Exhibit 99
| | | | | |
| INVESTOR CONTACT: | | Donald J. MacLeod | | FOR IMMEDIATE RELEASE: |
| | | (716) 842-5138 | | October 20, 2009 |
| | | | | |
| MEDIA CONTACT: | | C. Michael Zabel | | |
| | | (716) 842-5385 | | |
M&T BANK CORPORATION ANNOUNCES THIRD QUARTER PROFITS
BUFFALO, NEW YORK — M&T Bank Corporation (“M&T”) (NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2009.
GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the third quarter of 2009 were $.97. On the same basis, net income in the recent quarter totaled $128 million. GAAP-basis net income for 2009’s third quarter expressed as an annualized rate of return on average assets and average common stockholders’ equity was .73% and 6.72%, respectively.
Several noteworthy items are reflected in M&T’s results for the recently completed quarter. As previously announced, on August 28, 2009 M&T’s principal bank subsidiary, M&T Bank, entered into an agreement with the Federal Deposit Insurance Corporation (“FDIC”) to assume all of the deposits and acquire certain assets of Bradford Bank (“Bradford”), Baltimore, Maryland, under which the FDIC will reimburse M&T Bank for most loan losses. Assets acquired in the transaction totaled approximately $469 million, including $302 million of loans, and liabilities assumed aggregated $440 million, including $361 million of deposits. In accordance with GAAP, M&T Bank recorded an after-tax gain on the transaction of $18 million during the recent quarter. Merger-related expenses associated with this transaction and with M&T’s second quarter
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acquisition of Provident Bankshares Corporation (“Provident”) totaled $9 million, after applicable tax effect, in the recent quarter. Also reflected in M&T’s third quarter 2009 results were $29 million of after-tax other-than-temporary impairment charges on certain available-for-sale investment securities. However, because those investment securities were previously reflected at fair value on the consolidated balance sheet, the impairment charges did not reduce stockholders’ equity. Finally, M&T’s results benefited from a $10 million reversal of taxes previously accrued for uncertain tax positions in various jurisdictions. The overall impact of the items described herein was to reduce M&T’s third quarter 2009 GAAP net income by approximately $9 million, or $.08 of diluted earnings per common share.
Commenting on the recent quarter, René F. Jones, Executive Vice President and Chief Financial Officer, noted, “M&T posted solid results. Our approach of providing basic banking services to customers we know in the communities where we live and work continues to prove quite successful. Credit costs remain below current industry experience and our net interest margin improved by 18 basis points during the quarter. As a result, diluted net operating earnings per common share rose 24% from this year’s second quarter to $.98 and were up 8% from last year’s third quarter. We are pleased to report that our 2009 acquisitions in the Mid-Atlantic region added $.08 of diluted net operating earnings per common share to the recent quarter’s results. Also notable was the 40 basis point rise in our tangible common equity ratio, to 4.89% at the recent quarter-end from 4.49% at June 30, 2009.”
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Diluted earnings per common share were $.82 and $.36 in the third quarter of 2008 and the second quarter of 2009, respectively. Net income for those respective quarters was $91 million and $51 million. Net income expressed as an annualized rate of return on average assets and average common stockholders’ equity for the third quarter of 2008 was .56% and 5.66%, respectively, compared with ..31% and 2.53%, respectively, in the second quarter of 2009.
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 acquisition-related income (specifically, the recent quarter’s gain on the Bradford transaction) and expenses associated with merging acquired operations into M&T, since such amounts 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. Reconciliations of GAAP to non-GAAP measures are provided herein on page 15.
Diluted net operating earnings per common share were $.98 in the third quarter of 2009, up from $.91 in the third quarter of 2008 and $.79 in the second quarter of 2009. Net operating income during the recent quarter was $129 million, up from $101 million in each of the third quarter of 2008 and the second quarter of 2009. Expressed as an annualized rate of return on average tangible assets and average tangible common stockholders’ equity, net operating income was .78% and 14.87%, respectively, in the
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recent quarter, compared with .65% and 13.17% in the year-earlier quarter and .64% and 12.08% in the second quarter of 2009.
Taxable-equivalent Net Interest Income. Taxable-equivalent net interest income totaled $553 million in the third quarter of 2009, 12% higher than $493 million in the year-earlier period and up 9% from $507 million in the second quarter of 2009. The growth in such income from the second 2009 quarter reflects a widening of the net interest margin which rose to 3.61% from 3.43%. That improvement resulted from lower interest rates paid on deposits and long-term borrowings. Also contributing to the higher net interest income in the recent quarter as compared with the second quarter of 2009 was the full quarter’s impact of the earning assets obtained in the Provident transaction, compared with approximately one-half of such impact in 2009’s second quarter.
