||
Total |
| $ | 11,408 |
|
|
|
|
| $ | 5,128 |
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| Amount of Gain (Loss) Recognized |
| |||||||||||||
|
| Nine Months Ended September 30 |
| |||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||
|
| Derivative |
|
| Hedged Item |
|
| Derivative |
|
| Hedged Item |
| ||||
|
| (In thousands) |
| |||||||||||||
Derivatives in fair value hedging relationships |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest rate swap agreements: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed rate long-term borrowings (a) |
| $ | (114,932 | ) |
|
| 114,581 |
|
| $ | (42,217 | ) |
|
| 41,456 |
|
Derivatives not designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest rate contracts (b) |
| $ | 17,907 |
|
|
|
|
| $ | 8,047 |
|
|
|
| ||
Foreign exchange and other option and futures contracts (b) |
|
| 10,701 |
|
|
|
|
|
| 6,286 |
|
|
|
| ||
Total |
| $ | 28,608 |
|
|
|
|
| $ | 14,333 |
|
|
|
| ||
|
|
- 3334 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
11. Derivative financial instruments, continued
|
| Amount of Gain (Loss) Recognized |
| |||||||||||||
|
| Three Months Ended September 30, 2021 |
|
| Three Months Ended September 30, 2020 |
| ||||||||||
|
| Derivative |
|
| Hedged Item |
|
| Derivative |
|
| Hedged Item |
| ||||
|
| (In thousands) |
| |||||||||||||
Derivatives in fair value hedging relationships |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap agreements: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate long-term borrowings (a) |
| $ | (9,713 | ) |
|
| 9,636 |
|
| $ | (13,067 | ) |
|
| 12,822 |
|
Derivatives not designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts (b) |
| $ | (3,456 | ) |
|
|
|
|
| $ | (4,776 | ) |
|
|
|
|
Foreign exchange and other option and futures contracts (b) |
|
| 3,060 |
|
|
|
|
|
|
| 1,486 |
|
|
|
|
|
Total |
| $ | (396 | ) |
|
|
|
|
| $ | (3,290 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amount of Gain (Loss) Recognized |
| |||||||||||||
|
| Nine Months Ended September 30, 2021 |
|
| Nine Months Ended September 30, 2020 |
| ||||||||||
|
| Derivative |
|
| Hedged Item |
|
| Derivative |
|
| Hedged Item |
| ||||
|
| (In thousands) |
| |||||||||||||
Derivatives in fair value hedging relationships |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap agreements: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate long-term borrowings (a) |
| $ | (42,217 | ) |
|
| 41,456 |
|
| $ | 75,760 |
|
|
| (75,607 | ) |
Derivatives not designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts (b) |
| $ | (9,434 | ) |
|
|
|
|
| $ | 8,988 |
|
|
|
|
|
Foreign exchange and other option and futures contracts (b) |
|
| 6,286 |
|
|
|
|
|
|
| 6,555 |
|
|
|
|
|
Total |
| $ | (3,148 | ) |
|
|
|
|
| $ | 15,543 |
|
|
|
|
|
|
|
|
|
- 34 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
11. Derivative financial instruments, continued
|
| Carrying Amount of the Hedged Item |
|
| Cumulative Amount of Fair Value Hedging Adjustment Increasing (Decreasing) the Carrying Amount of the Hedged Item |
|
| Carrying Amount of the Hedged Item |
|
| Cumulative Amount of Fair Value Hedging Adjustment Increasing (Decreasing) the Carrying Amount of the |
| ||||||||||||||||||||
|
| September 30, 2021 |
|
| December 31, 2020 |
|
| September 30, 2021 |
|
| December 31, 2020 |
|
| September 30, 2022 |
|
| December 31, 2021 |
|
| September 30, 2022 |
|
| December 31, 2021 |
| ||||||||
|
| (In thousands) |
|
| (In thousands) |
| ||||||||||||||||||||||||||
Location in the Consolidated Balance Sheet of the Hedged Items in Fair Value Hedges | Location in the Consolidated Balance Sheet of the Hedged Items in Fair Value Hedges |
| Location in the Consolidated Balance Sheet |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Long-term debt |
| $ | 1,708,872 |
|
| $ | 1,750,048 |
|
| $ | 59,714 |
|
| $ | 101,326 |
|
| $ | 1,427,977 |
|
| $ | 1,692,943 |
|
| $ | (70,971 | ) |
| $ | 43,610 |
|
The amount of interest income recognized in the consolidated statement of income associated with derivatives designated as cash flow hedges was $58a decrease of $22 million and $82an increase of $58 million for the three months ended September 30, 20212022 and 2020,2021, respectively, and $207an increase of $36 million and $184$207 million for the nine months ended September 30, 20212022 and 2020,2021, respectively. As of September 30, 20212022 the unrealized gainnet loss recognized in other comprehensive income related to cash flow hedges was $167$377 million, of which $4losses of $16 million, $119$75 million and $44$286 million related to interest rate swap agreements maturing in 2021, 2022, 2023, and 2023,2025, respectively.
The Company also has commitments to sell and commitments to originate residential and commercial real estate loans that are considered derivatives. The Company designates certain of the commitments to sell real estate loans as fair value hedges of real estate loans held for sale. The Company also utilizes commitments to sell real estate loans to offset the exposure to changes in the fair value of certain commitments to originate real estate loans for sale. As a result of these activities, net unrealized pre-tax gains related to hedged loans held for sale, commitments to originate loans for sale and commitments to sell loans were approximately $36$12 million and $64$24 million at September 30, 20212022 and December 31, 2020,2021, respectively. Changes in unrealized gains and losses are included in mortgage banking revenues and, in general, are realized in subsequent periods as the related loans are sold and commitments satisfied.
The Company does not offset derivative asset and liability positions in its consolidated financial statements. The Company’s exposure to credit risk by entering into derivative contracts is mitigated through master netting agreements and collateral posting or settlement requirements. Master netting agreements covering interest rate and foreign exchange contracts with the same party include a right to set-off that becomes enforceable in the event of default, early termination or under other specific conditions.
The aggregate fair value of derivative financial instruments in a liability position and the net liability positions with counterparties which are subject to master netting arrangements was $53$1 million and $114$35 million at September 30, 20212022 and December 31, 2020,2021, respectively. The Company was required to post collateral relating tofor those positions of $52$33 million and $103 millionat December 31, 2021. No collateral was posted for those positions at September 30, 2021 and December 31, 2020, respectively.2022. Certain of the Company’s derivative financial instruments contain provisions that require the Company to maintain specific credit ratings from credit rating agencies to avoid higher collateral posting requirements. If the Company’s debt rating were to fall below specified ratings, the counterparties of the derivative financial instruments could demand immediate incremental collateralization on those instruments in a net liability position. The aggregate fair value of all derivative financial instruments with such credit risk-related contingent features in a net liability position on September 30, 20212022 was not material.
The aggregate fair value of derivative financial instruments in an asset position and the net asset positions with counterparties which are subject to enforceable master netting arrangements was $4$316 million at September 30, 20212022 and $3$7 million at December 31, 2020.2021. Counterparties posted collateral relating to those positions of $4 million and $3$308 million at those respective dates. Trading account interestSeptember 30, 2022 and $6 million at December 31, 2021. Interest rate swap agreements entered into with customers are subject to the Company’s credit risk standards and often contain collateral provisions.
- 35 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
11. Derivative financial instruments, continued
In addition to the derivative contracts noted above, the Company clears certain derivative transactions through a clearinghouse, rather than directly with counterparties. Those transactions cleared through a clearinghouse require initial margin collateral and variation margin payments depending on the contracts being in a net asset or liability position. The amount of initial margin collateral posted by the Company was $136$215 million and $135$132 million at September 30, 20212022 and December 31, 2020,2021, respectively. The fair value asset and liability amounts of derivative contracts have been reduced by variation margin payments treated as settlements as described herein. Variation margin on derivative contracts not treated as settlements continues to represent collateral posted or received by the Company.
12. Variable interest entities and asset securitizations
The Company’s securitization activity has consisted of securitizing loans originated for sale into government issued or guaranteed mortgage-backed securities.The Company has 0tnot recognized any losses as a result of having securitized assets.
As described in note 5, M&T has issued junior subordinated debentures payable to various trusts that have issued Capital Securities. M&T owns the common securities of those trust entities. The Company is not considered to be the primary beneficiary of those entities and, accordingly, the trusts are not included in the Company’s consolidated financial statements. At each of September 30, 20212022 and December 31, 2020,2021, the Company included the junior subordinated debentures as “long-term borrowings” in its consolidated balance sheet and recognized $23$23 million in other assets for its “investment” in the common securities of the trusts that will be concomitantly repaid to M&T by the respective trust from the proceeds of M&T’s repayment of the junior subordinated debentures associated with preferred capital securities described in note 5.
The Company has invested as a limited partner in various partnerships that collectively had total assets of approximately $2.9$8.5 billion at September 30, 20212022 and $2.3$3.0 billion at December 31, 2020.2021. Those partnerships generally construct or acquire properties for which the investing partners are eligible to receive certain federal income tax credits in accordance with government guidelines. Such investments may also provide tax deductible losses to the partners. The partnership investments also assist the Company in achieving its community reinvestment initiatives. As a limited partner, there is no recourse to the Company by creditors of the partnerships. However, the tax credits that result from the Company’s investments in such partnerships are generally subject to recapture should a partnership fail to comply with the respective government regulations. The Company’s carrying amount of its investments in such partnerships was $858 million,$1.4 billion, including $341$505 million of unfunded commitments, at September 30, 20212022 and $861$933 million, including $406$361 million of unfunded commitments, at December 31, 2020.2021. Contingent commitments to provide additional capital contributions to these partnerships were not material at September 30, 2021.2022. The Company has not provided financial or other support to the partnerships that was not contractually required. The Company’s maximum exposure to loss from its investments in such partnerships as of September 30, 20212022 was $1.1$1.6 billion, including possible recapture of certain tax credits. Management currently estimates that no material losses are probable as a result of the Company’s involvement with such entities. The Company, in its position as limited partner, does not direct the activities that most significantly impact the economic performance of the partnerships and, therefore, in accordance with the accounting provisions for variable interest entities, the partnership entities are not included in the Company’s consolidated financial statements. The Company’s investment in qualified affordable housing projects is amortized to income taxes in the consolidated statement of income as tax credits and other tax benefits resulting from deductible losses associated with the projects are received. The Company amortized $25$37 million and $63$94 million of its investments in qualified affordable housing projects to income tax expense during the three-month and nine-month periods ended September 30, 2021,2022, respectively, and recognized $27$44 million and $70$108 million of tax credits and other tax benefits during those respective periods. Similarly, for the three-month and nine-month periods ended September 30, 2020,2021, the Company amortized $22$25 million and $65$63 million of its investments in qualified affordable housing projects to income tax expense, respectively, and recognized $26$27 million and $78$70 million of tax credits and other tax benefits during those respective periods.
- 36 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
12. Variable interest entities and asset securitizations, continued
The Company serves as investment advisor for certain registered money-market funds. The Company has no explicit arrangement to provide support to those funds, but may waive portions of its allowable management fees as a result of market conditionsconditions.
.- 36 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair value measurements
GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has not made any fair value elections at September 30, 2021.2022.
Pursuant to GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy exists in GAAP for fair value measurements based upon the inputs to the valuation of an asset or liability.
| • Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities. • Level 2 — Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market. • Level 3 — Valuation is derived from model-based and other techniques in which at least one significant input is unobservable and which may be based on the Company's own estimates about the assumptions that market participants would use to value the asset or liability.
|
|
|
|
|
|
When available, the Company attempts to use quoted market prices in active markets to determine fair value and classifies such items as Level 1 or Level 2. If quoted market prices in active markets are not available, fair value is often determined using model-based techniques incorporating various assumptions including interest rates, prepayment speeds and credit losses. Assets and liabilities valued using model-based techniques are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation. The following is a description of the valuation methodologies used for the Company's assets and liabilities that are measured on a recurring basis at estimated fair value.
Trading account assets and liabilities
Trading account assets and liabilities consist primarily of interest rate contracts and foreign exchange contracts with customers who require such services with offsetting positions with third parties to minimize the Company's risk with respect to such transactions. The Company generally determines the fair value of its derivative trading account assets and liabilities using externally developed pricing models based on market observable inputs and, therefore, classifies such valuations as Level 2. Mutual funds held in connection with deferred compensation and other arrangements have been classified as Level 1 valuations. Valuations of investments in municipal and other bondsdebt securities can generally be obtained through reference to quoted prices in less active markets for the same or similar securities or through model-based techniques in which all significant inputs are observable and, therefore, such valuations have been classified as Level 2.
Investment securities available for sale and equity securities
The majority of the Company's available-for-sale investment securities have been valued by reference to prices for similar securities or through model-based techniques in which all significant inputs are observable and, therefore, such valuations have been classified as Level 2. Certain investments in mutual funds and equity securities are actively traded and, therefore, have been classified as Level 1 valuations.
- 37 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair value measurements, continued
Real estate loans held for sale
The Company utilizes commitments to sell real estate loans to hedge the exposure to changes in fair value of real estate loans held for sale. The carrying value of hedged real estate loans held for sale includes changes in estimated fair value during the hedge period. Typically, the Company attempts to hedge real estate loans held for sale from the date of close through the sale date. The fair value of hedged real estate loans held for sale is generally calculated by reference to quoted prices in secondary markets for commitments to sell real estate loans with similar characteristics and, accordingly, such loans have been classified as a Level 2 valuation.
- 37 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair value measurements, continued
Commitments to originate real estate loans for sale and commitments to sell real estate loans
The Company enters into various commitments to originate real estate loans for sale and commitments to sell real estate loans. Such commitments are considered to beaccounted for as derivative financial instruments and, therefore, are carried at estimated fair value on the consolidated balance sheet. The estimated fair values of such commitments were generally calculated by reference to quoted prices in secondary markets for commitments to sell real estate loans to certain government-sponsored entities and other parties. The fair valuations of commitments to sell real estate loans generally result in a Level 2 classification. The estimated fair value of commitments to originate real estate loans for sale are adjusted to reflect the Company's anticipated commitment expirations. The estimated commitment expirations are considered significant unobservable inputs contributing to the Level 3 classification of commitments to originate real estate loans for sale. Significant unobservable inputs used in the determination of estimated fair value of commitments to originate real estate loans for sale are included in the accompanying table of significant unobservable inputs to Level 3 measurements.
Interest rate swap agreements used for interest rate risk management
The Company utilizes interest rate swap agreements as part of the management of interest rate risk to modify the repricing characteristics of certain portions of its portfolios of earning assets and interest-bearing liabilities. The Company generally determines the fair value of its interest rate swap agreements using externally developed pricing models based on market observable inputs and, therefore, classifies such valuations as Level 2. The Company has considered counterparty credit risk in the valuation of its interest rate swap agreement assets and has considered its own credit risk in the valuation of its interest rate swap agreement liabilities.
Non-hedging derivatives
Non-hedging derivatives consist primarily of interest rate contracts and foreign exchange contracts with customers who require such services with offsetting positions with third parties to minimize the Company's risk with respect to such transactions. The Company generally determines the fair value of its non-hedging derivative assets and liabilities using externally developed pricing models based on market observable inputs and, therefore, classifies such valuations as Level 2.
- 38 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair value measurements, continued
The following tables present assets and liabilities at September 30, 20212022 and December 31, 20202021 measured at estimated fair value on a recurring basis:
|
| Fair Value Measurements |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||
|
| (In thousands) |
| |||||||||||||
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Trading account |
| $ | 129,672 |
|
| $ | 129,672 |
|
| $ | — |
|
| $ | — |
|
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury and federal agencies |
|
| 7,658,728 |
|
|
| — |
|
|
| 7,658,728 |
|
|
| — |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Government issued or guaranteed |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commercial |
|
| 606,571 |
|
|
| — |
|
|
| 606,571 |
|
|
| — |
|
Residential |
|
| 2,430,946 |
|
|
| — |
|
|
| 2,430,946 |
|
|
| — |
|
Other debt securities |
|
| 174,101 |
|
|
| — |
|
|
| 174,101 |
|
|
| — |
|
|
|
| 10,870,346 |
|
|
| — |
|
|
| 10,870,346 |
|
|
| — |
|
Equity securities |
|
| 194,537 |
|
|
| 184,811 |
|
|
| 9,726 |
|
|
| — |
|
Real estate loans held for sale |
|
| 342,720 |
|
|
| — |
|
|
| 342,720 |
|
|
| — |
|
Other assets (a) |
|
| 491,867 |
|
|
| — |
|
|
| 491,024 |
|
|
| 843 |
|
Total assets |
| $ | 12,029,142 |
|
| $ | 314,483 |
|
| $ | 11,713,816 |
|
| $ | 843 |
|
Other liabilities (a) |
|
| 1,481,364 |
|
|
| — |
|
|
| 1,432,215 |
|
|
| 49,149 |
|
Total liabilities |
| $ | 1,481,364 |
|
| $ | — |
|
| $ | 1,432,215 |
|
| $ | 49,149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Trading account |
| $ | 49,745 |
|
| $ | 49,545 |
|
| $ | 200 |
|
| $ | — |
|
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury and federal agencies |
|
| 678,690 |
|
|
| — |
|
|
| 678,690 |
|
|
| — |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Government issued or guaranteed |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Residential |
|
| 3,155,312 |
|
|
| — |
|
|
| 3,155,312 |
|
|
| — |
|
Other debt securities |
|
| 121,802 |
|
|
| — |
|
|
| 121,802 |
|
|
| — |
|
|
|
| 3,955,804 |
|
|
| — |
|
|
| 3,955,804 |
|
|
| — |
|
Equity securities |
|
| 77,640 |
|
|
| 68,850 |
|
|
| 8,790 |
|
|
| — |
|
Real estate loans held for sale |
|
| 899,282 |
|
|
| — |
|
|
| 899,282 |
|
|
| — |
|
Other assets (a) |
|
| 442,453 |
|
|
| — |
|
|
| 430,725 |
|
|
| 11,728 |
|
Total assets |
| $ | 5,424,924 |
|
| $ | 118,395 |
|
| $ | 5,294,801 |
|
| $ | 11,728 |
|
Other liabilities (a) |
|
| 93,843 |
|
|
| — |
|
|
| 88,555 |
|
|
| 5,288 |
|
Total liabilities |
| $ | 93,843 |
|
| $ | — |
|
| $ | 88,555 |
|
| $ | 5,288 |
|
|
| Fair Value Measurements |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||
|
| (In thousands) |
| |||||||||||||
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading account assets |
| $ | 624,556 |
|
| $ | 50,335 |
|
| $ | 574,221 |
|
| $ | — |
|
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and federal agencies |
|
| 9,744 |
|
|
| — |
|
|
| 9,744 |
|
|
| — |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government issued or guaranteed |
|
| 3,475,479 |
|
|
| — |
|
|
| 3,475,479 |
|
|
| — |
|
Other debt securities |
|
| 132,883 |
|
|
| — |
|
|
| 132,883 |
|
|
| — |
|
|
|
| 3,618,106 |
|
|
| — |
|
|
| 3,618,106 |
|
|
| — |
|
Equity securities |
|
| 82,456 |
|
|
| 75,169 |
|
|
| 7,287 |
|
|
| — |
|
Real estate loans held for sale |
|
| 838,051 |
|
|
| — |
|
|
| 838,051 |
|
|
| — |
|
Other assets (a) |
|
| 44,383 |
|
|
| — |
|
|
| 19,924 |
|
|
| 24,459 |
|
Total assets |
| $ | 5,207,552 |
|
| $ | 125,504 |
|
| $ | 5,057,589 |
|
| $ | 24,459 |
|
Trading account liabilities |
| $ | 92,649 |
|
| $ | — |
|
| $ | 92,649 |
|
| $ | — |
|
Other liabilities (a) |
|
| 13,120 |
|
|
| — |
|
|
| 8,806 |
|
|
| 4,314 |
|
Total liabilities |
| $ | 105,769 |
|
| $ | — |
|
| $ | 101,455 |
|
| $ | 4,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading account assets |
| $ | 1,068,581 |
|
| $ | 50,060 |
|
| $ | 1,018,521 |
|
| $ | — |
|
Investment securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and federal agencies |
|
| 9,338 |
|
|
| — |
|
|
| 9,338 |
|
|
| — |
|
Mortgage-backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government issued or guaranteed |
|
| 4,683,438 |
|
|
| — |
|
|
| 4,683,438 |
|
|
| — |
|
Privately issued |
|
| 16 |
|
|
| — |
|
|
| — |
|
|
| 16 |
|
Other debt securities |
|
| 129,814 |
|
|
| — |
|
|
| 129,814 |
|
|
| — |
|
|
|
| 4,822,606 |
|
|
| — |
|
|
| 4,822,590 |
|
|
| 16 |
|
Equity securities |
|
| 92,985 |
|
|
| 63,129 |
|
|
| 29,856 |
|
|
| — |
|
Real estate loans held for sale |
|
| 1,054,676 |
|
|
| — |
|
|
| 1,054,676 |
|
|
| — |
|
Other assets (a) |
|
| 49,464 |
|
|
| — |
|
|
| 5,865 |
|
|
| 43,599 |
|
Total assets |
| $ | 7,088,312 |
|
| $ | 113,189 |
|
| $ | 6,931,508 |
|
| $ | 43,615 |
|
Trading account liabilities |
| $ | 116,902 |
|
| $ | — |
|
| $ | 116,902 |
|
| $ | — |
|
Other liabilities (a) |
|
| 23,583 |
|
|
| — |
|
|
| 23,218 |
|
|
| 365 |
|
Total liabilities |
| $ | 140,485 |
|
| $ | — |
|
| $ | 140,120 |
|
| $ | 365 |
|
|
|
- 39 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair value measurements, continued
The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the three months ended September 30, 20212022 and 20202021 were as follows:
|
| Other Assets and Other Liabilities |
|
| |
2022 |
| (In thousands) |
|
| |
|
|
|
|
| |
Balance — June 30, 2022 |
| $ | (24,181 | ) |
|
Total gains (losses) realized/unrealized: |
|
|
|
| |
Included in earnings |
|
| (9,321 | ) | (a) |
Transfers out of Level 3 |
|
| (14,804 | ) | (b) |
Balance — September 30, 2022 |
| $ | (48,306 | ) |
|
Changes in unrealized gains included in earnings |
| $ | (17,160 | ) | (a) |
|
|
|
|
| |
2021 |
|
|
|
| |
|
|
|
|
| |
Balance — June 30, 2021 |
| $ | 35,666 |
|
|
Total gains realized/unrealized: |
|
|
|
| |
Included in earnings |
|
| 44,152 |
| (a) |
Transfers out of Level 3 |
|
| (59,673 | ) | (b) |
Balance — September 30, 2021 |
| $ | 20,145 |
|
|
Changes in unrealized gains included in earnings |
| $ | 18,196 |
| (a) |
| (a) Reported as mortgage banking revenues in the consolidated statement of income and includes the fair value of commitment issuances and expirations. (b) Transfers out of Level 3 consist of interest rate locks transferred to closed loans.
|
| ||||||||
|
| ||||||||
|
| ||||||||
|
|
|
| ||||||
| |||||||||
|
|
|
| ||||||
|
|
| |||||||
|
|
|
|
| |||||
|
|
|
| ||||||
|
|
|
|
| |||||
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance — June 30, 2020 |
| $ | 16 |
|
|
| 40,106 |
|
|
Total gains realized/unrealized: |
|
|
|
|
|
|
|
|
|
Included in earnings |
|
| — |
|
|
| 57,819 |
| (a) |
Transfers out of Level 3 |
|
| — |
|
|
| (46,422 | ) | (b) |
Balance — September 30, 2020 |
| $ | 16 |
|
|
| 51,503 |
|
|
Changes in unrealized gains included in earnings related to assets still held at September 30, 2020 |
| $ | — |
|
|
| 44,127 |
| (a) |
- 40 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair value measurements, continued
The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the nine months ended September 30, 20212022 and 20202021 were as follows:
|
| Investment Securities |
|
|
|
|
| ||
|
| Privately Issued Mortgage-Backed Securities |
|
| Other Assets and Other Liabilities |
|
| ||
2022 |
| (In thousands) |
|
| |||||
|
|
|
|
|
|
|
| ||
Balance — January 1, 2022 |
| $ | — |
|
| $ | 6,440 |
|
|
Total gains (losses) realized/unrealized: |
|
|
|
|
|
|
| ||
Included in earnings |
|
| — |
|
|
| (34,630 | ) | (a) |
Transfers out of Level 3 |
|
| — |
|
|
| (20,116 | ) | (b) |
Balance — September 30, 2022 |
| $ | — |
|
| $ | (48,306 | ) |
|
Changes in unrealized gains included in earnings |
| $ | — |
|
| $ | (48,108 | ) | (a) |
2021 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
Balance — January 1, 2021 |
| $ | 16 |
|
| $ | 43,234 |
|
|
Total gains realized/unrealized: |
|
|
|
|
|
|
| ||
Included in earnings |
|
| — |
|
|
| 102,489 |
| (a) |
Settlements |
|
| (16 | ) |
|
| — |
|
|
Transfers out of Level 3 |
|
| — |
|
|
| (125,578 | ) | (b) |
Balance — September 30, 2021 |
| $ | — |
|
| $ | 20,145 |
|
|
Changes in unrealized gains included in earnings |
| $ | — |
|
| $ | 21,722 |
| (a) |
|
| Investment Securities Available for Sale |
|
|
|
|
|
| |
|
| Privately Issued Mortgage-Backed Securities |
|
| Other Assets and Other Liabilities |
|
| ||
2021 |
| (In thousands) |
|
| |||||
|
|
|
|
|
|
|
|
|
|
Balance — January 1, 2021 |
| $ | 16 |
|
|
| 43,234 |
|
|
Total gains realized/unrealized: |
|
|
|
|
|
|
|
|
|
Included in earnings |
|
| — |
|
|
| 102,489 |
| (a) |
Settlements |
|
| (16 | ) |
|
| — |
|
|
Transfers out of Level 3 |
|
| — |
|
|
| (125,578 | ) | (b) |
Balance — September 30, 2021 |
| $ | — |
|
|
| 20,145 |
|
|
Changes in unrealized gains included in earnings related to assets still held at September 30, 2021 |
| $ | — |
|
|
| 21,722 |
| (a) |
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance — January 1, 2020 |
| $ | 16 |
|
|
| 10,740 |
|
|
Total gains realized/unrealized: |
|
|
|
|
|
|
|
|
|
Included in earnings |
|
| — |
|
|
| 150,632 |
| (a) |
Transfers out of Level 3 |
|
| — |
|
|
| (109,869 | ) | (b) |
Balance — September 30, 2020 |
| $ | 16 |
|
|
| 51,503 |
|
|
Changes in unrealized gains included in earnings related to assets still held at September 30, 2020 |
| $ | — |
|
|
| 50,411 |
| (a) |
- 41 - NOTES TO FINANCIAL STATEMENTS, CONTINUED 13. Fair value measurements, continued
|
|
|
|
The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements. The more significant of those assets follow.
- 41 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Loans
13. Fair value measurements, continued
Loans
Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectable portions of those loans. Nonrecurring adjustments also include certain impairment amounts for collateral-dependent loans when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace and the related nonrecurring fair value measurement adjustments have been classified as Level 2, unless significant adjustments have been made to the valuation that are not readily observable by market participants. Non-real estate collateral supporting commercial loans generally consists of business assets such as receivables, inventory and equipment. Fair value estimations are typically determined by discounting recorded values of those assets to reflect estimated net realizable value consideringspecific borrower facts and circumstances and the experience of credit personnel in their dealings with similar borrower collateral liquidations. Such discounts were in the range of 15%15% to 90%90% with a weighted-average of 39%37% at September 30, 2021.2022. As these discounts are not readily observable and are considered significant, the valuations have been classified as Level 3. Automobile collateral is typically valued by reference to independent pricing sources based on recent sales transactions of similar vehicles and, accordingly, the related nonrecurring fair value measurement adjustments have been classified as Level 2. Collateral values for other consumer installment loans are generally estimated based on historical recovery rates for similar types of loans which at September 30, 20212022 was 64%66%. As these recovery rates are not readily observable by market participants, such valuation adjustments have been classified as Level 3. Loans subject to nonrecurring fair value measurement were $591$706 million at September 30, 20212022 ($330439 million and $261$267 million of which were classified as Level 2 and Level 3, respectively), $652$574 million at December 31, 20202021 ($339340 million and $313$234 million of which were classified as Level 2 and Level 3, respectively) and $387$591 million at September 30, 20202021 ($159330 million and $228$261 million of which were classified as Level 2 and Level 3, respectively). Changes in fair value recognized for partial charge-offs of loans and loan impairment reserves on loans held by the Company on September 30, 20212022 were decreases of $35$38 million and $125$128 million for the three-month and nine-month periods ended September 30, 2021,2022, respectively. Changes in fair value recognized for partial charge-offs of loans and loan impairment reserves on loans held by the Company on September 30, 20202021 were decreases of $82$35 million and $153$125 million for the three-month and nine-month periods ended September 30, 2020,2021, respectively.
- 42 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair value measurements, continued
Assets taken in foreclosure of defaulted loans
Assets taken in foreclosure of defaulted loans are primarily comprised of commercial and residential real property and are generally measured at the lower of cost or fair value less costs to sell. The fair value of the real property is generally determined using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace and accordingly, the related nonrecurring fair value measurement adjustments have generally been classified as Level 2. Assets taken ininto foreclosure of defaulted loans subject to nonrecurring fair value measurement were $4 million and $27 millionnot material at September 30, 20212022 and 2020, respectively.2021. Changes in fair value recognized for those foreclosed assets held by the Company were not material during the three-month and nine-month periods ended September 30, 20212022 and 2020.
- 42 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2021.
13. Fair value measurements, continued
Capitalized servicing rights
Capitalized servicing rights are initially measured at fair value in the Company’s consolidated balance sheet. The Company utilizes the amortization method to subsequently measure its capitalized servicing assets. In accordance with GAAP, the Company must record impairment charges, on a nonrecurring basis, when the carrying value of certain strata exceed their estimated fair value. To estimate the fair value of servicing rights, the Company considers market prices for similar assets, if available, and the present value of expected future cash flows associated with the servicing rights calculated using assumptions that market participants would use in estimating future servicing income and expense. Such assumptions include estimates of the cost of servicing loans, loan default rates, an appropriate discount rate, and prepayment speeds. For purposes of evaluating and measuring impairment of capitalized servicing rights, the Company stratifies such assets based on the predominant risk characteristics of the underlying financial instruments that are expected to have the most impact on projected prepayments, cost of servicing and other factors affecting future cash flows associated with the servicing rights. Such factors may include financial asset or loan type, note rate and term. The amount of impairment recognized is the amount by which the carrying value of the capitalized servicing rights for a stratum exceed estimated fair value. Impairment is recognized through a valuation allowance. The determination of fair value of capitalized servicing rights is considered a Level 3 valuation. Capitalized servicing rights related to residential mortgage loans of $147 million and $159$138 million at September 30, 2021 and December 31, 2020, respectively,2021 required a valuation allowance of $29 million and $30 million, respectively.$24 million. Significant unobservable inputs used in this Level 3 valuation included a weighted-average prepayment speedsspeed of 14.96% and 16.01% at September 30, 2021 and December 31, 2020, respectively,14.64% and a weighted-average option-adjusted spread of 900 basis points at each date.December 31, 2021. Changes in fair value recognized for impairment of capitalized servicing rights werea decrease decreases in the valuation allowance of $1$10 million and $24 million, respectively, for the three-month and nine-month periods ended September 30, 2022 and $1 million during the nine monthsnine-month period ended September 30, 2021 and an increase in the valuation allowance of $20 million during the nine months ended September 30, 2020. There were 0 impairment charges for capitalized servicing rights during the three months ended September 30, 2021 or 2020. 2021.
Significant unobservable inputs to Level 3 measurements
The following tables presenttable presents quantitative information about significant unobservable inputs used in the fair value measurements for certain Level 3 assets and liabilities at September 30, 20212022 and December 31, 2020:2021:
|
| Fair Value |
|
| Valuation |
| Unobservable |
| Range | |
|
| (In thousands) |
|
|
|
|
|
|
| |
September 30, 2022 |
|
|
|
|
|
|
|
|
| |
Recurring fair value measurements |
|
|
|
|
|
|
|
|
| |
Net other assets (liabilities) (a) |
| $ | (48,306 | ) |
| Discounted cash flow |
| Commitment expirations |
| 0% - 90% (4%) |
|
|
|
|
|
|
|
|
|
| |
December 31, 2021 |
|
|
|
|
|
|
|
|
| |
Recurring fair value measurements |
|
|
|
|
|
|
|
|
| |
Net other assets (liabilities) (a) |
| $ | 6,440 |
|
| Discounted cash flow |
| Commitment expirations |
| 0% - 80% (10%) |
|
| Fair Value |
|
| Valuation Technique |
| Unobservable Inputs/Assumptions |
|
| Range (Weighted- Average) |
| |||
|
| (In thousands) |
|
|
|
|
|
|
|
|
|
|
| |
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring fair value measurements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net other assets (liabilities) (a) |
|
| 20,145 |
|
| Discounted cash flow |
| Commitment expirations |
|
| 0% - 93% (14%) |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring fair value measurements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Privately issued mortgage- backed securities |
| $ | 16 |
|
| Two independent pricing quotes |
|
| — |
|
|
| — |
|
Net other assets (liabilities) (a) |
|
| 43,234 |
|
| Discounted cash flow |
| Commitment expirations |
|
| 0% - 98% (16%) |
| ||
|
|
- 43 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair value measurements, continued
Sensitivity of fair value measurements to changes in unobservable inputs
An increase (decrease) in the estimate of expirations for commitments to originate real estate loans would generally result in a lower (higher)fair value measurement. Estimated commitment expirations are derived considering loan type, changes in interest rates and remaining length of time until closing.
Disclosures of fair value of financial instruments
The carrying amounts and estimated fair value for financial instrument assets (liabilities) are presented in the following table:tables:
|
| September 30, 2021 |
|
| September 30, 2022 |
| ||||||||||||||||||||||||||||||||||
|
| Carrying Amount |
|
| Estimated Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Carrying |
|
| Estimated |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||||
|
| (In thousands) |
|
| (In thousands) |
| ||||||||||||||||||||||||||||||||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents |
| $ | 1,479,712 |
|
|
| 1,479,712 |
|
|
| 1,351,944 |
|
|
| 127,768 |
|
|
| — |
|
| $ | 2,255,810 |
|
|
| 2,255,810 |
|
|
| 2,115,730 |
|
|
| 140,080 |
|
|
| — |
|
Interest-bearing deposits at banks |
|
| 38,445,788 |
|
|
| 38,445,788 |
|
|
| — |
|
|
| 38,445,788 |
|
|
| — |
|
|
| 25,391,528 |
|
|
| 25,391,528 |
|
|
| — |
|
|
| 25,391,528 |
|
|
| — |
|
Trading account assets |
|
| 624,556 |
|
|
| 624,556 |
|
|
| 50,335 |
|
|
| 574,221 |
|
|
| — |
| ||||||||||||||||||||
Trading account |
|
| 129,672 |
|
|
| 129,672 |
|
|
| 129,672 |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||
Investment securities |
|
| 6,447,622 |
|
|
| 6,501,833 |
|
|
| 75,169 |
|
|
| 6,364,735 |
|
|
| 61,929 |
|
|
| 24,603,765 |
|
|
| 23,259,558 |
|
|
| 184,811 |
|
|
| 23,021,349 |
|
|
| 53,398 |
|
Loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Commercial loans and leases |
|
| 22,514,940 |
|
|
| 22,315,530 |
|
|
| — |
|
|
| — |
|
|
| 22,315,530 |
|
|
| 38,807,949 |
|
|
| 38,230,478 |
|
|
| — |
|
|
| — |
|
|
| 38,230,478 |
|
Commercial real estate loans |
|
| 37,023,952 |
|
|
| 36,312,089 |
|
|
| — |
|
|
| 558,970 |
|
|
| 35,753,119 |
|
|
| 46,138,665 |
|
|
| 44,324,720 |
|
|
| — |
|
|
| 300,373 |
|
|
| 44,024,347 |
|
Residential real estate loans |
|
| 16,209,354 |
|
|
| 16,397,551 |
|
|
| — |
|
|
| 3,902,745 |
|
|
| 12,494,806 |
|
|
| 23,074,280 |
|
|
| 21,173,522 |
|
|
| — |
|
|
| 7,262,522 |
|
|
| 13,911,000 |
|
Consumer loans |
|
| 17,834,648 |
|
|
| 17,935,068 |
|
|
| — |
|
|
| — |
|
|
| 17,935,068 |
|
|
| 20,204,693 |
|
|
| 19,844,173 |
|
|
| — |
|
|
| — |
|
|
| 19,844,173 |
|
Allowance for credit losses |
|
| (1,515,024 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,875,591 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Loans and leases, net |
|
| 92,067,870 |
|
|
| 92,960,238 |
|
|
| — |
|
|
| 4,461,715 |
|
|
| 88,498,523 |
|
|
| 126,349,996 |
|
|
| 123,572,893 |
|
|
| — |
|
|
| 7,562,895 |
|
|
| 116,009,998 |
|
Accrued interest receivable |
|
| 378,433 |
|
|
| 378,433 |
|
|
| — |
|
|
| 378,433 |
|
|
| — |
|
|
| 539,270 |
|
|
| 539,270 |
|
|
| — |
|
|
| 539,270 |
|
|
| — |
|
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Noninterest-bearing deposits |
| $ | (56,542,309 | ) |
|
| (56,542,309 | ) |
|
| — |
|
|
| (56,542,309 | ) |
|
| — |
|
| $ | (73,023,271 | ) |
|
| (73,023,271 | ) |
|
| — |
|
|
| (73,023,271 | ) |
|
| — |
|
Savings and interest-checking deposits |
|
| (69,195,960 | ) |
|
| (69,195,960 | ) |
|
| — |
|
|
| (69,195,960 | ) |
|
| — |
|
|
| (86,015,700 | ) |
|
| (86,015,700 | ) |
|
| — |
|
|
| (86,015,700 | ) |
|
| — |
|
Time deposits |
|
| (2,963,027 | ) |
|
| (2,967,906 | ) |
|
| — |
|
|
| (2,967,906 | ) |
|
| — |
|
|
| (4,806,417 | ) |
|
| (4,797,112 | ) |
|
| — |
|
|
| (4,797,112 | ) |
|
| — |
|
Short-term borrowings |
|
| (103,548 | ) |
|
| (103,548 | ) |
|
| — |
|
|
| (103,548 | ) |
|
| — |
|
|
| (917,806 | ) |
|
| (917,806 | ) |
|
| — |
|
|
| (917,806 | ) |
|
| — |
|
Long-term borrowings |
|
| (3,500,391 | ) |
|
| (3,605,637 | ) |
|
| — |
|
|
| (3,605,637 | ) |
|
| — |
|
|
| (3,459,336 | ) |
|
| (3,431,790 | ) |
|
| — |
|
|
| (3,431,790 | ) |
|
| — |
|
Accrued interest payable |
|
| (38,808 | ) |
|
| (38,808 | ) |
|
| — |
|
|
| (38,808 | ) |
|
| — |
|
|
| (38,502 | ) |
|
| (38,502 | ) |
|
| — |
|
|
| (38,502 | ) |
|
| — |
|
Trading account liabilities |
|
| (92,649 | ) |
|
| (92,649 | ) |
|
| — |
|
|
| (92,649 | ) |
|
| — |
| ||||||||||||||||||||
Other financial instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Commitments to originate real estate loans for sale |
| $ | 20,145 |
|
|
| 20,145 |
|
|
| — |
|
|
| — |
|
|
| 20,145 |
|
| $ | (48,306 | ) |
|
| (48,306 | ) |
|
| — |
|
|
| — |
|
|
| (48,306 | ) |
Commitments to sell real estate loans |
|
| 9,734 |
|
|
| 9,734 |
|
|
| — |
|
|
| 9,734 |
|
|
| — |
|
|
| 74,527 |
|
|
| 74,527 |
|
|
| — |
|
|
| 74,527 |
|
|
| — |
|
Other credit-related commitments |
|
| (124,145 | ) |
|
| (124,145 | ) |
|
| — |
|
|
| — |
|
|
| (124,145 | ) |
|
| (135,000 | ) |
|
| (135,000 | ) |
|
| — |
|
|
| — |
|
|
| (135,000 | ) |
Interest rate swap agreements used for interest rate risk management |
|
| 1,384 |
|
|
| 1,384 |
|
|
| — |
|
|
| 1,384 |
|
|
| — |
|
|
| (11,495 | ) |
|
| (11,495 | ) |
|
| — |
|
|
| (11,495 | ) |
|
| — |
|
Interest rate and foreign exchange contracts |
|
| (1,004,223 | ) |
|
| (1,004,223 | ) |
|
| — |
|
|
| (1,004,223 | ) |
|
| — |
| ||||||||||||||||||||
- 44 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair value measurements, continued
|
| December 31, 2020 |
|
| December 31, 2021 |
| ||||||||||||||||||||||||||||||||||
|
| Carrying Amount |
|
| Estimated Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Carrying |
|
| Estimated |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||||
|
|
|
|
|
| (In thousands) |
|
|
|
|
|
|
|
| (In thousands) |
|
|
| ||||||||||||||||||||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents |
| $ | 1,552,743 |
|
|
| 1,552,743 |
|
|
| 1,497,457 |
|
|
| 55,286 |
|
|
| — |
|
| $ | 1,337,577 |
|
|
| 1,337,577 |
|
|
| 1,205,269 |
|
|
| 132,308 |
|
|
| — |
|
Interest-bearing deposits at banks |
|
| 23,663,810 |
|
|
| 23,663,810 |
|
|
| — |
|
|
| 23,663,810 |
|
|
| — |
|
|
| 41,872,304 |
|
|
| 41,872,304 |
|
|
| — |
|
|
| 41,872,304 |
|
|
| — |
|
Trading account assets |
|
| 1,068,581 |
|
|
| 1,068,581 |
|
|
| 50,060 |
|
|
| 1,018,521 |
|
|
| — |
| ||||||||||||||||||||
Trading account |
|
| 49,745 |
|
|
| 49,745 |
|
|
| 49,545 |
|
|
| 200 |
|
|
| — |
| ||||||||||||||||||||
Investment securities |
|
| 7,045,697 |
|
|
| 7,138,989 |
|
|
| 63,129 |
|
|
| 7,005,571 |
|
|
| 70,289 |
|
|
| 7,155,860 |
|
|
| 7,192,476 |
|
|
| 68,850 |
|
|
| 7,066,293 |
|
|
| 57,333 |
|
Loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Commercial loans and leases |
|
| 27,574,564 |
|
|
| 27,220,699 |
|
|
| — |
|
|
| — |
|
|
| 27,220,699 |
|
|
| 23,473,324 |
|
|
| 23,285,224 |
|
|
| — |
|
|
| — |
|
|
| 23,285,224 |
|
Commercial real estate loans |
|
| 37,637,889 |
|
|
| 36,816,580 |
|
|
| — |
|
|
| 277,911 |
|
|
| 36,538,669 |
|
|
| 35,389,730 |
|
|
| 34,730,191 |
|
|
| — |
|
|
| 425,010 |
|
|
| 34,305,181 |
|
Residential real estate loans |
|
| 16,752,993 |
|
|
| 17,089,141 |
|
|
| — |
|
|
| 4,135,655 |
|
|
| 12,953,486 |
|
|
| 16,074,445 |
|
|
| 16,160,799 |
|
|
| — |
|
|
| 4,524,018 |
|
|
| 11,636,781 |
|
Consumer loans |
|
| 16,570,421 |
|
|
| 16,554,050 |
|
|
| — |
|
|
| — |
|
|
| 16,554,050 |
|
|
| 17,974,953 |
|
|
| 18,121,363 |
|
|
| — |
|
|
| — |
|
|
| 18,121,363 |
|
Allowance for credit losses |
|
| (1,736,387 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,469,226 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Loans and leases, net |
|
| 96,799,480 |
|
|
| 97,680,470 |
|
|
| — |
|
|
| 4,413,566 |
|
|
| 93,266,904 |
|
|
| 91,443,226 |
|
|
| 92,297,577 |
|
|
| — |
|
|
| 4,949,028 |
|
|
| 87,348,549 |
|
Accrued interest receivable |
|
| 419,936 |
|
|
| 419,936 |
|
|
| — |
|
|
| 419,936 |
|
|
| — |
|
|
| 335,162 |
|
|
| 335,162 |
|
|
| — |
|
|
| 335,162 |
|
|
| — |
|
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Noninterest-bearing deposits |
| $ | (47,572,884 | ) |
|
| (47,572,884 | ) |
|
| — |
|
|
| (47,572,884 | ) |
|
| — |
|
| $ | (60,131,480 | ) |
|
| (60,131,480 | ) |
|
| — |
|
|
| (60,131,480 | ) |
|
| — |
|
Savings and interest-checking deposits |
|
| (67,680,840 | ) |
|
| (67,680,840 | ) |
|
| — |
|
|
| (67,680,840 | ) |
|
| — |
|
|
| (68,603,966 | ) |
|
| (68,603,966 | ) |
|
| — |
|
|
| (68,603,966 | ) |
|
| — |
|
Time deposits |
|
| (3,899,910 | ) |
|
| (3,919,367 | ) |
|
| — |
|
|
| (3,919,367 | ) |
|
| — |
|
|
| (2,807,963 | ) |
|
| (2,810,143 | ) |
|
| — |
|
|
| (2,810,143 | ) |
|
| — |
|
Deposits at Cayman Islands office |
|
| (652,104 | ) |
|
| (652,104 | ) |
|
| — |
|
|
| (652,104 | ) |
|
| — |
| ||||||||||||||||||||
Short-term borrowings |
|
| (59,482 | ) |
|
| (59,482 | ) |
|
| — |
|
|
| (59,482 | ) |
|
| — |
|
|
| (47,046 | ) |
|
| (47,046 | ) |
|
| — |
|
|
| (47,046 | ) |
|
| — |
|
Long-term borrowings |
|
| (4,382,193 | ) |
|
| (4,490,433 | ) |
|
| — |
|
|
| (4,490,433 | ) |
|
| — |
|
|
| (3,485,369 | ) |
|
| (3,562,223 | ) |
|
| — |
|
|
| (3,562,223 | ) |
|
| — |
|
Accrued interest payable |
|
| (59,916 | ) |
|
| (59,916 | ) |
|
| — |
|
|
| (59,916 | ) |
|
| — |
|
|
| (40,866 | ) |
|
| (40,866 | ) |
|
| — |
|
|
| (40,866 | ) |
|
| — |
|
Trading account liabilities |
|
| (116,902 | ) |
|
| (116,902 | ) |
|
| — |
|
|
| (116,902 | ) |
|
| — |
| ||||||||||||||||||||
Other financial instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Commitments to originate real estate loans for sale |
| $ | 43,234 |
|
|
| 43,234 |
|
|
| — |
|
|
| — |
|
|
| 43,234 |
|
| $ | 6,440 |
|
|
| 6,440 |
|
|
| — |
|
|
| — |
|
|
| 6,440 |
|
Commitments to sell real estate loans |
|
| (18,429 | ) |
|
| (18,429 | ) |
|
| — |
|
|
| (18,429 | ) |
|
| — |
|
|
| 7,525 |
|
|
| 7,525 |
|
|
| — |
|
|
| 7,525 |
|
|
| — |
|
Other credit-related commitments |
|
| (133,354 | ) |
|
| (133,354 | ) |
|
| — |
|
|
| — |
|
|
| (133,354 | ) |
|
| (123,032 | ) |
|
| (123,032 | ) |
|
| — |
|
|
| — |
|
|
| (123,032 | ) |
Interest rate swap agreements used for interest rate risk management |
|
| 1,076 |
|
|
| 1,076 |
|
|
| — |
|
|
| 1,076 |
|
|
| — |
|
|
| (207 | ) |
|
| (207 | ) |
|
| — |
|
|
| (207 | ) |
|
| — |
|
Interest rate and foreign exchange contracts |
|
| 334,852 |
|
|
| 334,852 |
|
|
| — |
|
|
| 334,852 |
|
|
| — |
| ||||||||||||||||||||
With the exception of marketable securities, certain off-balance sheet financial instruments and mortgage loans originated for sale, the Company’s financial instruments are not readily marketable and market prices do not exist. The Company, in attempting to comply with the provisions of GAAP that require disclosures of fair value of financial instruments, has not attempted to market its financial instruments to potential buyers, if any exist. Since negotiated prices in illiquid markets depend greatly upon the then present motivations of the buyer and seller, it is reasonable to assume that actual sales prices could vary widely from any estimate of fair value made without the benefit of negotiations. Additionally, changes in market interest rates can dramatically impact the value of financial instruments in a short period of time.
The Company does not believe that the estimated information presented herein is representative of the earnings power or value of the Company. The preceding analysis, which is inherently limited in depicting fair value, also does not consider any value associated with existing customer relationships nor the ability of the Company to create value through loan origination, deposit gathering or fee generating activities. Many of the estimates presented herein are based upon the use of highly subjective information and assumptions and, accordingly, the results may not be precise. Management believes that fair value estimates may not be comparable between financial institutions due to the wide range of permitted valuation techniques and numerous estimates which must be made. Furthermore,because the disclosed fair value amounts were estimated as of the balance sheet date, the amounts actually realized or paid upon maturity or settlement of the various financial instruments could be significantly different.
- 45 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
14. Commitments and contingencies
In the normal course of business, various commitments and contingent liabilities are outstanding. The following table presents the Company's significant commitments. Certain of these commitments are not included in the Company's consolidated balance sheet.
| September 30, |
|
| December 31, |
| ||
| 2022 |
|
| 2021 |
| ||
| (In thousands) |
| |||||
Commitments to extend credit |
|
|
|
|
| ||
Home equity lines of credit | $ | 8,317,141 |
|
| $ | 5,693,045 |
|
Commercial real estate loans to be sold |
| 401,369 |
|
|
| 324,943 |
|
Other commercial real estate |
| 5,063,155 |
|
|
| 4,998,631 |
|
Residential real estate loans to be sold |
| 57,155 |
|
|
| 233,257 |
|
Other residential real estate |
| 889,013 |
|
|
| 924,211 |
|
Commercial and other |
| 32,089,753 |
|
|
| 22,145,057 |
|
Standby letters of credit |
| 2,393,048 |
|
|
| 2,151,595 |
|
Commercial letters of credit |
| 28,926 |
|
|
| 31,981 |
|
Financial guarantees and indemnification contracts |
| 3,893,455 |
|
|
| 4,211,797 |
|
Commitments to sell real estate loans |
| 783,405 |
|
|
| 1,367,523 |
|
| September 30, |
|
| December 31, |
| ||
| 2021 |
|
| 2020 |
| ||
| (In thousands) |
| |||||
Commitments to extend credit |
|
|
|
|
|
|
|
Home equity lines of credit | $ | 5,687,595 |
|
| $ | 5,563,854 |
|
Commercial real estate loans to be sold |
| 433,529 |
|
|
| 363,735 |
|
Other commercial real estate |
| 5,747,541 |
|
|
| 7,237,367 |
|
Residential real estate loans to be sold |
| 750,820 |
|
|
| 1,026,118 |
|
Other residential real estate |
| 840,039 |
|
|
| 665,259 |
|
Commercial and other |
| 21,685,356 |
|
|
| 19,427,886 |
|
Standby letters of credit |
| 2,236,321 |
|
|
| 2,241,417 |
|
Commercial letters of credit |
| 34,495 |
|
|
| 27,332 |
|
Financial guarantees and indemnification contracts |
| 4,133,648 |
|
|
| 4,220,531 |
|
Commitments to sell real estate loans |
| 1,788,113 |
|
|
| 2,108,823 |
|
Commitments to extend credit are agreements to lend to customers, generally having fixed expiration dates or other termination clauses that may require payment of a fee. In addition to the amounts in the preceding table, the Company had discretionary funding commitments to commercial customers of $10.6$15.2 billion and $10.4$10.8 billion at September 30, 20212022 and December 31, 2020,2021, respectively, that the Company had the unconditional right to cancel prior to funding. Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party, whereas commercial letters of credit are issued to facilitate commerce and typically result in the commitment being funded when the underlying transaction is consummated between the customer and a third party. The credit risk associated with commitments to extend credit and standby and commercial letters of credit is essentially the same as that involved with extending loans to customers and is subject to normal credit policies. Collateral may be obtained based on management's assessment of the customer's creditworthiness.
Financial guarantees and indemnification contracts are oftentimes similar to standby letterspredominantly comprised of credit and include mandatory purchase agreements issued to ensure that customer obligations are fulfilled, recourse obligations associated with sold loans and other guarantees of customer performance or compliance with designated rules and regulations.commitments. Included in financial guarantees and indemnification contracts are loan principal amounts sold with recourse in conjunction with the Company's involvement in the Fannie Mae Delegated Underwriting and Servicing program. The Company's maximum credit risk for recourse associated with loans sold under this program totaled approximately $3.9 billion and $4.0$3.7 billion at September 30, 20212022 and $4.0 billion at December 31, 2020, respectively.2021. There have been no material losses incurred as a result of those credit recourse arrangements.
Since many loan commitments, standby letters of credit, and guarantees and indemnification contracts expire without being funded in whole or in part, the contract amounts are not necessarily indicative of future cash flows.
The Company utilizes commitments to sell real estate loans to hedge exposure to changes in the fair value of real estate loans held for sale. Such commitments are consideredaccounted for as derivatives and along with commitments to originate real estate loans to be held for sale are generally recorded in the consolidated balance sheet at estimated fair market value.
- 46 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
14. Commitments and contingencies, continued
The Company is contractually obligated to repurchase previously sold residential real estate loans that do not ultimately meet investor sale criteria related to underwriting procedures or loan documentation. When required to do so, the Company may reimburse loan purchasers for losses incurred or may repurchase certain loans. The Company reduces residential mortgage banking revenues by an estimate for losses related to its obligations to loan purchasers.
- 46 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
14. Commitments and contingencies, continued
The amount of those charges is based on the volume of loans sold, the level of reimbursement requests received from loan purchasers and estimates of losses that may be associated with previously sold loans. At September 30, 2021,2022, the Company believes that its obligation to loan purchasers was not material to the Company’s consolidated financial position.
M&T and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings and matters in which claims for monetary damages are asserted. On an on-going basis management, after consultation with legal counsel, assesses the Company’s liabilities and contingencies in connection with such proceedings. For those matters where it is probable that the Company will incur losses and the amounts of the losses can be reasonably estimated, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent pending or threatened litigation could result in exposure in excess of the recordedthat liability, the amount of such excess is not currently estimable. Although not considered probable, the range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability, was estimated to be between $0$0 and $25$25 million as of September 30, 2021.2022. Although the Company does not believe that the outcome of pending legal matters will be material to the Company’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future.
15. Segment information
Reportable segments have been determined based upon the Company's internal profitability reporting system, which is organized by strategic business unit. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer and the distribution of those products and services are similar. The reportable segments are Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking.
The financial information of the Company's segments was compiled utilizing the accounting policies described in note 2223 of Notes to Financial Statements in the 20202021 Annual Report. The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, the financial information of the reported segments is not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data. Information about the Company's segments follows.
- 47 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
15. Segment information, continued
|
| Three Months Ended September 30 |
| |||||||||||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||
|
| Total |
|
| Inter- |
|
| Net |
|
| Total |
|
| Inter- |
|
| Net |
| ||||||
|
| (In thousands) |
| |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Business Banking |
| $ | 241,629 |
|
| $ | 663 |
|
| $ | 94,094 |
|
| $ | 181,873 |
|
| $ | 694 |
|
| $ | 72,017 |
|
Commercial Banking |
|
| 510,549 |
|
|
| 802 |
|
|
| 214,063 |
|
|
| 295,209 |
|
|
| 1,009 |
|
|
| 144,367 |
|
Commercial Real Estate |
|
| 234,479 |
|
|
| 249 |
|
|
| 94,937 |
|
|
| 228,317 |
|
|
| 227 |
|
|
| 84,663 |
|
Discretionary Portfolio |
|
| 36,622 |
|
|
| (23,044 | ) |
|
| 11,813 |
|
|
| 112,529 |
|
|
| (14,448 | ) |
|
| 74,666 |
|
Residential Mortgage Banking |
|
| 95,091 |
|
|
| 35,647 |
|
|
| (3,283 | ) |
|
| 159,213 |
|
|
| 25,150 |
|
|
| 46,077 |
|
Retail Banking |
|
| 650,229 |
|
|
| (5 | ) |
|
| 181,639 |
|
|
| 357,335 |
|
|
| (53 | ) |
|
| 88,004 |
|
All Other |
|
| 473,171 |
|
|
| (14,312 | ) |
|
| 53,333 |
|
|
| 201,900 |
|
|
| (12,579 | ) |
|
| (14,334 | ) |
Total |
| $ | 2,241,770 |
|
| $ | — |
|
| $ | 646,596 |
|
| $ | 1,536,376 |
|
| $ | — |
|
| $ | 495,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Information about
|
| Nine Months Ended September 30 |
| |||||||||||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||
|
| Total |
|
| Inter- |
|
| Net |
|
| Total |
|
| Inter- |
|
| Net |
| ||||||
|
| (In thousands) |
| |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Business Banking |
| $ | 586,605 |
|
| $ | 2,060 |
|
| $ | 205,741 |
|
| $ | 482,874 |
|
| $ | 2,157 |
|
| $ | 159,895 |
|
Commercial Banking (b) |
|
| 1,239,300 |
|
|
| 2,605 |
|
|
| 521,749 |
|
|
| 865,780 |
|
|
| 2,830 |
|
|
| 378,040 |
|
Commercial Real Estate |
|
| 676,176 |
|
|
| 687 |
|
|
| 314,284 |
|
|
| 629,719 |
|
|
| 679 |
|
|
| 242,625 |
|
Discretionary Portfolio |
|
| 190,761 |
|
|
| (74,952 | ) |
|
| 103,283 |
|
|
| 365,380 |
|
|
| (34,554 | ) |
|
| 243,744 |
|
Residential Mortgage Banking |
|
| 346,409 |
|
|
| 110,986 |
|
|
| 35,028 |
|
|
| 459,655 |
|
|
| 70,208 |
|
|
| 125,791 |
|
Retail Banking (b) |
|
| 1,523,992 |
|
|
| (12 | ) |
|
| 379,688 |
|
|
| 1,055,240 |
|
|
| 500 |
|
|
| 262,562 |
|
All Other (b) |
|
| 1,106,405 |
|
|
| (41,374 | ) |
|
| (333,481 | ) |
|
| 620,694 |
|
|
| (41,820 | ) |
|
| (11,879 | ) |
Total |
| $ | 5,669,648 |
|
| $ | — |
|
| $ | 1,226,292 |
|
| $ | 4,479,342 |
|
| $ | — |
|
| $ | 1,400,778 |
|
|
| Three Months Ended September 30 |
| |||||||||||||||||||||
|
| 2021 |
|
| 2020 |
| ||||||||||||||||||
|
| Total Revenues(a) |
|
| Inter- segment Revenues |
|
| Net Income (Loss) |
|
| Total Revenues(a) |
|
| Inter- segment Revenues |
|
| Net Income (Loss) |
| ||||||
|
| (In thousands) |
| |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Banking |
| $ | 181,873 |
|
|
| 694 |
|
|
| 72,017 |
|
| $ | 131,566 |
|
|
| (1 | ) |
|
| 35,614 |
|
Commercial Banking |
|
| 295,209 |
|
|
| 1,009 |
|
|
| 144,367 |
|
|
| 276,125 |
|
|
| 117 |
|
|
| 131,414 |
|
Commercial Real Estate |
|
| 228,317 |
|
|
| 227 |
|
|
| 84,663 |
|
|
| 202,987 |
|
|
| (17 | ) |
|
| 87,095 |
|
Discretionary Portfolio |
|
| 112,529 |
|
|
| (14,448 | ) |
|
| 74,666 |
|
|
| 140,135 |
|
|
| (10,748 | ) |
|
| 97,399 |
|
Residential Mortgage Banking |
|
| 159,213 |
|
|
| 25,150 |
|
|
| 46,077 |
|
|
| 161,151 |
|
|
| 22,190 |
|
|
| 45,318 |
|
Retail Banking |
|
| 357,335 |
|
|
| (53 | ) |
|
| 88,004 |
|
|
| 351,312 |
|
|
| 268 |
|
|
| 85,229 |
|
All Other |
|
| 201,900 |
|
|
| (12,579 | ) |
|
| (14,334 | ) |
|
| 200,380 |
|
|
| (11,809 | ) |
|
| (109,933 | ) |
Total |
| $ | 1,536,376 |
|
|
| — |
|
|
| 495,460 |
|
| $ | 1,463,656 |
|
|
| — |
|
|
| 372,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nine Months Ended September 30 |
|
| Average Total Assets |
| ||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| Nine Months Ended September 30 |
| Year Ended |
| |||||||||||||||||||||||||
|
| Total Revenues(a) |
|
| Inter- segment Revenues |
|
| Net Income (Loss) |
|
| Total Revenues(a) |
|
| Inter- segment Revenues |
|
| Net Income (Loss) |
|
| 2022 |
|
| 2021 |
|
| 2021 |
| |||||||||
|
| (In thousands) |
|
| (In millions) |
| ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Business Banking |
| $ | 482,874 |
|
|
| 2,157 |
|
|
| 159,895 |
|
| $ | 407,485 |
|
|
| 1,028 |
|
|
| 106,103 |
|
| $ | 7,515 |
|
| $ | 8,386 |
|
| $ | 8,007 |
|
Commercial Banking |
|
| 865,780 |
|
|
| 2,830 |
|
|
| 378,040 |
|
|
| 855,426 |
|
|
| 1,419 |
|
|
| 386,176 |
|
|
| 40,464 |
|
|
| 29,109 |
|
|
| 28,559 |
|
Commercial Real Estate |
|
| 629,719 |
|
|
| 679 |
|
|
| 242,625 |
|
|
| 653,405 |
|
|
| 452 |
|
|
| 311,586 |
|
|
| 28,811 |
|
|
| 25,913 |
|
|
| 25,628 |
|
Discretionary Portfolio |
|
| 365,380 |
|
|
| (34,554 | ) |
|
| 243,744 |
|
|
| 328,181 |
|
|
| (33,646 | ) |
|
| 218,758 |
|
|
| 40,987 |
|
|
| 22,317 |
|
|
| 22,262 |
|
Residential Mortgage Banking |
|
| 459,655 |
|
|
| 70,208 |
|
|
| 125,791 |
|
|
| 428,757 |
|
|
| 64,623 |
|
|
| 107,334 |
|
|
| 4,370 |
|
|
| 6,582 |
|
|
| 6,463 |
|
Retail Banking |
|
| 1,055,240 |
|
|
| 500 |
|
|
| 262,562 |
|
|
| 1,107,516 |
|
|
| 802 |
|
|
| 281,973 |
|
|
| 20,063 |
|
|
| 17,701 |
|
|
| 17,897 |
|
All Other |
|
| 620,694 |
|
|
| (41,820 | ) |
|
| (11,879 | ) |
|
| 633,461 |
|
|
| (34,678 | ) |
|
| (529,918 | ) |
|
| 45,185 |
|
|
| 40,959 |
|
|
| 43,853 |
|
Total |
| $ | 4,479,342 |
|
|
| — |
|
|
| 1,400,778 |
|
| $ | 4,414,231 |
|
|
| — |
|
|
| 882,012 |
|
| $ | 187,395 |
|
| $ | 150,967 |
|
| $ | 152,669 |
|
|
| Average Total Assets |
| |||||||||
|
| Nine Months Ended September 30 |
|
| Year Ended December 31 |
| ||||||
|
| 2021 |
|
| 2020 |
|
| 2020 |
| |||
|
| (In millions) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Banking |
| $ | 8,386 |
|
|
| 7,902 |
|
|
| 8,152 |
|
Commercial Banking |
|
| 29,109 |
|
|
| 30,450 |
|
|
| 30,338 |
|
Commercial Real Estate |
|
| 25,913 |
|
|
| 25,594 |
|
|
| 25,792 |
|
Discretionary Portfolio |
|
| 22,317 |
|
|
| 27,878 |
|
|
| 27,726 |
|
Residential Mortgage Banking |
|
| 6,582 |
|
|
| 3,530 |
|
|
| 4,038 |
|
Retail Banking |
|
| 17,701 |
|
|
| 16,231 |
|
|
| 16,438 |
|
All Other |
|
| 40,959 |
|
|
| 20,845 |
|
|
| 22,996 |
|
Total |
| $ | 150,967 |
|
|
| 132,430 |
|
|
| 135,480 |
|
|
|
- 48 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
16. Relationship with Bayview Lending Group LLC and Bayview Financial Holdings, L.P.
M&T holds a 20%20% minority interest in Bayview Lending Group LLC ("BLG"), a privately-held commercial mortgage company. That investment had 0no remaining carrying value at September 30, 20212022 as a result of cumulative losses recognized and cash distributions received in prior years. Cash distributions now received from BLG are recognized as income by M&T and included in other revenues from operations. That income totaled $23$30 million duringfor the nine-month period ended September 30, 2020.2022. There were 0was no similar cash distributionsdistribution during the nine-month period ended September 30, 2021 or in the three-month period ended September 30, 2020.2022.
Bayview Financial Holdings, L.P. (together with its affiliates, "Bayview Financial"), a privately-held specialty finance company, is BLG's majority investor. In addition to their common investment in BLG, the Company and Bayview Financial conduct other business activities with each other. The Company has obtained loan servicing rights for mortgage loans from BLG and Bayview Financial having outstanding principal balances of $1.7$1.4 billion and $1.9$1.6 billion at September 30, 20212022 and December 31, 2020,2021, respectively. Revenues from those servicing rights were $2$3 million and $2 million in each of the three-month periods ended September 30, 2022 and 2021, respectively, and 2020 and $7$7 millionfor each of the nine-month periods ended September 30, 20212022 and 2020.2021. The Company sub-services residential mortgage loans for Bayview Financial having outstanding principal balances of $73.2$81.2 billion and $68.1$74.7 billion at September 30, 20212022 and December 31, 2020,2021, respectively. Revenues earned for sub-servicing loans for Bayview Financial were $39$33 million and $30$39 million for the three-month periods ended September 30, 20212022 and 2020,2021, respectively, and $110$119 million and $101$110 million in the nine-month periods ended September 30, 20212022 and 2020,2021, respectively. In addition, the Company held $65$52 million and $77$62 million of mortgage-backed securities in its held-to-maturity portfolio at September 30, 20212022 and December 31, 2020,2021, respectively, that were securitized by Bayview Financial. At September 30, 2021,2022, the Company held $130$298 million of Bayview Financial’s $1.1Financial's $2.0 billion syndicated loan facility. In the first three months of 2021, theThe Company purchased $965held $210 million of delinquent FHA guaranteed mortgage loans, including past due accrued interest, from Bayview Financial for $1.0 billion. The servicing rights for such loans were retained by Bayview Financial, but the Company continues to sub-service the loans.Financial's $1.4 billion syndicated loan facility at December 31, 2021.
- 49 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
17. Recent accounting developments
The following table provides a description of accounting standards that were adopted by the Company in 20212022 as well as standards that are not effective that could have an impact to M&T’s consolidated financial statements upon adoption.
| Standard |
|
| Description |
|
| Required date of adoption |
|
| Effect on consolidated financial statements |
|
|
Standards Adopted in |
| |||||||||
|
|
|
|
| |||||||
- 49 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
17. Recent accounting developments, continued
|
|
|
| ||||||||
| |||||||||||
|
|
|
| ||||||||
- 50 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
17. Recent accounting developments, continued
|
|
|
| ||||||||
| |||||||||||
Changes to Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
|
| The amendments reduce the number of accounting models for convertible debt instruments and convertible preferred stock. The amendments also reduce form-over-substance-based guidance for the derivatives scope exception for
|
|
| January 1, 2022
|
|
|
| ||
- 51 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
17. Recent accounting developments, continued
|
|
|
|
| |||||||
|
| ||||||||||
Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options |
|
| The amendments clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.
|
|
| January 1, 2022
|
|
|
|
- 52 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
17. Recent accounting developments, continued
|
|
|
|
| |||||||
|
| ||||||||||
Lessor’s Accounting for Certain Leases with Variable Lease Payments |
|
| The amendments update the classification guidance for lessors. Under the amended guidance lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if both of the following criteria are met: 1. The lease would have been classified as a sales-type lease or a direct financing lease. 2. The lessor would have otherwise recognized a day-one loss. When a lease is classified as operating, the lessor does not recognize a net investment in the lease, does not derecognize the underlying asset, and, therefore, does not recognize a selling profit or loss. |
|
| January 1, 2022
|
|
| The |
- 50 -
NOTES TO FINANCIAL STATEMENTS, CONTINUED
17. Recent accounting developments, continued
Standard | Description | Required date of adoption | Effect on consolidated financial statements |
| |||||||
|
Standards Not Yet Adopted as of September 30, 2022 | ||||||||||
Accounting for Contract Assets and Contract Liabilities from Contracts with Customers in a Business Combination |
|
| The amendments require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with specified revenue recognition |
|
| January 1, 2023
Early adoption permitted |
|
| The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments. However, if early adoption is elected, the amendments should be applied (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application.
| ||
Fair Value Hedging of Multiple Hedge Layers under Portfolio Layer Method | The amendments allow multiple hedged layers to be designated for a single closed portfolio of financial assets or one or more beneficial interests secured by a portfolio of financial instruments. If multiple hedged layers are designated, the amendments require an analysis to be performed to support the expectation that the aggregate amount of the hedged layers is anticipated to be outstanding for the designated hedge periods. Only closed portfolios may be hedged under the portfolio layer method (that is, no assets can be added to the closed portfolio once established), however designating new hedging relationships and dedesignating existing hedging relationships associated with the closed portfolio any time after the closed portfolio is established is permitted. | January 1, 2023 Early adoption permitted | The amendments should be applied on a modified retrospective basis by means of a cumulative-effect adjustment to the opening balance of retained earnings on the initial application date. The Company does not expect the guidance will have a material impact on its consolidated financial statements. | ||||||||
Accounting for Troubled Debt Restructurings (TDRs) and Expansion of Vintage Disclosures Applicable to Credit Losses | The amendments (1) eliminate the accounting guidance for TDRs and require enhanced disclosure for certain loan refinancings by creditors when a borrower is experiencing financial difficulty and (2) require disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases within credit loss disclosures. | January 1, 2023 Early adoption permitted | The amendments should be applied prospectively, except for the amendments related to the recognition and measurement of TDRs for which an option is permitted to apply a modified retrospective transition method. Under the amended guidance the Company will no longer be required to identify TDRs and apply specialized accounting to such loans. The Company does not expect the guidance will have a material impact on its consolidated financial statements outside of the modified disclosure requirements. | ||||||||
Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions | The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. In addition, the amendments require the following disclosures for equity securities subject to contractual sale restrictions: 1. The fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; 2. The nature and remaining duration of the restriction(s); and 3. The circumstances that could cause a lapse in the restriction(s). | January 1, 2024 Early adoption permitted | The amendments should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. The Company does not expect the guidance will have a material impact on its consolidated financial statements. |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Overview
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Overview
Net income for M&T Bank Corporation (“M&T”) had net income of $647 million in the third quarter of 2021 was2022, compared with $495 million, up from $372 million in the corresponding quarter of 20202021 and $458$218 million in the second quarter of 2021.2022. Diluted and basic earnings per common share were $3.53 and $3.55, respectively, in the recent quarter, $3.69 and $3.70, respectively, in the recent quarter. Diluted and basic earnings per common sharein the third quarter of 20202021 and were each $2.75 and$1.08 in the second quarter of 2021 were2022. M&T's second and third quarter results each $3.41.reflect a full-quarter impact of its April 1, 2022 acquisition of People's United Financial, Inc. ("People's United"). The after-tax impact of merger-related expenses was $39 million ($53 million pre-tax) or $.22 of basic and diluted earnings per common share in the recent quarter, $7 million ($9 million pre-tax), or $.05 of basic and diluted earnings per common share in the recentthird quarter of 2021 and $3$346 million ($4465 million pre-tax), or $.02$1.94 of basic and diluted earnings per common share in the second quarter of 2021.2022. Such expenses wereincluded professional services and other temporary help fees associated with M&T’s pending acquisitionconversions of People’s United Financial, Inc. (“People’s United”), headquartered in Bridgeport, Connecticut, and consisted predominantlysystems and/or integration of professional servicesoperations, costs related to planned integration efforts associated withterminations of existing contractual arrangements to purchase various services, severance, travel costs and, in the merger.second quarter of 2022, an initial provision for credit losses on loans not deemed to be purchased credit deteriorated ("PCD") on April 1, 2022. Net income aggregated $1.40$1.23 billion or $10.43$7.14 of diluted earnings per common share and $10.44$7.18 of basic earnings per common share in the first nine months of 2021,2022, compared with $882 million$1.40 billion or $6.42$10.43 of diluted and $10.44 of basic earnings per common share in the year-earliercorresponding 2021 period. After-tax merger relatedMerger-related expenses forwere $398 million ($535 million pre-tax) or $2.46 of basic and diluted earnings per common share in the nine-month periodnine months ended September 30, 2021 were2022 and $17 million ($23 million pre-tax), or $.13 of basic and diluted earnings per common share. There were no merger-related expenses during 2020.share in the nine months ended September 30, 2021.
The annualized rate of return on average total assets for M&T and its consolidated subsidiaries (“the Company”) in each of the third quarterquarters of 2022 and 2021 was 1.28%, compared with 1.06 %.42% in the thirdsecond quarter of 2020 and 1.22% in 2021’s second quarter.2022. The annualized rate of return on average common shareholders’ equity was 12.16%10.43% in the recent quarter, 9.53%12.16% in the year-earlierthird quarter of 2021 and 11.55%3.21% in the second quarter of 2021.2022. During the nine-month period ended September 30, 2021,2022, the annualized rates of return on average assets and average common shareholders’ equity were .87% and 7.24%, respectively, compared with 1.24% and 11.76%, respectively, compared with .89% and 7.57%, respectively, in the similar 2020 period.corresponding period of 2021.
On February 22, 2021, M&T announced that it had entered into a definitive agreement with People’sApril 1, 2022, the Company closed the acquisition of People's United under which People’s United will be acquired by M&Tresulting in an all-stock transaction.the issuance of 50,325,004 common shares. Pursuant to the terms of the merger agreement, People’s United shareholders will receivereceived consideration valued at .118 of an M&T common share in the formexchange for each common share of M&T common stock. People’s United outstanding preferred stock will be converted to a new series of M&T preferred stock upon completion of the acquisition.United. The transaction is valued atpurchase price totaled approximately $7.6$8.4 billion (with the price based on M&T’s closing price of $149.34$164.66 per share as of September 30, 2021)April 1, 2022).
As of September 30, 2021, Additionally, People’s United reported $63.7outstanding preferred stock was converted into new shares of Series H preferred stock of M&T.
The People's United transaction has been accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair value on the acquisition date. M&T preliminarily recorded assets acquired of $64.2 billion, of assets, including $39.5$35.8 billion of loans and $10.5leases and $11.6 billion of investment securities, $55.9and liabilities assumed totaling $55.5 billion, including $53.0 billion of liabilities, including $52.9deposits. The transaction added $8.4 billion to M&T's common shareholders' equity and $261 million to preferred equity. In connection with the acquisition the Company recorded $3.9 billion of deposits,goodwill and $7.8$261 million of core deposit and other intangible assets. The acquisition of People's United formed a banking franchise with approximately $200 billion in assets serving communities in the Northeast and Mid-Atlantic from Maine to Virginia, including Washington, D.C. M&T completed the transfer of most financial records of People’s United to M&T’s core operating systems in the recent quarter.
On July 19, 2022 the Company's Board of Directors authorized a program to repurchase up to $3.0 billion of stockholders’ equity.M&T's common stock. The merger has been approved byaction replaced the common shareholders of M&T and People’s United, but remains subject to approval byprevious program under which the Board of Governors ofrepurchases in the Federal Reserve System. The merger is expected to be completed promptly after the parties have obtained that approval and satisfied other customary closing conditions.
Financial results during 2020 and through the thirdsecond quarter of 20212022 were adversely impacted byconducted. In accordance with the Coronavirus Disease 2019 (“COVID-19”) pandemic. Large portionsprogram and its capital plan, M&T repurchased 3,282,449 shares of its common stock during the U.S. economy were substantially curtailed for extended periodsrecent quarter at an average cost per share of time and, as$182.79 resulting in a result, many commercial and consumer customers were negatively impacted. Specifically, those adverse economic impacts resulted intotal cost of $600 million. During the Company recognizing elevated levels of provisions for credit losses during 2020 that reflected projections of credit losses based on macroeconomic forecasts at the end of each quarter of that year. The Company recorded provisions for credit losses of $150 million and $725 million in the three months andfirst nine months ended September 30, 2020. An improvement in economic conditions and forecastsof 2022, M&T repurchased 6,788,395 shares of its common stock at the endan average cost per share of each of the first three quarters of 2021 as compared with previous forecasts led the Company to recognize provision recaptures of $20 million and $60 million in the three months and nine months ended September 30, 2021, respectively.In response to the pandemic, the Federal Reserve took actions to lower interest rates that have negatively affected the Company’s net interest income since the beginning of the pandemic.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law. The CARES Act and applicable extensions provide relief to borrowers, including the opportunity to defer loan payments while not negatively affecting their credit standing, and also provided funding opportunities for small businesses under the Paycheck Protection Program (“PPP”) from approved Small Business Administration (“SBA”)
- 54 -
lenders, including M&T Bank, the principal bank subsidiary of M&T. For commercial and consumer customers, the Company provided a host of relief options, including payment deferrals (including maturity extensions), loan covenant waivers and low interest rate loan products. M&T Bank funded approximately $7.0 billion of PPP loans during 2020 and another $2.9 billion in 2021. PPP loans outstanding at September 30, 2021 and December 31, 2020 totaled $2.2 billion and $5.4 billion, respectively.
Updated economic forecasts at the end of each of the quarters of 2020 resulted in higher estimates of expected credit losses in the Company’s loan portfolio than at January 1, 2020, when the Company adopted amended accounting guidance for the measurement of credit losses on financial instruments,$176.77 resulting in historically high levelsa total cost of the provision for credit losses. Specifically, the level of the provision in 2020 reflected the ongoing impacts of the pandemic on economic activity in the hospitality and retail sectors, the uncertainty at December 31, 2020 as to the sufficiency and effectiveness of economic stimulus provided by the U.S. government to the economy, and concerns about ultimate collectability of real estate loans where borrowers requested re-payment forbearance. Improvement in the economic outlook at the end of each of the first three quarters of 2021 resulted in reduced estimates of expected credit losses. Nevertheless, concerns remain about large sectors of the economy, including the hotel, healthcare and office space sectors, and possible threat of resurgence of spread of the COVID-19 virus. The Company expects that certain aspects of its businesses will continue to be negatively impacted by the COVID-19 pandemic after September 30, 2021.$1.2 billion.
The national effort to mitigate the pandemic resulted in a challenging environment for businesses and their employees. The Company took actions designed to help maintain a safe environment for its customers and employees and to provide relief to customers in a variety of ways. Examples of those actions include:- 52 -
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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 gains (when realized) and expenses (when incurred) associated with merging acquired operations into the Company, since such items are considered by management to be “nonoperating” in nature. 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.
Net operating income totaled $504$700 million in the third quarter of 2021,2022, compared with $375$504 million in the year-earlier quarter and $463$578 million in the second 20212022 quarter. Diluted net operating earnings per common share in the third quarters of 2022 and 2021 were $3.83 and 2020 were $3.76, and $2.77, respectively, and $3.45compared with $3.10 in the second quarter of 2021.2022. For the first nine months of 2021,2022, net operating income and diluted net operating earnings per common share were $1.65 billion and $9.78, respectively, compared with $1.42
- 55 -
billion and $10.61, respectively, compared with $891 million and $6.49, respectively, in the corresponding 2020 period.first nine months of 2021.
Net operating income in the recent quarter expressed as an annualized rate of return on average tangible assets was 1.34%1.44%, compared with 1.10%1.34% in the third quarter of 20202021 and 1.27%1.16% in the2022’s second quarter of 2021. quarter.Net operating income represented an annualized return on average tangible common equity of 17.54%17.89% in the third quarter of 2021, 13.94%2022, 17.54% in the year-earlier quarter and 16.68%14.41% in the second quarter of 2021.2022. For the first three quartersnine months of 2021,2022, net operating income represented an annualized return on average tangible assets and average tangible common shareholders’ equity of 1.30%1.23% and 17.10%15.13%, respectively, compared with .93%1.30% and 11.15%17.10%, respectively, in the corresponding 20202021 period.
Reconciliations of GAAP amounts with corresponding non-GAAP amounts are provided in table 2.
Taxable-equivalent Net Interest Income
Taxable-equivalent net interest income was $971 million$1.69 billion in the third quarter of 2021, compared with $9472022, 74% higher than $971 million recorded in the year-earlier quarter. That improvementincrease reflects lower rates paid on deposit accounts offset, in part, by the impact of lower average outstanding loan balances. When compared with the third quarter of 2020, the results for the recent quarter reflected the impact of a $12.7$42.0 billion or 10% increase in additional average earning assets that was partially offset bypredominantly resulting from the People's United transaction, and a 2194 basis point (hundredths of one percent) narrowingexpansion of the net interest margin, or taxable-equivalent net interest income expressed as an annualized percentage of average earningsearning assets, to 2.74%3.68% in the recent quarter from 2.95%2.74% in the year-earlier quarter. Thethird quarter of 2021. That increase resulted from higher average earning assets reflected growth in low-yielding balancesyields on loans, deposits at the Federal Reserve Bank ("FRB") of New York, and investment securities, partially offset by declinesa 27 basis point increase in average balances of loans, investment securities and agreements to resell securities. The narrowing of the net interest margin reflects the impact of the low-yielding balances at the Federal Reserve Bank of New York constituting a higher percentage of average earning assets. Those balances add to net interest income, but due to their low yield lower the reported net interest margin.rates paid on interest-bearing liabilities. Taxable-equivalent net interest income in the recent quarter increased $25$268 million or 3%, from the second quarter of 2021.2022 reflecting an increase in the net interest margin in the recent quarter from 3.01% in the prior quarter. For the first nine months of 2022, taxable-equivalent net interest income was $4.02 billion, up 39% from $2.90 billion in the corresponding 2021 period. The increase was largely attributable to the higher level of earning assets, including the impact of the People's United transaction, and a 32 basis point widening of the net interest margin to 3.15% in the 2022 period from 2.83% in the year-earlier period. The higher net interest incomemargin in the recent periods is generally reflective of a rising interest rate environment resulting from actions taken by the Federal Reserve to raise interest rates in an attempt to temper inflationary pressures on the U.S. economy.
Average loans and leases totaled $127.5 billion in the third quarter of 2022, up $32.2 billion or 34% from $95.3 billion in the similar quarter of 2021. Included in average loans and leases in the recent quarter were loans obtained in the People's United acquisition. Loans acquired from People's United totaled $35.8 billion on the April 1, 2022 acquisition date and consisted of approximately $13.6 billion of commercial loans and leases, $13.5 billion of commercial real estate loans, $7.1 billion of residential real estate loans and $1.6 billion of consumer loans. Including the impact of the acquired loan balances, commercial loans and leases averaged $38.3 billion in the recent quarter, $14.6 billion or 61% higher than in the year-earlier quarter. Partially offsetting the increase from acquired loans was a reduction in average balances of Paycheck Protection Program (“PPP”) loans, reflecting loan repayments by the Small Business Administration. PPP loans averaged $241 million in the third quarter of 2022, compared with $3.3 billion in the third quarter of 2021. Average commercial real estate loans were $46.3 billion in the recent quarter, up
- 53 -
$8.7 billion or 23% from $37.5 billion in the corresponding quarter of 2021. That increase was predominantly due to the resultimpact of increased yields onloans obtained in the acquisition of People's United partially offset by a reduction in balances of construction and permanent mortgage loans, reflecting fees earnedrepayments by customers. Average residential real estate loans increased $6.6 billion or 40% to $23.0 billion in the third quarter of 2022 from payoffs$16.4 billion in the year-earlier quarter. The growth in residential real estate loans was largely attributable to the acquisition of PPP loans. The net interest marginloans from People's United and the Company's decision in the third quarter of 2021 reflected a three basis point narrowing compared with the second quarter of 2021 that was attributable to $6.9 billion of higher balances of low-yielding deposits held at the Federal Reserve Bank of New York, offset, in part, by the higher loan yields. In aggregate, average earning assets in the recent quarter increased $3.5 billion, or approximately 3%, from the second 2021 quarter.
For the first nine months of 2021, taxable-equivalent net interest income was $2.90 billion, up from $2.89 billion in the corresponding 2020 period. The increase was primarily attributable to a $17.4 billion, or 15% increase in average earning assets, partially offset by a 39 basis point narrowing of the net interest margin to 2.83% in the 2021 period from 3.22% in the year-earlier period.
Averageretain rather than sell most originated residential mortgage loans. Consumer loans and leases totaled $95.3averaged $20.0 billion in the third quarter of 2021, down $2.92022, up $2.3 billion or 3%13% from $98.2 billion in the similar quarter of 2020. Commercial loans and leases averaged $23.7 billion in the recent quarter, $4.6 billion or 16% lower than in the year-earlier quarter. That decline was largely the result of decreased average balances of PPP loans, due to loan payoffs, lower dealer floor plan balances, reflecting automobile production and inventory issues experienced by the industry, and subdued loan demand by commercial customers, in general. Average commercial real estate loans were $37.5 billion in the recent quarter, up $304 million, or 1%, from $37.2 billion in the corresponding 2020 quarter. Included in average commercial real estate loans in the third quarters of 2021 and 2020 were loans held for sale of $411 million and $260 million, respectively. Average residential real estate loans declined $179 million, or 1%, to $16.4 billion in the third quarter of 2021 from $16.6 billion in the year-earlier quarter. Included in average residential real estate loans were loans held for sale of $537 million in the recent quarter and $494 million in the third quarter of 2020. Consumer loans averaged $17.7 billion in the third quarter of 2021 up $1.6 billion, or 10%, from $16.1 billion in the year-earlier quarter, due toreflecting the impact of loans obtained in the acquisition of People's United (that consisted predominantly of outstanding balances of home equity lines of credit) and growth in average recreational finance loans (consisting predominantly of loans secured by recreational vehicles and boats) and, to a lesser extent, automobile loans that was partially offset by declines in outstanding balances of home equity loans and lines of credit.