Provision for Credit Losses/Asset Quality. The provision for credit losses increased to $154 million in the third quarter of 2009 from $101 million in the year-earlier period. Net charge-offs of loans totaled $141 million during the recent quarter, compared with $94 million in 2008’s third quarter. The rise in net charge-offs in the recent quarter as compared with the year-earlier period was largely attributable to a partial charge-off of a commercial relationship that had been transferred to nonaccrual status during the second quarter of 2009. During the second quarter of 2009, the provision for credit losses was $147 million, while net charge-offs totaled $138 million. Expressed as an annualized percentage of average loans outstanding, net charge-offs were 1.07%, and .77% in the third quarter of 2009 and 2008, respectively, 1.09% in the second quarter of 2009 and 1.00% for the first nine months of 2009.
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Reflecting the difficult economic environment faced by businesses and individuals, loans classified as nonaccrual rose to $1.23 billion, or 2.35% of total loans at September 30, 2009 from $688 million or 1.41% a year earlier and $1.11 billion or 2.11% at June 30, 2009. Assets taken in foreclosure of defaulted loans were $85 million at September 30, 2009, unchanged from a year earlier but down from $90 million at June 30, 2009.
In an effort to assist borrowers, M&T has modified the terms of select residential real estate loans, consisting largely of loans in M&T’s portfolio of Alt-A loans. At September 30, 2009, outstanding balances of those modified loans totaled $276 million, of which $109 million were classified as nonaccrual. The remaining modified loans have demonstrated payment capability consistent with the modified terms and, accordingly, were classified as renegotiated loans and were accruing interest at September 30, 2009.
Loans past due 90 days or more and accruing interest were $183 million at the end of the recent quarter, compared with $96 million a year earlier. Included in these past due but accruing amounts were loans guaranteed by government-related entities of $173 million and $90 million at September 30, 2009 and 2008, respectively.
Allowance for Credit Losses. M&T regularly performs detailed analyses of individual borrowers and portfolios for purposes of assessing the adequacy of the allowance for credit losses. Reflecting those analyses, the allowance for credit losses was $868 million at September 30, 2009, compared with $781 million at September 30, 2008 and $855 million at June 30, 2009. Beginning in 2009, GAAP requires that expected credit losses associated with loans obtained in an acquisition be reflected in the estimation of loan fair value as of each respective acquisition date and prohibits any carryover of an allowance for credit
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losses. Excluding loans obtained in the Provident and Bradford acquisitions, the allowance-to-legacy loan ratio increased to 1.81% at September 30, 2009 from 1.76% at June 30, 2009. That same ratio was 1.60% and 1.61% at September 30, 2008 and December 31, 2008, respectively.
Noninterest Income and Expense. Excluding gains and losses from investment securities and the recent quarter’s gain on the Bradford transaction, noninterest income in each of the third and second quarters of 2009 aggregated $296 million, compared with $266 million in the third quarter of 2008. The higher level of noninterest income in the recent quarter as compared with the year-earlier quarter resulted largely from higher mortgage banking revenues, service charges on acquisition-related deposit accounts and credit-related fees. As compared with 2009’s second quarter, higher service charges on deposit accounts in the recent quarter were largely offset by declines in mortgage banking revenues and M&T’s pro-rata portion of the operating results of Bayview Lending Group, LLC.
Noninterest expense in the third quarter of 2009 totaled $500 million, compared with $435 million in the year-earlier quarter and $564 million in the second quarter of 2009. Included in such amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets and merger-related expenses. Exclusive of these expenses, noninterest operating expenses were $469 million in the recent quarter, compared with $419 million in the third quarter of 2008 and $482 million in 2009’s second quarter. As compared with the third quarter of 2008, the recent quarter’s rise in operating expenses was due, in large part, to the operations obtained in the 2009 acquisitions and higher deposit insurance assessments. The decline in noninterest operating expenses from the second to the
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third quarter of 2009 was due to the $33 million special deposit insurance assessment levied by the FDIC in 2009’s second quarter, partially offset by higher operating expenses resulting from the 2009 acquisition transactions.
The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities and gains on merger transactions), measures the relationship of operating expenses to revenues. M&T’s efficiency ratio was 55.2% in each of the third quarters of 2009 and 2008, and 60.0% in the second quarter of 2009. If the second quarter 2009 special assessment by the FDIC was excluded from the computation, the efficiency ratio for that quarter would have been 56.0%.
Balance Sheet. M&T had total assets of $69.0 billion at September 30, 2009, up from $65.2 billion at September 30, 2008. Loans and leases, net of unearned discount, were $52.2 billion at September 30, 2009, up 7% from $48.7 billion a year earlier. Total deposits aggregated $46.9 billion at the recent quarter-end, compared with $42.5 billion at September 30, 2008. Deposits at domestic offices rose $8.8 billion, or 24%, to $45.5 billion at the recent quarter-end from $36.7 billion at September 30, 2008. Moreover, exclusive of the impact of the 2009 acquisitions, core customer deposits increased 18% to $38.4 billion at September 30, 2009 from $32.6 billion a year earlier. Fueling that growth were noninterest-bearing deposits, which jumped 42% to $11.8 billion at the recently ended quarter from $8.3 billion at September 30, 2008, also excluding the impact of acquisitions.