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.
Average loan and lease balances in the third quarter of 2021 decreased $3.32022 were $127.5 billion, or 3%,little changed from $98.6$127.6 billion in the second quarter of 2021.2022. Commercial loan and lease average balances in the recent quarter decreased $3.3increased $504 million from $37.8 billion or 12%, fromin the second quarter of 2021, primarily due to PPP loan payoffs and lower dealer floor plan loans.2022. Average commercial real estate loans in the third quarter of 2021 increased $1292022 declined $946 million from $37.4$47.2 billion in the second quarter of 2021. Commercial real estate loans held for sale averaged $82 million in the second quarter of 2021.2022. Average balances of residential real estate loans in the recently completed quarter declined $643increased $201 million or 4%, from $17.0$22.8 billion in 2021’s2022’s second quarter, largely reflecting the impact of loan repayments by customers and lower average balances of loans held for sale. Residential real estate loans held for sale averaged $685 million in the second quarter of 2021.quarter. Average consumer loans in the recent quarter increased $544$167 million or 3%, from $17.1$19.8 billion in 2021’s2022’s second quarter, reflecting growth in recreational finance and automobile loans.quarter. The accompanying table summarizes quarterly changes in the major components of the loan and lease portfolio.
AVERAGE LOANS AND LEASES
(net of unearned discount)
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| Percent Increase |
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| ||||||
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|
|
|
| (Decrease) from |
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| ||||||
|
| Third Quarter |
|
| Third Quarter |
|
| Second Quarter |
|
| |||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| |||
|
| (In millions) |
|
|
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|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
| |||
Commercial, financial, etc. |
| $ | 38,321 |
|
|
| 61 |
| % |
| 1 |
| % |
Real estate — commercial |
|
| 46,282 |
|
|
| 23 |
|
|
| (2 | ) |
|
Real estate — consumer |
|
| 22,962 |
|
|
| 40 |
|
|
| 1 |
|
|
Consumer |
|
|
|
|
|
|
|
|
|
| |||
Recreational finance |
|
| 8,626 |
|
|
| 9 |
|
|
| 4 |
|
|
Automobile |
|
| 4,379 |
|
|
| (4 | ) |
|
| (5 | ) |
|
Home equity lines and loans |
|
| 5,056 |
|
|
| 38 |
|
|
| — |
|
|
Other |
|
| 1,899 |
|
|
| 25 |
|
|
| 5 |
|
|
Total consumer |
|
| 19,960 |
|
|
| 13 |
|
|
| 1 |
|
|
Total |
| $ | 127,525 |
|
|
| 34 |
| % |
| — |
| % |
|
|
|
|
|
| Percent Increase |
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| |||||
|
|
|
|
|
| (Decrease) from |
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| |||||
|
| 3rd Qtr. |
|
| 3rd Qtr. |
|
| 2nd Qtr. |
|
| |||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| |||
|
| (In millions) |
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|
|
|
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|
|
|
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| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, etc. |
| $ | 23,730 |
|
|
| (16 | ) | % |
| (12 | ) | % |
Real estate — commercial |
|
| 37,547 |
|
|
| 1 |
|
|
| — |
|
|
Real estate — consumer |
|
| 16,379 |
|
|
| (1 | ) |
|
| (4 | ) |
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
Recreational finance |
|
| 7,918 |
|
|
| 18 |
|
|
| 5 |
|
|
Automobile |
|
| 4,566 |
|
|
| 19 |
|
|
| 4 |
|
|
Home equity lines and loans |
|
| 3,660 |
|
|
| (12 | ) |
|
| (2 | ) |
|
Other |
|
| 1,514 |
|
|
| 8 |
|
|
| 6 |
|
|
Total consumer |
|
| 17,658 |
|
|
| 10 |
|
|
| 3 |
|
|
Total |
| $ | 95,314 |
|
|
| (3 | ) | % |
| (3 | ) | % |
For the first nine months of 2021,2022, average loans and leases totaled $97.7$115.9 billion, up 2%,19% from $95.9$97.7 billion in the corresponding 20202021 period. Contributing toThe impact of loans obtained in the rise were increases of $1.5 billion in average consumer loans, $900 million in average residential real estate loan balances (reflecting repurchases of government-guaranteed loans) and $782 million in average commercial real estate balancesPeople's United acquisition was the most significant factor for that increase offset, in part, by a $1.3 billion decrease inlower average commercial loanbalances of PPP loans of $549 million and lease balances.Loans purchased from Ginnie Mae pools averaged $3.8$4.9 billion in the first nine months of 2022 and 2021, compared with $1.2 billion in the year-earlier period. Loans are purchased to reduce associated servicing costs, namely a requirement to advance principal and interest payments that had not been received from individual mortgagors, including payments deferred under COVID-19 forbearance arrangements.respectively.
The investment securities portfolio averaged $6.0$23.9 billion in the third quarter of 2021, down $1.92022, up $17.9 billion or 24%, from $7.9$6.0 billion in the year-earlier quarter and $192 million lower$1.6 billion higher than the $6.2$22.4 billion averaged in the second quarter of 2021.2022. For the first nine months of 20212022 and 2020,2021, investment securities averaged $6.3$18.1 billion and $8.5$6.3 billion, respectively. The lowerhigher average balancesbalance in the recent periods reflect net reductionsthe acquisition of mortgage-backedPeople’s United, which added approximately $11.6 billion to the investment securities due to paydowns, partially offset by purchases. Duringportfolio on April 1, 2022, and purchases of approximately $2.7 billion of investment securities during each of the three months and nine monthsquarters ended September 30, 2021,2022, June 30, 2022 and March 31, 2022. The purchases in the Company purchased $782 millionfirst nine months of 2022 consisted predominantly of U.S. Treasury notes and $1.1 billion, respectively, of fixed rate residential mortgage-backed securities. There were no significant purchases of investment securities during the first nine months of 2020. There were no significant sales of investment securities during the first nine months of 20212022 or 2020.2021. The Company routinely has increases and decreases in its holdings of capital stock of the Federal Home Loan Bank (“FHLB”) of New York and the Federal Reserve BankFRB of New York. Those holdings are accounted for at cost and are adjusted based on amounts of outstanding borrowings and available lines of credit with those entities.
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The investment securities portfolio is largely comprised of residential mortgage-backed securities and shorter-term U.S. Treasury notes and, federal agency notes.following the acquisition of People's United, municipal securities. When purchasing investment securities, the Company considers its
- 57 -
liquidity position and its overall interest-rate risk profile as well as the adequacy of expected returns relative to risks assumed, including prepayments. The Company may occasionally sell investment securities as a result of changes in interest rates and spreads, actual or anticipated prepayments, credit risk associated with a particular security, or as a result of restructuring its investment securities portfolio in connection with a business combination. The amounts of investment securities held by the Company are influenced by such factors as available yield in comparison with alternative investments, demand for loans, which generally yield more than investment securities, ongoing repayments, the levels of deposits, and management of liquidity and balance sheet size and resulting capital ratios.
Fair value changes in equity securities with readily determinable fair values are recognized in the consolidated statement of income. Net unrealized gainslosses on such equity securities were less than $1 millionnot significant in the third quarter of 2021 and $3 million in2022, the year-earliersecond quarter compared with net unrealized losses of $11 million in2022 or the secondthird quarter of 2021. Net unrealized losses for the first nine months of 2022 and 2021 and 2020 were $23$2 million and $11$23 million, respectively. Those gains and losses were predominantly related toinclude changes in the value of the Company’s holdings of Fannie Mae and Freddie Mac preferred stock.
The Company regularly reviews its debt investment securities for declines in value below amortized cost that might be indicative of credit-related losses. In light of such reviews, there were no credit-related losses on debt investment securities recognized in either of the nine-month periods ended September 30, 20212022 or 2020.2021. Based on management’s assessment of future cash flows associated with individual investment securities as of September 30, 2021,2022, the Company did not expect to incur any material credit-related losses in its portfolios of debt investment securities. Additional information about the investment securities portfolio is included in notes 3 and 13 of Notes to Financial Statements.
Other earning assets include interest-bearing deposits at the Federal Reserve BankFRB of New York and other banks, trading account assets, federal funds sold and agreements to resell securities. Those other earning assets in the aggregate averaged $39.1$30.9 billion in the thirdrecently completed quarter, of 2021, compared with $21.6$39.1 billion in the year-earlier quarter and $32.1$39.8 billion in the second quarter of 2021.2022. Interest-bearing deposits at banks averaged $30.8 billion, $39.0 billion $16.4and $39.4 billion and $32.1 billion forduring the three months ended September 30, 2021,2022, September 30, 20202021 and June 30, 2021,2022, respectively. The amounts of interest-bearing deposits at banks at the respective dates were predominantly comprised of deposits held at the Federal Reserve BankFRB of New York. The levelsdecline in the recent quarter reflects actions taken by the Company including the purchases of thoseinvestment securities and treasury stock and the management of select deposit relationships designed to reduce the balances of higher-cost deposit accounts. In general, the level of deposits often fluctuateheld at the FRB of New York also fluctuates due to changes in trust-related deposits of commercial entities, purchasestrust-related deposits and additions to or maturities of investment securities or borrowings to manage the Company’s liquidity. The higher balances in the two most recent quarters compared with the year-earlier period reflect increased commercial and consumer deposit balances. Agreements to resell securities averaged $5.1 billion during the quarter ended September 30, 2020.borrowings.There were no agreements to resell securities outstanding during the quarters ended September 30, 2021 or June 30, 2021.
As a result of the changes described herein, average earning assets totaled $140.4$182.4 billion in the most recent quarter, compared with $127.7$140.4 billion in the third quarter of 20202021 and $137.0$189.8 billion in the second quarter of 2021.2022. Average earning assets totaled $137.3$170.4 billion and $119.8$137.3 billion during the first nine months of 2022 and 2021, and 2020, respectively.
The most significant source of funding for the Company is core deposits. The Company considers noninterest-bearing deposits, interest-bearing transaction accounts, savings deposits and time deposits of $250,000 or less as core deposits. The Company’s branch network is its principal source of core deposits, which generally carry lower interest rates than wholesale funds of comparable maturities. Average core deposits totaled $127.1$162.8 billion in the third quarter of 2021, compared with $110.62022, up 28% from $127.1 billion in the similar 20202021 quarter, and $124.2but down 4% from $169.6 billion in the second quarter of 2021.2022. The increasePeople's United acquisition added approximately $50.8 billion of core deposits on April 1, 2022, including $30.8 billion of savings and interest-checking deposits, $2.6 billion of time deposits and $17.4 billion of noninterest-bearing deposits. The decline in average core deposits in the two most recent quartersquarter as compared with the third quarter of 2020 reflected higher balances of noninterest-bearing deposits and savings and interest-checking deposits. Average balances of savings and interest-checking core deposits rose $5.5 billion or 9% to $67.1 billion in the third 2021 quarter from $61.7 billion in the year-earlier quarter. Average noninterest-bearing deposits increased $12.4 billion or 28% to $57.2 billion in the recent quarter from $44.8 billion in the third 2020 quarter. Those increases reflected higher average deposits of commercial, consumer and trust customers. Average core deposits were $124.2 billion in the second quarter of 2021. Average savings and interest-checking core2022 is largely reflective of the Company's initiative to reduce certain historically higher-cost deposits decreased $710 million or 1% inas well as customer reactions to the third 2021 quarter from $67.9 billion in the immediately preceding quarter. Average noninterest-bearing deposits in the recent
- 58 -
quarter were $3.8 billion or 7% higher than the second quarter 2021 average of $53.4 billion, reflecting higher levels of trust deposits.generally rising rate environment. The following table provides an analysis of quarterly changes in the components of average core deposits.
- 55 -
AVERAGE CORE DEPOSITS
|
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| Percent Increase |
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| Percent Increase |
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|
| (Decrease) from |
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|
|
|
| (Decrease) from |
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| ||||||||||||
|
| 3rd Qtr. |
|
| 3rd Qtr. |
|
| 2nd Qtr. |
|
|
| Third Quarter |
| Third Quarter |
| Second Quarter |
|
| ||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| ||||||
|
| (In millions) |
|
|
|
|
|
|
|
|
|
|
| (In millions) |
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
| |||||
Savings and interest-checking deposits |
| $ | 67,145 |
|
|
| 9 |
| % |
| (1 | ) | % |
| $ | 85,585 |
|
|
| 27 |
| % |
| (6 | ) | % |
Time deposits |
|
| 2,704 |
|
|
| (34 | ) |
|
| (8 | ) |
|
|
| 4,313 |
|
|
| 60 |
|
|
| (8 | ) |
|
Noninterest-bearing deposits |
|
| 57,218 |
|
|
| 28 |
|
|
| 7 |
|
|
|
| 72,861 |
|
|
| 27 |
|
|
| (2 | ) |
|
Total |
| $ | 127,067 |
|
|
| 15 |
| % |
| 2 |
| % |
| $ | 162,759 |
|
|
| 28 |
| % |
| (4 | ) | % |
The Company also receives funding from other deposit sources, including branch-related time deposits over $250,000, brokered deposits and, prior to June 30, 2021, deposits associated with the Company’s Cayman Islands office. Cayman Islands office deposits consisted predominantly of balances swept from lower-yielding commercial customer accounts. Time deposits over $250,000 excluding brokered deposits, averaged $357$681 million in the recent quarter, compared with $612$357 million in the third quarter of 20202021 and $411$808 million in the second 2021 quarter. The decreases in such deposits since the third quarter of 2020 were predominantly the result of maturities of higher-rate time deposits. Cayman Islands office deposits averaged $50 million for the quarter ended June 30, 2021 and $1.0 billion for the quarter ended September 30, 2020. During2022. In the second quarter of 2021, the Company introduced a new interest-bearing sweep product (included in savings and interest-bearing deposits) that replaced the Eurodollar sweep product previously recorded as Cayman Islands office deposits. As a result, there wereare no outstandinglonger deposits maintained at the Cayman Islands office during the third quarter of 2021 and the office is closed. The Company had brokered savings and interest-bearing transaction accounts, which in the aggregate averaged $3.8 billion $4.2 billionduring each of the recent quarter and $3.7the third quarter of 2021 and $4.2 billion during the quarters endedsecond quarter of 2022. Total uninsured deposits, including deposits associated with the People's United acquisition, were estimated to be $74.7 billion at September 30, 2021, September 30, 20202022 and June 30, 2021, respectively.
- 59 -
$69.1 billion at December 31, 2021.
The followingaccompanying table summarizes average total deposits for the quarters ended September 30, 2021,2022, June 30, 20212022 and September 30, 2020.2021.
AVERAGE DEPOSITS
|
| Retail |
|
| Trust |
|
| Commercial and Other |
|
| Total |
| ||||||||||||||||||||
|
| Retail |
|
| Trust |
|
| Commercial |
|
| Total |
| ||||||||||||||||||||
|
| (In millions) |
| |||||||||||||||||||||||||||||
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Savings and interest-checking deposits |
| $ | 51,196 |
|
| $ | 7,008 |
|
| $ | 31,156 |
|
| $ | 89,360 |
| ||||||||||||||||
Time deposits |
|
| 4,607 |
|
|
| 12 |
|
|
| 431 |
|
|
| 5,050 |
| ||||||||||||||||
Noninterest-bearing deposits |
|
| 14,414 |
|
|
| 10,927 |
|
|
| 47,520 |
|
|
| 72,861 |
| ||||||||||||||||
Total |
| $ | 70,217 |
|
| $ | 17,947 |
|
| $ | 79,107 |
|
| $ | 167,271 |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Three Months Ended June 30, 2022 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Savings and interest-checking deposits |
| $ | 52,750 |
|
| $ | 6,852 |
|
| $ | 35,547 |
|
| $ | 95,149 |
| ||||||||||||||||
Time deposits |
|
| 5,001 |
|
|
| 17 |
|
|
| 462 |
|
|
| 5,480 |
| ||||||||||||||||
Noninterest-bearing deposits |
|
| 14,483 |
|
|
| 11,691 |
|
|
| 47,880 |
|
|
| 74,054 |
| ||||||||||||||||
Total |
| $ | 72,234 |
|
| $ | 18,560 |
|
| $ | 83,889 |
|
| $ | 174,683 |
| ||||||||||||||||
|
| (In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Savings and interest-checking deposits |
| $ | 34,344 |
|
| $ | 5,934 |
|
| $ | 30,698 |
|
| $ | 70,976 |
|
| $ | 34,344 |
|
| $ | 5,934 |
|
| $ | 30,698 |
|
| $ | 70,976 |
|
Time deposits |
|
| 2,892 |
|
|
| 12 |
|
|
| 157 |
|
|
| 3,061 |
|
|
| 2,892 |
|
|
| 12 |
|
|
| 157 |
|
|
| 3,061 |
|
Noninterest-bearing deposits |
|
| 8,557 |
|
|
| 12,022 |
|
|
| 36,639 |
|
|
| 57,218 |
|
|
| 8,557 |
|
|
| 12,022 |
|
|
| 36,639 |
|
|
| 57,218 |
|
Deposits at Cayman Islands office |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||
Total |
| $ | 45,793 |
|
| $ | 17,968 |
|
| $ | 67,494 |
|
| $ | 131,255 |
|
| $ | 45,793 |
|
| $ | 17,968 |
|
| $ | 67,494 |
|
| $ | 131,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Three Months Ended June 30, 2021 |
|
|
| |||||||||||||||||||||||||||||
Savings and interest-checking deposits |
| $ | 34,087 |
|
| $ | 6,023 |
|
| $ | 31,451 |
|
| $ | 71,561 |
| ||||||||||||||||
Time deposits |
|
| 3,156 |
|
|
| 33 |
|
|
| 169 |
|
|
| 3,358 |
| ||||||||||||||||
Noninterest-bearing deposits |
|
| 8,573 |
|
|
| 9,318 |
|
|
| 35,553 |
|
|
| 53,444 |
| ||||||||||||||||
Deposits at Cayman Islands office |
|
| — |
|
|
| — |
|
|
| 50 |
|
|
| 50 |
| ||||||||||||||||
Total |
| $ | 45,816 |
|
| $ | 15,374 |
|
| $ | 67,223 |
|
| $ | 128,413 |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Savings and interest-checking deposits |
| $ | 29,902 |
|
| $ | 5,323 |
|
| $ | 30,623 |
|
| $ | 65,848 |
| ||||||||||||||||
Time deposits |
|
| 4,452 |
|
|
| 49 |
|
|
| 214 |
|
|
| 4,715 |
| ||||||||||||||||
Noninterest-bearing deposits |
|
| 6,977 |
|
|
| 5,408 |
|
|
| 32,401 |
|
|
| 44,786 |
| ||||||||||||||||
Deposits at Cayman Islands office |
|
| — |
|
|
| — |
|
|
| 957 |
|
|
| 957 |
| ||||||||||||||||
Total |
| $ | 41,331 |
|
| $ | 10,780 |
|
| $ | 64,195 |
|
| $ | 116,306 |
| ||||||||||||||||
The Company also uses borrowings from banks, securities dealers, various Federal Home Loan Banks, the Federal Reserve BankFRB of New York and others as sources of funding. Short-term borrowings represent borrowing arrangements that at the time they were entered into or were assumed in an acquisition had a contractual maturity of one year or less. Average short-term borrowings totaled $91$913 million in the third quarter of 2021,2022, compared with $62$91 million in the year-earlier quarter and $61 million$1.1 billion in the second quarter of 2021.2022. Short-term borrowings assumed in connection with the People's United acquisition totaled $895 million. In October 2022 M&T redeemed $500 million of unsecured senior notes due to mature in December 2022 that had been assumed in the acquisition of People's United and included in short-term borrowings.
- 56 -
Long-term borrowings averaged $3.4$3.3 billion in each of the two most recent quarter and the second quarter of 2021,quarters, compared with $5.5$3.4 billion in the third quarter of 2020.2021. Average balances of the Company’s outstanding senior notes were $2.4$1.7 billion during each of the three-month periodsthree months ended September 30, 20212022 and June 30, 2021 and $3.52022, compared with $2.4 billion duringin the three-month period ended September 30, 2020.third quarter of 2021. In January 2021, $350August 2022, M&T issued $500 million of variable rate senior notes that mature in August 2028 and pay a fixed rate of 4.553% semi-annually until August 2027 after which the Secured Overnight Financing Rate ("SOFR") plus 1.78% will be paid quarterly until maturity. In April 2022, M&T Bank matured. In July 2020, M&T Bank redeemed $750 million of fixed rate senior notes and in December 2020 redeemed $650 million of fixed rate senior notes that were due to mature on May 18, 2022. During May 2022, $250 million of variable rate senior notes of M&T Bank matured. In January 25, 2021.2021, $350 million of variable rate senior notes matured. Subordinated capital notes included in long-term borrowings averaged $500$982 million in the third and second quarters of 2021 and $1.4 billion in the third quarter of 2020.2022, $500 million in the three-month period ended September 30, 2021 and $983 million in the second quarter of 2022. In March 2021, M&T Bank redeemed $500 million of subordinated capital notes that were due to mature on December 1, 2021, and during December 2020, $409 million of subordinated capital notes of M&T Bank matured.notes. Junior subordinated debentures associated with trust preferred securities that were included in average long-term borrowings were $534 million, $530 million $527 million and $529$533 million during the third quarters ended September 30,of 2022 and 2021 September 30, 2020 and June 30, 2021.the second quarter of 2022, respectively. Additional information regarding junior subordinated debentures is provided in note 5 of Notes to Financial Statements. As of April 1, 2022, long-term borrowings assumed in the People's United acquisition totaled $494 million and included $483 million of fixed-rate subordinated notes and $11 million of FHLB advances.
The Company has utilized interest rate swap agreements to modify the repricing characteristics of certain components of its loans and long-term debt. As of September 30, 2021,2022, interest rate swap agreements were used as fair value hedges of approximately $1.65$1.5 billion of outstanding fixed rate long-term borrowings. Additionally, interest rate swap agreements with a notional amount of $17.35$15.25 billion were used as cash flow hedges of interest payments associated with variable rate commercial real estate loans. Further information on interest rate swap agreements is provided herein and in note 11 of Notes to Financial Statements.
- 60 -
Changes in the composition of the Company’s earning assets and interest-bearing liabilities, as discussed herein, as well as changes in interest rates and spreads, can impact net interest income. Net interest spread, or the difference between the taxable-equivalent yield on earning assets and the rate paid on interest-bearing liabilities, was 2.68%3.49% in the recent quarter, compared with 2.83%up 81 basis points from 2.68% in the third quarter of 2020.2021. The yield on earning assets during the third quarter of 20212022 was 2.82%3.90%, down 31up 108 basis points from 3.13%2.82% in the similar 20202021 period, while the rate paid on interest-bearing liabilities declined 16increased 27 basis points to .14%.41% in the recent quarter from .30%.14% in the year-earlier period. In the second quarter of 2021,2022, the net interest spread was 2.71%2.92%, the yield on earning assets was 2.85%3.12% and the rate paid on interest-bearing liabilities was .14%.20%.The narrowing ofincreases in the net interest spread in the two most recent quarters as compared withsince the third quarter of 2020 reflects2021 reflect the impact of agenerally rising interest rates that resulted in higher proportion of low-yielding balancesyields on loans and leases, deposits at the Federal Reserve BankFRB of New York to total average earning assets.and investment securities, partially offset by higher rates on interest-bearing liabilities. For the first nine months of 2021,2022, the net interest spread was 2.76%3.03%, downup 27 basis points from 3.03%2.76% in the year-earlier period. The yield on earning assets and the rate paid on interest-bearing liabilities for the first nine months of 20212022 were 2.91%3.30% and .15%.27%, respectively, compared with 3.53%2.91% and .50%.15%, respectively, in the initial nine months of 2020.2021. The Federal Reserve raised its target Federal funds rate 3.00% since September 30, 2021, including hikes of 1.50% and 1.25% in the third quarter of 2022 and second quarter of 2022, respectively.
Net interest-free funds consist largely of noninterest-bearing demand deposits and shareholders’ equity, partially offset by bank owned life insurance and non-earning assets, including goodwill and core deposit and other intangible assets. Net interest-free funds averaged $62.9$83.8 billion in the third quarter of 2021,2022, compared with $50.6$62.9 billion in the year-earlier quarter and $58.5$84.7 billion in the second quarter of 2022. During the first nine months of 2022 and 2021, quarter.average net interest-free funds aggregated $78.0 billion and $59.0 billion, respectively. The increaseincreases in average net interest-free funds in the recent quarter and the second quarter of 2022 as compared with those prior quarters reflectsthird quarter of 2021 reflect higher average balances of noninterest-bearing deposits. Duringdeposits and shareholders’ equity that include the first nine monthsimpact of 2021 and 2020, average net interest-free funds aggregated $59.0 billion and $45.6 billion, respectively.the acquisition of People's United. Shareholders’ equity averaged $17.1$25.7 billion during the three-month period ended September 30, 2021, $16.12022, compared with $17.1 billion during the year-earlier period and $16.6$26.1 billion during the three-month period ended June 30, 2022. The higher amounts of shareholders' equity in the two most recent quarters as compared with 2021's third quarter reflect retained earnings and additional equity issued in connection with the People's United acquisition, partially offset by share repurchase activity. M&T issued $8.4 billion of common equity and $261 million of preferred equity in completing the acquisition of People's United on April 1, 2022. M&T also
- 57 -
repurchased $600 million of its common stock in each of the third and second 2021 quarter.quarters of 2022. Goodwill and core deposit and other intangible assets averaged $8.7 billion and $8.8 billion in the third quarter of 2022 and second quarter of 2022, respectively, up from $4.6 billion during eachin the third quarter of those quarters.2021. The Company recorded $3.9 billion of goodwill on April 1, 2022 which represents excess consideration over the fair value of net assets acquired in the People's United transaction. As part of the transaction, intangible assets were identified and recorded at fair value, thereby increasing the balance of core deposit and other intangible assets on the Company's balance sheet by $261 million on April 1, 2022. Reflecting the impact of the People's United acquisition, the cash surrender value of bank owned life insurance averaged $1.86$2.6 billion in each of the two most recentthird and second quarters of 2021,2022, compared with $1.84$1.9 billion in the third quarter of 2020. Increases2021. Changes in the cash surrender value of bank owned life insurance and benefits received are not included in interest income, but rather are recorded in “other revenues from operations.” The contribution of net interest-free funds to net interest margin was .06% in each of the third and second quarters of 2021, compared with .12%.19% in the third quarter of 2020.2022, compared with .06% and .09% in the third quarter of 2021 and the second quarter of 2022, respectively. The reducedincreased contribution of net interest-free funds to net interest margin in the two most recent quartersquarter as compared with the third quarter of 20202021 and second quarter of 2022 reflects the lowerhigher rates on interest-bearing liabilities used to value net interest-free funds. The contribution of net interest-free funds to net interest margin in the first nine months of 2022 and 2021 was .12% and 2020 was .07% and .19%, respectively.
Reflecting the changes to the net interest spread and the contribution of net interest-free funds as described herein, the Company’s net interest margin was 2.74%3.68% in the third quarter of 2021,2022, compared with 2.95%2.74% in the year-earlier period and 2.77%3.01% in the second quarter of 2021.2022. During the first nine months of 20212022 and 2020,2021, the net interest margin was 2.83%3.15% and 3.22%2.83%, respectively. Future changes in market interest rates or spreads, as well as changes in the composition of the Company’s portfolios of earning assets and interest-bearing liabilities that result in reductions inchanges to spreads, could adversely impact the Company’s net interest income and net interest margin. The Federal Open Market Committee has conducted a series of basis point increases in short-term interest rates during the first nine months of 2022. These actions have led to generally higher interest rates overall and, accordingly, have contributed to the Company's higher net interest margin in the recent quarter as compared with the year-earlier quarter and immediately preceding quarter.
Management assesses the potential impact of future changes in interest rates and spreads by projecting net interest income under several interest rate scenarios. In managing interest rate risk, the Company has utilized interest rate swap agreements to modify the repricing characteristics of certain portions of its earning assets and interest-bearing liabilities. Periodic settlement amounts arising from these agreements are reflected in either the yields on earning assets or the rates paid on interest-bearing liabilities. The notional amount of interest rate swap agreements entered into for interest rate risk management purposes was $19.00$16.75 billion (excluding $4.65 billion of forward-starting swap agreements) at September 30, 2022, $19.0 billion (excluding $8.35 billion of forward-starting swap agreements) at September 30, 2021 $15.65and $15.0 billion (excluding $38.90 billion of forward-starting swap agreements) at September 30, 2020 and $19.00 billion (excluding $32.05$8.35 billion of forward-starting swap agreements) at December 31, 2020.2021. Under the terms of those interest rate swap agreements, the Company received payments based on the outstanding notional amount at fixed rates and made payments at variable rates. At each of September 30, 2021 and December 31, 2020,2022 interest rate swap agreements with notional amounts of $17.35$15.25 billion were serving as cash flow hedges of interest payments associated with variable rate commercial real estate loans, compared with $13.35$17.35 billion at September 30, 2020.2021 and $13.35 billion at December 31, 2021. Interest rate swap agreements with notional amounts of $1.5 billion at September 30, 2022 and $1.65 billion at each of September 30, 2021 and December 31, 2020 and $2.30 billion at September 30, 20202021 were serving as fair value hedges
- 61 -
of fixed rate long-term borrowings. The Company has enteredenters into forward-starting interest rate swap agreements predominantly to extend the term of its interest rate swap agreements serving as cash flow hedges and provide a hedge against changing interest rates on certain of its variable rate loans.
- 58 -
In a fair value hedge, the fair value of the derivative (the interest rate swap agreement) and changes in the fair value of the hedged item are recorded in the Company’s consolidated balance sheet with the corresponding gain or loss recognized in current earnings. The difference between changes in the fair value of the interest rate swap agreements and the hedged items represents hedge ineffectiveness and is recorded as an adjustment to the interest income or interest expense of the respective hedged item. In a cash flow hedge, the effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings when the forecasted transaction affects earnings. The ineffective portion of the derivative’s gain or loss on cash flow hedges is accounted for similar to that associated with fair value hedges. The amounts of hedge ineffectiveness recognized during each of the quarters ended September 30, 2021,2022, September 30, 20202021 and June 30, 20212022 were not material to the Company’s consolidated results of operations. Information regarding the fair value of interest rate swap agreements and hedge ineffectiveness is presented in note 11 of Notes to Financial Statements. Information regarding the effective portionvaluation of cash flow hedges included in other comprehensive income is presented in note 10 of Notes to Financial Statements. The changes in the fair values of the interest rate swap agreements and the hedged items primarily result from the effects of changing interest rates and spreads.
The weighted-average rates to be received and paid under interest rate swap agreements currently in effect were 1.38% and .12%, respectively, at September 30, 2021. The average notional amounts of interest rate swap agreements entered into for interest rate risk management purposes, the related effect on net interest income and margin, and the weighted-average interest rates paid or received on those swap agreements are presented in the accompanying table. Additional information about the Company’s use of interest rate swap agreements and other derivatives is included in note 11 of Notes to Financial Statements.
INTEREST RATE SWAP AGREEMENTS
|
| Three Months Ended September 30 | |||||||||||||||
. |
| 2022 |
|
| 2021 |
|
| ||||||||||
|
|
|
|
| Rate(a) |
|
| Amount |
|
| Rate(a) |
|
| ||||
|
| (Dollars in thousands) | |||||||||||||||
Increase (decrease) in: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest income |
| $ | (22,466 | ) |
|
| .(05 | ) | % | $ | 58,058 |
|
|
| .16 |
| % |
Interest expense |
|
| (651 | ) |
|
| — |
|
|
| (8,731 | ) |
|
| .(04 | ) |
|
Net interest income/margin |
| $ | (21,815 | ) |
|
| .(05 | ) | % | $ | 66,789 |
|
|
| .19 |
| % |
Average notional amount (c) |
| $ | 16,472,826 |
|
|
|
|
| $ | 18,923,913 |
|
|
|
|
| ||
Rate received (b) |
|
|
|
|
| 2.06 |
| % |
|
|
|
| 1.53 |
| % | ||
Rate paid (b) |
|
|
|
|
| 2.57 |
| % |
|
|
|
| .15 |
| % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| Nine Months Ended September 30, | |||||||||||||||
. |
| 2022 |
|
| 2021 |
|
| ||||||||||
|
| Amount |
|
| Rate(a) |
|
| Amount |
|
| Rate(a) |
|
| ||||
|
| (Dollars in thousands) | |||||||||||||||
Increase (decrease) in: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest income |
| $ | 35,500 |
|
|
| .03 |
| % | $ | 206,713 |
|
|
| .20 |
| % |
Interest expense |
|
| (14,436 | ) |
|
| .(02 | ) |
|
| (26,084 | ) |
|
| .(04 | ) |
|
Net interest income/margin |
| $ | 49,936 |
|
|
| .04 |
| % | $ | 232,797 |
|
|
| .23 |
| % |
Average notional amount (c) |
| $ | 15,452,015 |
|
|
|
|
| $ | 18,915,751 |
|
|
|
|
| ||
Rate received (b) |
|
|
|
|
| 1.67 |
| % |
|
|
|
| 1.79 |
| % | ||
Rate paid (b) |
|
|
|
|
| 1.25 |
| % |
|
|
|
| .17 |
| % | ||
|
| Three Months Ended September 30 | |||||||||||||||
. |
| 2021 |
|
| 2020 |
|
| ||||||||||
|
| Amount |
|
| Rate(a) |
|
| Amount |
|
| Rate(a) |
|
| ||||
|
| (Dollars in thousands) | |||||||||||||||
Increase (decrease) in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
| $ | 58,058 |
|
|
| .16 |
| % | $ | 82,404 |
|
|
| .26 |
| % |
Interest expense |
|
| (8,731 | ) |
|
| (.04 | ) |
|
| (12,312 | ) |
|
| (.06 | ) |
|
Net interest income/margin |
| $ | 66,789 |
|
|
| .19 |
| % | $ | 94,716 |
|
|
| .29 |
| % |
Average notional amount (c) |
| $ | 18,923,913 |
|
|
|
|
|
| $ | 15,780,436 |
|
|
|
|
|
|
Rate received (b) |
|
|
|
|
|
| 1.53 |
| % |
|
|
|
|
| 2.60 |
| % |
Rate paid (b) |
|
|
|
|
|
| .15 |
| % |
|
|
|
|
| .25 |
| % |
|
| Nine Months Ended September 30 |
|
| |||||||||||||
|
| 2021 |
|
| 2020 |
|
| ||||||||||
|
| Amount |
|
| Rate(a) |
|
| Amount |
|
| Rate(a) |
|
| ||||
|
| (Dollars in thousands) |
|
| |||||||||||||
Increase (decrease) in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
| $ | 206,713 |
|
|
| .20 |
| % | $ | 183,598 |
|
|
| .20 |
| % |
Interest expense |
|
| (26,084 | ) |
|
| (.04 | ) |
|
| (28,258 | ) |
|
| (.05 | ) |
|
Net interest income/margin |
| $ | 232,797 |
|
|
| .23 |
| % | $ | 211,856 |
|
|
| .23 |
| % |
Average notional amount (c) |
| $ | 18,915,751 |
|
|
|
|
|
| $ | 16,275,182 |
|
|
|
|
|
|
Rate received (b) |
|
|
|
|
|
| 1.79 |
| % |
|
|
|
|
| 2.55 |
| % |
Rate paid (b) |
|
|
|
|
|
| .17 |
| % |
|
|
|
|
| .84 |
| % |
|
|
|
Excludes forward-starting interest rate swap agreements not in effect during the period. |
|
|
- 62 -
As a financial intermediary, the Company is exposed to various risks, including liquidity and market risk. Liquidity refers to the Company’s ability to ensure that sufficient cash flow and liquid assets are available to satisfy current and future obligations, including demands for loans and deposit withdrawals, funding operating costs and other corporate purposes. Liquidity risk arises whenever the maturities of financial instruments included in assets and liabilities differ.
The most significant source of funding for the Company is core deposits, which are generated from a large base of consumer, corporate and institutional customers. That customer base has, over the past several years, become more geographically diverse as a result of expansion of the Company’s businesses. Nevertheless, the Company faces competition in offering products and services from a large array of financial market participants, including banks,
- 59 -
thrifts, mutual funds, securities dealers and others. The Company supplements funding provided through deposits with various short-term and long-term wholesale borrowings, including overnight federal funds purchased, short-term advances from the FHLB of New York, brokered deposits, and longer-term borrowings. M&T Bank has access to additional funding sources through borrowings from the FHLB of New York, lines of credit with the Federal Reserve BankFRB of New York, M&T Bank’s Bank Note Program, and other available borrowing facilities. The Bank Note Program enables M&T Bank to offer unsecured senior and subordinated notes. The Company has, from time to time, also issued subordinated capital notes and junior subordinated debentures associated with trust preferred securities to provide liquidity and enhance regulatory capital ratios. The Company’s junior subordinated debentures associated with trust preferred securities and other subordinated capital notes are considered Tier 2 capital and are includable in total regulatory capital. At each of September 30, 20212022 and December 31, 2020,2021, long-term borrowings aggregated $3.5 billion and $4.4 billion, respectively.billion.
Prior to June 2021, Cayman Islands office deposits werehad been used by some customers of the Company as an alternative to other deposit and investment products. During the second quarter of 2021, the Company introduced a new interest-bearing sweep product (included in savings and interest-checking deposits) that replaced the Eurodollar sweep product previously recorded as Cayman Islands office deposits. As a result, the Cayman Islands office has been closed and there were no Cayman Islands office deposits totaled $900 million atoutstanding as of September 30, 20202022 and $652 million at December 31, 2020.2021. The Company no longer offers deposits at the Cayman Islands office but, as previously noted, now offers an interest-bearing sweep product to commercial customers through its domestic branches. The Company has also benefited from the placement of brokered deposits. The Company had brokered savings and interest-bearing checkinginterest-checking deposit accounts which aggregated approximately $3.3 billion at September 30, 2022, $3.2 billion at December 31, 2021 and $3.4 billion at September 30, 2021, $4.2 billion at September 30, 2020 and $4.5 billion at December 31, 2020.2021. Brokered time deposits were not a significant source of funding as of those dates.
The Company’s ability to obtain funding from these sources could be negatively impacted should the Company experience a substantial deterioration in its financial condition or its debt ratings, or should the availability of funding become restricted due to a disruption in the financial markets. The Company attempts to quantify such credit-event risk by modeling scenarios that estimate the liquidity impact resulting from a short-term ratings downgrade over various grading levels. Such impact is estimated by attempting to measure the effect on available unsecured lines of credit, available capacity from secured borrowing sources and securitizable assets. In addition to deposits and borrowings, other sources of liquidity include maturities of investment securities and other earning assets, repayments of loans and investment securities, and cash generated from operations, such as fees collected for services.
- 63 -
Certain customers of the Company obtain financing through the issuance of variable rate demand bonds (“VRDBs”). The VRDBs are generally enhanced by letters of credit provided by M&T Bank. M&T Bank oftentimes acts as remarketing agent for the VRDBs and, at its discretion, may from time-to-time own some of the VRDBs while such instruments are remarketed. When this occurs, the VRDBs are classified as trading account assets in the Company’s consolidated balance sheet. Nevertheless, M&T Bank is not contractually obligated to purchase the VRDBs. The value of VRDBs in the Company’s trading account was not material at September 30, 20212022 or December 31, 2020.2021. The total amountamounts of VRDBs outstanding backed by M&T Bank letters of credit waswere $633 million at September 30, 2022, $662 million at December 31, 2021 and $683 million at September 30, 2021, compared with $831 million at September, 30, 2020 and $725 million at December 31, 2020.2021. M&T Bank also serves as remarketing agent for most of those bonds.
The Company enters into contractual obligations in the normal course of business that require future cash payments. Such obligations include, among others, payments related to deposits, borrowings, leases and other contractual commitments. Off-balance sheet commitments to customers may impact liquidity, including commitments to extend credit, standby letters of credit, commercial letters of credit, financial guarantees and indemnification contracts, and commitments to sell real estate loans. Because many of these commitments or contracts expire without being funded in whole or in part, the contract amounts are not necessarily indicative of future cash flows. Further discussion of these commitments is provided in note 14 of Notes to Financial Statements.
M&T’s primary source of funds to pay for operating expenses, shareholder dividends and treasury stock repurchases has historically been the receipt of dividends from its bank subsidiaries, which are subject to various regulatory limitations. Dividends from any bank subsidiary to M&T are limited by the amount of earnings of the subsidiary in the current year and the two preceding years. For purposes of that test, at September 30, 20212022 approximately $1.4 billion$937 million was available for payment of dividends to M&T from bank subsidiaries. M&T also may
- 60 -
obtain funding through long-term borrowings. Outstanding senior notes of M&T at September 30, 20212022 and December 31, 20202021 were $772$1.22 billion and $766 million, respectively. M&T assumed $503 million of short-term borrowings and $783$78 million respectively.of long-term borrowings in the acquisition of People's United. In October 2022, M&T redeemed the short-term borrowings obtained in the acquisition of People's United. Junior subordinated debentures of M&T associated with trust preferred securities outstanding at September 30, 20212022 and December 31, 20202021 totaled $531$535 million and $528$532 million, respectively.
Management closely monitors the Company’s liquidity position on an ongoing basis for compliance with internal policies and believes that available sources of liquidity are adequate to meet funding needs anticipated in the ordinary course of business. Management does not anticipate engaging in any activities, either currently or in the long-term, for which adequate funding would not be available and would therefore result in a significant strain on liquidity at either M&T or its subsidiary banks.
Market risk is the risk of loss from adverse changes in the market prices and/or interest rates of the Company’s financial instruments. The primary market risk the Company is exposed to is interest rate risk. Interest rate risk arises from the Company’s core banking activities of lending and deposit-taking, because assets and liabilities reprice at different times and by different amounts as interest rates change. As a result, net interest income earned by the Company is subject to the effects of changing interest rates. The Company measures interest rate risk by calculating the variability of net interest income in future periods under various interest rate scenarios using projected balances for earning assets, interest-bearing liabilities and derivatives used to manage interest rate risk. Management’s philosophy toward interest rate risk management is to limit the variability of net interest income. The balances of financial instruments used in the projections are based on expected growth from forecasted business opportunities, anticipated prepayments of loans and investment securities, and expected maturities of investment securities, loans and deposits. Management uses a “value of equity” model to supplement the modeling technique described above. Those supplemental analyses are based on discounted cash flows associated with on- and off-balance sheet financial instruments. Such analyses are modeled to reflect changes in interest rates and provide management with a long-term interest rate risk metric. The Company has entered into interest rate swap agreements to help manage exposure to interest rate risk. At September 30, 2021,2022, the aggregate notional amount of interest rate swap agreements entered into for interest rate risk management purposes that were currently in effect was $19.0$16.75 billion. In addition, the Company has entered into $8.35$4.65 billion of forward-starting interest rate swap agreements.
- 64 -
The Company’s Asset-Liability Committee, which includes members of senior management, monitors the sensitivity of the Company’s net interest income to changes in interest rates with the aid of a computer model that forecasts net interest income under different interest rate scenarios. In modeling changing interest rates, the Company considers different yield curve shapes that consider both parallel (that is, simultaneous changes in interest rates at each point on the yield curve) and non-parallel (that is, allowing interest rates at points on the yield curve to vary by different amounts) shifts in the yield curve. In utilizing the model, market-implied forward interest rates over the subsequent twelve months are generally used to determine a base interest rate scenario for the net interest income simulation. That calculated base net interest income is then compared to the income calculated under the varying interest rate scenarios. The model considers the impact of ongoing lending and deposit-gathering activities, as well as interrelationships in the magnitude and timing of the repricing of financial instruments, including the effect of changing interest rates on expected prepayments and maturities. When deemed prudent, management has taken actions to mitigate exposure to interest rate risk through the use of on- or off-balance sheet financial instruments and intends to do so in the future. Possible actions include, but are not limited to, changes in the pricing of loan and deposit products, modifying the composition of earning assets and interest-bearing liabilities, and adding to, modifying or terminating existing interest rate swap agreements or other financial instruments used for interest rate risk management purposes.
The accompanying table as of September 30, 20212022 and December 31, 20202021 displays the estimated impact on net interest income in the base scenario described above resulting from parallel changes in interest rates across repricing categories during the first modeling year.
- 61 -
SENSITIVITY OF NET INTEREST INCOME
TO CHANGES IN INTEREST RATES
|
| Calculated Increase (Decrease) |
|
| |||||
Changes in interest rates |
| September 30, 2022 |
|
| December 31, 2021 |
|
| ||
|
| (In thousands) |
|
| |||||
|
|
|
|
|
|
|
| ||
+200 basis points |
| $ | 251,494 |
|
|
| 533,317 |
|
|
+100 basis points |
|
| 179,848 |
|
|
| 297,573 |
|
|
-100 basis points |
|
| (248,760 | ) |
|
| (204,760 | ) |
|
-200 basis points |
|
| (520,661 | ) |
|
| — |
| (a) |
|
| Calculated Increase (Decrease) in Projected Net Interest Income |
|
| |||||
Changes in interest rates |
| September 30, 2021 |
|
| December 31, 2020 |
|
| ||
|
| (In thousands) |
|
| |||||
|
|
|
|
|
|
|
|
|
|
+200 basis points |
| $ | 531,480 |
|
|
| 324,684 |
|
|
+100 basis points |
|
| 294,060 |
|
|
| 182,661 |
|
|
-100 basis points |
|
| (101,798 | ) |
|
| (61,792 | ) |
|
The Company utilized many assumptions to calculate the impact that changes in interest rates may have on net interest income. The more significant of those assumptions included the rate of prepayments of mortgage-related assets, cash flows from derivative and other financial instruments, held for non-trading purposes, loan and deposit volumes and pricing, and deposit maturities. In the scenarios presented, the Company also assumed gradual changes in interest rates during a twelve-month period as compared with the base scenario. In the declining rate scenario, the rate changes may be limited to lesser amounts such that interest rates remain at or above zero on all points of the yield curve. Changes in amounts presented since December 31, 2021 reflect higher balances of earnings assets obtained in the People's United acquisition, changes in portfolio composition, the level of market-implied forward interest rates and hedging actions taken by the Company. The assumptions used in interest rate sensitivity modeling are inherently uncertain and, as a result, the Company cannot precisely predict the impact of changes in interest rates on net interest income. Actual results may differ significantly from those presented due to the timing, magnitude and frequency of changes in interest rates and changes in market conditions and interest rate differentials (spreads) between maturity/repricing categories, as well as any actions, such as those previously described, which management may take to counter such changes.
A significant amount of the Company’s interest-earning assets, interest-bearing liabilities, preferred equity instruments and interest rate swap agreements have contractual repricing terms that reference the London Interbank Offered Rate (“LIBOR”). Various regulatory bodies have encouraged banks to transition away from LIBOR as soon as practicable, generally cease entering new contracts that use LIBOR as a reference rate no later than December 31, 2021, and for new contracts entered into before December 31, 2021 to utilize a reference rate other than LIBOR or include robust language that includes a clearly defined alternative reference rate after LIBOR’s discontinuation. Publication of certain tenors of LIBOR has already ceased and complete cessation of LIBOR publication is expected by June 30, 2023. Effective December 31, 2021, the Company essentially discontinued entering into new LIBOR-based contracts.
At September 30, 2022 the Company had LIBOR-based commercial loans and leases and commercial real estate loans of $36.6 billion and residential mortgage and consumer loans of $4.3 billion outstanding. Approximately 70% of the loans either mature before June 30, 2023 or have been amended to include appropriate alternative language to be effective upon cessation of LIBOR publication. Approximately $731 million of borrowings and $1.1 billion of preferred equity instruments reference LIBOR as of September 30, 2022. The Company’s interest rate swap agreements primarily reference LIBOR. In October 2020, the International Swaps and Derivatives Association, Inc. published the IBOR Fallbacks Supplement (“Supplement”) and the IBOR Fallback Protocol (“Protocol”). The Protocol enables market participants to incorporate certain revisions into their legacy non-cleared derivative trades with other counterparties that also choose to adhere to the Protocol. M&T adhered to the Protocol in November 2020 and is in the process of remediating its interest rate swap transactions with its end-user customers. With respect to the Company’s cleared interest rate swap agreements that reference LIBOR, clearinghouses have adopted the same relevant Secured Overnight Financing Rate (“SOFR”) benchmark alternatives of the Supplement and Protocol.
As loans mature and new originations occur a larger percentage of the Company’s variable-rate loans are expected to reference SOFR or other indexes, including the Bloomberg Short Term Bank Yield Index (“BSBY”). At September 30, 2022 the Company had approximately $21.3 billion and $274 million of outstanding loan balances that reference SOFR and BSBY, respectively. Additionally, as of September 30, 2022, the Company had $15.6 billion of notional amount of interest rate swap agreements designated as cash flow hedges of commercial real estate loans,
- 62 -
including $4.7 billion of forward-starting interest rate swap agreements that become effective in 2023, and notional amounts of $4.3 billion of non-hedging derivative interest rate contracts that are referenced to SOFR. The Company’s usage of interest rate swap agreements referenced to SOFR or BSBY is expected to increase in response to the discontinuation of LIBOR. The Company continues to work with its customers and other counterparties to remediate LIBOR-based agreements which expire after June 30, 2023 by incorporating alternative language, negotiating new agreements, or other means. The discontinuation of LIBOR and uncertainty relating to the emergence of one or more alternative benchmark indexes to replace LIBOR could materially impact the Company’s interest rate risk profile and its management thereof.
Changes in fair value of the Company’s financial instruments can also result from a lack of trading activity for similar instruments in the financial markets. That impact is most notable on the values assigned to some of the Company’s investment securities. Information about the fair valuation of investment securities is presented in notes 3 and 13 of Notes to Financial Statements.
The Company engages in limited trading account activitiesenters into interest rate and foreign exchange contracts to meet the financial needs of customers that it includes in its financial statements as non-hedging derivatives within other assets and to fund the Company’s obligations under certain deferred compensation plans.other liabilities. Financial instruments utilized for trading accountsuch activities consist predominantly of interest rate contracts, such as interest rate swap agreements and forward and futures contracts related to foreign currencies. The Company generally mitigates the foreign currency and interest rate risk associated with trading accountcustomer activities by entering into offsetting trading positions with third parties that are also included in the trading account.other assets and other liabilities. The fair values of trading accountnon-hedging derivative positions associated with interest rate contracts and foreign
- 65 -
currency and other option and futures contracts are presented in note 11 of Notes to Financial Statements. The amounts of gross and net trading account positions, as well as the type of trading account activities conducted by the Company, are subject to a well-defined series of potential loss exposure limits established by management and approved by M&T’s Board of Directors. However, asAs with any non-government guaranteed financial instrument, the Company is exposed to credit risk associated with counterparties to the Company’s trading accountnon-hedging derivative activities.
The notional amounts of interest rate contracts entered into for trading account purposes totaled $34.5 billion at September 30, 2021, $36.6 billion at September 30, 2020 and $37.8 billion at December 31, 2020. The notional amounts of foreign currency and other option and futures contracts entered into for trading account purposes were $815 million at September 30, 2021, compared with $877 million at September 30, 2020 and $776 million at December 31, 2020. Although the notional amounts of these contracts are not recorded in the consolidated balance sheet, the unsettled fair values of allsuch financial instruments used for trading account activities are recorded in the consolidated balance sheet. The fair values of all trading accountsuch non-hedging derivative assets and liabilities recognized on the balance sheet were $625$416 million and $93 million,$1.42 billion, respectively, at September 30, 20212022 and $1.1 billion$418 million and $117$83 million, respectively, at December 31, 2020.2021. The fair value asset and liability amounts at September 30, 2022 have been reduced by contractual settlements of $1.15 billion and $20 million, respectively, and at December 31, 2021 have been reduced by contractual settlements of $42$54 million and $433 million, respectively, and at December 31, 2020 have been reduced by contractual settlements of $6 million and $806$305 million, respectively. The lower balance of trading account assetsvalues associated with the Company's non-hedging derivative activities at September 30, 20212022 as compared with December 31, 2020 was largely the result of decreased2021 reflect changes in values associated with interest rate swap agreements entered into with commercial customers that are not subject to periodic variation margin settlement payments.
Trading account assets were $130 million at September 30, 2022, $50 million at December 31, 2021 and $51 million at September 30, 2021. Included in trading account assets were assets related to deferred compensation plans aggregating $23 million at September 30, 2022, compared with $21 million at each of September 30, 2021 September 30, 2020 and December 31, 2020.2021. Changes in the fair values of such assets are recorded as “trading account and foreign exchangenon-hedging derivative gains” in the consolidated statement of income. Included in “other liabilities” in the consolidated balance sheet at September 30, 2021 were $252022 was $29 million of liabilities related to deferred compensation plans, compared with $25 million at September 30, 2021 and $24 million at each of September 30, 2020and December 31, 2020.2021. Changes in the balances of such liabilities due to the valuation of allocated investment options to which the liabilities are indexed are recorded in “other costs of operations” in the consolidated statement of income. Also included in trading account assets were investments in mutual funds and other assets that the Company was required to hold under terms of certain non-qualified supplemental retirement and other benefit plans that were assumed by the Company in various acquisitions. Those assets totaled $107 million at September 30, 2022 and $29 million at each of September 30, 2021 September 30, 2020 and December 31, 2020.2021. The increase at September 30, 2022 as compared with the prior dates reflects assets obtained in the acquisition of the People's United non-qualified supplemental retirement and other benefit plans.
- 63 -
Given the Company’s policies limits and positions, management believes that the potential loss exposure to the Company resulting from market risk associated with trading account and non-hedging derivative activities was not material, however, as previously noted, the Company is exposed to credit risk associated with counterparties to transactions related to the Company’s trading accountactions to mitigate foreign currency and interest rate risk associated with customer activities. Additional information about the Company’s use of derivative financial instruments in its trading account activities is included in note 11 of Notes to Financial Statements.
- 66 -
Provision for Credit Losses
A provision for (or recapture of) credit losses is recorded to adjust the level of the allowance to reflect expected credit losses that are based on economic forecasts as of each reporting date. ProvisionProvisions for credit loss recaptureslosses of $115 million and $302 million were recorded in the third and second quarters of 2021 for $20 million and $15 million,2022, respectively, compared with a provision for credit lossesloss recapture of $150 million that was recorded in the third quarter of 2020. The provision (or recapture) in each quarter adjusts the allowance for credit losses to reflect expected losses that are based on macroeconomic forecasts as of each quarter-end date. Net charge-offs of loans were $40 million in the recent quarter, $30$20 million in the third quarter of 2020 and $462021. The provision recorded in the second quarter of 2022 included $242 million on loans obtained in the acquisition of People's United not deemed to be PCD. GAAP requires a provision for credit losses to be recorded beyond the recognition of the fair value of the loans at the acquisition date. In addition to the recorded provision, the allowance for credit losses was also increased by $99 million in the second quarter of 2021.2022 to reflect the expected credit losses on loans obtained in the acquisition of People's United deemed to be PCD. That addition represents an increase of the carrying values of loans identified as PCD at the time of the acquisition. The Company's estimates of expected credit losses at September 30, 2022 reflect anticipated increases in unemployment spurred by Federal Reserve initiatives to curb high rates of inflation that could lead to overall deterioration of economic conditions and, thus, credit quality during an eight-quarter forecast period. Risks considered included inflation, a projected rise in unemployment, reduction of economic growth projections, decreasing residential real estate prices as compared with the immediately preceding quarter and continued concerns about commercial real estate values in the hospitality and office building sectors. Macroeconomic assumptions used to estimate credit losses on loans acquired from People's United at the April 1, 2022 acquisition date were consistent with those used by the Company to estimate credit losses at March 31, 2022.
Net charge-offs of loans were $63 million in the recent quarter, compared with net charge-offs of $40 million in the third quarter of 2021 and $50 million in the second quarter of 2022. Net charge-offs as an annualized percentage of average loans and leases were .17%.20% in the third quarter of 2021, .12%2022, .17% in the year-earlier quarter and .19%.16% in the second quarter of 2021.2022. As an annualized percentage by loan type, net charge-offs (recoveries) for the third quarter of 2022, third quarter of 2021 and the second quarter of 2022 were .16%, .38% and .31% for commercial loans and leases, .30%, .13% and .06% for commercial real estate loans and .25%, .12% and .26% for consumer loans, respectively. Net charge-offs of residential real estate loans as an annualized percentage of average loan balances were less than .01% for each of the three quarters noted herein. Net charge-offs for the nine-month periods ended September 30, 2022 and 2021 and 2020 were $161$120 million and $150$161 million, respectively, representing an annualized .22%.14% and .21%.22%, respectively, of average loans and leases. A summary of net charge-offs by loan type is presented in the table that follows.
- 64 -
NET CHARGE-OFFS (RECOVERIES)
BY LOAN/LEASE TYPE
|
| 2022 |
| |||||||||||||
|
| First Quarter |
|
| Second |
|
| Third Quarter |
|
| Year- |
| ||||
|
| (In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commercial, financial, leasing, etc. |
| $ | 5,569 |
|
|
| 29,502 |
|
|
| 15,374 |
|
|
| 50,445 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commercial |
|
| (13,143 | ) |
|
| 7,140 |
|
|
| 34,812 |
|
|
| 28,809 |
|
Residential |
|
| 865 |
|
|
| 256 |
|
|
| 338 |
|
|
| 1,459 |
|
Consumer |
|
| 13,576 |
|
|
| 12,671 |
|
|
| 12,675 |
|
|
| 38,922 |
|
|
| $ | 6,867 |
|
|
| 49,569 |
|
|
| 63,199 |
|
|
| 119,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| 2021 |
| |||||||||||||
|
| First Quarter |
|
| Second Quarter |
|
| Third Quarter |
|
| Year- |
| ||||
|
| (In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commercial, financial, leasing, etc. |
| $ | 4,434 |
|
|
| 29,242 |
|
|
| 22,813 |
|
|
| 56,489 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commercial |
|
| 54,092 |
|
|
| 11,330 |
|
|
| 11,880 |
|
|
| 77,302 |
|
Residential |
|
| 366 |
|
|
| (149 | ) |
|
| 22 |
|
|
| 239 |
|
Consumer |
|
| 16,289 |
|
|
| 5,655 |
|
|
| 5,389 |
|
|
| 27,333 |
|
|
| $ | 75,181 |
|
|
| 46,078 |
|
|
| 40,104 |
|
|
| 161,363 |
|
|
| 2021 |
| |||||||||||||
|
| First Quarter |
|
| Second Quarter |
|
| Third Quarter |
|
| Year- to-date |
| ||||
|
| (In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, leasing, etc. |
| $ | 4,434 |
|
|
| 29,242 |
|
|
| 22,813 |
|
|
| 56,489 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
| 54,092 |
|
|
| 11,330 |
|
|
| 11,880 |
|
|
| 77,302 |
|
Residential |
|
| 366 |
|
|
| (149 | ) |
|
| 22 |
|
|
| 239 |
|
Consumer |
|
| 16,289 |
|
|
| 5,655 |
|
|
| 5,389 |
|
|
| 27,333 |
|
|
| $ | 75,181 |
|
|
| 46,078 |
|
|
| 40,104 |
|
|
| 161,363 |
|
|
| 2020 |
| |||||||||||||
|
| First Quarter |
|
| Second Quarter |
|
| Third Quarter |
|
| Year- to-date |
| ||||
|
| (In thousands) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, leasing, etc. |
| $ | 13,122 |
|
|
| 29,235 |
|
|
| 9,959 |
|
|
| 52,316 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
| 834 |
|
|
| 16,458 |
|
|
| 1,944 |
|
|
| 19,236 |
|
Residential |
|
| 3,428 |
|
|
| (279 | ) |
|
| 556 |
|
|
| 3,705 |
|
Consumer |
|
| 31,778 |
|
|
| 25,716 |
|
|
| 17,272 |
|
|
| 74,766 |
|
|
| $ | 49,162 |
|
|
| 71,130 |
|
|
| 29,731 |
|
|
| 150,023 |
|
The levels of net charge-offs of commercial loans andin the third quarter of 2022 reflect a $23 million charge-off of a loan to a paper distribution company partially offset by recoveries of previously charged-off loan balances. Net charge-offs of commercial loans in the second quarter of 2022 include a $23 million charge-off of a loan to a consumer products manufacturer. The net charge-offs of commercial real estate loans in the third quarter of 2022 reflect a $20 million charge-off of a loan to a healthcare provider and a $7 million charge-off of a loan to a residential leasing company. Included in net charge-offs of consumer loans were: net recoveries of automobile loans of less than $1 million in the impactrecent quarter, $2 million in the year-earlier quarter and $1 million in the second quarter of 2022; net charge-offs of recreational finance loans of $5 million in the third quarter of 2022, $1 million in the year-earlier quarter and $7 million in the second 2022 quarter; and net recoveries of home equity loans and lines of credit secured by one-to-four family residential properties of less than $1 million in each of the pandemic on borrowers’ abilities to repay loans. Inrecent quarter, the commercial real estate portfolio, those loans are mostlythird quarter of 2021 and the second quarter of 2022. Net charge-offs associated with other consumer loans including credit cards and installment loans totaled $8 million in each of the retail, office buildingrecent quarter and hospitality sectors.the second quarter of 2022, compared with $7 million in the third quarter of 2021.
Nonaccrual loans aggregated $2.24$2.43 billion or 2.40%1.89% of total loans and leases outstanding at September 30, 2021,2022, compared with $1.24$2.24 billion or 1.26%2.40% at September 30, 2020, $1.892021, $2.06 billion or 1.92%2.22% at December 31, 20202021 and $2.24$2.63 billion or 2.31%2.05% at June 30, 2021.2022. Loans obtained in the acquisition of People's United that have been classified as nonaccrual totaled $581 million at September 30, 2022 and $545 million at June 30, 2022. The higher level of nonaccrual loans since September 30, 2020 reflects the continuing impact of the pandemiceconomic conditions on borrowers’ abilityabilities to make contractual payments on their loans, most notably commercial real estate loans in the hospitality, sector.office, retail and health care-related sectors.
Accruing loans past due 90 days or more were $1.03 billion$477 million or 1.10%.37% of loans and leases at September 30, 2021,2022, compared with $527 million$1.03 billion or .54%1.10% at September 30, 2020, $8592021, $963 million or .87%1.04% at December 31, 20202021 and $1.08 billion$524 million or 1.11%.41% at June 30, 2021.2022. Accruing loans past due 90 days or more were predominantly residential real estate loans and included loans guaranteed by government-related entities of $423 million, $947 million, $505$928 million $798and $468 million $1.03 billion at September 30, 2021,2022, September 30, 2020,2021, December 31, 20202021 and June 30, 2022, respectively. The lower balance at September 30, 2022 and June 30, 2022 compared with the 2021 respectively.dates reflects residential real estate loans guaranteed by government-related entities receiving payment deferrals during the COVID-19 pandemic, but ineligible for treatment under the CARES act, that exited these arrangements and complied with modified terms to
- 65 -
become current. Guaranteed loans included one-to-four family residential mortgage loans serviced by the Company that were purchased to reduce associated servicing costs, including a
- 67 -
requirement to advance principal and interest payments that had not been received from individual mortgagors. Despite the loans being purchased by the Company, the insurance or guarantee by the applicable government-related entity remains in force. The outstanding principal balances of those purchased loans that are guaranteed by government-related entities totaled $919$366 millionat September 30, 2021, $4802022, $919 million a year earlier, $764$889 million at December 31, 20202021 and $1.00 billion$435 million at June 30, 2021.2022. The remaining accruing loans past due 90 days or more not guaranteed by government-related entities were loans considered to be with creditworthy borrowers that were in the process of collection or renewal. In addition to the past due loans, the Company also has $1.6 billion of government-guaranteed residential mortgage loans that are not considered delinquent because the borrower has requested and received a COVID-19 related payment deferral. In general, those loans were also purchased to reduce associated servicing costs as described above and also remain covered by the insurance or guarantee of the applicable government-related entity, but are not considered to be past due in accordance with the accounting treatment afforded under the CARES Act and related regulatory and financial accounting guidance as described below and in note 1 of Notes to Financial Statements in M&T’s 2020 Annual Report.
Loans that were 30-89 days past due were $837 million at September 30, 2021, compared with $874 million at September 30, 2020, $662 million at December 31, 2020 and $640 million at June 30, 2021. COVID-19 related payment deferral modifications of loans are classified as current in accordance with regulatory guidance and, as a result, did not contribute in incremental additions to loans categorized as 30-89 days past due.
The United States has been operating under a state of emergency related to the COVID-19 pandemic since March 13, 2020. The direct and indirect effects of the COVID-19 pandemic resulted in a dramatic reduction in 2020 in economic activity that severely hampered the ability of some businesses and consumers to meet their repayment obligations. The CARES Act, in additionInformation regarding the Company's treatment of loan modifications subject to providing financial assistance to both businesses and consumers, created a forbearance program for federally-backed mortgage loans, protects borrowers from negative credit reporting due to loan accommodations related toapplicable regulatory guidance issued during the national emergency, and provides financial institutions the option to temporarily suspend certain requirements under GAAP related to troubled debt restructurings for a limited period of time to account for the effects of COVID-19. The banking regulatory agencies likewise issued guidance encouraging financial institutions to work prudently with borrowers who are, or may be, unable to meet their contractual payment obligations because of the effects of COVID-19. That guidance, with concurrence of the Financial Accounting Standards Board and provisions ofpandemic, including the CARES Act, allowcan be found in Management's Discussion and Analysis of Financial Condition and Results of Operations within Form 10-K for the year ended December 31, 2021. COVID-19 related modifications made on a good faith basis in response to COVID-19 to borrowers who were generally current with their payments prior to any relief, to not be treated as delinquent or as troubled debt restructurings. Modifications may include payment deferrals (including extensions of maturity dates), covenant waivers and fee waivers. The Company has worked with its customers affected by COVID-19 and has granted modifications across many of its loan portfolios. To the extent that such modifications met the criteria previously described, such modifications haveat September 30, 2022 were not been classified as delinquent or as troubled debt restructurings. A summary of loans for which COVID-19 forbearances have been granted and which are not considered impaired or past due is presented herein and in note 4 of Notes to Financial Statements.material.
The Company also modified the terms of select loans in an effort to assist borrowers that were not related to the COVID-19 pandemic or that did not meet the criteria for a COVID-19 modification under the CARES Act.pandemic. If the borrower was experiencing financial difficulty and a concession was granted, the Company considered such modifications as troubled debt restructurings. Loan modifications included such actions as the extension of loan maturity dates and the lowering of interest rates and monthly payments. The objective of the modifications was to increase loan repayments by customers and thereby reduce net charge-offs. Information about modifications of loans that are considered troubled debt restructurings is included in note 4 of Notes to Financial Statements.
Residential real estate loans modified under specified loss mitigation programs prescribed by government guarantors that were not related to the COVID-19 pandemic have not been included in renegotiated loans because the loan guarantee remains in full force and, accordingly, the Company has not granted a concession with respect to the ultimate collection of the original loan balance. Such loans aggregated $425 million, $267 million, $342 million and $525$382 million at September 30, 2021,2022, $425 million at each of September 30, 2020,2021 and December 31, 20202021, and $356 million at June 30, 2021, respectively.2022.
Commercial loans and leases classified as nonaccrual totaled $368 million, $280 million, $351 million, $307$221 million and $330$442 million at September 30, 2021,2022, September 30, 2020,2021, December 31, 20202021 and June 30, 2021,2022, respectively. Commercial
- 68 -
real estate loans in nonaccrual status aggregated $1.47 billion, $1.31 billion, $292 million, $891 million$1.18 billion, and $1.23$1.55 billion atSeptember 30, 2022, September 30, 2021, September 30, 2020, December 31, 20202021 and June 30, 2021,2022, respectively.The increases in commercial Commercial real estate loans in nonaccrual status since September 30, 2020 were largely due toreflective of loans in the additions of hotel-relatedhospitality, office, retail and health care-related sectors. Commercial loans to that category. Hotel-relatedand leases and commercial real estate loans (including construction) inacquired from People's United and classified as nonaccrual statustotaled $136 million and $416 million, respectively, at September 30, 2021, September 30, 2020, December 31, 20202022 and $188 million and $312 million, respectively, at June 30, 2021 were $819 million, $77 million, $607 million and $815 million, respectively.2022.
Nonaccrual residential real estate loans totaled $381 million at September 30, 2022, compared with $480 million at September 30, 2021, compared with $413 million at September 30, 2020, $513$479 million at December 31, 20202021 and $509$444 million at June 30, 2021.2022. The increasesdecreases since September 30, 2020 were2021 largely reflectivereflect borrower repayment performance since that date partially offset by $17 million of the effect of recent economic conditions on borrowers.residential real estate loans acquired from People's United and classified as nonaccrual at September 30, 2022. Included in residential real estate loans classified as nonaccrual were limited documentation first mortgage loans of $95 million at September 30, 2022, compared with $127 million at September 30, 2021, compared with $116 million at September 30, 2020, $147$123 million at December 31, 2020,2021 and $137$113 million at June 30, 2021.2022. Limited documentation first mortgage loans represent loans secured by residential real estate that at origination typically included some form of limited borrower documentation requirements as compared with more traditional loans. The Company no longer originates limited documentation loans. Residential real estate loans past due 90 days or more and accruing interest aggregated $412 million at September 30, 2022, compared with $945 million at September 30, 2021, compared with $503 million at September 30, 2020, $793$920 million at December 31, 20202021 and $1.03 billion$474 million at June 30, 2021.2022. Those amounts related predominantly to government-guaranteed loans as previously noted. The lower balances at the two most recent quarter-ends also reflect improved borrower repayment performance. Information about the location of nonaccrual and charged-off residential real estate loans as of and for the quarter ended September 30, 20212022 is presented in the accompanying table.
- 66 -
Nonaccrual consumer loans were $206 million at September 30, 2022, $170 million at September 30, 2021, compared with $184 million at September 30, 2020, $183$177 million at December 31, 20202021 and $173$196 million at June 30, 2021.2022. Included in nonaccrual consumer loans at September 30, 2021,2022, September 30, 2020,2021, December 31, 20202021 and June 30, 20212022 were: automobile loans of $40 million, $31 million, $42 million, $39$34 million and $31$36 million, respectively; recreational finance loans of $24$39 million, $24 million, $26$28 million and $23$33 million, respectively; and outstanding balances of home equity loans and lines of credit of $78 million, $71 million, $70 million and $79 million, $79respectively. Consumer loans acquired from People's United and classified as nonaccrual at September 30, 2022 totaled $12 million and $77 million, respectively.consisted predominantly of home equity loans and lines of credit. Information about the location of nonaccrual and charged-off home equity loans and lines of credit as of and for the quarter ended September 30, 20212022 is presented in the accompanying table.
Information about past due and nonaccrual loans as of September 30, 20212022 and December 31, 20202021 is also included in note 4 of Notes to Financial Statements.
- 69 -
SELECTED RESIDENTIAL REAL ESTATE-RELATED LOAN DATA
|
|
|
|
|
|
|
|
|
|
|
| Quarter Ended |
| ||||||||
|
| September 30, 2022 |
|
|
| September 30, 2022 |
| ||||||||||||||
|
|
|
|
| Nonaccrual |
|
|
| Net Charge-offs (Recoveries) |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Percent of |
| |||||
|
|
|
|
|
|
|
| Percent of |
|
|
|
|
|
| Average |
| |||||
|
| Outstanding |
|
|
|
|
| Outstanding |
|
|
|
|
|
| Outstanding |
| |||||
|
| Balances |
|
| Balances |
|
| Balances |
|
|
| Balances |
|
| Balances |
| |||||
|
| (Dollars in thousands) |
| ||||||||||||||||||
Residential mortgages: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
New York |
| $ | 6,553,820 |
|
| $ | 111,080 |
|
|
| 1.69 | % |
|
| $ | 1,383 |
|
|
| .09 | % |
Mid-Atlantic (a) |
|
| 6,549,714 |
|
|
| 104,464 |
|
|
| 1.59 |
|
|
|
| (185 | ) |
|
| .(01 | ) |
New England (b) |
|
| 6,187,859 |
|
|
| 49,177 |
|
|
| .79 |
|
|
|
| (124 | ) |
|
| .(01 | ) |
Other |
|
| 2,631,196 |
|
|
| 19,086 |
|
|
| .73 |
|
|
|
| (216 | ) |
|
| .(03 | ) |
Total |
| $ | 21,922,589 |
|
| $ | 283,807 |
|
|
| 1.29 | % |
|
| $ | 858 |
|
|
| .02 | % |
Residential construction loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
New York |
| $ | 21,563 |
|
| $ | 375 |
|
|
| 1.74 | % |
|
| $ | — |
|
|
| — | % |
Mid-Atlantic (a) |
|
| 21,688 |
|
|
| 336 |
|
|
| 1.55 |
|
|
|
| — |
|
|
| — |
|
New England (b) |
|
| 18,439 |
|
|
| 877 |
|
|
| 4.76 |
|
|
|
| — |
|
|
| — |
|
Other |
|
| 2,566 |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
Total |
| $ | 64,256 |
|
| $ | 1,588 |
|
|
| 2.47 | % |
|
| $ | — |
|
|
| — | % |
Limited documentation first lien mortgages: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
New York |
| $ | 501,679 |
|
| $ | 40,427 |
|
|
| 8.06 | % |
|
| $ | 45 |
|
|
| .03 | % |
Mid-Atlantic (a) |
|
| 442,905 |
|
|
| 34,664 |
|
|
| 7.83 |
|
|
|
| — |
|
|
| — |
|
New England (b) |
|
| 99,097 |
|
|
| 15,358 |
|
|
| 15.50 |
|
|
|
| — |
|
|
| — |
|
Other |
|
| 43,754 |
|
|
| 4,933 |
|
|
| 11.27 |
|
|
|
| (565 | ) |
|
| (4.94 | ) |
Total |
| $ | 1,087,435 |
|
| $ | 95,382 |
|
|
| 8.77 | % |
|
| $ | (520 | ) |
|
| .(18 | %) |
First lien home equity loans and lines of credit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
New York |
| $ | 969,253 |
|
| $ | 16,728 |
|
|
| 1.73 | % |
|
| $ | 274 |
|
|
| .17 | % |
Mid-Atlantic (a) |
|
| 1,110,862 |
|
|
| 21,961 |
|
|
| 1.98 |
|
|
|
| (18 | ) |
|
| .(01 | ) |
New England (b) |
|
| 704,555 |
|
|
| 2,551 |
|
|
| .36 |
|
|
|
| — |
|
|
| — |
|
Other |
|
| 20,620 |
|
|
| 1,010 |
|
|
| 4.90 |
|
|
|
| (20 | ) |
|
| .(01 | ) |
Total |
| $ | 2,805,290 |
|
| $ | 42,250 |
|
|
| 1.51 | % |
|
| $ | 236 |
|
|
| .03 | % |
Junior lien home equity loans and lines of credit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
New York |
| $ | 768,949 |
|
| $ | 16,106 |
|
|
| 2.09 | % |
|
| $ | (479 | ) |
|
| .(41 | %) |
Mid-Atlantic (a) |
|
| 929,851 |
|
|
| 16,674 |
|
|
| 1.79 |
|
|
|
| (539 | ) |
|
| .(45 | ) |
New England (b) |
|
| 538,721 |
|
|
| 2,802 |
|
|
| .52 |
|
|
|
| 376 |
|
|
| .36 |
|
Other |
|
| 20,612 |
|
|
| 376 |
|
|
| 1.82 |
|
|
|
| — |
|
|
| — |
|
Total |
| $ | 2,258,133 |
|
| $ | 35,958 |
|
|
| 1.59 | % |
|
| $ | (642 | ) |
|
| .(11 | %) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Quarter Ended |
| |||||
|
| September 30, 2021 |
|
|
| September 30, 2021 |
| ||||||||||||||
|
|
|
|
|
| Nonaccrual |
|
|
| Net Charge-offs (Recoveries) |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Percent of |
| |
|
|
|
|
|
|
|
|
|
| Percent of |
|
|
|
|
|
|
| Average |
| ||
|
| Outstanding |
|
|
|
|
|
| Outstanding |
|
|
|
|
|
|
| Outstanding |
| |||
|
| Balances |
|
| Balances |
|
| Balances |
|
|
| Balances |
|
| Balances |
| |||||
|
| (Dollars in thousands) |
| ||||||||||||||||||
Residential mortgages: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York |
| $ | 5,011,523 |
|
| $ | 137,156 |
|
|
| 2.74 | % |
|
| $ | (780 | ) |
|
| (.06 | %) |
Pennsylvania |
|
| 1,029,349 |
|
|
| 13,680 |
|
|
| 1.33 |
|
|
|
| 166 |
|
|
| .06 |
|
Maryland |
|
| 1,419,112 |
|
|
| 14,707 |
|
|
| 1.04 |
|
|
|
| 414 |
|
|
| .12 |
|
New Jersey |
|
| 2,404,854 |
|
|
| 88,448 |
|
|
| 3.68 |
|
|
|
| (25 | ) |
|
| — |
|
Other Mid-Atlantic (a) |
|
| 1,196,526 |
|
|
| 18,871 |
|
|
| 1.58 |
|
|
|
| 68 |
|
|
| .02 |
|
Other |
|
| 3,742,785 |
|
|
| 80,345 |
|
|
| 2.15 |
|
|
|
| 282 |
|
|
| .03 |
|
Total |
| $ | 14,804,149 |
|
| $ | 353,207 |
|
|
| 2.39 | % |
|
| $ | 125 |
|
|
| — | % |
Residential construction loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York |
| $ | 20,554 |
|
| $ | 146 |
|
|
| .71 | % |
|
| $ | — |
|
|
| — | % |
Pennsylvania |
|
| 6,898 |
|
|
| 73 |
|
|
| 1.06 |
|
|
|
| — |
|
|
| — |
|
Maryland |
|
| 7,300 |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
New Jersey |
|
| 10,247 |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
Other Mid-Atlantic (a) |
|
| 14,704 |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
Other |
|
| 4,111 |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
Total |
| $ | 63,814 |
|
| $ | 219 |
|
|
| .34 | % |
|
| $ | — |
|
|
| — | % |
Limited documentation first mortgages: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York |
| $ | 614,648 |
|
| $ | 57,045 |
|
|
| 9.28 | % |
|
| $ | 19 |
|
|
| .01 | % |
Pennsylvania |
|
| 26,266 |
|
|
| 5,089 |
|
|
| 19.37 |
|
|
|
| — |
|
|
| — |
|
Maryland |
|
| 15,284 |
|
|
| 2,359 |
|
|
| 15.43 |
|
|
|
| — |
|
|
| — |
|
New Jersey |
|
| 493,561 |
|
|
| 38,045 |
|
|
| 7.71 |
|
|
|
| — |
|
|
| — |
|
Other Mid-Atlantic (a) |
|
| 12,320 |
|
|
| 1,437 |
|
|
| 11.66 |
|
|
|
| — |
|
|
| — |
|
Other |
|
| 179,312 |
|
|
| 22,554 |
|
|
| 12.58 |
|
|
|
| (122 | ) |
|
| (.26 | ) |
Total |
| $ | 1,341,391 |
|
| $ | 126,529 |
|
|
| 9.43 | % |
|
| $ | (103 | ) |
|
| (.03 | %) |
First lien home equity loans and lines of credit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York |
| $ | 930,675 |
|
| $ | 15,804 |
|
|
| 1.70 | % |
|
| $ | (117 | ) |
|
| (.05 | %) |
Pennsylvania |
|
| 566,156 |
|
|
| 9,476 |
|
|
| 1.67 |
|
|
|
| 99 |
|
|
| .07 |
|
Maryland |
|
| 457,118 |
|
|
| 9,507 |
|
|
| 2.08 |
|
|
|
| 50 |
|
|
| .04 |
|
New Jersey |
|
| 68,588 |
|
|
| 1,190 |
|
|
| 1.73 |
|
|
|
| (2 | ) |
|
| (.01 | ) |
Other Mid-Atlantic (a) |
|
| 161,683 |
|
|
| 2,638 |
|
|
| 1.63 |
|
|
|
| (25 | ) |
|
| (.06 | ) |
Other |
|
| 28,052 |
|
|
| 1,192 |
|
|
| 4.25 |
|
|
|
| (1 | ) |
|
| (.01 | ) |
Total |
| $ | 2,212,272 |
|
| $ | 39,807 |
|
|
| 1.80 | % |
|
| $ | 4 |
|
|
| — | % |
Junior lien home equity loans and lines of credit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York |
| $ | 557,238 |
|
| $ | 13,866 |
|
|
| 2.49 | % |
|
| $ | (92 | ) |
|
| (.07 | %) |
Pennsylvania |
|
| 190,297 |
|
|
| 2,295 |
|
|
| 1.21 |
|
|
|
| (53 | ) |
|
| (.11 | ) |
Maryland |
|
| 361,894 |
|
|
| 9,897 |
|
|
| 2.73 |
|
|
|
| (688 | ) |
|
| (.74 | ) |
New Jersey |
|
| 94,078 |
|
|
| 1,019 |
|
|
| 1.08 |
|
|
|
| (257 | ) |
|
| (1.10 | ) |
Other Mid-Atlantic (a) |
|
| 176,988 |
|
|
| 3,609 |
|
|
| 2.04 |
|
|
|
| 136 |
|
|
| .31 |
|
Other |
|
| 39,078 |
|
|
| 796 |
|
|
| 2.04 |
|
|
|
| (147 | ) |
|
| (1.49 | ) |
Total |
| $ | 1,419,573 |
|
| $ | 31,482 |
|
|
| 2.22 | % |
|
| $ | (1,101 | ) |
|
| (.31 | %) |
Limited documentation junior lien: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York |
| $ | 377 |
|
| $ | 21 |
|
|
| 5.57 | % |
|
| $ | (2 | ) |
|
| (1.86 | %) |
Pennsylvania |
|
| 152 |
|
|
| 24 |
|
|
| 15.79 |
|
|
|
| — |
|
|
| — |
|
Maryland |
|
| 518 |
|
|
| 25 |
|
|
| 4.83 |
|
|
|
| — |
|
|
| — |
|
New Jersey |
|
| 116 |
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
Other Mid-Atlantic (a) |
|
| 250 |
|
|
| 32 |
|
|
| 12.80 |
|
|
|
| — |
|
|
| — |
|
Other |
|
| 1,748 |
|
|
| 83 |
|
|
| 4.75 |
|
|
|
| (81 | ) |
|
| (16.86 | ) |
Total |
| $ | 3,161 |
|
| $ | 185 |
|
|
| 5.85 | % |
|
| $ | (83 | ) |
|
| (9.25 | %) |
(a)
- 70 -
Real estate and other foreclosed assets totaled $37 million at September 30, 2022, compared with $25 million at September 30, 2021, compared with $50 million at September 30, 2020, $35$24 million at December 31, 20202021 and $28$29 million at June 30, 2021. The declines since September 30, 2020 are largely reflective of foreclosure moratoriums imposed by government authorities in numerous jurisdictions.2022. Net gains or losses associated with real estate and other foreclosed assets were not material during the three-monthsthree months and nine months ended September 30, 2021, September 30, 20202022 and June 30, 2021. At September 30, 2021,2022, foreclosed assets are comprised entirelypredominantly of residential real estate-related properties.
- 67 -
A comparative summary of nonperforming assets and certain past due, renegotiated and impaired loan data and credit quality ratios is presented in the accompanying table.
NONPERFORMING ASSET AND PAST DUE, RENEGOTIATED AND IMPAIRED LOAN DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2021 Quarters |
|
| 2020 Quarters |
| ||||||||||||||
|
| Third |
|
| Second |
|
| First |
|
| Fourth |
|
| Third |
| |||||
|
| (Dollars in thousands) |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
| $ | 2,242,263 |
|
|
| 2,242,057 |
|
|
| 1,957,106 |
|
|
| 1,893,299 |
|
|
| 1,239,972 |
|
Real estate and other foreclosed assets |
|
| 24,786 |
|
|
| 27,902 |
|
|
| 29,797 |
|
|
| 34,668 |
|
|
| 49,872 |
|
Total nonperforming assets |
| $ | 2,267,049 |
|
|
| 2,269,959 |
|
|
| 1,986,903 |
|
|
| 1,927,967 |
|
|
| 1,289,844 |
|
Accruing loans past due 90 days or more(a) |
| $ | 1,026,080 |
|
|
| 1,077,227 |
|
|
| 1,084,553 |
|
|
| 859,208 |
|
|
| 527,258 |
|
Government guaranteed loans included in totals above: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
| $ | 47,358 |
|
|
| 49,796 |
|
|
| 51,668 |
|
|
| 48,820 |
|
|
| 45,975 |
|
Accruing loans past due 90 days or more(a) |
|
| 947,091 |
|
|
| 1,029,331 |
|
|
| 1,044,599 |
|
|
| 798,121 |
|
|
| 505,446 |
|
Renegotiated loans |
| $ | 242,955 |
|
|
| 236,377 |
|
|
| 242,121 |
|
|
| 238,994 |
|
|
| 242,581 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans to total loans and leases, net of unearned discount |
|
| 2.40 | % |
|
| 2.31 | % |
|
| 1.97 | % |
|
| 1.92 | % |
|
| 1.26 | % |
Nonperforming assets to total net loans and leases and real estate and other foreclosed assets |
|
| 2.42 | % |
|
| 2.34 | % |
|
| 2.00 | % |
|
| 1.96 | % |
|
| 1.31 | % |
Accruing loans past due 90 days or more(a) to total loans and leases, net of unearned discount |
|
| 1.10 | % |
|
| 1.11 | % |
|
| 1.09 | % |
|
| .87 | % |
|
| .54 | % |
|
| 2022 Quarters |
|
| 2021 Quarters |
| ||||||||||||||
|
| Third |
|
| Second |
|
| First |
|
| Fourth |
|
| Third |
| |||||
|
| (Dollars in thousands) |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Nonaccrual loans |
| $ | 2,429,326 |
|
|
| 2,633,005 |
|
|
| 2,134,231 |
|
|
| 2,060,083 |
|
|
| 2,242,263 |
|
Real estate and other foreclosed assets |
|
| 37,031 |
|
|
| 28,692 |
|
|
| 23,524 |
|
|
| 23,901 |
|
|
| 24,786 |
|
Total nonperforming assets |
| $ | 2,466,357 |
|
|
| 2,661,697 |
|
|
| 2,157,755 |
|
|
| 2,083,984 |
|
|
| 2,267,049 |
|
Accruing loans past due 90 days or more(a) |
| $ | 476,503 |
|
|
| 523,662 |
|
|
| 776,751 |
|
|
| 963,399 |
|
|
| 1,026,080 |
|
Government guaranteed loans included in totals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Nonaccrual loans |
| $ | 44,797 |
|
|
| 46,937 |
|
|
| 46,151 |
|
|
| 51,429 |
|
|
| 47,358 |
|
Accruing loans past due 90 days or more(a) |
|
| 423,371 |
|
|
| 467,834 |
|
|
| 689,831 |
|
|
| 927,788 |
|
|
| 947,091 |
|
Renegotiated loans |
| $ | 356,797 |
|
|
| 276,584 |
|
|
| 242,108 |
|
|
| 230,408 |
|
|
| 242,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Nonaccrual loans to total loans and leases, net of |
|
| 1.89 | % |
|
| 2.05 | % |
|
| 2.32 | % |
|
| 2.22 | % |
|
| 2.40 | % |
Nonperforming assets to total net loans and |
|
| 1.92 | % |
|
| 2.07 | % |
|
| 2.35 | % |
|
| 2.24 | % |
|
| 2.42 | % |
Accruing loans past due 90 days or more(a) to |
|
| .37 | % |
|
| .41 | % |
|
| .85 | % |
|
| 1.04 | % |
|
| 1.10 | % |
Management determines the allowance for credit losses under accounting guidance that requires estimating the amount of current expected credit losses over the remaining contractual term of the loan and lease portfolio. A description of the methodologies used by the Company to estimate its allowance for credit losses can be found in note 4 of Notes to Financial Statements.