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Total stockholders’ equity was $7.6 billion and $6.4 billion at September 30, 2009 and 2008, representing 11.03% and 9.83%, respectively, of total assets. Common stockholders’ equity was $6.9 billion, or $58.22 per share, at September 30, 2009, compared with $6.4 billion, or $58.17 per share, at September 30, 2008. Tangible equity per common share was $27.03 at September 30, 2009, compared with $27.67 at September 30, 2008. In the calculation of tangible equity per common share, stockholders’ equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances, which aggregated $3.7 billion and $3.4 billion at September 30, 2009 and 2008, respectively. M&T’s tangible common equity to tangible assets ratio was 4.89% at September 30, 2009, compared with 4.93% and 4.49% at September 30, 2008 and June 30, 2009, respectively.
Conference Call. Investors will have an opportunity to listen to M&T’s conference call to discuss third quarter financial results today at 2:30 p.m. Eastern Time. Those wishing to participate in the call may dial 877-780-2276. International participants, using any applicable international calling codes, may dial 973-582-2700. Callers should reference M&T Bank Corporation or the conference ID #33686532. The conference call will be webcast live on M&T’s website athttp://ir.mandtbank.com/conference.cfm. A replay of the call will be available until Thursday, October 22, 2009 by calling 800-642-1687, or 706-645-9291 for international participants, and by making reference to ID #33686532. The event will also be archived and available by 7:00 p.m. today on M&T’s website at
http://ir.mandtbank.com/conference.cfm.
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M&T is a bank holding company whose banking subsidiaries, M&T Bank and M&T Bank, National Association, operate branch offices in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Jersey and the District of Columbia.
Forward-Looking Statements. This news release contains forward-looking statements that are based on current expectations, estimates and projections about M&T’s business, management’s beliefs and assumptions made by management. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”) which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.
Future Factors include changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation; regulatory supervision and oversight, including monetary policy and required capital levels; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective
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basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries’ future businesses; and material differences in the actual financial results of merger, acquisition and investment activities compared with M&T’s initial expectations, including the full realization of anticipated cost savings and revenue enhancements.
These are representative of the Future Factors that could affect the outcome of the forward-looking statements. In addition, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other Future Factors.
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Financial Highlights
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | | | | | Nine months ended | | | | |
| Amounts in thousands, | | September 30 | | | | | | | September 30 | | | | |
| except per share | | 2009 | | | 2008 | | | Change | | | 2009 | | | 2008 | | | Change | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Performance | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 127,664 | | | | 91,185 | | | | 40 | % | | $ | 243,073 | | | | 453,646 | | | | -46 | % |
| Net income available to common shareholders | | | 113,894 | | | | 91,185 | | | | 25 | | | | 209,062 | | | | 453,646 | | | | -54 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Per common share: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic earnings | | $ | .97 | | | | .83 | | | | 17 | % | | $ | 1.84 | | | | 4.12 | | | | -55 | % |
| Diluted earnings | | | .97 | | | | .82 | | | | 18 | | | | 1.84 | | | | 4.09 | | | | -55 | |
| Cash dividends | | $ | .70 | | | | .70 | | | | — | | | $ | 2.10 | | | | 2.10 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Common shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | |
| Average — diluted (1) | | | 117,547 | | | | 110,807 | | | | 6 | % | | | 113,800 | | | | 111,000 | | | | 3 | % |
| Period end (2) | | | 118,156 | | | | 110,313 | | | | 7 | | | | 118,156 | | | | 110,313 | | | | 7 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on (annualized): | | | | | | | | | | | | | | | | | | | | | | | | |
| Average total assets | | | .73 | % | | | .56 | % | | | | | | | .49 | % | | | .93 | % | | | | |
| Average common stockholders’ equity | | | 6.72 | % | | | 5.66 | % | | | | | | | 4.35 | % | | | 9.37 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable-equivalent net interest income | | $ | 553,450 | | | | 493,499 | | | | 12 | % | | $ | 1,512,971 | | | | 1,470,615 | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Yield on average earning assets | | | 4.60 | % | | | 5.54 | % | | | | | | | 4.62 | % | | | 5.80 | % | | | | |