In establishing the allowance for credit losses, the Company estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes and also estimates losses for other loans and leases with similar risk characteristics on a collective basis. For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by loan type. Despite recent improvements in macroeconomic forecasts, atAt the time of the Company’s analysis regarding the determination of the allowance for credit losses as of September 30, 2021,2022, concerns existed about the somewhat uneven and incomplete recovery evident in some sectors of the economy; elevated levels of inflation; fears of a slowing economy the ultimate effectiveness of economic stimulus being provided by the U.S. government that has contributed to increased deficit spending and raised inflation concerns; disruptions to supply chains and the related impacts to businesses and consumers;possible recession in coming quarters; the volatile nature of global markets including the impactand international economic conditions that could have onimpact the U.S. economy; Federal Reserve positioning of monetary policy; ongoing supply chain issues and wage pressures impacting commercial borrowers; the extent to which borrowers, in particular commercial real estate borrowers, may continue to be negatively affected by pandemic-related and general economic conditions; and continued stagnant population and economic growth in the upstate New York and central Pennsylvania regions (approximately 49%37% of the Company’s loans and leases are to customers in New York State and Pennsylvania) that could see lingering effectshistorically lag other regions of the economic downturn.country. The Company utilizes
- 71 -
a loan grading system to differentiate risk amongst its commercial loans and commercial real estate loans. Loans with a lower expectation of default are typically assigned one of ten possible “pass” loan grades while specific loans determined to have an elevated level of credit risk are classified as “criticized.” A criticized loan may be classified as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more. During the latter half of 2020 and the first nine months of 2021, the Company re-graded significant portions of its commercial loans and commercial real estate loans based on financial results and projections of specific borrowers, particularly those that were affected by COVID-19 impacts. Criticized commercial loans and commercial real estate loans totaled $10.9 billion, including $2.8 billion of loans acquired from People's United, at September 30, 2022, compared with $9.6 billion at September 30, 2021, compared with $6.9 billion at September 30, 2020, $7.2$9.0 billion at December 31, 2020,2021 and $9.7$11.6 billion at June 30, 2021.2022, including $2.8 billion of loans acquired from People's United. The rise inlevel of criticized loans at the two most recent quarter-ends as compared with December 31, 2020 reflectsremains reflective of the impact of the pandemiccurrent conditions on borrowers’ financial condition and the continuing re-grading of loans by the Company, and is reflective of the provision for credit losses recorded by the Company in 2020 as the pandemic unfolded. The increases in such loans since December 31, 2020 were largely attributable tomany borrowers, particularly those with investor-owned permanent commercial real estate loans in the hotel, office and healthcare sectors andsectors. Investor-owned commercial real estate constructionloans
- 68 -
comprised $8.0 billion or 74% of total criticized loans in the hotel and healthcare sectors. On an overall basis,at September 30, 2022. The weighted-average loan-to-stabilized valueloan-to-value (“LTV”) ratiosratio for investor-owned commercial real estate properties do not vary significantlywas approximately 60%. Criticized loans secured by asset class or sector, and at September 30, 2021 were generally withininvestor-owned commercial real estate had a range of 55% to 65% with an overall weighted-average LTV ratio of approximately 58%65%. Investor-owned commercial real estate loans comprised $7.7 billion
Line of total criticized loans of $9.6 billion at September 30, 2021.
The COVID-19 pandemic and related governmental responses led to a significant reduction in economic activity that was detrimental to many borrowers across the Company’s geographic regions, particularly borrowers in the hotel, healthcare-related, and office sectors. Many of those borrowers have been and will likely continue to be adversely impacted by the economic effects of the COVID-19 pandemic. Summaries of loans outstanding as of September 30, 2021 for which borrowers have been granted a COVID-19 related forbearance and loans extended under the PPP are provided in the accompanying table. Of the COVID-19 related modifications with payment deferrals at September 30, 2021, the vast majority are scheduled to expire during 2021.
As commercial loans and commercial real estate loans were approved for modifications related to COVID-19, the Company assessed loans considering the creditworthiness of the borrower, collateral values, the financial condition of any guarantors, and the expected collectability of contractual principal and interest payments. Loan-to-collateral values on investor-owned loans are generally relatively low and oftentimes the loans include some form of recourse. Loans secured by residential real estate with a COVID-19 payment forbearance were evaluated for collectability based on the borrower’s ability to repay considering past performance and estimated collateral values. If collectability was considered doubtful, loans were classified as nonaccrual.
Loan officersbusiness personnel in different geographic locations with the support offrom and review by the Company’s credit departmentrisk personnel review and reassign loan grades based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. The Company re-assessed its loan grades for those borrowers most impacted by COVID-19 and expects that loans will continue to be regraded in subsequent periods as more information becomes available. The Company’s policy is that, at least annually, updated financial information beis obtained from commercial borrowers associated with pass grade loans and additional analysis performed. On a quarterly basis, the Company’s centralized credit risk department reviews all criticized commercial loans and commercial real estate loans greater than $1 million to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing. For criticized nonaccrual loans, additional meetings are held with loan officers and their managers, workout specialists and senior management to discuss each of the relationships. In analyzing criticized loans, borrower-specific information is reviewed, including operating results, future cash flows, recent developments and the borrower’s outlook, and other pertinent data. The timing and extent of potential losses, considering collateral valuation and other factors, and the Company’s potential courses of action are contemplated.
- 72 -
COVID-19 RELATED LOANS AND LEASES DATA
|
| September 30, 2021 |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
| COVID-19 Forbearance |
| |||||||||
Commercial, financial, leasing, etc. |
| Total |
|
| PPP |
|
| Payment Deferrals(a) |
|
| Other Forbearances(b) |
|
| Total |
| |||||
|
| (Dollars in millions) |
| |||||||||||||||||
Industry |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services |
| $ | 4,381 |
|
| $ | 737 |
|
| $ | — |
|
| $ | 29 |
|
| $ | 29 |
|
Manufacturing |
|
| 3,393 |
|
|
| 194 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Motor vehicle and recreational finance dealers |
|
| 2,310 |
|
|
| 65 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Wholesale |
|
| 2,048 |
|
|
| 102 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Financial and insurance |
|
| 2,022 |
|
|
| 23 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Real estate investors |
|
| 1,578 |
|
|
| 82 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Health services |
|
| 1,556 |
|
|
| 240 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Construction |
|
| 1,543 |
|
|
| 369 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Retail |
|
| 1,469 |
|
|
| 260 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Transportation, communications, utilities |
|
| 1,449 |
|
|
| 101 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Other |
|
| 766 |
|
|
| 69 |
|
|
| — |
|
|
| 25 |
|
|
| 25 |
|
Total commercial, financial, leasing, etc. |
|
| 22,515 |
|
|
| 2,242 |
|
|
| — |
|
|
| 54 |
|
|
| 54 |
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor-owned |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent finance by property type |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail/Service |
|
| 4,477 |
|
|
| — |
|
|
| — |
|
|
| 64 |
|
|
| 64 |
|
Apartments/Multifamily |
|
| 4,202 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Office |
|
| 4,163 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Health facilities |
|
| 2,766 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Hotel |
|
| 2,696 |
|
|
| — |
|
|
| — |
|
|
| 118 |
|
|
| 118 |
|
Industrial/Warehouse |
|
| 1,444 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Other |
|
| 244 |
|
|
| — |
|
|
| — |
|
|
| 37 |
|
|
| 37 |
|
Total permanent |
|
| 19,992 |
|
|
| — |
|
|
| — |
|
|
| 219 |
|
|
| 219 |
|
Total construction/development |
|
| 9,602 |
|
|
| — |
|
|
| — |
|
|
| 21 |
|
|
| 21 |
|
Total investor-owned |
|
| 29,594 |
|
|
| — |
|
|
| — |
|
|
| 240 |
|
|
| 240 |
|
Owner-occupied by industry |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other services |
|
| 1,487 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Motor vehicle and recreational finance dealers |
|
| 1,406 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Retail |
|
| 1,218 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Wholesale |
|
| 784 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Health services |
|
| 655 |
|
|
| — |
|
|
| — |
|
|
| 7 |
|
|
| 7 |
|
Manufacturing |
|
| 572 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Other |
|
| 1,308 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total owner-occupied |
|
| 7,430 |
|
|
| — |
|
|
| — |
|
|
| 7 |
|
|
| 7 |
|
Total commercial real estate |
|
| 37,024 |
|
|
| — |
|
|
| — |
|
|
| 247 |
|
|
| 247 |
|
Residential real estate |
|
| 16,209 |
|
|
| — |
|
|
| 2,103 |
| (c) |
| — |
|
|
| 2,103 |
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recreational finance |
|
| 8,026 |
|
|
| — |
|
|
| 2 |
|
|
| — |
|
|
| 2 |
|
Automobile |
|
| 4,619 |
|
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| 4 |
|
Homes equity lines and loans |
|
| 3,635 |
|
|
| — |
|
|
| 6 |
|
|
| — |
|
|
| 6 |
|
Other |
|
| 1,555 |
|
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
|
Total consumer |
|
| 17,835 |
|
|
| — |
|
|
| 13 |
|
|
| — |
|
|
| 13 |
|
Total |
| $ | 93,583 |
|
| $ | 2,242 |
|
| $ | 2,116 |
|
| $ | 301 |
|
| $ | 2,417 |
|
|
|
|
|
|
|
With regard to residential real estate loans, the Company’s loss identification and estimation techniques make reference to loan performance and house price data in specific areas of the country where collateral securing the Company’s residential real estate loans is located. For residential real estate-related loans, including home equity loans and lines of credit, the excess of the loan balance over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. That charge-off is based on recent indications of value
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from external parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that file for bankruptcy are generally charged off to estimated net collateral value shortly after the Company is notified of such filings. At September 30, 2021,2022, approximately 61%55% of the Company’s home equity portfolio consisted of first lien loans and lines of credit. Of the remainingcredit and 45% were junior liens. With respect to junior lien loans, in the portfolio, approximately 58% (or approximately 22% of the aggregate home equity portfolio)consisted of junior lien loans that were behind a first lien mortgage loan that was not owned or serviced by the Company. Toto the extent known by the Company, if a related senior lien loan would be on nonaccrual status because of payment delinquency, even if such senior lien loan was not owned by the Company, the junior lien loan or line that is owned by the Company is placed on nonaccrual status. In monitoring the credit quality of its home equity portfolio for purposes of determining the allowance for credit losses, the Company reviews delinquency and nonaccrual information and considers recent charge-off experience. When evaluating individual home equity loans and lines of credit for charge off and for purposes of determining the allowance for credit losses, the Company gives consideration to the required repayment of any first lien positions related to collateral property. Home equity line of credit terms vary but such lines are generally originated with an open draw period of ten years followed by an amortization period of up to twenty years. At September 30, 20212022 approximately 85%86% of all outstanding balances of home equity lines of credit related to lines that were still in the draw period, the weighted-average remaining draw periods were approximately five years, and approximately 10%18% were making contractually allowed payments that do not include any repayment of principal.
Factors that influence the Company’s credit loss experience include overall economic conditions affecting businesses and consumers, generally, but also residential and commercial real estate valuations, in particular, given the size of the Company’s real estate loan portfolios. Commercial real estate valuations can be highly subjective, as they are based upon many assumptions. Such valuations can be significantly affected over relatively short periods of time by changes in business climate, economic conditions, interest rates and, in many cases, the results of operations of businesses and other occupants of the real property. Similarly, residential real estate valuations can be impacted by housing trends, the availability of financing at reasonable interest rates and general economic conditions affecting consumers.
The Company generally estimates current expected credit losses on loans with similar risk characteristics on a collective basis. To estimate expected losses, the Company utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and determine estimated credit losses through a reasonable and supportable forecast period. The Company’s approach for estimating current expected credit losses for loans and leases at September 30, 2021,2022, September 30, 20202021 and June 30,December 31, 2021 included utilizing macroeconomic assumptions to project losses over a two-year reasonable and supportable forecast period. Subsequent
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to the forecast period, the Company reverted to longer-term historical loss experience, over a period of one year, to estimate expected credit losses over the remaining contractual life. Forward-looking estimates of certain macroeconomic variables are determined by the M&T Scenario Development Group, which is comprised of senior management business leaders and economists. Events posing emerging risks to the macroeconomic environment, such as international conflicts and other events, inflation and supply chain issues, are considered when developing economic forecasts even if the events do not directly and materially impact the Company’s financial results. Supply chain disruptions, inflationary pressures or other peripheral impacts of global events may alter economic forecasts and the Company monitors this activity as part of its risk management procedures in assessing the allowance for credit losses. Among the assumptions utilized as of September 30, 2022 was that the national unemployment rate will average 3.9% through the reasonable and supportable forecast period. The forecast also assumed gross domestic product grows at a 1.5% average rate during the first year of the reasonable and supportable forecast period and at a 2.7% average rate in the second year. Commercial real estate prices were assumed to cumulatively grow 6.5% and residential real estate prices were assumed to contract 4.4% over the two-year reasonable and supportable forecast period. As of June 30, 2022 the national unemployment rate was assumed to average 3.4% through the reasonable and supportable period. The forecast also assumed gross domestic product would grow during the first year of the reasonable and supportable period at a 2.4% average annual rate and at a 2.9% average rate in the second year. Commercial real estate and residential real estate prices were assumed to cumulatively grow 11.6% and 0.4%, respectively, over the two-year reasonable and supportable forecast period. As of December 31, 2021 the forecast assumed that national unemployment would average 4.6% through the first year of the reasonable and supportable forecast period before gradually improving to 3.7% in the latter half of 2023. The forecast also assumed gross domestic product would grow during 2022 at a 3.1% average annual rate and during 2023 at a 2.7% annual rate. Commercial and residential real estate prices were assumed to cumulatively grow 11.1% and 5.9%, respectively, over the two-year reasonable and supportable forecast period. Among the assumptions utilized as of September 30, 2021 was that the national unemployment rate continueswould continue to be at then elevated levels, on average 4.6%, through the remainder of 2021, followed by a gradual improvement reaching 3.5% within the reasonable and supportable forecast period. The forecast also assumed that GDP growsgross domestic product would grow at an average annualized rate of 3.3% during the eight-quarter forecast period. The commercial real estate price index was assumed to be down modestly in 2021, but improving in 2022 and 2023. Residential real estate prices were not assumed to fluctuate significantly. The assumptions utilized as of June 30, 2021 included the national unemployment rate continuing at elevated levels, on average 5.4%, through 2021, followed by a gradual improvement reaching 3.5% by mid-2023. That forecast assumed that GDP would grow at a 7.4% annual rate during 2021 resulting in GDP returning to pre-pandemic levels during 2021. The commercial real estate price index was assumed to be down modestly in 2021, but improving in 2022 and 2023. Residential real estate prices were not assumed to fluctuate significantly. The assumptions utilized as of December 31, 2020 included the national unemployment rate continuing at elevated levels, on average 6.9% through 2021, followed by a gradual return to long-term historical averages by the end of 2022. The forecast also assumed gross domestic product to grow at a 4.1% annual rate during 2021 resulting in a return to pre-pandemic levels by the end of 2022. Commercial real estate prices were assumed to decline by 6.8% in 2021, followed by improvement. Residential real estate prices were not assumed to fluctuate significantly. The assumptions utilized as of September 30, 2020 included an increase in the unemployment rate in the fourth quarter of 2020 to approximately
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10% from 8% at the end of the third quarter of 2020, followed by a sustained high single-digit unemployment rate through 2022. The forecast also assumed gross domestic product to contract nearly 5.1% in 2020 and to then recover to pre-pandemic levels by the third quarter of 2022. Commercial real estate prices were assumed to decline by 17% in 2020, followed by improvement. Residential real estate prices were not assumed to fluctuate significantly. The assumptions utilized were based on the information available to the Company at or near September 30, 2021,2022, June 30, 2021,2022, December 31, 20202021 and September 30, 2020 at2021 (at the time itthe Company was preparing its estimate of expected credit losses as of those dates.dates).
In establishing the allowance for credit losses the Company also considers the impact of portfolio concentrations, changes in underwriting practices, product expansions into new markets, imprecision in its economic forecasts, geopolitical conditions and other risk factors that might influence itsthe loss estimation process. With respect to economic forecasts the Company assessed the likelihood of alternative economic scenarios during the two-year reasonable and supportable time period. Economic forecasts have changed rapidly in the recent past due to the uncertain impacts of COVID-19. Generally, an increase in unemployment rate or a decrease in any of the rate of change in gross domestic product, commercial real estate prices or home prices wouldcould have an adverse impact on expected credit losses and would likelymay result in an increase to the allowance for credit losses. Forward looking economic forecasts are subject to inherent imprecision and future events may differ materially from forecasted events. In consideration of such uncertainty, the following alternative economic scenarios were considered to estimate the possible impact on modeled credit losses.
A potential downside economic scenario assumed the unemployment rate averages 7.1% in the reasonable and supportable forecast period. The scenario also assumed gross domestic product contracts 2.4% in the first year of the reasonable and supportable forecast period before recovering to 2.2% growth in the second year and commercial real estate and residential real estate prices cumulatively decline 18.4% and 11.4%, respectively, by the end of the reasonable and supportable forecast period.
A potential upside economic scenario assumed the unemployment rate declines to approximately 3.4% for the duration of the reasonable and supportable forecast period. The scenario also assumes gross domestic product grows 5.2% in the initial year of the reasonable and supportable forecast period and 2.0% in the second year while commercial real estate and residential real estate prices cumulatively rise 8.9% and 1.4%, respectively, over the two-year reasonable and supportable forecast period.
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The scenario analyses resulted in an additional $370 million of modeled credit losses under the assumptions of the downside economic scenario, whereas under the assumptions of the upside economic scenario a $161 million reduction in modeled credit losses could occur. These examples are only a few of the numerous possible economic scenarios that could be utilized in assessing the sensitivity of expected credit losses. The estimated impacts on credit losses in such scenarios pertain only to modeled credit losses and do not include consideration of other factors the Company may evaluate when determining its allowance for credit losses.
As a result, it is possible that the Company may, at another point in time, reach different conclusions regarding credit loss estimates. The Company’s process for determining the allowance for credit losses undergoes quarterly and periodic evaluations by independent risk management personnel, which among many other considerations, evaluate the reasonableness of management’s methodology and significant assumptions. Further information about the Company’s methodology to estimate expected credit losses is included in note 4 of Notes to Financial Statements.
Management believes that the allowance for credit losses at September 30, 20212022 appropriately reflected expected credit losses inherent in the portfolio as of that date. The allowance for credit losses totaled $1.88 billion at September 30, 2022, compared with $1.52 billion at September 30, 2021, $1.76 billion at September 30, 2020, $1.74$1.47 billion at December 31, 20202021 and $1.58$1.82 billion at June 30, 2021.2022. As a percentage of loans outstanding, the allowance was 1.46% at September 30, 2022, 1.62% at each of September 30, and June 30, 2021, 1.76%1.58% at December 31, 20202021 and 1.79%1.42% at SeptemberJune 30, 2020.2022. Using the same methodology described herein, the Company added $341 million to the allowance for credit losses related to the $35.8 billion of loans and leases obtained in the acquisition of People's United on April 1, 2022. The combined Company allowance for credit losses at April 1, 2022 as a percentage of loans outstanding was 1.42%. The level of the allowance reflects management’s evaluation of the loan and lease portfolio using the methodology and considering the factors as described herein. Should the various economic forecasts and credit factors considered by management in establishing the allowance for credit losses change and should management’s assessment of losses in the loan portfolio also change, the level of the allowance as a percentage of loans could increase or decrease in future periods. The reported level of the allowance reflects management’s evaluation of the loan and lease portfolio as of each respective date.
The ratio of the allowance for credit losses to total nonaccrual loans at September 30, 2022 and December 31, 2021 was 77% and 71%, respectively. Given the Company’s general position as a secured lender and its practice of charging off loan balances when collection is deemed doubtful, that ratio and changes in the ratio are generally not an indicative measure of the adequacy of the Company’s allowance for credit losses, nor does management rely upon that ratio in assessing the adequacy of the Company’s allowance for credit losses.
Other Income
Other income totaled $569$563 million in the third quarter of 2021, up from $5212022, compared with $569 million in the year-earlier quarterquarter. Trust income, service charges on deposit accounts and $514credit-related fees all increased reflecting the acquisition of People's United, but were offset by a decline in mortgage banking revenues resulting from the Company's decision to retain the substantial majority of recently originated mortgage loans in portfolio rather than sell such loans. Other income was $571 million in the second quarter of 2021.2022. The higher level of other incomemodest decline in the recent quarter as compared with the year-earlier quarter resulted from higherlower service charges on deposit accounts merchant discount and credit card fees, mortgage banking revenues,trust income, from the Company’s trust and brokerage services businesses, andoffset by higher credit-related fees. As compared with the second quarter of 2021, the recent quarter’s improvement reflected higher mortgage banking revenues, service charges on deposit accounts, brokerage services income, credit-related fees, and lower unrealized losses on investment securities.
Mortgage banking revenues were $160$83 million in each of the recentthird quarter up from $153and second quarter of 2022, compared with $160 million in the third quarter of 2020 and $133 million in the second 2021 quarter.2021. Mortgage banking revenues are comprised of both residential and commercial mortgage banking activities. The Company’s involvement in commercial mortgage banking activities includes the origination, sales and servicing of loans under the multi-family loan programs of Fannie Mae, Freddie Mac and the U.S. Department of Housing and Urban Development.
Residential mortgage banking revenues, consisting of realized gains and losses from sales of residential real estate loans and loan servicing rights, unrealized gains and losses on residential real estate loans held for sale and related commitments, residential real estate loan servicing fees, and other residential real estate loan-related fees and income, were $110$55 million in the third quarter of 2021, $1192022, $110 million in the correspondingsimilar quarter of 20202021 and $98$50 million in 2021’sthe second quarter.quarter of 2022. As compared with the third quarter of 2020, the2021, lower residential mortgage banking revenues
- 75 -
in the recent quarter resulted largely from decreased gains associated with loans held for sale and related commitments, due largelyreflecting the Company’s decision late in the third quarter of 2021 to narrower margins. The increase from 2021’sretain most originated mortgage loans in portfolio
- 71 -
rather than sell such loans. Residential mortgage banking revenues were $5 million lower in the second quarter reflected higher gains associatedof 2022 as compared with the recent quarter as a result of the Company recognizing a loss on lower-yielding repurchased mortgage loans held for sale and related commitments, reflecting wider margins.in the second quarter of 2022.
New commitments to originate residential real estate loans to be sold were approximately $1.1 billion$47 million in the third quarter of 2021,2022, compared with $1.2$1.1 billion in the each of the year-earlier quarter and $78 million in the second quarter of 2021.2022. Realized gains and losses from sales of residential real estate loans and loan servicing rights and recognized net unrealized gains or losses attributable to residential real estate loans held for sale, commitments to originate loans for sale and commitments to sell loans totaled to gains of $49$1 million in the third quarter of 2021, $642022 and $49 million in the corresponding period of 2020 and $402021, compared with losses of $17 million in the2022’s second quarter of 2021. Beginning in late September 2021, the Company began to originate the majority of its residential real estate loans to retain in its loan portfolio rather than for sale. That decision did not have a material impact on residential mortgage banking revenues in the third quarter of 2021.quarter.
Loans held for sale that were secured by residential real estate aggregated $43 million at September 30, 2022, $279 million at September 30, 2021 $571 million at September 30, 2020 and $777$474 million at December 31, 2020.2021. Commitments to sell residential real estate loans and commitments to originate residential real estate loans for sale at pre-determined rates totaled $80 million and $57 million, respectively, at September 30, 2022, compared with $795 million and $751 million, respectively, at September 30, 2021 compared with $1.34 billion and $1.13 billion, respectively, at September 30, 2020$617 million and $1.47 billion and $1.03 billion,$233 million, respectively, at December 31, 2020.2021. Net recognized unrealized gains on residential real estate loans held for sale, commitments to sell loans, and commitments to originate loans for sale were $1 million at September 30, 2022, $22 million at September 30, 2021 $59 million at September 30, 2020 and $52$10 million at December 31, 2020.2021. Changes in net unrealized gains or losses are recorded in mortgage banking revenues and resulted in a net increasesincrease in revenues of $1 million in the recent quarter and $10 million in the third quarter of 2021, and $15 million in the third quarter of 2020, compared with a net decrease in revenues of $9$5 million in the second quarter of 2021.2022.
Revenues from servicing residential real estate loans for others were $61 million, $55 million, and $59$54 million during the quartersquarter ended September 30, 2022, compared with $61 million and $67 million during the three months ended September 30, 2021 September 30, 2020, and June 30, 2021,2022, respectively. Residential real estate loans serviced for others totaled $97.1 billion at each of September 30, 2021 and June 30, 2021, $94.9$104.0 billion at September 30, 2020 and $94.42022, $97.1 billion at September 30, 2021, $97.9 billion at December 31, 2020.2021 and $102.5 billion at June 30, 2022. Reflected in residential real estate loans serviced for others were loans sub-serviced for others of $81.2 billion, $73.2 billion, $67.0 billion, $68.1$74.7 billion and $72.6$79.0 billion at September 30, 2021,2022, September 30, 2020,2021, December 31, 20202021 and June 30, 2021,2022, respectively. Revenues earned for sub-servicing loans totaled $39$33 million during the recent quarter, $30$39 million in the third quarter of 20202021 and $37$44 million in the second quarter of 2021.2022. The decrease in sub-servicing fees in the recent quarter reflects lower fees associated with modifying and selling reperforming loans previously repurchased by the holder of the contractual servicing rights. The contractual servicing rights associated with loans sub-serviced by the Company were predominantly held by affiliates of Bayview Lending Group (“BLG”LLC ("BLG"). Information about the Company’s relationship with BLG and its affiliates is included in note 16 of Notes to Financial Statements.
Capitalized residential mortgage servicing assets totaled $208 million at September 30, 2022, $218 million at September 30, 2021, (net of a $29 million valuation allowance), $202 million at September 30, 2020 (net of a $27 million valuation allowance), $201$217 million at December 31, 2020 (net of a $30 million valuation allowance)2021 and $221$215 million at June 30, 2021 (net of a $29 million valuation allowance). During the second quarter of 2021, the valuation allowance for capitalized residential mortgage servicing rights was increased by $8 million. There was no similar provision in the third quarters of 2021 or 2020. The increase in the valuation allowance resulted from changes in the estimated fair value of capitalized mortgage servicing rights that reflected the impact of changes in interest rates on expected prepayments of serviced residential mortgage loans.2022.
Commercial mortgage banking revenues totaled $28 million in the third quarter of 2022 compared to $50 million in the third quarter of 2021 up from $34 million in the third quarter of 2020 and $35$33 million in the second quarter of 2021.2022. Included in such amounts were revenues from loan origination and sales activities of $12 million and $24 million forin the quarter ended September 30,third quarters of 2022 and 2021, respectively, compared with $19$14 million in eachthe second quarter of the quarters ended September 30, 2020 and June 30, 2021.2022. Commercial real estate loans originated for sale to other investors were approximately $1.7 billion$906 million in the recent quarter, compared with $785 million$1.7 billion in the third quarter of 20202021 and $411$692 million in the second quarter of 2021.2022. Loan servicing revenues totaled $16 million and $26 million in the third quarterquarters of 2022 and 2021, respectively, compared with $15 million in the third quarter of 2020 and $16$19 million in the second quarter of 2021. The higher servicing revenues in the recent quarter were reflective of fees received from customers who repaid loans prior to contractual maturity.2022. Capitalized commercial mortgage servicing assets were $131$129 million and $129$131 million at September 30, 20212022 and 2020,September 30, 2021, respectively, and $133 million at December 31, 2020.2021. Commercial real
- 76 -
estate loans serviced for other investors totaled $25.1 billion at September 30, 2022, $23.1 billion at September 30, 2021 $21.7and $23.7 billion at December 31, 2021. Those servicing amounts included $3.7 billion at September 30, 2020 and $22.2 billion at December 31, 2020. Those servicing amounts included2022, $3.9 billion at each of September 30, 2021 and September 30, 2020 and $4.0 billion at December 31, 20202021 of loan balances for which investors had recourse to the Company if such balances are ultimately uncollectable. Included in commercial real estate loans serviced for others were loans sub-serviced for others of $3.7 billion at September 30, 2022, $3.4 billion at September 30, 2021 and $3.3$3.5 billion at each of September 30, 2020 and December 31, 2020.2021. Commitments to sell commercial real estate loans and commitments to originate commercial real estate loans for sale were $993$703 million and $434$401 million, respectively, at September 30, 2021, $5522022, $993 million and $216$434 million,
- 72 -
respectively, at September 30, 20202021 and $641$751 million and $364$325 million, respectively, at December 31, 2020.2021. Commercial real estate loans held for sale at September 30, 2021,2022, September 30, 20202021 and December 31, 20202021 were $300 million, $559 million $336 million and $278$425 million, respectively.
Service charges on deposit accounts were $105$115 million and $91$105 million in the third quarters of 2022 and 2021, and 2020, respectively, and $99compared with $124 million in the second quarter of 2021.2022. The increase in such service charges duringPeople's United acquisition contributed $20 million to the recent quarter as compared with the third quarter of 2020 was due to higher consumer and commercial service charges reflecting increased customer activity. The higher consumer fees included increased debit card, overdraft-related and other customer transactions. The rise in service charges on deposit accounts total in the most recent quarter and $33 million in the second quarter of 2022. The lower fees associated with People's United reflect waivers of certain fees in September following conversion of customer deposit accounts to the Company's deposit servicing system. The Company is waiving additional fees and reimbursing select customers in the fourth quarter. The Company does not expect those amounts to ultimately be material to its consolidated financial position or results of operations. Excluding the contribution associated with the People's United acquisition, the decrease in the recent quarter as compared with the immediately precedingyear-earlier quarter, was largely due to higher consumer-related servicereflected the Company's planned elimination, announced in February 2022, of certain non-sufficient funds fees and overdraft protection transfer charges reflecting increased overdraft-related fees.from linked deposit accounts.
Trust income includes fees related to two significant businesses. The Institutional Client Services (“ICS”) business provides a variety of trustee, agency, investment management and administrative services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients who: (i) use capital markets financing structures; (ii) use independent trustees to hold retirement plan and other assets; and (iii) need investment and cash management services. The Wealth Advisory Services (“WAS”) business offers personal trust, planning, fiduciary, asset management, family office and other services designed to help high net worth individuals and families grow, preserve and transfer wealth. Trust income aggregated $157$187 million in the third quarter of 2021,2022, compared with $150$157 million in the year-earlier quarter and $163$190 million in the second quarter of 2021.2022. Trust income contributed from the acquisition of People's United totaled approximately $11 million in the recent quarter and $14 million in the second quarter of 2022. Revenues associated with the ICS business were approximately$114 million during the quarter ended September 30, 2022 and $109 million during the quarter ended June 30, 2022, each inclusive of $2 million of People's United-related revenue, compared with $94 million during the quarter ended September 30, 2021, compared with $87 million and $91 million during the quarters ended September 30, 2020 and June 30, 2021, respectively.2021. The higher revenues in the recent quarter as compared with the previous quartersprior year third quarter were largely attributable to increased retirement services incomereduced fee waivers of $13 million resulting from growth inhigher rates on money market fund accounts and incremental fees from sales. Relative to the second quarter of 2022, the higher level of ICS revenues resulted from lower money market fund account fee waivers and higher collective fund balances.fees. Revenues attributable to WAS, including $8 million of People's United-related fees, totaled approximately $71 million in the three-month period ended September 30, 2022, compared with $78 million, including $10 million of People's United-related fees, during the quarter ended June 30, 2022 and $63 million during the quarter ended September 30, 2021, compared with $57 million and $65 million during the quarters ended September 30, 2020 and June 30, 2021, respectively.2021. The higherdecline in WAS revenues in the recent quarter as compared with the year-earliersecond quarter wereof 2022 was largely attributable to favorable equity market performance. The slightly higher revenuesreflective of annual tax service fees of $4 million recognized in the second quarter of 2021 as compared with the recent quarter reflected annual tax service fees earned in the second quarter for assisting customers with their tax filings.2022. Trust assets under management were $153.5 billion, $152.2 billion, $123.4 billion, $149.8$165.6 billion and $135.8$151.8 billion at September 30, 2021,2022, September 30, 2020,2021, December 31, 2021 and June 30, 2021 and December 31, 2020,2022, respectively. Trust assets under management include the Company’s proprietary mutual funds’ assets of $12.7 billion, $13.0 billion, $12.5 billion, $12.7$13.2 billion and $12.9$11.9 billion at September 30, 2021,2022, September 30, 2020,2021, December 31, 2021 and June 30, 2021 and December 31, 2020,2022, respectively. Additional trust income from investment management activities comprised of fees earned from retail customer investment accounts was $2 million in the third quarter of 2022, less than $1 million in the third quarter of 2021 compared with $6 million and $7$3 million in the thirdsecond quarter of 2020 and the second 2021 quarter, respectively, and was predominantly comprised of fees earned from retail customer investment accounts.2022. Approximately $10 million of revenues associated with the sale of select investment products of LPL Financial, an independent financial services broker, were reported as brokerage services income during the third quarter of 2021. Prior to the transition of M&T’s retail brokerage and certain trust customer business to LPL Financial in mid-June 2021, those customers were provided proprietary trust products managed by the Company and revenues related thereto were reported as trust income.
Brokerage services income, which includes revenues from the sale of mutual funds and annuities and securities brokerage fees, and, since mid-JuneJune 2021, sales of select investment products of LPL Financial, totaled $21 million in the third quarter of 2022, $20 million in the third quarter of 2021 up from $12 million in the corresponding 2020 quarter and $10$24 million in the second quarter of 2021.2022. The recent quarter increase compared withacquisition of People's United contributed approximately $2 million and $3 million to brokerage services income in the prior periods reflects the change in product delivery to retail brokeragethird and certain trust customers related to the LPL Financial relationship noted above.second quarters of 2022, respectively. Trading account and foreign
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exchange activity resulted innon-hedging derivative gains ofwere $5 million, $6 million $4 million and $7$2 million during the quarters ended September 30, 2021,2022, September 30, 20202021 and June 30, 2021,2022, respectively. Information about the notional amount of interest rate, foreign exchange and other contracts entered into by the Company for trading account purposes is included in note 11 of Notes to Financial Statements and herein under the heading “Taxable-equivalent Net Interest Income.”
The Company recognized net gains on investment securities of less than $1- 73 -
Other revenues from operations were $153 million in the recentthird quarter and $3of 2022, compared with $120 million in the year-earlier quarter, compared with net losses of $11corresponding 2021 period and $148 million in the second quarter of 2021. The gains and losses represented unrealized gains and losses on investments in Fannie Mae and Freddie Mac preferred stock.
2022. Other revenues from operations were $120associated with the People's United acquisition totaled $28 million and $29 million in the third quarterand second quarters of 2021, compared with $108 million in the corresponding 2020 period and $113 million in the second quarter of 2021. The primary factor for the rise in such revenues in the recent quarter as compared with the third quarter of 2020 and 2021’s second quarter was the impact of increased customer activity, predominantly related to merchant discount and credit card fees and credit-related fees.2022, respectively. Included in other revenues from operations were the following significant components. Letter of credit and other credit-related fees aggregated $36$54 million in the recent quarter, $27compared with $36 million in the year-earlier quarter and $28$38 million in the second quarter of 2021.2022. As compared with the second quarter of 2022, the higher credit-related fees in 2022's third quarter resulted from an increase in loan syndication fees. The higher levelincrease in letter of such revenuescredit and other credit-related fees in the recent quarter as compared with the prior quarters resulted from increasedyear-earlier quarter reflects both higher loan syndication fees. Revenuesfees and the impact resulting from the acquisition of People's United. Reflecting increased customer activity and incremental revenues associated with the People's United acquisition, revenues from merchant discount and credit card fees were $45 million in each of the recent quarter and second quarter of 2022, compared with $39 million in the third quarter of 2021, compared with $28 million in the year-earlier quarterand $36 million in the second quarter of 2021. Increased customer activity in the two most recent quarters resulted in the improvement as compared with the third quarter of 2020.quarter. Tax-exempt income from bank owned life insurance, which includes increaseschanges in the cash surrender value of life insurance policies and benefits received, totaled $12 million in the third quarter of 2022, $11 million in the third quarter of 2021 $12 million in the third quarter of 2020 and $13$14 million in the second quarter of 2021.2022. The Company owns both general account and separate account policies. To the extent market conditions change such that the market value of assets in a separate account bank owned life insurance policy becomes less than the previously recorded cash surrender value, an adjustment is recorded as a reduction to "other revenues from operations." The increase in interest rates during 2022 has led to reductions of the market values of assets in some separate account bank owned life insurance policies below previously recorded cash surrender value. While the resultant reductions in recognized cash surrender value have not been material, a continued rise in interest rates could result in additional adjustments. Insurance-related sales commissions and other revenues totaled $13 million in the quarter ended September 30, 2022, compared with $10 million in the recentthird quarter of 2021 and $11$14 million in eachthe second quarter of the quarters ended September 30, 2020 and June 30, 2021.2022.
Other income totaled $1.59 billion and $1.54$1.68 billion during the first nine months of 2021 and 2020, respectively.2022, compared with $1.59 billion during the year-earlier period. Higher trust income, service charges on deposit accounts, brokerage services income, income resulting from a distribution received from the Company's investment in BLG in 2022, a reduction in unrealized losses on investment securities, and an increase in credit-related and merchant discount and credit card fees and credit-related fees in 2021 were the predominant factors for the improvement, partially offset by lower trading accountmortgage banking revenues. The acquisition of People's United contributed approximately $140 million to other income in the second and foreign exchange gains and unrealized losses on investment securities.third quarters of 2022.
Mortgage banking revenues totaled $432$275 million during the first nine months of 2021,2022, compared with $426$432 million during the similar period in 2020.2021. Residential mortgage banking revenues aggregated $315$181 million and $329$315 million during the nine-month periods ended September 30, 20212022 and 2020,2021, respectively. New commitments to originate residential real estate loans to be sold aggregated $3.7 billion$286 million and $3.3$3.7 billion in the initial nine months of 20212022 and 2020,2021, respectively. Realized gains from sales of residential real estate loans and loan servicing rights and recognized unrealized gains and losses on residential real estate loans held for sale, commitments to originate loans for sale and commitments to sell loans aggregated to losses of $2 million in the first nine months of 2022, compared with gains of $138 million and $148 million in the nine-month periods ended September 30, 2021first nine months of 2021. The reductions in volume and 2020, respectively.revenues reflect the Company’s decision to retain the substantial majority of recently originated mortgage loans in portfolio rather than sell such loans. Revenues from servicing residential real estate loans for others were $177$183 million in the first nine months of 20212022 and $181$177 million in the corresponding 20202021 period. Included in servicing revenues were sub-servicing revenues aggregating $110$119 million and $101$110 million in the first nine months of 20212022 and 2020,2021, respectively. For the nine months ended September 30, commercial mortgage banking revenues were $94 million and $117 million in 2022 and $98 million in 2021, and 2020, respectively. Commercial real estate loans originated for sale to other investors totaled $2.7$2.2 billion and $2.2$2.7 billion during the nine-month periods ended September 30, 2022 and 2021, and 2020, respectively. The decline in commercial mortgage banking revenues is predominantly reflective of the origination volumes.
Service charges on deposit accounts aggregated $297$341 million during the first nine months of 2021,2022, compared with $275$297 million in the year-earlier period. ThatThe increase was predominantly duecan be attributed to depressed levelsthe acquisition of People's United and increased consumer service charges in 2020activity, partially offset by reductions resulting from the impactCompany's planned elimination of the pandemic, reflecting waivedcertain fees and lower customer transaction activitycharges beginning in that year.the second quarter of 2022. Trust income totaled $476$546 million and $451$476 million during the first nine months of 20212022 and 2020,2021, respectively. The increase in trust income in 20212022 as compared with 20202021 was largely due to higher revenues from the ICS business, reflecting bothlower money market fund fee waivers, increased sales
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activities and higher retirement services income from growth in collective fund balances, and inas well as WAS revenues associated with the WAS business, reflecting favorable equity market performance.People's United acquisition. Brokerage services income totaled $44$65 million in the first nine months of 2021,2022, compared with $35$44 million in the nine-month period ended September 30, 2020.2021. That riseincrease reflects a change in June 2021 in product delivery to retail brokerage and certain trust customers related to the impactLPL Financial relationship. Revenues associated with certain trust customer business that was transferred
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the sale of investment products of LPL Financial, an independent financial services broker, are included in “brokerage services income.” Prior to the transition to LPL Financial. Trading account and foreign exchange activity resulted in gains of $18 million and $33 million inFinancial’s product platform, revenues earned from providing those customers with proprietary trust products managed by the nine-months ended September 30, 2021 and 2020, respectively. The lower gains in 2021Company were predominantly due to decreased activity related to interest rate swap agreements executed on behalf of commercial customers.reported as trust income.
The Company enters into interest rate and foreign exchange contracts with customers who need such services and concomitantly enters into offsetting trading positions with third parties to minimize the risks involved with these types of transactions. Net unrealized losses on investment securities, including investments of Fannie Mae and Freddie Mac preferred stock, totaling $23$2 million were recognized during the first nine months of 2021,2022, compared with net unrealized losses of $11$23 million in the corresponding 20202021 period.
Other revenues from operations totaled $344$437 million during(including approximately $55 million associated with the acquisition of People's United) in the first nine months of 2021,2022, compared with $328$344 million in the year-earlier period. Other revenues from operations include the following significant components. Letter of credit and other credit-related fees aggregated $119 million (including $21 million associated with the acquisition of People's United) and $96 million in 2022 and $832021, respectively. Merchant discount and credit card fees were $124 million (including $5 million associated with the acquisition of People's United) and $101 million in the first nine months of 2022 and 2021, and 2020, respectively. That increase resulted from higher loan syndication fees. Income from bank owned life insurance totaled $34 million in the first nine months of 2021, compared with $37 million in the corresponding 2020 period. Merchant discount and credit card fees were $101 million and $80 million in the first nine months of 2021 and 2020, respectively. Increased customer activity, predominantly related to debit card and ATM usage, led to the improvement in 2021. Insurance-related commissions and other revenues aggregated $35 million and $36 million in the first nine months of 2022, compared with $34 million in the corresponding 2021 period. Insurance-related commissions and 2020,other revenues aggregated $42 million and $35 million in the first nine months of 2022 and 2021, respectively. M&T’s investment in BLG resulted in income of $23$30 million in the first nine months of 2020;2022; there was no similar income in the first nine months of 2021.
Other Expense
Other expense totaled $899 million$1.28 billion in the third quarter of 2021,2022, compared with $827$899 million in the year-earlier quarter and $865 million$1.40 billion in the second quarter of 2021.2022. Included in those amounts are expenses considered to be “nonoperating” in nature consisting of amortization of core deposit and other intangible assets of $3$18 million in each of the two most recent quarterssecond and $4third quarter of 2022 and $3 million in the third quarter of 20202021, and merger-related expenses of $53 million, $9 million and $223 million in the recent quarter, third quarter of 2021 and $4 million in the second 2021 quarter. The merger-related expenses in the recent quarter largely reflected professional and other outside services, reflecting technology-related efforts to prepare for the integration of People’s United’s systems with those of the Company, and in the second quarter of 2021 were primarily comprised of printing costs associated with the production of the joint proxy statement/prospectus distributed to the shareholders of M&T and People’s United.2022, respectively. Exclusive of those nonoperating expenses, noninterest operating expenses were $888 million$1.21 billion in the recent quarter, compared with $823$888 million in the year-earlier quarter and $859 million$1.16 billion in the second 2021 quarter. Factors contributingquarter of 2022. Operations acquired from People's United were the largest contributor to the increasedrise in noninterest operating expenses in the recent quarterthird and second quarters of 2022 as compared with the third quarter of 20202021. Factors contributing to the higher level of operating expenses in 2022’s third quarter as compared with the year-earlier quarter, in addition to People's United-related noninterest operating expenses, were higher costs for salaries and employee benefits and outside data processing and software, and professional services. Whenoffset by lower defined benefit pension-related expenses included in other costs of operations. As compared with the second quarter of 2021,2022, the rise in noninterest operating expensesincrease in the recent quarter resulted from increased costs forwas predominantly attributed to higher salaries and employee benefits.benefits expenses resulting from an additional pay day and M&T's continued investment in its talent base through salaries and incentive compensation. Table 2 provides a reconciliation of other expense to noninterest operating expense.
Other expense for the first nine months of 20212022 totaled $2.68$3.64 billion, compared with $2.54$2.68 billion in the year-earlier period. Included in those amounts are expenses considered to be “nonoperating” in nature consisting of amortization of core deposit and other intangible assets of $8$38 million and $12$8 million in the nine-month periods ended September 30, 20212022 and 2020,2021, respectively, and merger-related expenses of $293 million and $23 million during the first nine months of 2021.same respective periods. Exclusive of those nonoperating expenses, noninterest operating expenses for the first nine months of 20212022 were $2.65$3.31 billion, compared with $2.53$2.65 billion in the similar 2020 period. Thefirst nine months of 2021. Approximately three-fourths of that increase in noninterestcan be attributed to operating expenses inassociated with the 2021 period was largely attributablePeople's United acquisition. In addition, the year-over-year increase reflects higher costs for salaries and employee benefits, outside data processing and software, equipment and net occupancy and professional services and charitable contributions. Partially offsetting those factors was a $1 million decreaseexpenses partially offset by lower defined benefit pension-related expenses included in other costs of the valuation allowance for capitalized residential mortgage servicing rights that was recorded in the first nine months of 2021, compared with an addition to that valuation allowance of $20 million in the similar 2020 period.operations.
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Salaries and employee benefits expense totaled $510$736 million in the third quarter of 2021,2022, compared with $479$510 million in each of the year-earlier quarter and $776 million in the second quarter of 2021.2022. Excluding the nonoperating expense items described earlier, salaries and employee benefits expense totaled $723 million and $691 million in the third and second quarters of 2022, respectively. The increased expenseshigher operating expense in the recent quarter were predominantlyas compared with the resultthird quarter of 2021 reflects higher employee staffing levels, including employees retained from the acquisition of People's United, and higher salaries from merit increases and incentive compensation, including commissions.compensation. Comparing the recent quarter with the second quarter of 2022, the increase reflected an additional pay day in the recent quarter and M&T's continued investment in its talent base through salaries and incentive compensation. During the first nine months of 20212022 and 2020,2021, salaries and employee benefits expense aggregated $2.09 billion and $1.53 billion, respectively. Excluding nonoperating expenses described herein, salaries and $1.47 billion, respectively.employee benefits expense in the first nine months of 2022 totaled $1.99 billion. The higher operating expense level in 20212022 largely reflects increased costs forstaffing levels, including the addition of People's United employees at the beginning of the second quarter, higher salaries resulting from merit increases and a rise in incentive compensation including commissions, and stock-based compensation. The Company, in accordance with GAAP, has accelerated the recognition of compensation costs for stock-based awards granted to retirement-eligible employees and employees who will become retirement-eligible prior to full vesting of the award. Salaries and employee benefits expense included stock-based compensation of $21 million, $12 million and $23 million, in each of the three-month periods ended September 30, 2021 and 2020, $13 million in the three-month period ended June2022, September 30, 2021 and $74June 30, 2022, respectively, and $94 million and $69$74 million during the nine-month periods ended September 30, 20212022 and September 30, 2020,2021, respectively. The number of full-time equivalent employees was 22,879 at September 30, 2022, compared with 17,103 and 22,680 at September 30, 2021 compared with 16,980, and 16,978 at September 30, 2020 and June 30, 2022, respectively. The increase in staffing levels since September 30, 2021 respectively.was predominantly the result of the acquisition of People's United.
Excluding the nonoperating expense items described earlier from each quarter, nonpersonnelnon-personnel operating expenses were $485 million, $377 million and $471 million in the quarterquarters ended September 30, 2021, $344 million in the quarter ended2022, September 30, 20202021 and $380 million in the second quarter of 2021.June 30, 2022, respectively. On that same basis, such expenses were $1.12$1.32 billion and $1.05$1.12 billion in the nine-month periods ended September 30, 20212022 and 2020,2021, respectively. The increase in nonpersonnelnon-personnel operating expenses in 2022’s third quarter as compared with 2022’s second quarter reflects higher FDIC assessments and professional services expenses. The higher non-personnel operating expenses in the recent quarter2022 periods as compared with the third quartercorresponding 2021 periods is predominantly attributable to the impact of 2020 resulted largely fromthe People's United acquisition. In addition to those expenses, higher costs for professional services, outside data processing and software. The rise in nonpersonnel operating expenses in the first nine months of 2021 as compared with the same period in 2020 was largely the result of increased costs for professional services, outside data processing and software, professional services and charitable contributionsequipment and net occupancy were offset by reduced defined benefit pension-related expenses. Components of pension expense included in part, byother costs of operations reflect the impactamortization of a $1 million reductionnet unrecognized losses included in accumulated other comprehensive income. Such net unrecognized losses had been amortized over the average remaining service periods of active participants in the plan. If all or substantially all of the valuation allowanceplan’s participants are inactive, GAAP provides for capitalized servicing rights in 2021 contrasted with an additionthe average remaining life expectancy of the participants to that valuation allowancebe used instead of average remaining service period. Substantially all of the participants in the 2020Company’s qualified defined benefit pension plan were inactive and beginning in 2022 the average remaining life expectancy was utilized prospectively to amortize the net unrecognized gains and losses of the Plan existent at each measurement date. The change increased the amortization period by approximately sixteen years and reduced the amount of $20quarterly amortization of unrecognized losses recorded in 2022 from what would have been recorded without such change in the amortization period by $9 million.
The efficiency ratio measures the relationship of noninterest operating expenses to revenues. The Company’s efficiency ratio was 57.7%53.6% during the recent quarter, compared with 56.2%57.7% and 58.4%58.3% in the third quarter of 20202021 and second quarter of 2021,2022, respectively. The efficiency ratios for the nine-month periods ended September 30, 2022 and 2021 were 58.1% and 2020 were 58.8% and 57.0%, respectively.Therespectively. The calculation of the efficiency ratio is presented in tableTable 2.
Income Taxes
The provision for income taxesIncome tax expense was $162$201 million in the third quarter of 2021,2022, compared with $115$162 million in the year-earlier quarter and $148$60 million in the second quarter of 2021.2022. For the nine-month periods ended September 30, 2022 and 2021, and 2020, the provisions for income taxes weretax expense was $374 million and $454 million, and $267 million, respectivelyrespectively. The effective tax rates were 24.6%23.7%, 23.6%24.6% and 24.4%21.7% for the quarters ended September 30, 2021,2022, September 30, 20202021 and June 30, 2021,2022, respectively, and 24.5%23.4% and 23.2%24.5% for the nine-month periods ended September 30, 2022 and 2021, and 2020, respectively.
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The effective tax rate is affected by the level of income earned that is exempt from tax relative to the overall level of pre-tax income, the level of income allocated to the various state and local jurisdictions where the Company operates, because tax rates differ among such jurisdictions, and the impact of any large discrete or infrequently occurring items. The Company’s effective tax rate in future periods will also be affected by any change in income tax laws or regulations and interpretations of income tax regulations that differ from the Company’s interpretations by any of various tax authorities that may examine tax returns filed by M&T or any of its subsidiaries.
Capital
Shareholders’ equity was $17.5$25.3 billion at September 30, 2021,2022, representing 11.54%12.76% of total assets, compared with $16.1$17.5 billion or 11.61%11.54% a year earlier and $16.2$17.9 billion or 11.35%11.54% at December 31, 2020.2021. The increase in shareholders' equity reflects the issuance of 50,325,004 M&T common shares and other common equity consideration totaling $8.4 billion for the acquisition of People's United and the conversion of People's United preferred stock into 10,000,000 shares of Series H Perpetual Fixed-to-Floating Rate Non-cumulative Preferred Stock of M&T ("Series H Preferred Stock") amounting to $261 million.
Included in shareholders’ equity was preferred stock with financial statement carrying values of $1.75$2.01 billion at September 30, 2021 and $1.252022, compared with $1.75 billion at each of September 30, 20202021 and December 31, 2020.2021. On August 17, 2021, M&T issued 50,000April 1, 2022, the Company closed the acquisition of People's United resulting in the issuance of 10,000,000 shares of Series I Perpetual Fixed-Rate Reset Non-cumulativeH Preferred stock,Stock, par value $1.00 per share and liquidation preference of $10,000$25.00 per share.share, valued at $261 million. Through August 31,December 14, 2026, holders of the Series I preferred stockH Preferred Stock are entitled to receive, only when, as and if declared by M&T’s&T's Board of Directors, non-cumulative cash dividends at an annual rate of 3.5%5.625%, payable semiannuallyquarterly in arrears. Subsequent to August 31,December 14, 2026, holders will be entitled to
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receive, only when, as and if declared by M&T’s&T's Board of Directors, non-cumulative cash dividends at an annual rate of the five-year U.S. Treasury Ratethree-month LIBOR plus 2.679%, payable semiannually in arrears.402 basis points. The Series IH preferred stock may be redeemed at M&T’s&T's option, in whole or in part, on any dividend payment datefrom time to time, on or after SeptemberApril 1, 20262027 or, in whole but not in part, at any time within 90 days following a regulatory capital treatment event whereby the full liquidation value of the shares no longer qualifies as “additional"additional Tier 1 capital”capital". The Series H Preferred Stock is listed on the NYSE under the symbol MTPrH.
Common shareholders’ equity was $23.2 billion, or $134.45 per share, at September 30, 2022, compared with $15.8 billion, or $122.60 per share, at September 30, 2021, compared with $14.9 billion or $115.75 per share, a year earlier and $14.9$16.2 billion, or $116.39$125.51 per share, at December 31, 2020.2021. Tangible equity per common share, which excludes goodwill and core deposit and other intangible assets and applicable deferred tax balances, was $86.88$84.28 at the end of the recent quarter, compared with $79.85$86.88 at September 30, 20202021 and $80.52$89.80 at December 31, 2020.2021. The Company’s ratio of tangible common equity to tangible assets was 7.59%7.70% at September 30, 2021,2022, compared with 7.64%7.59% a year earlier and 7.49%7.68% at December 31, 2020.2021. Reconciliations of total common shareholders’ equity and tangible common equity and total assets and tangible assets as of each of those respective dates are presented in table 2.
Shareholders’ equity reflects accumulated other comprehensive income or loss, which includes the net after-tax impact of unrealized gains or losses on investment securities classified as available for sale, remaining unrealized losses on held-to-maturity securities transferred from available for sale that have not yet been amortized, gains or losses associated with interest rate swap agreements designated as cash flow hedges, foreign currency translation adjustments and adjustments to reflect the funded status of defined benefit pension and other postretirement plans. Net unrealized gainslosses on investment securities reflected in shareholders’ equity, net of applicable tax effect, were $348 million or $2.01 per common share, at September 30, 2022 compared with net unrealized gains of $105 million, or $.81 per common share, at September 30, 2021 $152and $78 million, or $1.18 per common share, at September 30, 2020 and $145 million, or $1.13$.60 per common share, at December 31, 2020.2021. Changes in unrealized gains and losses on investment securities are predominantly reflective of the impact of changes in interest rates on the values of such securities. Information about unrealized gains and losses as of September 30, 20212022 and December 31, 20202021 is included in note 3 of Notes to Financial Statements.
Reflected in the carrying amount of available-for-sale investment securities at September 30, 20212022 were pre-tax effect unrealized gains of $151$1 million on securities with an amortized cost of $3.4 billion$261 million and pre-tax effect unrealized losses of $7$471 million on securities with an amortized cost of $100 million.$11.1 billion. Information concerning the Company’s fair valuations of investment securities is provided in notes 3 and 13 of Notes to Financial Statements.
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Each reporting period the Company reviews its available-for-sale investment securities for declines in value that might be indicative of credit-related losses through an analysis of the creditworthiness of the issuer or the credit performance of the underlying collateral supporting the bond. If the Company does not expect to recover the entire amortized cost basis of a debt security a credit loss is recognized in the consolidated statement of income. A loss is also recognized if the Company intends to sell a bond or it more likely than not will be required to sell a bond before recovery of the amortized cost basis.
As of September 30, 2021,2022, based on a review of each of the securities in the available-for-sale investment securities portfolio, the Company concluded that it expected to realize the amortized cost basis of each security. As of September 30, 2021,2022, the Company did not intend to sell nor is it anticipated that it would be required to sell any securities for which fair value was less than the amortized cost basis of the security. The Company intends to continue to closely monitor the performance of its securities because changes in their underlying credit performance or other events could cause the amortized cost basis of those securities to become uncollectable.
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Accounting guidance requires investment securities held to maturity to be presented at their net carrying value that is expected to be collected over their contractual term. The Company estimated no material allowance for credit losses for its investment securities classified as held-to-maturity at September 30, 20212022 and December 31, 2020 as the substantial majority2021. The amortized cost basis of such investment securities were obligations backed by the U.S. government or its agencies. The Company assessed the potential for expected credit losses on privately issued mortgage-backed securitiesof states and political subdivisions in the held-to-maturity portfolio by performing internal modeling to estimate bond-specific cash flows considering recent performance of the mortgage loan collateral and utilizing assumptions about future defaults and loss severity. These bond-specific cash flows also reflect the placement of the bond in the overall securitization structure and the remaining subordination levels. In total,totaled $2.7 billion at September 30, 20212022 and less than $1 million at December 31, 2021. The increase reflected municipal securities obtained in the acquisition of People's United. At September 30, 2022 and December 31, 2020,2021, the Company had in its held-to-maturity portfolio privately issued mortgage-backed securities with an amortized cost basis of $65$52 million and $77$62 million, respectively, and a fair value of $62$53 million and $70$57 million, respectively. At September 30, 2021, 82%2022, 83% of thethose mortgage-backed securities were in the most senior tranche of the securitization structure. The mortgage-backed securities are generally collateralized by residential and small-balance commercial real estate loans originated between 2004 and 2008. After considering the repayment structure and estimated future collateral cash flows of each individual bond, the Company has concluded that as of September 30, 2021,2022, it expected to recover the amortized cost basis of those privately issued mortgage-backed securities. Nevertheless, it is possible that adverse changes in the estimated future performance of mortgage loan collateral underlying such securities could impact the Company’s conclusions.
Adjustments to reflect the funded status of defined benefit pension and other postretirement plans, net of applicable tax effect, reduced accumulated other comprehensive income by $258 million, or $1.49 per common share, at September 30, 2022, $436 million or $3.38 per common share, at September 30, 2021 $315and $267 million or $2.46 per common share, at September 30, 2020 and $481 million or $3.75$2.08 per common share, at December 31, 2020. 2021.
OnIn January 20, 2021 M&T’s Board of Directors authorized a stock repurchase plan to repurchase up to $800 million of shares of M&T’s common stock during the twelve-month period from January 1, 2021 to December 31, 2021 subject to all applicable regulatory limitations. In February 2022, the Board reaffirmed that plan. M&T repurchased 3,505,946 shares of its common stock for $600 million in the second quarter of 2022. There were no repurchases pursuant to that repurchase plan during the first nine months of 2021, and2021. On July 19, 2022, M&T does not expect any repurchases while the acquisition of People’s United is pending. Pursuant to previously approved capital plans and authorizations by M&T’s&T's Board of Directors authorized a new stock purchase program to repurchase up to $3.0 billion of common shares subject to all applicable regulatory reporting limitations. The new plan authorized in July 2022 replaced the previous plan. M&T repurchased 2,577,0003,282,449 shares of its common stock for $374$600 million inunder the first quarter of 2020. There were no repurchases of M&T common stock in either of the second or third quarters of 2020.
Cash dividends declared on M&T’s common stock totaled $143 million in each of the two most recent quarters, compared with $142 millionnew program in the third quarter of 2020.2022.
Cash dividends declared on M&T's common stock totaled $210 million in the recent quarter, compared with $143 million and $215 million in the quarters ended September 30, 2021 and June 30, 2022, respectively. During the fourth quarter of 2021, M&T's Board of Directors authorized an increase in the quarterly common stock dividend to $1.20 per common share from the previous rate of $1.10 per common share. Common stock cash dividends declared during the nine-month periods ended September 30, 2022 and 2021 were $581 million and $428 million, respectively. Cash dividends declared on preferred stock aggregated $17$25 million in each ofboth the thirdrecent quarter and second quartersquarter of 2021 and2022 compared with $17 million in the third quarter of 2020.2021. Preferred stock dividends totaled $72 million and $51 million during the first nine months of 2022 and 2021, respectively.
M&T and its subsidiary banks are required to comply with applicable capital adequacy standards established by the federal banking agencies. Pursuant to those regulations, the minimum capital ratios are as follows:
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In addition, capitalCapital regulations require buffers in addition to the minimum risk-based capital ratios noted above. M&T is subject to a “capitalstress capital buffer requirement that is determined through the Federal Reserve’s supervisory stress tests and M&T’s bank subsidiaries are subject to a capital conservation buffer” of 2.5%buffer requirement. The buffer requirement must be composed entirely of CET1 and for each entity was 2.5% of risk-weighted assets at September 30, 2022. In June 2022, the Federal Reserve released the results of its most recent supervisory stress tests. Based on topthose results, on October 1, 2022, M&T's stress capital buffer of the minimum risk-weighted asset ratios.4.7% became effective.
The federal bank regulatory agencies have issued rules that allow banks and bank holding companies to phase-in the impact of adopting the expected credit loss accounting model on regulatory capital. Those rules allow banks and bank holding companies to delay for two years the day one impact on retained earnings of adopting the expected loss accounting standard and 25% of the cumulative change in the reported allowance for credit losses subsequent to the
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initial adoption through the end of 2021, followed by a three-year transition period. M&T and its subsidiary banks adopted these rules and the impact is reflected in the regulatory capital ratios presented herein.
The regulatory capital ratios of the Company and its bank subsidiaries, M&T Bank and Wilmington Trust, N.A., as of September 30, 20212022 are presented in the accompanying table.
REGULATORY CAPITAL RATIOS
September 30, 20212022
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| M&T |
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| M&T |
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| Wilmington |
| M&T |
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| M&T |
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| Wilmington |
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| (Consolidated) |
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| Bank |
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| Trust, N.A. |
| (Consolidated) |
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| Bank |
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| Trust, N.A. |
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Common equity Tier 1 |
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| 11.15% |
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| 11.78% |
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| 34.43% |
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| 10.75 | % |
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| 11.37 | % |
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| 257.25 | % |
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Tier 1 capital |
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| 12.83% |
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| 11.78% |
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| 34.43% |
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| 12.13 | % |
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| 11.37 | % |
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| 257.25 | % |
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Total capital |
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| 15.06% |
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| 13.52% |
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| 34.50% |
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| 13.96 | % |
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| 12.87 | % |
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| 257.76 | % |
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Tier 1 leverage |
|
| 8.91% |
|
|
| 8.18% |
|
|
| 6.27% |
|
| 9.13 | % |
|
| 8.56 | % |
|
| 83.96 | % |
|
The Company is subject to the comprehensive regulatory framework applicable to bank and financial holding companies and their subsidiaries, which includes examinations by a number of regulators. Regulation of financial institutions such as M&T and its subsidiaries is intended primarily for the protection of depositors, the Deposit Insurance Fund of the FDIC and the banking and financial system as a whole, and generally is not intended for the protection of shareholders, investors or creditors other than insureddepositors. Changes in laws, regulations and regulatory policies applicable to the Company’s operations can increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive environment in which the Company operates, all of which could have a material effect on the business, financial condition or results of operations of the Company and in M&T’s ability to pay dividends. For additional information concerning this comprehensive regulatory framework, refer to Part I, Item 1 of M&T’s Form 10-K for the year ended December 31, 2020.2021.
Segment Information
The Company's reportable segments have been determined based upon its internal profitability reporting system, which is organized by strategic business unit. Financial information about the Company's segments is presented in note 15 of Notes to Financial Statements. The reportable segments are Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking.
The Business Banking segment contributed net income of $72 million during the quarter ended September 30, 2021, compared with $36$94 million in the year-earlierthird quarter of 2022, up from $72 million in the third quarter of 2021 and $42$71 million in the second quarter of 2021.2022. As compared with 2021’s third
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quarter, the thirdrecent quarter’s higher net income primarily reflected a rise in net interest income of $54 million and higher service charges on deposit accounts of $5 million partially offset by a $20 million increase in centrally-allocated costs associated with data processing, risk management and other support services provided to the Business Banking segment and higher personnel-related costs of $6 million (each reflecting the impact of the People’s United acquisition). The increase in net interest income resulted largely from a widening of the net interest margin on deposits of 126 basis points and higher average deposit balances of $7.1 billion, which was offset, in part, by a narrowing of the net interest margin on loans. The growth in net income in the recent quarter as compared with the second quarter of 2020,2022 reflected a $42$40 million increase in net interest income, resulting largely from a 278an 80 basis point widening of the net interest margin on loansdeposits. Partially offsetting that increase in net interest income was a $7 million rise in centrally-allocated costs associated with data processing, risk management and other support services provided to the Business Banking segment. Net income for the Business Banking segment totaled $206 million during the first nine months of 2022, compared with $160 million in the corresponding 2021 period. The 29% year-over-year increase reflected a six-month impact of the People’s United acquisition and was predominantly attributable to higher net interest income of $82 million, an increase in service charges on deposit accounts of $14 million and higher average outstanding deposit balancesmerchant discount and credit card fees of $2.6 billion were$8 million, partially offset by a 33rise in centrally-allocated costs associated with data processing, risk management and other support services provided to the Business Banking segment of $32 million and higher personnel-related costs of $6 million. The higher net interest income reflected a widening of the net interest margin on deposits of 59 basis pointpoints and higher average balances of deposits of $5.5 billion, partially offset by a narrowing of the net interest margin on depositsloans of 67 basis points.
Net income earned by the Commercial Banking segment totaled $214 million during the recent quarter, up from $144 million in the year-earlier quarter and a $1.4 billion decline$163 million in average outstanding loan balances.The recent quarter’s higher net income asthe second quarter of 2022. As compared with 2021’s secondthe third quarter reflectedof 2021, the recent quarter included a $34$178 million increase in net interest income resulting fromreflecting a 200140 basis point widening of the net interest margin on loans, partially offset by lowerdeposits and an increase in average outstanding loan and deposit balances of $929 million. The wider net interest margin on loans$18.8 billion and $3.2 billion, respectively, and higher credit-related fees each reflecting the decline in outstanding loan balances inimpact of the recent quarter as compared with the prior quarters resulted from payoffs of PPP loans, and the related recognition of previously deferred fees associated with those payoffs. Net income earned by the Business Banking segment totaled $160 million during the first nine months of 2021, compared with $106 million in the year-earlier period. That 51% increase was attributable to a $62 million rise inPeople’s United acquisition. Partially offsetting that higher net interest income was a $13$58 million decreaseincrease in centrally-allocated costs associated with data processing, risk management and other support services provided to the Commercial Banking segment, higher personnel-related costs of $28 million and a $27 million increase in the provision for credit losses, and higher merchant discount and credit card fees of $9 million offset, in part, by higher personnel-related costs of $9 million due largely to increased incentive compensation.losses. The improvement in net interest income reflected a 145 basis point widening of the net interest margin on loans (due predominantly to fees from PPP loan payoffs) and higher average outstanding deposit balances of $3.5 billion, partially offset by a 68 basis point narrowing of the net interest margin on deposits.
Net income of the Commercial Banking segment was $144 million in the recent quarter, compared with $131 million in 2020’s third quarter and $111 million in the second quarter of 2021. The 10% increase in the third quarter of 2021 as compared with the year-earlier quarter reflected an $11 million increase in letter of credit and other credit-
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related fees (largely loan syndication fees), a $5 million increase in net interest income and higher merchant discount and credit card fees of $4 million. The higher net interestincome resulted from a 31 basis point widening of the net interest margin on loans and higher average outstanding deposit balances of $3.1 billion, partially offset by a decline in average outstanding loan balances of $2.6 billion and a 25 basis point narrowing of the net interest margin on deposits, Partially offsetting those favorable factors was a $5 million decline in gains on the sale of previously leased equipment. The 30%31% rise in net income in the recent quarter as compared with the second quarter of 20212022 was largelyprimarily due to a $34$57 million decrease in the provision for credit losses and an $8 million increase in letter of credit and other credit-related fees (largely loan syndication fees). Year-to-date net income for the Commercial Banking segment totaled $378 million in 2021, compared with $386 million in 2020. The main factors contributing to that decrease were a $19 million increase in the provision for credit losses, primarily due to higher net charge-offs and lower net interest income of $11 million.The decline in net interest income, reflecteddriven by a 67 basis point narrowing of the net interest margin on deposits and lower average outstanding loan balances of $1.3 billion, partially offset by the impact of a $6.8 billion increase in average deposit balances and an 1894 basis point widening of the net interest margin on loans. Partially offsetting those unfavorable factors were a $17 million increase in letter of creditdeposits and otherhigher credit-related fees (largely loan syndication fees) and an $11 million increase in merchant discount and credit card fees.
The Commercial Real Estate segment recordedof $13 million. Through the first nine months of the year, net income of $85for the Commercial Banking segment totaled $522 million in 2022, compared with $378 million in the third quarter ofcorresponding 2021 compared with $87 million in each of the year-earlier period and the second quarter of 2021. As compared with the third quarter of 2020, an $11 million increase in the provision for credit losses, due to higher net charge-offs, and a $7 million increase in expenses associated with servicing loans, were predominantly offset by higher mortgage banking revenues of $16 million, due to increased origination activities and higher servicing income. The slight declineperiod. That rise in net income in the third quarter of 2021 as compared with the immediately preceding quarter was largely attributable to a $15 million increase in the provision for credit losses,predominantly due to higher net charge-offs, a $7 millionan increase in expenses associated with servicing loans, and higher personnel-related costs of $6 million that reflected higher incentive compensation, offset by higher mortgage banking revenues of $17 million anda $10 million rise in net interest income reflecting a 12 basis point widening of the net interest margin on loans. The rise in mortgage banking revenues reflects increases in origination and servicing income. Net income for the Commercial Real Estate segment totaled $243$305 million, during the first three quarters of 2021, compared with $312 million in the similar 2020 period. That 22% year-over-year decline resulted from a $39 million increase in the provision for credit losses, due to higher net charge-offs, a $30 million decrease in net interest income that reflected narrowing of the net interest margin on deposits and loans of 69 basis points and 8 basis points, respectively, lower trading account and foreign exchange gains of $12 million resulting from reduced activity related to interest rate swap agreements executed on behalf of commercial customers,and higher costs for salaries and employee benefits of $7 million due to increased incentive compensation. Partially offsetting those unfavorable factors was a $17 million rise in mortgage banking revenues that reflected increases in origination and servicing income.
Net income earned by the Discretionary Portfolio segment aggregated $75 million during the three-month period ended September 30, 2021, compared with $97 million in the year-earlier period and $79 million in the second quarter of 2021. The decline in the recent quarter’s results as compared with the third quarter of 2020 was driven by a $21 million decrease in net interest income, reflecting lower loan and investment securities balances, a 56 basis point narrowing of the net interest margin on loans, and lower valuation gains associated with marketable equity securities of $2 million. The lower net income in 2021’s third quarter as compared with the immediately preceding quarter resulted from lower net interest income of $12 million, also reflecting lower loan and investment securities balances, a 22 basis point narrowing of the net interest margin on loans, partially offset by an $11 million improvement in the valuation of marketable equity securities. For the first nine months, net income for this segment totaled $244 million in 2021 and $219 million in 2020. The main favorable factor contributing to that improvement was a $52 million increase in net interest income, reflecting a widening of the net interest margin on deposits and loans of 3898 basis points and 30 basis points, respectively, partially offset by lowerhigher average outstanding loan balances in loans of $930 million. Reducing$11.1 billion (including the favorablesix-month impact of the People’s United acquisition), an increase of $35 million in letter of credit and other credit-related fees, and higher net interest incomedeposit service charges. Those favorable factors were increased valuation losses associated with marketable equity securities of $12 million and additionaloffset, in part, by increases in centrally-allocated costs associated with data processing, risk management and other support services provided to the Discretionary Portfolio segment of $6 million.
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Net income recorded by the Residential MortgageCommercial Banking segment, aggregated $46 million duringpersonnel-related expenses and other costs of operations (all largely reflecting the three-month period ended September 30, 2021, compared with $45six-month impact of the People’s United acquisition).
The Commercial Real Estate segment recorded net income of $95 million in the year-earlierthird quarter of 2022, compared with $85 million in the similar 2021 period and $30$122 million in the second quarter of 2021.2022. The slight improvement in the recent quarterhigher net income as compared with the similar 2020 period was predominantly attributable to a $9 million decrease in servicing-related costs (including intersegment costs and changes to the valuation allowance for capitalized residential mortgage servicing rights) and higher revenues of $7 million associated with servicing residential real estate loans. Almost entirely offsetting those favorable factors were lower revenues associated with mortgage origination and sales activities (including intersegment revenues) of $15 million. As compared with the secondyear-earlier quarter of 2021, the recent quarter improvement was attributable to a $10 million increase in revenues associated with mortgage origination and sales activities (including intersegment revenues) and lower servicing-related costs (including intersegment costs and changes to the valuation allowance for capitalized residential mortgage servicing rights) of $9 million. Year-to-date net income for this segment totaled $126 million in 2021 and $107 million in 2020. Contributing to that year-over-year increase were a $38reflected an $18 million increase in net interest income, reflecting higher outstanding loan balances of $1.8 billiona $19 million decrease in the provision for credit losses and a 13$6 million decline in other costs of operations. The higher net interest income predominantly resulted from a 129 basis point widening of the net interest margin on deposits and a $30 million decrease in servicing-related costs (including intersegment costs and changes to the valuation allowance for capitalized residential mortgage servicing rights). Those favorable factors werehigher loan balances of $5.1 billion, partially offset by a $23reduction in the net interest margin on loans of 56 basis points. A decrease in commercial mortgage banking revenues and a rise in centrally-allocated costs associated with data processing, risk management and other support services provided to the Commercial Real Estate segment largely offset those favorable factors. The decline in commercial mortgage banking revenues reflects reduced origination volume and lower servicing revenues. The $27 million decrease in the recent quarter’s net income as compared with the immediately preceding quarter was largely the result of a $9 million increase in each of centrally-allocated costs associated with data processing, risk management and other support services provided to the Commercial Real Estate segment and the
- 80 -
provision for credit losses, and a decline in commercial mortgage banking revenues mainly resulting from lower servicing revenues. Net income for the Commercial Real Estate segment was $314 million during the nine-month period ended September 30, 2022, up 30% from $243 million in the corresponding 2021 period. That rise reflects a $72 million decrease in the provision for credit losses and higher revenues of $46 million that includes an increase in net interest income of $45 million. Higher credit-related and other fees were offset by a decline in commercial mortgage banking revenues. The impact of those overall improvements was reduced by higher centrally-allocated costs associated with data processing, risk management and other support services provided to the Commercial Real Estate segment. The increase in net interest income reflected a widening of the net interest margin on deposits of 56 basis points and higher average outstanding balances of loans and deposits of $2.7 billion and $2.0 billion, respectively, partially offset by a narrowing of the net interest margin on loans of 24 basis points.
Net income recorded by the Discretionary Portfolio segment aggregated $12 million during the three-month period ended September 30, 2022, compared with $75 million in the year-earlier period and $56 million earned in the second quarter of 2022. The decline in the recent quarter’s net income as compared with the third quarter of 2021 was due primarily to a $63 million decrease in net interest income. The lower net interest income was mainly driven by a decline in average outstanding deposit balances of $4.0 billion and reduced income from interest rate swap agreements entered into for interest rate risk management purposes, partially offset by an increase in average balances of investment securities and loans of $17.8 billion and $7.9 billion, respectively, reflecting balances obtained in the acquisition of People’s United and the purchase of investment securities during 2022. The lower net income in the recent quarter as compared with the 2022’s second quarter reflected decreases in net interest income of $57 million. The decline in net interest income was primarily due to reduced income from interest rate swap agreements entered into for interest rate risk management purposes. Net income for this segment for the first nine months totaled $103 million in 2022 and $244 million in 2021. The decline in net income can be attributed to lower net interest income due to reduced income from interest rate swap agreements entered into for interest rate risk management purposes. Intersegment fees paid to the Residential Mortgage Banking segment during the first nine months of 2022 increased $40 million. Partially offsetting those unfavorable factors was a $22 million reduction of valuation losses on investment securities as compared with the corresponding 2021 period.
The Residential Mortgage Banking segment recorded a net loss of $3 million in the recent quarter, compared with net income of $46 million in the third quarter of 2021 and $9 million in the second quarter of 2022. The decline in the recent quarter from the third quarter of 2021 predominantly resulted from a $38 million decrease in revenues (including intersegment revenues) associated with lower mortgage origination and sales activities, lower net interest income and a rise in centrally-allocated costs associated with data processing, risk management and other support services provided to the Residential Mortgage Banking segment. As compared with the net income in the second quarter of 2022, the net loss in the recent quarter reflected lower mortgage banking revenues of $13 million, predominantly associated with servicing residential real estate loans (including intersegment revenues) and a decline in net interest income of $11 million, partially offset by higher revenues of $7 million (including intersegment revenues) associated with mortgage origination and sales activities. The Residential Mortgage Banking segment earned $35 million in the first nine months of 2022, compared with $126 million in the similar period of 2021. The decline compared with the corresponding 2021 period was largely due to a decrease in revenues of $95 million (including intersegment revenues) resulting from lower mortgage origination and sales activities, lower net interest income of $31 million and a $19 million rise in centrally-allocated costs associated with data processing, risk management and other support services provided to the Residential Mortgage Banking segment, higher personnel-related costspartially offset by an increase of $11$20 million and lowerin revenues of $10 million associated with mortgage origination and sales activitiesservicing residential real estate loans (including intersegment revenues). The decline in net interest income was driven by a decline in average outstanding balances in loans and deposits of $1.7 billion and $1.4 billion, respectively.
Net income for the Retail Banking segment totaled $88 million in the recent quarter, compared with $85$182 million in the third quarter of 20202022, compared with $88 million in the corresponding quarter of 2021 and $89$114 million in the second quarter of 2021.2022. The increase from the third quarter of 2020 was largely attributable to a $13 million declinerise in the provision for credit losses, an $8 million decrease in personnel-related costs, and higher service charges on deposit accounts of $8 million. Those favorable factors were offset, in part, by a $25 million increase in centrally-allocated costs associated with data processing, risk management and other support services provided to the Retail Banking segment. Netnet income in the recent quarter as compared with the secondyear-earlier quarter of 2021 declined slightly,reflected a $291 million increase in net interest income, largely driven by a $15widening of the net interest margin earned on deposits of 119 basis points and higher average outstanding deposit and loan balances of $24.4 billion and $2.2 billion, respectively (reflecting the impact of the People’s United acquisition). Those favorable factors were partially offset by higher expenses, also reflecting the
- 81 -
impact of the People's United acquisition, including higher personnel-related costs of $73 million, increasea rise in centrally-allocated costsexpenses associated with data processing, risk management and other support services provided to the Retail Banking segment largelyof $32 million, an increase in equipment and net occupancy costs of $28 million, higher other costs of operations of $21 million and an increase in the provision for credit losses of $7 million. The 59% improvement in net income in the current quarter as compared with the second quarter of 2022 reflected an increase in net interest income of $137 million, which was offset, in part, by a $6 million decrease in personnel-related costs and a $5 million increase inlower service charges on deposit accounts.accounts of $5 million, higher personnel-related costs of $20 million and increases in other operating expenses of $26 million. The increase in net interest income reflected a widening of the net interest margin on deposits of 81 basis points, partially offset by lower average deposit balances of $2.0 billion. The Retail Banking segment recorded net income of $263$380 million and $282$263 million in the first nine months of 2022 and 2021, respectively. The improvement from the 2021 period reflected higher net interest income of $449 million and 2020, respectively. That decrease was predominantly duehigher consumer service charges on deposit accounts of $16 million. Those favorable factors were partially offset by higher personnel-related costs of $122 million, a rise in centrally-allocated expenses associated with support services provided to the Retail Banking segment of $104 million, an increase in equipment and net occupancy costs of $49 million, higher professional services expense of $20 million, and an increase in the provision for credit losses of $6 million (all reflecting a $76 million declinesix-month impact of the People’s United acquisition). The increase in net interest income reflectingreflected a 5754 basis point widening of the net interest margin on deposits and higher average outstanding deposit and loan balances of $18.2 billion and $2.1 billion, respectively, partially offset by a 25 basis point narrowing of the net interest margin on deposits, partially offset by higher average outstanding deposit and loan balances of $5.4 billion and $1.5 billion, respectively, and a $47 million increase in centrally-allocated costs associated with data processing, risk management and other support services provided to the Retail Banking segment. Those unfavorable factors were offset, in part, by a $42 million decrease in the provision for credit losses, due to lower net charge-offs, lower personnel-related costs of $26 million, a $15 million increase in service charges on deposit accounts, a $6 million rise in merchant discount and credit card fees, and a $6 million reduction in outside data processing and software expenses.loans.
The “All Other” category reflects other activities of the Company that are not directly attributable to the reported segments. Reflected in this category are the amortization of core deposit and other intangible assets resulting from the acquisitions of financial institutions, distributionsdistributed income from BLG, merger-related expenses resulting from acquisitions (when incurred) and the net impact of the Company’s allocation methodologies for internal transfers for funding charges and credits associated with the earning assets and interest-bearing liabilities of the Company’s reportable segments and the provision for credit losses. The “All Other” category also includes trust income of the Company that reflects the ICS and WAS business activities. The various components of the “All Other” category resulted inreported net income totaling $53 million for the quarter ended September 30, 2022 as compared with net losses of $14 million in the third quarter of 2021 and $110$317 million in the third 2020year-earlier quarter compared with net income of $21 million in theand second quarter of 2021.2022, respectively. The lower“All Other” category had net loss inlosses of $333 million and $12 million for the nine-month periods ended September 30, 2022 and 2021, respectively. As compared with the respective 2021 periods the recent quarter as compared with the third quarterand first nine months of 2020 resulted from a decrease in the provision for credit losses of $162 million and higher trust and brokerage services income of $16 million, partially offset by a $33 million increase in personnel-related costs (reflecting higher incentive compensation) and higher professional services costs of $31 million. The net loss in the recent quarter as compared with the second 2021 quarter’s net income2022 each reflected higher personnel-related costs of $32 million (reflecting higher
- 85 -
incentive compensation)net interest income and an increase in the provision for credit losses of $18 million. Offsetting those factors wastrust income, as well as the favorable impact from the Company’s allocation methodologies for internal transfers for funding charges and credits associated with earning assets and interest-bearing liabilities of the Company’s reportable segments. The “All Other” category had net losses of $12 million and $530 million for the nine-month periods ended September 30, 2021 and 2020, respectively. The primary factor contributing to the decreased net lossThose favorable factors were offset by increases in the 2021 period was a lower provision for credit losses and expenses resulting from the acquisition of $785 millionPeople’s United (inclusive of merger-related expenses). That favorable factor was partially offset by higher professional services costsThe net loss recorded in the second quarter of $65 million, higher personnel-related costs2022 reflected an increased provision for credit losses and merger-related expenses associated with the acquisition of $57 million and increased outside data processing and software costs of $26 million.People's United.
Recent Accounting Developments
A discussion of recent accounting developments is included in note 1617 of Notes to Financial Statements.
- 82 -
Forward-Looking Statements
Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this quarterly report may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.1995 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 that are based on current expectations, estimates and projections about the Company’s business, and management’smanagement's beliefs and assumptions.
Statements regarding the potential effects of events or factors specific to the COVID-19 pandemicCompany and/or the financial industry as a whole, as well as national and global events generally, on the Company's business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the Company's control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on customers, clients, third parties and the Company.
Statementscontrol. As described further below, statements regarding the Company’sM&T's expectations or predictions regarding the proposed transaction between M&T and People’sacquisition of People's United are also are forward-looking statements, including statements regarding the expected timing, completion and effects of the proposed transaction as well as M&T’s and People’s United’s expected financial results, prospects, targets, goals and outlook. M&T provides further detail regarding the risks and uncertainties related to the proposed transaction in its public filings, including in the “Risk Factors” section of this quarterly report.
Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “prospects”"believe," "expect," "anticipate," "intend," "target," "estimate," "continue," or “potential,”"potential," by future conditional verbs such as “will,” “would,” “should,” “could,”"will," "would," "should," "could," or “may,”"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”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.
FutureExamples of future factors include risks, predictions and uncertainties relating to:include: the proposedimpact of the People's United transaction between M&T and People’s United, including the factors that are(as described in the “Risk Factors” sectionnext paragraph); economic conditions including inflation and supply chain issues; the impact of this quarterly report;international conflicts and other events; the impact of the COVID-19 pandemic; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; legislation andand/or regulations affecting the financial services industry and/or M&T and its subsidiaries individually or collectively, including tax policy; regulatory supervision and oversight, including monetary policy and capital requirements; governmental and public policy changes; 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; 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
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contracts; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.
In addition, future factors related to the acquisition of People's United include, among others: the outcome of any legal proceedings that may be instituted against M&T or its subsidiaries; the possibility that the anticipated benefits of the transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company does business; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships; the Company's success in executing its business plans and strategies and managing the risks involved in the foregoing; the business, economic and political conditions in the markets in which the Company operates; and other factors that may affect future results of the Company.
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Future factors related to the acquisition also include risks, such as, among others: that there could be an adverse effect on the Company's ability to retain customers and retain or hire key personnel and maintain relationships with customers; that integration efforts may be more difficult or time-consuming than anticipated, including in areas such as sales force, cost containment, asset realization, systems integration and other key strategies; that profitability following the combination may be lower than expected including for possible reasons such as lower than expected revenues or higher or unexpected costs, charges or expenses resulting from the transaction; unforeseen risks that may exist; and other factors that may affect future results of the Company.
These are representative of the future factors that could affect the outcome of the forward-looking statements. In addition, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other future factors.
M&T provides further detail regarding these risks and uncertainties and other factors elsewhere in this quarterly report and in other public filings, including the risk factors described inits Form 10-K for the year ended December 31, 2020 and this quarterly report.2021, 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 they are made, and the Company assumes noM&T does not assume any duty and does not undertake to update forward-looking statements.
- 8784 -
M&T BANK CORPORATION AND SUBSIDIARIES
Table 1
QUARTERLY TRENDS
|
| 2021 Quarters |
|
| 2020 Quarters |
|
| ||||||||||||||||||||||
|
| Third |
|
| Second |
|
| First |
|
| Fourth |
|
| Third |
|
| Second |
|
| First |
|
| |||||||
Earnings and dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in thousands, except per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (taxable-equivalent basis) |
| $ | 996,649 |
|
|
| 974,090 |
|
|
| 1,020,695 |
|
|
| 1,042,862 |
|
|
| 1,005,180 |
|
|
| 1,036,476 |
|
|
| 1,125,482 |
|
|
Interest expense |
|
| 25,696 |
|
|
| 28,018 |
|
|
| 35,567 |
|
|
| 49,610 |
|
|
| 58,066 |
|
|
| 75,105 |
|
|
| 143,614 |
|
|
Net interest income |
|
| 970,953 |
|
|
| 946,072 |
|
|
| 985,128 |
|
|
| 993,252 |
|
|
| 947,114 |
|
|
| 961,371 |
|
|
| 981,868 |
|
|
Less: provision for credit losses |
|
| (20,000 | ) |
|
| (15,000 | ) |
|
| (25,000 | ) |
|
| 75,000 |
|
|
| 150,000 |
|
|
| 325,000 |
|
|
| 250,000 |
|
|
Other income |
|
| 569,126 |
|
|
| 513,633 |
|
|
| 505,598 |
|
|
| 551,250 |
|
|
| 520,561 |
|
|
| 487,273 |
|
|
| 529,360 |
|
|
Less: other expense |
|
| 899,334 |
|
|
| 865,345 |
|
|
| 919,444 |
|
|
| 845,008 |
|
|
| 826,774 |
|
|
| 807,042 |
|
|
| 906,416 |
|
|
Income before income taxes |
|
| 660,745 |
|
|
| 609,360 |
|
|
| 596,282 |
|
|
| 624,494 |
|
|
| 490,901 |
|
|
| 316,602 |
|
|
| 354,812 |
|
|
Applicable income taxes |
|
| 161,582 |
|
|
| 147,559 |
|
|
| 145,300 |
|
|
| 149,382 |
|
|
| 114,746 |
|
|
| 71,314 |
|
|
| 80,927 |
|
|
Taxable-equivalent adjustment |
|
| 3,703 |
|
|
| 3,732 |
|
|
| 3,733 |
|
|
| 3,972 |
|
|
| 4,019 |
|
|
| 4,234 |
|
|
| 5,063 |
|
|
Net income |
| $ | 495,460 |
|
|
| 458,069 |
|
|
| 447,249 |
|
|
| 471,140 |
|
|
| 372,136 |
|
|
| 241,054 |
|
|
| 268,822 |
|
|
Net income available to common shareholders-diluted |
| $ | 475,961 |
|
|
| 438,759 |
|
|
| 428,093 |
|
|
| 451,869 |
|
|
| 353,400 |
|
|
| 223,099 |
|
|
| 250,701 |
|
|
Per common share data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings |
| $ | 3.70 |
|
|
| 3.41 |
|
|
| 3.33 |
|
|
| 3.52 |
|
|
| 2.75 |
|
|
| 1.74 |
|
|
| 1.93 |
|
|
Diluted earnings |
|
| 3.69 |
|
|
| 3.41 |
|
|
| 3.33 |
|
|
| 3.52 |
|
|
| 2.75 |
|
|
| 1.74 |
|
|
| 1.93 |
|
|
Cash dividends |
| $ | 1.10 |
|
|
| 1.10 |
|
|
| 1.10 |
|
|
| 1.10 |
|
|
| 1.10 |
|
|
| 1.10 |
|
|
| 1.10 |
|
|
Average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 128,689 |
|
|
| 128,671 |
|
|
| 128,537 |
|
|
| 128,303 |
|
|
| 128,285 |
|
|
| 128,275 |
|
|
| 129,696 |
|
|
Diluted |
|
| 128,844 |
|
|
| 128,842 |
|
|
| 128,669 |
|
|
| 128,379 |
|
|
| 128,355 |
|
|
| 128,333 |
|
|
| 129,755 |
|
|
Performance ratios, annualized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
| 1.28 |
| % |
| 1.22 |
| % |
| 1.22 |
| % |
| 1.30 |
| % |
| 1.06 |
| % |
| .71 |
| % |
| .90 |
| % |
Average common shareholders’ equity |
|
| 12.16 |
| % |
| 11.55 |
| % |
| 11.57 |
| % |
| 12.07 |
| % |
| 9.53 |
| % |
| 6.13 |
| % |
| 7.00 |
| % |
Net interest margin on average earning assets (taxable-equivalent basis) |
|
| 2.74 |
| % |
| 2.77 |
| % |
| 2.97 |
| % |
| 3.00 |
| % |
| 2.95 |
| % |
| 3.13 |
| % |
| 3.65 |
| % |
Nonaccrual loans to total loans and leases, net of unearned discount |
|
| 2.40 |
| % |
| 2.31 |
| % |
| 1.97 |
| % |
| 1.92 |
| % |
| 1.26 |
| % |
| 1.18 |
| % |
| 1.13 |
| % |
Net operating (tangible) results (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income (in thousands) |
| $ | 504,030 |
|
|
| 462,959 |
|
|
| 457,372 |
|
|
| 473,453 |
|
|
| 375,029 |
|
|
| 243,958 |
|
|
| 271,705 |
|
|
Diluted net operating income per common share |
| $ | 3.76 |
|
|
| 3.45 |
|
|
| 3.41 |
|
|
| 3.54 |
|
|
| 2.77 |
|
|
| 1.76 |
|
|
| 1.95 |
|
|
Annualized return on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average tangible assets |
|
| 1.34 |
| % |
| 1.27 |
| % |
| 1.29 |
| % |
| 1.35 |
| % |
| 1.10 |
| % |
| .74 |
| % |
| .94 |
| % |
Average tangible common shareholders’ equity |
|
| 17.54 |
| % |
| 16.68 |
| % |
| 17.05 |
| % |
| 17.53 |
| % |
| 13.94 |
| % |
| 9.04 |
| % |
| 10.39 |
| % |
Efficiency ratio (b) |
|
| 57.7 |
| % |
| 58.4 |
| % |
| 60.3 |
| % |
| 54.6 |
| % |
| 56.2 |
| % |
| 55.7 |
| % |
| 58.9 |
| % |
Balance sheet data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions, except per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets (c) |
| $ | 154,037 |
|
|
| 150,641 |
|
|
| 148,157 |
|
|
| 144,563 |
|
|
| 140,181 |
|
|
| 136,446 |
|
|
| 120,585 |
|
|
Total tangible assets (c) |
|
| 149,439 |
|
|
| 146,041 |
|
|
| 143,554 |
|
|
| 139,958 |
|
|
| 135,574 |
|
|
| 131,836 |
|
|
| 115,972 |
|
|
Earning assets |
|
| 140,420 |
|
|
| 136,951 |
|
|
| 134,355 |
|
|
| 131,916 |
|
|
| 127,689 |
|
|
| 123,492 |
|
|
| 108,226 |
|
|
Investment securities |
|
| 6,019 |
|
|
| 6,211 |
|
|
| 6,605 |
|
|
| 7,195 |
|
|
| 7,876 |
|
|
| 8,500 |
|
|
| 9,102 |
|
|
Loans and leases, net of unearned discount |
|
| 95,314 |
|
|
| 98,610 |
|
|
| 99,356 |
|
|
| 98,666 |
|
|
| 98,210 |
|
|
| 97,797 |
|
|
| 91,706 |
|
|
Deposits |
|
| 131,255 |
|
|
| 128,413 |
|
|
| 125,733 |
|
|
| 120,976 |
|
|
| 116,306 |
|
|
| 111,795 |
|
|
| 96,166 |
|
|
Common shareholders’ equity (c) |
|
| 15,614 |
|
|
| 15,321 |
|
|
| 15,077 |
|
|
| 14,963 |
|
|
| 14,823 |
|
|
| 14,703 |
|
|
| 14,470 |
|
|
Tangible common shareholders’ equity (c) |
|
| 11,016 |
|
|
| 10,721 |
|
|
| 10,474 |
|
|
| 10,358 |
|
|
| 10,216 |
|
|
| 10,093 |
|
|
| 9,857 |
|
|
At end of quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets (c) |
| $ | 151,901 |
|
|
| 150,623 |
|
|
| 150,481 |
|
|
| 142,601 |
|
|
| 138,627 |
|
|
| 139,537 |
|
|
| 124,578 |
|
|
Total tangible assets (c) |
|
| 147,304 |
|
|
| 146,023 |
|
|
| 145,879 |
|
|
| 137,998 |
|
|
| 134,021 |
|
|
| 134,928 |
|
|
| 119,966 |
|
|
Earning assets |
|
| 138,257 |
|
|
| 137,171 |
|
|
| 137,367 |
|
|
| 129,295 |
|
|
| 126,418 |
|
|
| 127,149 |
|
|
| 112,046 |
|
|
Investment securities |
|
| 6,448 |
|
|
| 6,143 |
|
|
| 6,611 |
|
|
| 7,046 |
|
|
| 7,723 |
|
|
| 8,454 |
|
|
| 8,957 |
|
|
Loans and leases, net of unearned discount |
|
| 93,583 |
|
|
| 97,113 |
|
|
| 99,299 |
|
|
| 98,536 |
|
|
| 98,447 |
|
|
| 97,758 |
|
|
| 94,142 |
|
|
Deposits |
|
| 128,701 |
|
|
| 128,269 |
|
|
| 128,476 |
|
|
| 119,806 |
|
|
| 115,163 |
|
|
| 114,968 |
|
|
| 100,183 |
|
|
Common shareholders’ equity (c) |
|
| 15,779 |
|
|
| 15,470 |
|
|
| 15,197 |
|
|
| 14,937 |
|
|
| 14,851 |
|
|
| 14,695 |
|
|
| 14,566 |
|
|
Tangible common shareholders’ equity (c) |
|
| 11,182 |
|
|
| 10,870 |
|
|
| 10,595 |
|
|
| 10,334 |
|
|
| 10,245 |
|
|
| 10,086 |
|
|
| 9,954 |
|
|
Equity per common share |
|
| 122.60 |
|
|
| 120.22 |
|
|
| 118.12 |
|
|
| 116.39 |
|
|
| 115.75 |
|
|
| 114.54 |
|
|
| 113.54 |
|
|
Tangible equity per common share |
|
| 86.88 |
|
|
| 84.47 |
|
|
| 82.35 |
|
|
| 80.52 |
|
|
| 79.85 |
|
|
| 78.62 |
|
|
| 77.60 |
|
|
|
|
|
|
|
|
- 88 -
M&T BANK CORPORATION AND SUBSIDIARIES
Table 2
RECONCILIATION OF QUARTERLY GAAP TO NON-GAAP MEASURES
|
| 2021 |
|
| 2020 Quarters |
| ||||||||||||||||||||||
|
| Third |
|
| Second |
|
| First |
|
| Fourth |
|
| Third |
|
| Second |
|
| First |
| |||||||
Income statement data (in thousands, except per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ | 495,460 |
|
| $ | 458,069 |
|
|
| 447,249 |
|
|
| 471,140 |
|
|
| 372,136 |
|
|
| 241,054 |
|
|
| 268,822 |
|
Amortization of core deposit and other intangible assets (a) |
|
| 2,028 |
|
|
| 2,023 |
|
|
| 2,034 |
|
|
| 2,313 |
|
|
| 2,893 |
|
|
| 2,904 |
|
|
| 2,883 |
|
Merger-related expenses (a) |
|
| 6,542 |
|
|
| 2,867 |
|
|
| 8,089 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Net operating income |
| $ | 504,030 |
|
| $ | 462,959 |
|
|
| 457,372 |
|
|
| 473,453 |
|
|
| 375,029 |
|
|
| 243,958 |
|
|
| 271,705 |
|
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share |
| $ | 3.69 |
|
| $ | 3.41 |
|
|
| 3.33 |
|
|
| 3.52 |
|
|
| 2.75 |
|
|
| 1.74 |
|
|
| 1.93 |
|
Amortization of core deposit and other intangible assets (a) |
|
| .02 |
|
|
| .02 |
|
|
| .02 |
|
|
| .02 |
|
|
| .02 |
|
|
| .02 |
|
|
| .02 |
|
Merger-related expenses (a) |
|
| .05 |
|
|
| .02 |
|
|
| .06 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Diluted net operating earnings per common share |
| $ | 3.76 |
|
| $ | 3.45 |
|
|
| 3.41 |
|
|
| 3.54 |
|
|
| 2.77 |
|
|
| 1.76 |
|
|
| 1.95 |
|
Other expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense |
| $ | 899,334 |
|
| $ | 865,345 |
|
|
| 919,444 |
|
|
| 845,008 |
|
|
| 826,774 |
|
|
| 807,042 |
|
|
| 906,416 |
|
Amortization of core deposit and other intangible assets |
|
| (2,738 | ) |
|
| (2,737 | ) |
|
| (2,738 | ) |
|
| (3,129 | ) |
|
| (3,914 | ) |
|
| (3,913 | ) |
|
| (3,913 | ) |
Merger-related expenses |
|
| (8,826 | ) |
|
| (3,893 | ) |
|
| (9,951 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Noninterest operating expense |
| $ | 887,770 |
|
| $ | 858,715 |
|
|
| 906,755 |
|
|
| 841,879 |
|
|
| 822,860 |
|
|
| 803,129 |
|
|
| 902,503 |
|
Merger-related expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
| $ | 60 |
|
| $ | 4 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Equipment and net occupancy |
|
| 1 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Outside data processing and software |
|
| 625 |
|
|
| 244 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Advertising and marketing |
|
| 505 |
|
|
| 24 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Printing, postage and supplies |
|
| 730 |
|
|
| 2,049 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Other costs of operations |
|
| 6,905 |
|
|
| 1,572 |
|
|
| 9,951 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Other expense |
| $ | 8,826 |
|
| $ | 3,893 |
|
|
| 9,951 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Efficiency ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest operating expense (numerator) |
| $ | 887,770 |
|
| $ | 858,715 |
|
|
| 906,755 |
|
|
| 841,879 |
|
|
| 822,860 |
|
|
| 803,129 |
|
|
| 902,503 |
|
Taxable-equivalent net interest income |
| $ | 970,953 |
|
| $ | 946,072 |
|
|
| 985,128 |
|
|
| 993,252 |
|
|
| 947,114 |
|
|
| 961,371 |
|
|
| 981,868 |
|
Other income |
|
| 569,126 |
|
|
| 513,633 |
|
|
| 505,598 |
|
|
| 551,250 |
|
|
| 520,561 |
|
|
| 487,273 |
|
|
| 529,360 |
|
Less: Gain (loss) on bank investment securities |
|
| 291 |
|
|
| (10,655 | ) |
|
| (12,282 | ) |
|
| 1,619 |
|
|
| 2,773 |
|
|
| 6,969 |
|
|
| (20,782 | ) |
Denominator |
| $ | 1,539,788 |
|
| $ | 1,470,360 |
|
|
| 1,503,008 |
|
|
| 1,542,883 |
|
|
| 1,464,902 |
|
|
| 1,441,675 |
|
|
| 1,532,010 |
|
Efficiency ratio |
|
| 57.7 | % |
|
| 58.4 | % |
|
| 60.3 | % |
|
| 54.6 | % |
|
| 56.2 | % |
|
| 55.7 | % |
|
| 58.9 | % |
Balance sheet data (in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
| $ | 154,037 |
|
| $ | 150,641 |
|
|
| 148,157 |
|
|
| 144,563 |
|
|
| 140,181 |
|
|
| 136,446 |
|
|
| 120,585 |
|
Goodwill |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
Core deposit and other intangible assets |
|
| (7 | ) |
|
| (10 | ) |
|
| (13 | ) |
|
| (16 | ) |
|
| (19 | ) |
|
| (23 | ) |
|
| (27 | ) |
Deferred taxes |
|
| 2 |
|
|
| 3 |
|
|
| 3 |
|
|
| 4 |
|
|
| 5 |
|
|
| 6 |
|
|
| 7 |
|
Average tangible assets |
| $ | 149,439 |
|
| $ | 146,041 |
|
|
| 143,554 |
|
|
| 139,958 |
|
|
| 135,574 |
|
|
| 131,836 |
|
|
| 115,972 |
|
Average common equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total equity |
| $ | 17,109 |
|
| $ | 16,571 |
|
|
| 16,327 |
|
|
| 16,213 |
|
|
| 16,073 |
|
|
| 15,953 |
|
|
| 15,720 |
|
Preferred stock |
|
| (1,495 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
Average common equity |
|
| 15,614 |
|
|
| 15,321 |
|
|
| 15,077 |
|
|
| 14,963 |
|
|
| 14,823 |
|
|
| 14,703 |
|
|
| 14,470 |
|
Goodwill |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
Core deposit and other intangible assets |
|
| (7 | ) |
|
| (10 | ) |
|
| (13 | ) |
|
| (16 | ) |
|
| (19 | ) |
|
| (23 | ) |
|
| (27 | ) |
Deferred taxes |
|
| 2 |
|
|
| 3 |
|
|
| 3 |
|
|
| 4 |
|
|
| 5 |
|
|
| 6 |
|
|
| 7 |
|
Average tangible common equity |
| $ | 11,016 |
|
| $ | 10,721 |
|
|
| 10,474 |
|
|
| 10,358 |
|
|
| 10,216 |
|
|
| 10,093 |
|
|
| 9,857 |
|
At end of quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
| $ | 151,901 |
|
| $ | 150,623 |
|
|
| 150,481 |
|
|
| 142,601 |
|
|
| 138,627 |
|
|
| 139,537 |
|
|
| 124,578 |
|
Goodwill |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
Core deposit and other intangible assets |
|
| (6 | ) |
|
| (9 | ) |
|
| (12 | ) |
|
| (14 | ) |
|
| (17 | ) |
|
| (21 | ) |
|
| (25 | ) |
Deferred taxes |
|
| 2 |
|
|
| 2 |
|
|
| 3 |
|
|
| 4 |
|
|
| 4 |
|
|
| 5 |
|
|
| 6 |
|
Total tangible assets |
| $ | 147,304 |
|
| $ | 146,023 |
|
|
| 145,879 |
|
|
| 137,998 |
|
|
| 134,021 |
|
|
| 134,928 |
|
|
| 119,966 |
|
Total common equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
| $ | 17,529 |
|
| $ | 16,720 |
|
|
| 16,447 |
|
|
| 16,187 |
|
|
| 16,101 |
|
|
| 15,945 |
|
|
| 15,816 |
|
Preferred stock |
|
| (1,750 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
Common equity |
|
| 15,779 |
|
|
| 15,470 |
|
|
| 15,197 |
|
|
| 14,937 |
|
|
| 14,851 |
|
|
| 14,695 |
|
|
| 14,566 |
|
Goodwill |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
Core deposit and other intangible assets |
|
| (6 | ) |
|
| (9 | ) |
|
| (12 | ) |
|
| (14 | ) |
|
| (17 | ) |
|
| (21 | ) |
|
| (25 | ) |
Deferred taxes |
|
| 2 |
|
|
| 2 |
|
|
| 3 |
|
|
| 4 |
|
|
| 4 |
|
|
| 5 |
|
|
| 6 |
|
Total tangible common equity |
| $ | 11,182 |
|
| $ | 10,870 |
|
|
| 10,595 |
|
|
| 10,334 |
|
|
| 10,245 |
|
|
| 10,086 |
|
|
| 9,954 |
|
|
|
- 89 -
M&T BANK CORPORATION AND SUBSIDIARIES
Table 3
AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES
|
| 2021 Third Quarter |
|
| 2021 Second Quarter |
|
| 2021 First Quarter |
|
| |||||||||||||||||||||||||||
|
| Average Balance |
|
| Interest |
|
| Average Rate |
|
| Average Balance |
|
| Interest |
|
| Average Rate |
|
| Average Balance |
|
| Interest |
|
| Average Rate |
|
| |||||||||
Average balance in millions; interest in thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases, net of unearned discount (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, etc. |
| $ | 23,730 |
|
| $ | 236,820 |
|
|
| 3.96 |
| % |
| 27,055 |
|
|
| 219,686 |
|
|
| 3.26 |
| % |
| 27,723 |
|
|
| 240,961 |
|
|
| 3.53 |
| % |
Real estate – commercial |
|
| 37,547 |
|
|
| 371,150 |
|
|
| 3.87 |
|
|
| 37,419 |
|
|
| 371,050 |
|
|
| 3.92 |
|
|
| 37,609 |
|
|
| 391,094 |
|
|
| 4.16 |
|
|
Real estate – consumer |
|
| 16,379 |
|
|
| 146,898 |
|
|
| 3.59 |
|
|
| 17,022 |
|
|
| 150,704 |
|
|
| 3.54 |
|
|
| 17,404 |
|
|
| 154,219 |
|
|
| 3.54 |
|
|
Consumer |
|
| 17,658 |
|
|
| 193,256 |
|
|
| 4.34 |
|
|
| 17,114 |
|
|
| 189,254 |
|
|
| 4.44 |
|
|
| 16,620 |
|
|
| 190,038 |
|
|
| 4.64 |
|
|
Total loans and leases, net |
|
| 95,314 |
|
|
| 948,124 |
|
|
| 3.95 |
|
|
| 98,610 |
|
|
| 930,694 |
|
|
| 3.79 |
|
|
| 99,356 |
|
|
| 976,312 |
|
|
| 3.99 |
|
|
Interest-bearing deposits at banks |
|
| 39,036 |
|
|
| 14,922 |
|
|
| .15 |
|
|
| 32,081 |
|
|
| 8,711 |
|
|
| .11 |
|
|
| 27,666 |
|
|
| 6,874 |
|
|
| .10 |
|
|
Federal funds sold and agreements to resell securities |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 678 |
|
|
| 202 |
|
|
| .12 |
|
|
Trading account |
|
| 51 |
|
|
| 345 |
|
|
| 2.71 |
|
|
| 49 |
|
|
| 216 |
|
|
| 1.76 |
|
|
| 50 |
|
|
| 178 |
|
|
| 1.44 |
|
|
Investment securities (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and federal agencies |
|
| 5,352 |
|
|
| 30,362 |
|
|
| 2.25 |
|
|
| 5,525 |
|
|
| 31,621 |
|
|
| 2.30 |
|
|
| 5,920 |
|
|
| 34,094 |
|
|
| 2.34 |
|
|
Obligations of states and political subdivisions |
|
| — |
|
|
| 3 |
|
|
| 6.44 |
|
|
| 1 |
|
|
| 10 |
|
|
| 5.77 |
|
|
| 1 |
|
|
| 14 |
|
|
| 5.66 |
|
|
Other |
|
| 667 |
|
|
| 2,893 |
|
|
| 1.72 |
|
|
| 685 |
|
|
| 2,838 |
|
|
| 1.66 |
|
|
| 684 |
|
|
| 3,021 |
|
|
| 1.79 |
|
|
Total investment securities |
|
| 6,019 |
|
|
| 33,258 |
|
|
| 2.19 |
|
|
| 6,211 |
|
|
| 34,469 |
|
|
| 2.23 |
|
|
| 6,605 |
|
|
| 37,129 |
|
|
| 2.28 |
|
|
Total earning assets |
|
| 140,420 |
|
|
| 996,649 |
|
|
| 2.82 |
|
|
| 136,951 |
|
|
| 974,090 |
|
|
| 2.85 |
|
|
| 134,355 |
|
|
| 1,020,695 |
|
|
| 3.08 |
|
|
Allowance for credit losses |
|
| (1,577 | ) |
|
|
|
|
|
|
|
|
|
| (1,642 | ) |
|
|
|
|
|
|
|
|
|
| (1,744 | ) |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
| 1,480 |
|
|
|
|
|
|
|
|
|
|
| 1,409 |
|
|
|
|
|
|
|
|
|
|
| 1,408 |
|
|
|
|
|
|
|
|
|
|
Other assets |
|
| 13,714 |
|
|
|
|
|
|
|
|
|
|
| 13,923 |
|
|
|
|
|
|
|
|
|
|
| 14,138 |
|
|
|
|
|
|
|
|
|
|
Total assets |
| $ | 154,037 |
|
|
|
|
|
|
|
|
|
|
| 150,641 |
|
|
|
|
|
|
|
|
|
|
| 148,157 |
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and interest-checking deposits |
| $ | 70,976 |
|
|
| 7,000 |
|
|
| .04 |
|
|
| 71,561 |
|
|
| 8,052 |
|
|
| .05 |
|
|
| 70,458 |
|
|
| 11,504 |
|
|
| .07 |
|
|
Time deposits |
|
| 3,061 |
|
|
| 3,573 |
|
|
| .46 |
|
|
| 3,358 |
|
|
| 5,085 |
|
|
| .61 |
|
|
| 3,732 |
|
|
| 7,010 |
|
|
| .76 |
|
|
Deposits at Cayman Islands office |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 50 |
|
|
| 15 |
|
|
| .12 |
|
|
| 683 |
|
|
| 185 |
|
|
| .11 |
|
|
Total interest-bearing deposits |
|
| 74,037 |
|
|
| 10,573 |
|
|
| .06 |
|
|
| 74,969 |
|
|
| 13,152 |
|
|
| .07 |
|
|
| 74,873 |
|
|
| 18,699 |
|
|
| .10 |
|
|
Short-term borrowings |
|
| 91 |
|
|
| 2 |
|
|
| .01 |
|
|
| 61 |
|
|
| 2 |
|
|
| .01 |
|
|
| 62 |
|
|
| 2 |
|
|
| .01 |
|
|
Long-term borrowings |
|
| 3,431 |
|
|
| 15,121 |
|
|
| 1.75 |
|
|
| 3,429 |
|
|
| 14,864 |
|
|
| 1.74 |
|
|
| 3,851 |
|
|
| 16,866 |
|
|
| 1.78 |
|
|
Total interest-bearing liabilities |
|
| 77,559 |
|
|
| 25,696 |
|
|
| .14 |
|
|
| 78,459 |
|
|
| 28,018 |
|
|
| .14 |
|
|
| 78,786 |
|
|
| 35,567 |
|
|
| .18 |
|
|
Noninterest-bearing deposits |
|
| 57,218 |
|
|
|
|
|
|
|
|
|
|
| 53,444 |
|
|
|
|
|
|
|
|
|
|
| 50,860 |
|
|
|
|
|
|
|
|
|
|
Other liabilities |
|
| 2,151 |
|
|
|
|
|
|
|
|
|
|
| 2,167 |
|
|
|
|
|
|
|
|
|
|
| 2,184 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
| 136,928 |
|
|
|
|
|
|
|
|
|
|
| 134,070 |
|
|
|
|
|
|
|
|
|
|
| 131,830 |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
| 17,109 |
|
|
|
|
|
|
|
|
|
|
| 16,571 |
|
|
|
|
|
|
|
|
|
|
| 16,327 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
| $ | 154,037 |
|
|
|
|
|
|
|
|
|
|
| 150,641 |
|
|
|
|
|
|
|
|
|
|
| 148,157 |
|
|
|
|
|
|
|
|
|
|
Net interest spread |
|
|
|
|
|
|
|
|
|
| 2.68 |
|
|
|
|
|
|
|
|
|
|
| 2.71 |
|
|
|
|
|
|
|
|
|
|
| 2.90 |
|
|
Contribution of interest-free funds |
|
|
|
|
|
|
|
|
|
| .06 |
|
|
|
|
|
|
|
|
|
|
| .06 |
|
|
|
|
|
|
|
|
|
|
| .07 |
|
|
Net interest income/margin on earning assets |
|
|
|
|
| $ | 970,953 |
|
|
| 2.74 |
| % |
|
|
|
|
| 946,072 |
|
|
| 2.77 |
| % |
|
|
|
|
| 985,128 |
|
|
| 2.97 |
| % |
|
|
|
|
(continued)
- 90 -
M&T BANK CORPORATION AND SUBSIDIARIES
Table 1
QUARTERLY TRENDS
|
| 2022 Quarters |
|
| 2021 Quarters |
|
| ||||||||||||||||||||||
|
| Third |
|
| Second |
|
| First |
|
| Fourth |
|
| Third |
|
| Second |
|
| First |
|
| |||||||
Earnings and dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Amounts in thousands, except per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Interest income (taxable-equivalent basis) |
| $ | 1,793,340 |
|
| $ | 1,475,868 |
|
|
| 931,490 |
|
|
| 962,081 |
|
|
| 996,649 |
|
|
| 974,090 |
|
|
| 1,020,695 |
|
|
Interest expense |
|
| 102,822 |
|
|
| 53,425 |
|
|
| 24,082 |
|
|
| 24,725 |
|
|
| 25,696 |
|
|
| 28,018 |
|
|
| 35,567 |
|
|
Net interest income |
|
| 1,690,518 |
|
|
| 1,422,443 |
|
|
| 907,408 |
|
|
| 937,356 |
|
|
| 970,953 |
|
|
| 946,072 |
|
|
| 985,128 |
|
|
Less: provision for credit losses |
|
| 115,000 |
|
|
| 302,000 |
|
|
| 10,000 |
|
|
| (15,000 | ) |
|
| (20,000 | ) |
|
| (15,000 | ) |
|
| (25,000 | ) |
|
Other income |
|
| 563,079 |
|
|
| 571,100 |
|
|
| 540,887 |
|
|
| 578,637 |
|
|
| 569,126 |
|
|
| 513,633 |
|
|
| 505,598 |
|
|
Less: other expense |
|
| 1,279,253 |
|
|
| 1,403,154 |
|
|
| 959,741 |
|
|
| 927,500 |
|
|
| 899,334 |
|
|
| 865,345 |
|
|
| 919,444 |
|
|
Income before income taxes |
|
| 859,344 |
|
|
| 288,389 |
|
|
| 478,554 |
|
|
| 603,493 |
|
|
| 660,745 |
|
|
| 609,360 |
|
|
| 596,282 |
|
|
Applicable income taxes |
|
| 200,921 |
|
|
| 60,141 |
|
|
| 113,146 |
|
|
| 141,962 |
|
|
| 161,582 |
|
|
| 147,559 |
|
|
| 145,300 |
|
|
Taxable-equivalent adjustment |
|
| 11,827 |
|
|
| 10,726 |
|
|
| 3,234 |
|
|
| 3,563 |
|
|
| 3,703 |
|
|
| 3,732 |
|
|
| 3,733 |
|
|
Net income |
| $ | 646,596 |
|
| $ | 217,522 |
|
|
| 362,174 |
|
|
| 457,968 |
|
|
| 495,460 |
|
|
| 458,069 |
|
|
| 447,249 |
|
|
Net income available to common shareholders-diluted |
| $ | 620,554 |
|
| $ | 192,236 |
|
|
| 339,590 |
|
|
| 434,171 |
|
|
| 475,961 |
|
|
| 438,759 |
|
|
| 428,093 |
|
|
Per common share data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Basic earnings |
| $ | 3.55 |
|
| $ | 1.08 |
|
|
| 2.63 |
|
|
| 3.37 |
|
|
| 3.70 |
|
|
| 3.41 |
|
|
| 3.33 |
|
|
Diluted earnings |
|
| 3.53 |
|
|
| 1.08 |
|
|
| 2.62 |
|
|
| 3.37 |
|
|
| 3.69 |
|
|
| 3.41 |
|
|
| 3.33 |
|
|
Cash dividends |
| $ | 1.20 |
|
| $ | 1.20 |
|
|
| 1.20 |
|
|
| 1.20 |
|
|
| 1.10 |
|
|
| 1.10 |
|
|
| 1.10 |
|
|
Average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Basic |
|
| 174,609 |
|
|
| 177,367 |
|
|
| 128,945 |
|
|
| 128,698 |
|
|
| 128,689 |
|
|
| 128,671 |
|
|
| 128,537 |
|
|
Diluted |
|
| 175,682 |
|
|
| 178,277 |
|
|
| 129,416 |
|
|
| 128,888 |
|
|
| 128,844 |
|
|
| 128,842 |
|
|
| 128,669 |
|
|
Performance ratios, annualized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Return on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Average assets |
|
| 1.28 |
| % |
| .42 |
| % |
| .97 |
| % |
| 1.15 |
| % |
| 1.28 |
| % |
| 1.22 |
| % |
| 1.22 |
| % |
Average common shareholders’ equity |
|
| 10.43 |
| % |
| 3.21 |
| % |
| 8.55 |
| % |
| 10.91 |
| % |
| 12.16 |
| % |
| 11.55 |
| % |
| 11.57 |
| % |
Net interest margin on average earning assets |
|
| 3.68 |
| % |
| 3.01 |
| % |
| 2.65 |
| % |
| 2.58 |
| % |
| 2.74 |
| % |
| 2.77 |
| % |
| 2.97 |
| % |
Nonaccrual loans to total loans and leases, net of |
|
| 1.89 |
| % |
| 2.05 |
| % |
| 2.32 |
| % |
| 2.22 |
| % |
| 2.40 |
| % |
| 2.31 |
| % |
| 1.97 |
| % |
Net operating (tangible) results (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net operating income (in thousands) |
| $ | 700,030 |
|
| $ | 577,622 |
|
|
| 375,999 |
|
|
| 475,477 |
|
|
| 504,030 |
|
|
| 462,959 |
|
|
| 457,372 |
|
|
Diluted net operating income per common share |
| $ | 3.83 |
|
| $ | 3.10 |
|
|
| 2.73 |
|
|
| 3.50 |
|
|
| 3.76 |
|
|
| 3.45 |
|
|
| 3.41 |
|
|
Annualized return on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Average tangible assets |
|
| 1.44 |
| % |
| 1.16 |
| % |
| 1.04 |
| % |
| 1.23 |
| % |
| 1.34 |
| % |
| 1.27 |
| % |
| 1.29 |
| % |
Average tangible common shareholders’ equity |
|
| 17.89 |
| % |
| 14.41 |
| % |
| 12.44 |
| % |
| 15.98 |
| % |
| 17.54 |
| % |
| 16.68 |
| % |
| 17.05 |
| % |
Efficiency ratio (b) |
|
| 53.6 |
| % |
| 58.3 |
| % |
| 64.9 |
| % |
| 59.7 |
| % |
| 57.7 |
| % |
| 58.4 |
| % |
| 60.3 |
| % |
Balance sheet data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
In millions, except per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Average balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total assets (c) |
| $ | 201,131 |
|
| $ | 208,865 |
|
|
| 151,648 |
|
|
| 157,722 |
|
|
| 154,037 |
|
|
| 150,641 |
|
|
| 148,157 |
|
|
Total tangible assets (c) |
|
| 192,450 |
|
|
| 200,170 |
|
|
| 147,053 |
|
|
| 153,125 |
|
|
| 149,439 |
|
|
| 146,041 |
|
|
| 143,554 |
|
|
Earning assets |
|
| 182,382 |
|
|
| 189,755 |
|
|
| 138,624 |
|
|
| 144,420 |
|
|
| 140,420 |
|
|
| 136,951 |
|
|
| 134,355 |
|
|
Investment securities |
|
| 23,945 |
|
|
| 22,384 |
|
|
| 7,724 |
|
|
| 6,804 |
|
|
| 6,019 |
|
|
| 6,211 |
|
|
| 6,605 |
|
|
Loans and leases, net of unearned discount |
|
| 127,525 |
|
|
| 127,599 |
|
|
| 92,159 |
|
|
| 93,250 |
|
|
| 95,314 |
|
|
| 98,610 |
|
|
| 99,356 |
|
|
Deposits |
|
| 167,271 |
|
|
| 174,683 |
|
|
| 128,055 |
|
|
| 134,444 |
|
|
| 131,255 |
|
|
| 128,413 |
|
|
| 125,733 |
|
|
Common shareholders’ equity (c) |
|
| 23,654 |
|
|
| 24,079 |
|
|
| 16,144 |
|
|
| 15,863 |
|
|
| 15,614 |
|
|
| 15,321 |
|
|
| 15,077 |
|
|
Tangible common shareholders’ equity (c) |
|
| 14,973 |
|
|
| 15,384 |
|
|
| 11,549 |
|
|
| 11,266 |
|
|
| 11,016 |
|
|
| 10,721 |
|
|
| 10,474 |
|
|
At end of quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total assets (c) |
| $ | 197,955 |
|
| $ | 204,033 |
|
|
| 149,864 |
|
|
| 155,107 |
|
|
| 151,901 |
|
|
| 150,623 |
|
|
| 150,481 |
|
|
Total tangible assets (c) |
|
| 189,281 |
|
|
| 195,344 |
|
|
| 145,269 |
|
|
| 150,511 |
|
|
| 147,304 |
|
|
| 146,023 |
|
|
| 145,879 |
|
|
Earning assets |
|
| 178,351 |
|
|
| 185,109 |
|
|
| 137,237 |
|
|
| 141,990 |
|
|
| 138,527 |
|
|
| 137,171 |
|
|
| 137,367 |
|
|
Investment securities |
|
| 24,604 |
|
|
| 22,802 |
|
|
| 9,357 |
|
|
| 7,156 |
|
|
| 6,448 |
|
|
| 6,143 |
|
|
| 6,611 |
|
|
Loans and leases, net of unearned discount |
|
| 128,226 |
|
|
| 128,486 |
|
|
| 91,808 |
|
|
| 92,912 |
|
|
| 93,583 |
|
|
| 97,113 |
|
|
| 99,299 |
|
|
Deposits |
|
| 163,845 |
|
|
| 170,358 |
|
|
| 126,319 |
|
|
| 131,543 |
|
|
| 128,701 |
|
|
| 128,269 |
|
|
| 128,476 |
|
|
Common shareholders’ equity (c) |
|
| 23,245 |
|
|
| 23,784 |
|
|
| 16,126 |
|
|
| 16,153 |
|
|
| 15,779 |
|
|
| 15,470 |
|
|
| 15,197 |
|
|
Tangible common shareholders’ equity (c) |
|
| 14,571 |
|
|
| 15,095 |
|
|
| 11,531 |
|
|
| 11,557 |
|
|
| 11,182 |
|
|
| 10,870 |
|
|
| 10,595 |
|
|
Equity per common share |
|
| 134.45 |
|
|
| 135.16 |
|
|
| 124.93 |
|
|
| 125.51 |
|
|
| 122.60 |
|
|
| 120.22 |
|
|
| 118.12 |
|
|
Tangible equity per common share |
|
| 84.28 |
|
|
| 85.78 |
|
|
| 89.33 |
|
|
| 89.80 |
|
|
| 86.88 |
|
|
| 84.47 |
|
|
| 82.35 |
|
|
- 85 -
M&T BANK CORPORATION AND SUBSIDIARIES
Table 2
RECONCILIATION OF QUARTERLY GAAP TO NON-GAAP MEASURES
|
| 2022 Quarters |
|
| 2021 Quarters |
| ||||||||||||||||||||||
|
| Third |
|
| Second |
|
| First |
|
| Fourth |
|
| Third |
|
| Second |
|
| First |
| |||||||
Income statement data (in thousands, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net income |
|
| 646,596 |
|
| $ | 217,522 |
|
|
| 362,174 |
|
|
| 457,968 |
|
|
| 495,460 |
|
|
| 458,069 |
|
|
| 447,249 |
|
Amortization of core deposit and other |
|
| 14,141 |
|
|
| 14,138 |
|
|
| 933 |
|
|
| 1,447 |
|
|
| 2,028 |
|
|
| 2,023 |
|
|
| 2,034 |
|
Merger-related expenses (a) |
|
| 39,293 |
|
|
| 345,962 |
|
|
| 12,892 |
|
|
| 16,062 |
|
|
| 6,542 |
|
|
| 2,867 |
|
|
| 8,089 |
|
Net operating income |
|
| 700,030 |
|
| $ | 577,622 |
|
|
| 375,999 |
|
|
| 475,477 |
|
|
| 504,030 |
|
|
| 462,959 |
|
|
| 457,372 |
|
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Diluted earnings per common share |
|
| 3.53 |
|
| $ | 1.08 |
|
|
| 2.62 |
|
|
| 3.37 |
|
|
| 3.69 |
|
|
| 3.41 |
|
|
| 3.33 |
|
Amortization of core deposit and other |
|
| .08 |
|
|
| .08 |
|
|
| .01 |
|
|
| .01 |
|
|
| .02 |
|
|
| .02 |
|
|
| .02 |
|
Merger-related expenses (a) |
|
| .22 |
|
|
| 1.94 |
|
|
| .10 |
|
|
| .12 |
|
|
| .05 |
|
|
| .02 |
|
|
| .06 |
|
Diluted net operating earnings per |
|
| 3.83 |
|
| $ | 3.10 |
|
|
| 2.73 |
|
|
| 3.50 |
|
|
| 3.76 |
|
|
| 3.45 |
|
|
| 3.41 |
|
Other expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Other expense |
|
| 1,279,253 |
|
| $ | 1,403,154 |
|
|
| 959,741 |
|
|
| 927,500 |
|
|
| 899,334 |
|
|
| 865,345 |
|
|
| 919,444 |
|
Amortization of core deposit and other |
|
| (18,384 | ) |
|
| (18,384 | ) |
|
| (1,256 | ) |
|
| (1,954 | ) |
|
| (2,738 | ) |
|
| (2,737 | ) |
|
| (2,738 | ) |
Merger-related expenses |
|
| (53,027 | ) |
|
| (222,809 | ) |
|
| (17,372 | ) |
|
| (21,190 | ) |
|
| (8,826 | ) |
|
| (3,893 | ) |
|
| (9,951 | ) |
Noninterest operating expense |
|
| 1,207,842 |
|
| $ | 1,161,961 |
|
|
| 941,113 |
|
|
| 904,356 |
|
|
| 887,770 |
|
|
| 858,715 |
|
|
| 906,755 |
|
Merger-related expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Salaries and employee benefits |
|
| 13,094 |
|
| $ | 85,299 |
|
|
| 87 |
|
|
| 112 |
|
|
| 60 |
|
|
| 4 |
|
|
| — |
|
Equipment and net occupancy |
|
| 2,106 |
|
|
| 502 |
|
|
| 1,807 |
|
|
| 340 |
|
|
| 1 |
|
|
| — |
|
|
| — |
|
Outside data processing and software |
|
| 2,277 |
|
|
| 716 |
|
|
| 252 |
|
|
| 250 |
|
|
| 625 |
|
|
| 244 |
|
|
| — |
|
Advertising and marketing |
|
| 2,177 |
|
|
| 1,199 |
|
|
| 628 |
|
|
| 337 |
|
|
| 505 |
|
|
| 24 |
|
|
| — |
|
Printing, postage and supplies |
|
| 651 |
|
|
| 2,460 |
|
|
| 722 |
|
|
| 186 |
|
|
| 730 |
|
|
| 2,049 |
|
|
| — |
|
Other costs of operations |
|
| 32,722 |
|
|
| 132,633 |
|
|
| 13,876 |
|
|
| 19,965 |
|
|
| 6,905 |
|
|
| 1,572 |
|
|
| 9,951 |
|
Other expense |
|
| 53,027 |
|
|
| 222,809 |
|
|
| 17,372 |
|
|
| 21,190 |
|
|
| 8,826 |
|
|
| 3,893 |
|
|
| 9,951 |
|
Provision for credit losses |
|
| — |
|
|
| 242,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total |
|
| 53,027 |
|
| $ | 464,809 |
|
| $ | 17,372 |
|
| $ | 21,190 |
|
| $ | 8,826 |
|
| $ | 3,893 |
|
| $ | 9,951 |
|
Efficiency ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Noninterest operating expense (numerator) |
|
| 1,207,842 |
|
| $ | 1,161,961 |
|
|
| 941,113 |
|
|
| 904,356 |
|
|
| 887,770 |
|
|
| 858,715 |
|
|
| 906,755 |
|
Taxable-equivalent net interest income |
|
| 1,690,518 |
|
| $ | 1,422,443 |
|
|
| 907,408 |
|
|
| 937,356 |
|
|
| 970,953 |
|
|
| 946,072 |
|
|
| 985,128 |
|
Other income |
|
| 563,079 |
|
|
| 571,100 |
|
|
| 540,887 |
|
|
| 578,637 |
|
|
| 569,126 |
|
|
| 513,633 |
|
|
| 505,598 |
|
Less: Gain (loss) on bank investment |
|
| (1,108 | ) |
|
| (62 | ) |
|
| (743 | ) |
|
| 1,426 |
|
|
| 291 |
|
|
| (10,655 | ) |
|
| (12,282 | ) |
Denominator |
|
| 2,254,705 |
|
| $ | 1,993,605 |
|
|
| 1,449,038 |
|
|
| 1,514,567 |
|
|
| 1,539,788 |
|
|
| 1,470,360 |
|
|
| 1,503,008 |
|
Efficiency ratio |
|
| 53.6 | % |
|
| 58.3 | % |
|
| 64.9 | % |
|
| 59.7 | % |
|
| 57.7 | % |
|
| 58.4 | % |
|
| 60.3 | % |
Balance sheet data (in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Average assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Average assets |
|
| 201,131 |
|
| $ | 208,865 |
|
|
| 151,648 |
|
|
| 157,722 |
|
|
| 154,037 |
|
|
| 150,641 |
|
|
| 148,157 |
|
Goodwill |
|
| (8,501 | ) |
|
| (8,501 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
Core deposit and other intangible assets |
|
| (236 | ) |
|
| (254 | ) |
|
| (3 | ) |
|
| (5 | ) |
|
| (7 | ) |
|
| (10 | ) |
|
| (13 | ) |
Deferred taxes |
|
| 56 |
|
|
| 60 |
|
|
| 1 |
|
|
| 1 |
|
|
| 2 |
|
|
| 3 |
|
|
| 3 |
|
Average tangible assets |
|
| 192,450 |
|
| $ | 200,170 |
|
|
| 147,053 |
|
|
| 153,125 |
|
|
| 149,439 |
|
|
| 146,041 |
|
|
| 143,554 |
|
Average common equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Average total equity |
|
| 25,665 |
|
| $ | 26,090 |
|
|
| 17,894 |
|
|
| 17,613 |
|
|
| 17,109 |
|
|
| 16,571 |
|
|
| 16,327 |
|
Preferred stock |
|
| (2,011 | ) |
|
| (2,011 | ) |
|
| (1,750 | ) |
|
| (1,750 | ) |
|
| (1,495 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
Average common equity |
|
| 23,654 |
|
|
| 24,079 |
|
|
| 16,144 |
|
|
| 15,863 |
|
|
| 15,614 |
|
|
| 15,321 |
|
|
| 15,077 |
|
Goodwill |
|
| (8,501 | ) |
|
| (8,501 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
Core deposit and other intangible assets |
|
| (236 | ) |
|
| (254 | ) |
|
| (3 | ) |
|
| (5 | ) |
|
| (7 | ) |
|
| (10 | ) |
|
| (13 | ) |
Deferred taxes |
|
| 56 |
|
|
| 60 |
|
|
| 1 |
|
|
| 1 |
|
|
| 2 |
|
|
| 3 |
|
|
| 3 |
|
Average tangible common equity |
|
| 14,973 |
|
| $ | 15,384 |
|
|
| 11,549 |
|
|
| 11,266 |
|
|
| 11,016 |
|
|
| 10,721 |
|
|
| 10,474 |
|
At end of quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total assets |
|
| 197,955 |
|
| $ | 204,033 |
|
|
| 149,864 |
|
|
| 155,107 |
|
|
| 151,901 |
|
|
| 150,623 |
|
|
| 150,481 |
|
Goodwill |
|
| (8,501 | ) |
|
| (8,501 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
Core deposit and other intangible assets |
|
| (227 | ) |
|
| (245 | ) |
|
| (3 | ) |
|
| (4 | ) |
|
| (6 | ) |
|
| (9 | ) |
|
| (12 | ) |
Deferred taxes |
|
| 54 |
|
|
| 57 |
|
|
| 1 |
|
|
| 1 |
|
|
| 2 |
|
|
| 2 |
|
|
| 3 |
|
Total tangible assets |
|
| 189,281 |
|
| $ | 195,344 |
|
|
| 145,269 |
|
|
| 150,511 |
|
|
| 147,304 |
|
|
| 146,023 |
|
|
| 145,879 |
|
Total common equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total equity |
|
| 25,256 |
|
| $ | 25,795 |
|
|
| 17,876 |
|
|
| 17,903 |
|
|
| 17,529 |
|
|
| 16,720 |
|
|
| 16,447 |
|
Preferred stock |
|
| (2,011 | ) |
|
| (2,011 | ) |
|
| (1,750 | ) |
|
| (1,750 | ) |
|
| (1,750 | ) |
|
| (1,250 | ) |
|
| (1,250 | ) |
Common equity |
|
| 23,245 |
|
|
| 23,784 |
|
|
| 16,126 |
|
|
| 16,153 |
|
|
| 15,779 |
|
|
| 15,470 |
|
|
| 15,197 |
|
Goodwill |
|
| (8,501 | ) |
|
| (8,501 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
|
| (4,593 | ) |
Core deposit and other intangible assets |
|
| (227 | ) |
|
| (245 | ) |
|
| (3 | ) |
|
| (4 | ) |
|
| (6 | ) |
|
| (9 | ) |
|
| (12 | ) |
Deferred taxes |
|
| 54 |
|
|
| 57 |
|
|
| 1 |
|
|
| 1 |
|
|
| 2 |
|
|
| 2 |
|
|
| 3 |
|
Total tangible common equity |
|
| 14,571 |
|
| $ | 15,095 |
|
|
| 11,531 |
|
|
| 11,557 |
|
|
| 11,182 |
|
|
| 10,870 |
|
|
| 10,595 |
|
- 86 -
M&T BANK CORPORATION AND SUBSIDIARIES
Table 3
AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES
|
| 2022 Third Quarter |
|
| 2022 Second Quarter |
|
| 2022 First Quarter |
|
| |||||||||||||||||||||||||||
|
| Average |
|
| Interest |
|
| Average |
|
| Average |
|
| Interest |
|
| Average |
|
| Average |
|
| Interest |
|
| Average |
|
| |||||||||
Average balance in millions; interest in thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Loans and leases, net of unearned |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Commercial, financial, etc. |
| $ | 38,321 |
|
| $ | 470,738 |
|
|
| 4.87 |
| % | $ | 37,818 |
|
| $ | 373,543 |
|
|
| 3.96 |
| % | $ | 23,305 |
|
| $ | 207,715 |
|
|
| 3.61 |
| % |
Real estate – commercial |
|
| 46,282 |
|
|
| 531,225 |
|
|
| 4.49 |
|
|
| 47,227 |
|
|
| 461,594 |
|
|
| 3.87 |
|
|
| 34,957 |
|
|
| 337,100 |
|
|
| 3.86 |
|
|
Real estate – consumer |
|
| 22,962 |
|
|
| 220,464 |
|
|
| 3.84 |
|
|
| 22,761 |
|
|
| 207,080 |
|
|
| 3.64 |
|
|
| 15,870 |
|
|
| 141,001 |
|
|
| 3.55 |
|
|
Consumer |
|
| 19,960 |
|
|
| 239,471 |
|
|
| 4.76 |
|
|
| 19,793 |
|
|
| 210,290 |
|
|
| 4.26 |
|
|
| 18,027 |
|
|
| 188,017 |
|
|
| 4.23 |
|
|
Total loans and leases, net |
|
| 127,525 |
|
|
| 1,461,898 |
|
|
| 4.55 |
|
|
| 127,599 |
|
|
| 1,252,507 |
|
|
| 3.94 |
|
|
| 92,159 |
|
|
| 873,833 |
|
|
| 3.85 |
|
|
Interest-bearing deposits at banks |
|
| 30,752 |
|
|
| 172,956 |
|
|
| 2.23 |
|
|
| 39,386 |
|
|
| 80,773 |
|
|
| .82 |
|
|
| 38,693 |
|
|
| 18,280 |
|
|
| .19 |
|
|
Federal funds sold and agreements |
|
| 29 |
|
|
| 41 |
|
|
| .55 |
|
|
| 250 |
|
|
| 253 |
|
|
| .41 |
|
|
| — |
|
|
| — |
|
|
| .71 |
|
|
Trading account |
|
| 131 |
|
|
| 583 |
|
|
| 1.78 |
|
|
| 136 |
|
|
| 199 |
|
|
| .59 |
|
|
| 48 |
|
|
| 194 |
|
|
| 1.61 |
|
|
Investment securities (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
U.S. Treasury and federal agencies |
|
| 20,227 |
|
|
| 124,084 |
|
|
| 2.43 |
|
|
| 18,644 |
|
|
| 109,755 |
|
|
| 2.36 |
|
|
| 7,077 |
|
|
| 35,911 |
|
|
| 2.06 |
|
|
Obligations of states and political subdivisions |
|
| 2,688 |
|
|
| 23,626 |
|
|
| 3.49 |
|
|
| 2,768 |
|
|
| 23,344 |
|
|
| 3.38 |
|
|
| — |
|
|
| 3 |
|
|
| 6.99 |
|
|
Other |
|
| 1,030 |
|
|
| 10,152 |
|
|
| 3.91 |
|
|
| 972 |
|
|
| 9,037 |
|
|
| 3.73 |
|
|
| 647 |
|
|
| 3,269 |
|
|
| 2.05 |
|
|
Total investment securities |
|
| 23,945 |
|
|
| 157,862 |
|
|
| 2.62 |
|
|
| 22,384 |
|
|
| 142,136 |
|
|
| 2.55 |
|
|
| 7,724 |
|
|
| 39,183 |
|
|
| 2.06 |
|
|
Total earning assets |
|
| 182,382 |
|
|
| 1,793,340 |
|
|
| 3.90 |
|
|
| 189,755 |
|
|
| 1,475,868 |
|
|
| 3.12 |
|
|
| 138,624 |
|
|
| 931,490 |
|
|
| 2.72 |
|
|
Allowance for credit losses |
|
| (1,822 | ) |
|
|
|
|
|
|
|
| (1,814 | ) |
|
|
|
|
|
|
|
| (1,475 | ) |
|
|
|
|
|
|
| ||||||
Cash and due from banks |
|
| 1,962 |
|
|
|
|
|
|
|
|
| 1,690 |
|
|
|
|
|
|
|
|
| 1,448 |
|
|
|
|
|
|
|
| ||||||
Other assets |
|
| 18,609 |
|
|
|
|
|
|
|
|
| 19,234 |
|
|
|
|
|
|
|
|
| 13,051 |
|
|
|
|
|
|
|
| ||||||
Total assets |
| $ | 201,131 |
|
|
|
|
|
|
|
| $ | 208,865 |
|
|
|
|
|
|
|
| $ | 151,648 |
|
|
|
|
|
|
|
| ||||||
Liabilities and shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Savings and interest-checking deposits |
| $ | 89,360 |
|
| $ | 68,690 |
|
|
| .31 |
|
| $ | 95,149 |
|
| $ | 27,907 |
|
|
| .12 |
|
| $ | 67,267 |
|
| $ | 6,747 |
|
|
| .04 |
|
|
Time deposits |
|
| 5,050 |
|
|
| 1,124 |
|
|
| .09 |
|
|
| 5,480 |
|
|
| 1,227 |
|
|
| .09 |
|
|
| 2,647 |
|
|
| 1,397 |
|
|
| .21 |
|
|
Total interest-bearing deposits |
|
| 94,410 |
|
|
| 69,814 |
|
|
| .29 |
|
|
| 100,629 |
|
|
| 29,134 |
|
|
| .12 |
|
|
| 69,914 |
|
|
| 8,144 |
|
|
| .05 |
|
|
Short-term borrowings |
|
| 913 |
|
|
| 2,670 |
|
|
| 1.16 |
|
|
| 1,126 |
|
|
| 3,419 |
|
|
| 1.22 |
|
|
| 56 |
|
|
| 1 |
|
|
| .01 |
|
|
Long-term borrowings |
|
| 3,281 |
|
|
| 30,338 |
|
|
| 3.67 |
|
|
| 3,282 |
|
|
| 20,872 |
|
|
| 2.55 |
|
|
| 3,442 |
|
|
| 15,937 |
|
|
| 1.88 |
|
|
Total interest-bearing liabilities |
|
| 98,604 |
|
|
| 102,822 |
|
|
| .41 |
|
|
| 105,037 |
|
|
| 53,425 |
|
|
| .20 |
|
|
| 73,412 |
|
|
| 24,082 |
|
|
| .13 |
|
|
Noninterest-bearing deposits |
|
| 72,861 |
|
|
|
|
|
|
|
|
| 74,054 |
|
|
|
|
|
|
|
|
| 58,141 |
|
|
|
|
|
|
|
| ||||||
Other liabilities |
|
| 4,001 |
|
|
|
|
|
|
|
|
| 3,684 |
|
|
|
|
|
|
|
|
| 2,201 |
|
|
|
|
|
|
|
| ||||||
Total liabilities |
|
| 175,466 |
|
|
|
|
|
|
|
|
| 182,775 |
|
|
|
|
|
|
|
|
| 133,754 |
|
|
|
|
|
|
|
| ||||||
Shareholders’ equity |
|
| 25,665 |
|
|
|
|
|
|
|
|
| 26,090 |
|
|
|
|
|
|
|
|
| 17,894 |
|
|
|
|
|
|
|
| ||||||
Total liabilities and shareholders’ equity |
| $ | 201,131 |
|
|
|
|
|
|
|
| $ | 208,865 |
|
|
|
|
|
|
|
| $ | 151,648 |
|
|
|
|
|
|
|
| ||||||
Net interest spread |
|
|
|
|
|
|
|
| 3.49 |
|
|
|
|
|
|
|
|
| 2.92 |
|
|
|
|
|
|
|
|
| 2.59 |
|
| ||||||
Contribution of interest-free funds |
|
|
|
|
|
|
|
| .19 |
|
|
|
|
|
|
|
|
| .09 |
|
|
|
|
|
|
|
|
| .06 |
|
| ||||||
Net interest income/margin on earning assets |
|
|
|
| $ | 1,690,518 |
|
|
| 3.68 |
| % |
|
|
| $ | 1,422,443 |
|
|
| 3.01 |
| % |
|
|
| $ | 907,408 |
|
|
| 2.65 |
| % | |||
(continued)
- 87 -
M&T BANK CORPORATION AND SUBSIDIARIES
Table 3 (continued)
AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES (continued)
|
| 2021 Fourth Quarter |
|
| 2021 Third Quarter |
|
| ||||||||||||||||||
|
| Average |
|
| Interest |
|
| Average |
|
| Average |
|
| Interest |
|
| Average |
|
| ||||||
Average balance in millions; interest in thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Loans and leases, net of unearned |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Commercial, financial, etc. |
| $ | 22,330 |
|
| $ | 205,491 |
|
|
| 3.65 |
| % | $ | 23,730 |
|
| $ | 236,820 |
|
|
| 3.96 |
| % |
Real estate – commercial |
|
| 36,717 |
|
|
| 364,795 |
|
|
| 3.89 |
|
|
| 37,547 |
|
|
| 371,150 |
|
|
| 3.87 |
|
|
Real estate – consumer |
|
| 16,290 |
|
|
| 143,675 |
|
|
| 3.53 |
|
|
| 16,379 |
|
|
| 146,898 |
|
|
| 3.59 |
|
|
Consumer |
|
| 17,913 |
|
|
| 194,619 |
|
|
| 4.31 |
|
|
| 17,658 |
|
|
| 193,256 |
|
|
| 4.34 |
|
|
Total loans and leases, net |
|
| 93,250 |
|
|
| 908,580 |
|
|
| 3.87 |
|
|
| 95,314 |
|
|
| 948,124 |
|
|
| 3.95 |
|
|
Interest-bearing deposits at banks |
|
| 44,316 |
|
|
| 16,984 |
|
|
| .15 |
|
|
| 39,036 |
|
|
| 14,922 |
|
|
| .15 |
|
|
Federal funds sold and agreements |
|
| — |
|
|
| — |
|
|
| .47 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
Trading account |
|
| 50 |
|
|
| 202 |
|
|
| 1.62 |
|
|
| 51 |
|
|
| 345 |
|
|
| 2.71 |
|
|
Investment securities (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
U.S. Treasury and federal agencies |
|
| 6,150 |
|
|
| 32,516 |
|
|
| 2.10 |
|
|
| 5,352 |
|
|
| 30,362 |
|
|
| 2.25 |
|
|
Obligations of states and political |
|
| — |
|
|
| 3 |
|
|
| 6.82 |
|
|
| — |
|
|
| 3 |
|
|
| 6.44 |
|
|
Other |
|
| 654 |
|
|
| 3,796 |
|
|
| 2.30 |
|
|
| 667 |
|
|
| 2,893 |
|
|
| 1.72 |
|
|
Total investment securities |
|
| 6,804 |
|
|
| 36,315 |
|
|
| 2.12 |
|
|
| 6,019 |
|
|
| 33,258 |
|
|
| 2.19 |
|
|
Total earning assets |
|
| 144,420 |
|
|
| 962,081 |
|
|
| 2.64 |
|
|
| 140,420 |
|
|
| 996,649 |
|
|
| 2.82 |
|
|
Allowance for credit losses |
|
| (1,521 | ) |
|
|
|
|
|
|
|
| (1,577 | ) |
|
|
|
|
|
|
| ||||
Cash and due from banks |
|
| 1,483 |
|
|
|
|
|
|
|
|
| 1,480 |
|
|
|
|
|
|
|
| ||||
Other assets |
|
| 13,340 |
|
|
|
|
|
|
|
|
| 13,714 |
|
|
|
|
|
|
|
| ||||
Total assets |
| $ | 157,722 |
|
|
|
|
|
|
|
| $ | 154,037 |
|
|
|
|
|
|
|
| ||||
Liabilities and shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Savings and interest-checking deposits |
| $ | 70,518 |
|
| $ | 6,443 |
|
|
| .04 |
|
| $ | 70,976 |
|
| $ | 7,000 |
|
|
| .04 |
|
|
Time deposits |
|
| 2,914 |
|
|
| 2,968 |
|
|
| .40 |
|
|
| 3,061 |
|
|
| 3,573 |
|
|
| .46 |
|
|
Total interest-bearing deposits |
|
| 73,432 |
|
|
| 9,411 |
|
|
| .05 |
|
|
| 74,037 |
|
|
| 10,573 |
|
|
| .06 |
|
|
Short-term borrowings |
|
| 58 |
|
|
| — |
|
|
| .01 |
|
|
| 91 |
|
|
| 2 |
|
|
| .01 |
|
|
Long-term borrowings |
|
| 3,441 |
|
|
| 15,314 |
|
|
| 1.77 |
|
|
| 3,431 |
|
|
| 15,121 |
|
|
| 1.75 |
|
|
Total interest-bearing liabilities |
|
| 76,931 |
|
|
| 24,725 |
|
|
| .12 |
|
|
| 77,559 |
|
|
| 25,696 |
|
|
| .14 |
|
|
Noninterest-bearing deposits |
|
| 61,012 |
|
|
|
|
|
|
|
|
| 57,218 |
|
|
|
|
|
|
|
| ||||
Other liabilities |
|
| 2,166 |
|
|
|
|
|
|
|
|
| 2,151 |
|
|
|
|
|
|
|
| ||||
Total liabilities |
|
| 140,109 |
|
|
|
|
|
|
|
|
| 136,928 |
|
|
|
|
|
|
|
| ||||
Shareholders’ equity |
|
| 17,613 |
|
|
|
|
|
|
|
|
| 17,109 |
|
|
|
|
|
|
|
| ||||
Total liabilities and shareholders’ equity |
| $ | 157,722 |
|
|
|
|
|
|
|
| $ | 154,037 |
|
|
|
|
|
|
|
| ||||
Net interest spread |
|
|
|
|
|
|
|
| 2.52 |
|
|
|
|
|
|
|
|
| 2.68 |
|
| ||||
Contribution of interest-free funds |
|
|
|
|
|
|
|
| .06 |
|
|
|
|
|
|
|
|
| .06 |
|
| ||||
Net interest income/margin on earning assets |
|
|
|
| $ | 937,356 |
|
|
| 2.58 |
| % |
|
|
| $ | 970,953 |
|
|
| 2.74 |
| % | ||
|
| 2020 Fourth Quarter |
|
| 2020 Third Quarter |
|
| ||||||||||||||||||
|
| Average Balance |
|
| Interest |
|
| Average Rate |
|
| Average Balance |
|
| Interest |
|
| Average Rate |
|
| ||||||
Average balance in millions; interest in thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases, net of unearned discount (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, etc. |
|
| 27,713 |
|
|
| 247,847 |
|
|
| 3.56 |
| % | $ | 28,333 |
|
| $ | 217,171 |
|
|
| 3.05 |
| % |
Real estate – commercial |
|
| 37,707 |
|
|
| 400,176 |
|
|
| 4.15 |
|
|
| 37,243 |
|
|
| 398,619 |
|
|
| 4.19 |
|
|
Real estate – consumer |
|
| 16,761 |
|
|
| 149,218 |
|
|
| 3.56 |
|
|
| 16,558 |
|
|
| 152,594 |
|
|
| 3.69 |
|
|
Consumer |
|
| 16,485 |
|
|
| 197,992 |
|
|
| 4.78 |
|
|
| 16,076 |
|
|
| 192,223 |
|
|
| 4.76 |
|
|
Total loans and leases, net |
|
| 98,666 |
|
|
| 995,233 |
|
|
| 4.01 |
|
|
| 98,210 |
|
|
| 960,607 |
|
|
| 3.89 |
|
|
Interest-bearing deposits at banks |
|
| 22,206 |
|
|
| 5,648 |
|
|
| .10 |
|
|
| 16,440 |
|
|
| 4,163 |
|
|
| .10 |
|
|
Federal funds sold and agreements to resell securities |
|
| 3,799 |
|
|
| 1,101 |
|
|
| .12 |
|
|
| 5,113 |
|
|
| 1,615 |
|
|
| .13 |
|
|
Trading account |
|
| 50 |
|
|
| 243 |
|
|
| 1.97 |
|
|
| 50 |
|
|
| 201 |
|
|
| 1.62 |
|
|
Investment securities (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and federal agencies |
|
| 6,497 |
|
|
| 37,768 |
|
|
| 2.31 |
|
|
| 7,177 |
|
|
| 37,157 |
|
|
| 2.06 |
|
|
Obligations of states and political subdivisions |
|
| 2 |
|
|
| 24 |
|
|
| 5.25 |
|
|
| 2 |
|
|
| 23 |
|
|
| 4.51 |
|
|
Other |
|
| 696 |
|
|
| 2,845 |
|
|
| 1.63 |
|
|
| 697 |
|
|
| 1,414 |
|
|
| .81 |
|
|
Total investment securities |
|
| 7,195 |
|
|
| 40,637 |
|
|
| 2.25 |
|
|
| 7,876 |
|
|
| 38,594 |
|
|
| 1.95 |
|
|
Total earning assets |
|
| 131,916 |
|
|
| 1,042,862 |
|
|
| 3.15 |
|
|
| 127,689 |
|
|
| 1,005,180 |
|
|
| 3.13 |
|
|
Allowance for credit losses |
|
| (1,768 | ) |
|
|
|
|
|
|
|
|
|
| (1,649 | ) |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
| 1,372 |
|
|
|
|
|
|
|
|
|
|
| 1,390 |
|
|
|
|
|
|
|
|
|
|
Other assets |
|
| 13,043 |
|
|
|
|
|
|
|
|
|
|
| 12,751 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
| 144,563 |
|
|
|
|
|
|
|
|
|
| $ | 140,181 |
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and interest-checking deposits |
|
| 69,133 |
|
|
| 19,841 |
|
|
| .11 |
|
| $ | 65,848 |
|
|
| 22,403 |
|
|
| .14 |
|
|
Time deposits |
|
| 4,113 |
|
|
| 10,006 |
|
|
| .97 |
|
|
| 4,715 |
|
|
| 14,519 |
|
|
| 1.22 |
|
|
Deposits at Cayman Islands office |
|
| 826 |
|
|
| 233 |
|
|
| .11 |
|
|
| 957 |
|
|
| 241 |
|
|
| .10 |
|
|
Total interest-bearing deposits |
|
| 74,072 |
|
|
| 30,080 |
|
|
| .16 |
|
|
| 71,520 |
|
|
| 37,163 |
|
|
| .21 |
|
|
Short-term borrowings |
|
| 64 |
|
|
| 2 |
|
|
| .01 |
|
|
| 62 |
|
|
| 1 |
|
|
| .01 |
|
|
Long-term borrowings |
|
| 5,294 |
|
|
| 19,528 |
|
|
| 1.47 |
|
|
| 5,499 |
|
|
| 20,902 |
|
|
| 1.51 |
|
|
Total interest-bearing liabilities |
|
| 79,430 |
|
|
| 49,610 |
|
|
| .25 |
|
|
| 77,081 |
|
|
| 58,066 |
|
|
| .30 |
|
|
Noninterest-bearing deposits |
|
| 46,904 |
|
|
|
|
|
|
|
|
|
|
| 44,786 |
|
|
|
|
|
|
|
|
|
|
Other liabilities |
|
| 2,016 |
|
|
|
|
|
|
|
|
|
|
| 2,241 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
| 128,350 |
|
|
|
|
|
|
|
|
|
|
| 124,108 |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
| 16,213 |
|
|
|
|
|
|
|
|
|
|
| 16,073 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
| 144,563 |
|
|
|
|
|
|
|
|
|
| $ | 140,181 |
|
|
|
|
|
|
|
|
|
|
Net interest spread |
|
|
|
|
|
|
|
|
|
| 2.90 |
|
|
|
|
|
|
|
|
|
|
| 2.83 |
|
|
Contribution of interest-free funds |
|
|
|
|
|
|
|
|
|
| .10 |
|
|
|
|
|
|
|
|
|
|
| .12 |
|
|
Net interest income/margin on earning assets |
|
|
|
|
|
| 993,252 |
|
|
| 3.00 |
| % |
|
|
|
| $ | 947,114 |
|
|
| 2.95 |
| % |
|
|
|
|
- 9188 -
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
|
|
Incorporated by reference to the discussion contained under the caption “Taxable-equivalent Net Interest Income” in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Item 4. Controls and Procedures.
|
|
(a) Evaluation of disclosure controls and procedures. Based upon their evaluation of the effectiveness of M&T’s disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)), René F. Jones, Chairman of the Board and Chief Executive Officer, and Darren J. King, Senior Executive Vice President and Chief Financial Officer, concluded that M&T’s disclosure controls and procedures were effective as of September 30, 2021.2022.
(b) Changes in internal control over financial reporting. M&T regularly assesses the adequacy of its internal control over financial reporting and enhances its controls in response to internal control assessments and internal and external audit and regulatory recommendations. No changes in internal control over financial reporting have been identified in connection with the evaluation of disclosure controls and procedures during the quarter ended September 30, 20212022 that have materially affected, or are reasonably likely to materially affect, M&T’s internal control over financial reporting. Management has excluded processes and controls of People’s United from its assessment of internal control over financial reporting for the quarter ended September 30, 2022. Assets and liabilities associated with the People's United transaction that have not yet been converted to M&T's systems or processes as of September 30, 2022 include loans and leases of $5.5 billion, other assets of $106 million and other liabilities of $170 million. Approximately $94 million and $182 million of total revenues for the three and six months ended September 30, 2022, respectively, was contributed from business activities of People's United that have not yet been converted to M&T's systems or processes.
- 89 -
The emergence of the COVID-19 pandemic during the first quarter of 2020 necessitated the execution of several M&T contingency plans. Beginning in March 2020 and continuing through this filing date, the Company had a substantial number of its employees working remotely under such contingency plans.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
|
|
M&T and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings and other matters in which claims for monetary damages are asserted. On an on-going basis management, after consultation with legal counsel, assesses the Company’s liabilities and contingencies in connection with such proceedings. For those matters where it is probable that the Company will incur losses and the amounts of the losses can be reasonably estimated, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent the pending or threatened litigation could result in exposure in excess of that liability, the amount of such excess is not currently estimable. Although not considered probable, the range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability, was between $0 and $25 million.million as of September 30, 2022. Although the Company does not believe that the outcome of pending legal matters will be material to the Company’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future.
|
|
In addition to theItem 1A. Risk Factors.
There have been no material changes in risk factors relating to M&T to those disclosed in response to Item 1A1A. to Part I of M&T’s Form 10-K for the year ended December 31, 2020, M&T has identified certain supplemental risk factors relating to M&T’s acquisition2021.
Item 2. Unregistered Sales of People’s United Financial, Inc. (“People’s United”) pursuant to an agreement and plan of merger, dated February 21, 2021, by and among M&T, Bridge Merger Corp., a direct, wholly owned subsidiary of M&T, and People’s United (the “merger agreement” and, such transaction, the “merger”). These risk factors and other risks associated with the merger are more fully discussed in the joint proxy statement/prospectus in connection with the merger that was filed by M&T with theEquity Securities and Exchange Commission on April 23, 2021.
- 92 -
Use of Proceeds.
Risks Related to the Merger
M&T is expected to incur significant costs related to the merger and integration.
M&T has incurred and expects to incur significant, non-recurring costs in connection with negotiating the merger agreement and closing the merger. In addition, M&T will incur integration costs following the completion of the merger as M&T integrates the People’s United business, including facilities and systems consolidation costs and employment-related costs.
There can be no assurances that the expected benefits and efficiencies related to the integration of the businesses will be realized to offset these transaction and integration costs over time. M&T may also incur additional costs to maintain employee morale and to retain key employees. M&T will also incur significant legal, financial advisory, accounting, banking and consulting fees, fees relating to regulatory filings and notices, SEC filing fees, printing and mailing fees and other costs associated with the merger. Some of these costs are payable regardless of whether the merger is completed.
Combining M&T and People’s United may be more difficult, costly or time-consuming than expected, and M&T may fail to realize the anticipated benefits of the merger.
The success of the merger will depend, in part, on the ability to realize the anticipated cost savings from combining the businesses of M&T and People’s United. To realize the anticipated benefits and cost savings from the merger M&T and People’s United must integrate and combine their businesses in a manner that permits cost savings to be realized, without adversely affecting revenues and future growth. If M&T and People’s United are not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected. In addition, the actual cost savings of the merger could be less than anticipated, and integration may result in additional and unforeseen expenses.
An inability to realize the full extent of the anticipated benefits of the merger and the other transactions contemplated by the merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses and operating results of M&T following the completion of the merger, which may adversely affect the value of M&T’s common stock following the completion of the merger.
M&T and People’s United have operated and, until the completion of the merger, must continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the companies’ abilities to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger. Integration efforts between the two companies may also divert management attention and resources. These integration matters could have an adverse effect on M&T during this transition period and for an undetermined period after completion of the merger.
M&T may be unable to retain M&T and/or People’s United personnel successfully after the merger is completed.
The success of the merger will depend in part on M&T’s ability to retain the talents and dedication of key employees currently employed by M&T and People’s United. It is possible that these employees may decide not to remain with M&T or People’s United, as applicable, while the merger is pending or with M&T after the merger is completed. If M&T and People’s United are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, M&T and People’s United could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. In addition, following the merger, if key employees terminate their employment, M&T’s business activities may be adversely affected, and management’s attention may be diverted from successfully integrating M&T and People’s United to hiring suitable replacements, all of which may cause M&T’s business to suffer. In addition, M&T and People’s United may not be able to locate or retain suitable replacements for any key employees who leave either company.
- 93 -
The COVID-19 pandemic may delay and adversely affect the completion of the merger.
The Coronavirus Disease 2019 (“COVID-19”) pandemic has created economic and financial disruptions that have adversely affected, and are likely to continue to adversely affect, the business, financial condition, liquidity, capital and results of operations of M&T and People’s United. If the effects of the COVID-19 pandemic cause a continued or extended decline in the economic environment and the financial results of M&T or People’s United, or the business operations of M&T or People’s United are further disrupted as a result of the COVID-19 pandemic, efforts to complete the merger and integrate the businesses of M&T and People’s United may also be delayed and adversely affected. Additional time may be required to obtain the requisite regulatory approval, and the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) may impose additional requirements on M&T or People’s United that must be satisfied prior to completion of the merger, which could delay and adversely affect the completion of the merger.
Regulatory approval from the Federal Reserve Board may not be received, may take longer than expected, or may impose conditions that are not presently anticipated or that could have an adverse effect on M&T following the merger.
Before the merger and the other transactions contemplated by the merger agreement may be completed, certain regulatory approvals must be obtained. Approvals from the New York State Department of Financial Services and the State of Connecticut Department of Banking, among other regulatory approvals, have been received but the transaction remains subject to approval from the Federal Reserve Board. That approval could be delayed or not obtained at all, including due to: an adverse development in either party’s regulatory standing or in any other factors considered by regulators when granting such approval, including factors not known at the present time and factors that may arise in the future; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political environment generally. The Federal Reserve Board has stated that if material weaknesses are identified by examiners before a banking organization applies to engage in expansionary activity, the Federal Reserve Board will expect the banking organization to resolve all such weaknesses before applying for such expansionary activity. The Federal Reserve Board has also stated that if issues arise during the processing of an application for expansionary activity, it will expect the applicant banking organization to withdraw its application pending resolution of any supervisory concerns.
Any Federal Reserve Board approval, if granted, may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of M&T’s business or require changes to the terms of the transactions contemplated by the merger agreement. There can be no assurance that the regulator will not impose any such conditions, limitations, obligations or restrictions and that such conditions, limitations, obligations or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the merger agreement, imposing additional material costs on or materially limiting the revenues of M&T following the merger or otherwise reduce the anticipated benefits of the merger if the merger were consummated successfully within the expected timeframe. In addition, there can be no assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the merger. Additionally, the completion of the merger is conditioned on the absence of certain orders, injunctions or decrees by any court or regulatory agency of competent jurisdiction that would prohibit or make illegal the completion of any of the transactions contemplated by the merger agreement.
In addition, despite the parties’ commitments to use their reasonable best efforts to comply with conditions imposed by regulators, under the terms of the merger agreement, M&T will not be required, and People’s United will not be permitted without M&T’s prior written consent, to take actions or agree to conditions in connection with obtaining the foregoing permits, consents, approvals and authorizations of governmental entities that would reasonably be expected to have a material adverse effect on M&T and its subsidiaries, taken as a whole, after giving effect to the merger.
Failure to complete the merger could negatively impact M&T.
If the merger is not completed for any reason, there may be various adverse consequences and M&T may experience negative reactions from the financial markets and from its customers and employees. For example, M&T’s business may have been impacted adversely by the failure to pursue other beneficial opportunities due to the focus of
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management on the merger, without realizing any of the anticipated benefits of completing the merger. Additionally, if the merger agreement is terminated, the market price of M&T common stock could decline to the extent that the current market price of M&T common stock reflects a market assumption that the merger will be beneficial to M&T and will be completed. M&T could be subject to litigation related to any failure to complete the merger or to proceedings commenced against M&T to perform its obligations under the merger agreement. If the merger agreement is terminated under certain circumstances, M&T may be required to pay a termination fee of $280 million to People’s United.
Additionally, M&T has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of preparing, filing, printing and mailing the joint proxy statement/prospectus for the merger, and all filing and other fees paid in connection with the merger. If the merger is not completed, M&T would have incurred these expenses without realizing the expected benefits of the merger.
M&T will be subject to business uncertainties and contractual restrictions while the merger is pending.
Uncertainty about the effect of the merger on employees and customers may have an adverse effect on M&T. These uncertainties may impair M&T’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with M&T to seek to change existing business relationships with M&T. In addition, subject to certain exceptions, M&T has agreed to refrain from taking certain actions that may adversely affect its ability to consummate the merger on a timely basis without People’s United’s consent. These restrictions may prevent M&T from pursuing attractive business opportunities that may arise prior to the completion of the merger.
Litigation related to the merger has been filed against People’s United, the People’s United board of directors and M&T, and additional litigation may be filed against People’s United, the People’s United board of directors, M&T and the M&T board of directors in the future, which could prevent or delay the completion of the merger, result in the payment of damages or otherwise negatively impact the business and operations of M&T.
Litigation related to the merger has been filed against People’s United, the People’s United board of directors and M&T, and additional litigation may be filed against People’s United, the People’s United board of directors, M&T and the M&T board of directors in the future. Among other remedies, litigation that has been filed seeks, and additional litigation by shareholders of M&T and/or stockholders of People’s United in the future may seek, damages and/or to enjoin the merger or the other transactions contemplated by the merger agreement. The outcome of any litigation is uncertain. If any plaintiff were successful in obtaining an injunction prohibiting M&T or People’s United from completing the merger or any other transactions contemplated by the merger agreement, then such injunction may delay or prevent the effectiveness of the merger and could result in significant costs to M&T, including costs in connection with the defense or settlement of any shareholder lawsuits filed in connection with the merger. Further, such lawsuits and the defense or settlement of any such lawsuits may have an adverse effect on the financial condition and results of operations of M&T.
The COVID-19 pandemic’s impact on M&T’s business and operations following the completion of the merger is uncertain.
The extent to which the COVID-19 pandemic will negatively affect the business, financial condition, liquidity, capital and results of operations of M&T following the completion of the merger will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the COVID‑19 pandemic, the direct and indirect impact of the COVID-19 pandemic on employees, clients, counterparties and service providers, as well as other market participants, and actions taken by governmental authorities and other third parties in response to the COVID-19 pandemic. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the COVID-19 pandemic on M&T’s business, and there is no guarantee that efforts by M&T to address the adverse impacts of the COVID-19 pandemic will be effective.
Even after the COVID-19 pandemic has subsided, M&T may continue to experience adverse impacts to its business as a result of the COVID-19 pandemic’s global economic impact, including reduced availability of credit, adverse impacts on liquidity and the negative financial effects from any recession or depression that may occur.
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|
|
(a) – (b) Not applicable.
(c)
|
| Issuer Purchases of Equity Securities |
| |||||||||||||
Period |
| (a)Total |
|
| (b)Average |
|
| (c)Total |
|
| (d)Maximum |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
July 1 - July 31, 2022 |
|
| 275,689 |
|
| $ | 172.00 |
|
|
| 275,000 |
|
| $ | 2,952,688,995 |
|
August 1 - August 31, 2022 |
|
| 1,754,105 |
|
|
| 183.75 |
|
|
| 1,750,000 |
|
|
| 2,631,148,585 |
|
September 1 - September 30, 2022 |
|
| 1,265,647 |
|
|
| 183.80 |
|
|
| 1,257,449 |
|
|
| 2,400,000,142 |
|
Total |
|
| 3,295,441 |
|
| $ | 182.78 |
|
|
| 3,282,449 |
|
|
|
| |
|
| Issuer Purchases of Equity Securities |
| |||||||||||||
Period |
| (a)Total Number of Shares (or Units) Purchased (1) |
|
| (b)Average Price Paid per Share (or Unit) |
|
| (c)Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
|
| (d)Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be Purchased Under the Plans or Programs (2) |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 1 - July 31, 2021 |
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | 800,000,000 |
|
August 1 - August 31, 2021 |
|
| 771 |
|
|
| 133.85 |
|
|
| — |
|
|
| 800,000,000 |
|
September 1 - September 30, 2021 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 800,000,000 |
|
Total |
|
| 771 |
|
| $ | 133.85 |
|
|
| — |
|
|
|
|
|
- 90 - Item 3. Defaults Upon Senior Securities. (None.) Item 4. Mine Safety Disclosures.
|
|
|
|
|
|
(Not applicable.)
Item 5. Other Information.
(None.)
Item 6. Exhibits.
|
|
(None.)
|
|
(None.)
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|
|
The following exhibits are filed as a part of this report.
Exhibit No. |
|
|
|
| |
|
| |
Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith. | ||
|
| |
| ||
|
| |
| ||
|
| |
| ||
|
| |
101.INS |
| Inline XBRL Instance Document. Filed herewith. |
|
| |
101.SCH |
| Inline XBRL Taxonomy Extension Schema. Filed herewith. |
|
| |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase. Filed herewith. |
|
|
|
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase. Filed herewith. |
|
| |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase. Filed herewith. |
|
| |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase. Filed herewith. |
|
| |
104 |
| The cover page from M&T Bank Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, |
- 91 -
- 97 -
SIGNATURES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
| M&T BANK CORPORATION | ||
|
|
| ||
Date: November |
| By: |
| /s/ Darren J. King |
|
|
|
| Darren J. King |
|
|
|
| Senior Executive Vice President and Chief Financial Officer |
- 9892 -