| Cost of interest-bearing liabilities | | | 1.26 | % | | | 2.50 | % | | | | | | | 1.49 | % | | | 2.80 | % | | | | |
| Net interest spread | | | 3.34 | % | | | 3.04 | % | | | | | | | 3.13 | % | | | 3.00 | % | | | | |
| Contribution of interest-free funds | | | .27 | % | | | .35 | % | | | | | | | .28 | % | | | .38 | % | | | | |
| Net interest margin | | | 3.61 | % | | | 3.39 | % | | | | | | | 3.41 | % | | | 3.38 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs to average total net loans (annualized) | | | 1.07 | % | | | .77 | % | | | | | | | 1.00 | % | | | .65 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net operating results (3) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net operating income | | $ | 128,761 | | | | 100,809 | | | | 28 | % | | $ | 304,600 | | | | 486,767 | | | | -37 | % |
| Diluted net operating earnings per common share | | | .98 | | | | .91 | | | | 8 | | | | 2.37 | | | | 4.39 | | | | -46 | |
| Return on (annualized): | | | | | | | | | | | | | | | | | | | | | | | | |
| Average tangible assets | | | .78 | % | | | .65 | % | | | | | | | .64 | % | | | 1.05 | % | | | | |
| Average tangible common equity | | | 14.87 | % | | | 13.17 | % | | | | | | | 12.19 | % | | | 21.10 | % | | | | |
| Efficiency ratio | | | 55.21 | % | | | 55.16 | % | | | | | | | 57.90 | % | | | 53.47 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | At September 30 | | | | | |
Loan quality | | | | | | | | | | | | | | 2009 | | | 2008 | | | Change |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | | | | | | | | | | | | | $ | 1,228,341 | | | | 688,214 | | | | 78 | % |
| Real estate and other foreclosed assets | | | | | | | | | | | | | | | 84,676 | | | | 85,305 | | | | -1 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total nonperforming assets | | | | | | | | | | | | | | $ | 1,313,017 | | | | 773,519 | | | | 70 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Accruing loans past due 90 days or more | | | | | | | | | | | | | | $ | 182,750 | | | | 96,206 | | | | 90 | % |
| Renegotiated loans | | | | | | | | | | | | | | | 190,917 | | | | 21,804 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Purchased impaired loans (4): | | | | | | | | | | | | | | | | | | | | | | | | |
| Outstanding customer balance | | | | | | | | | | | | | | $ | 209,138 | | | | — | | | | — | |
| Carrying amount | | | | | | | | | | | | | | | 108,058 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans to total net loans | | | | | | | | | | | | | | | 2.35 | % | | | 1.41 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for credit losses to: | | | | | | | | | | | | | | | | | | | | | | | | |
| M&T legacy loans | | | | | | | | | | | | | | | 1.81 | % | | | 1.60 | % | | | | |
| Total loans | | | | | | | | | | | | | | | 1.66 | % | | | 1.60 | % | | | | |
| | |
| (1) | | Includes common stock equivalents. |
| |
| (2) | | Includes common stock issuable under deferred compensation plans. |
| |
| (3) | | Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related gains and expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. |
| |
| (4) | | Accruing loans that were impaired at acquisition date and recorded at fair value. |
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Condensed Consolidated Statement of Income
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | | | | | Nine months ended | | | | |
| | | September 30 | | | | | | | September 30 | | | | |
| Dollars in thousands | | 2009 | | | 2008 | | | Change | | | 2009 | | | 2008 | | | Change | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income | | $ | 700,593 | | | | 801,354 | | | | -13 | % | | $ | 2,032,528 | | | | 2,503,090 | | | | -19 | % |
| Interest expense | | | 152,938 | | | | 313,115 | | | | -51 | | | | 535,499 | | | | 1,049,369 | | | | -49 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 547,655 | | | | 488,239 | | | | 12 | | | | 1,497,029 | | | | 1,453,721 | | | | 3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Provision for credit losses | | | 154,000 | | | | 101,000 | | | | 52 | | | | 459,000 | | | | 261,000 | | | | 76 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for credit losses | | | 393,655 | | | | 387,239 | | | | 2 | | | | 1,038,029 | | | | 1,192,721 | | | | -13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other income | | | | | | | | | | | | | | | | | | | | | | | | |
| Mortgage banking revenues | | | 48,169 | | | | 38,002 | | | | 27 | | | | 157,385 | | | | 116,291 | | | | 35 | |
| Service charges on deposit accounts | | | 128,502 | | | | 110,371 | | | | 16 | | | | 342,010 | | | | 324,165 | | | | 6 | |
| Trust income | | | 31,586 | | | | 38,789 | | | | -19 | | | | 98,908 | | | | 119,519 | | | | -17 | |
| Brokerage services income | | | 14,329 | | | | 16,218 | | | | -12 | | | | 43,215 | | | | 48,902 | | | | -12 | |
| Trading account and foreign exchange gains | | | 7,478 | | | | 4,278 | | | | 75 | | | | 16,456 | | | | 15,627 | | | | 5 | |
| Gain (loss) on bank investment securities | | | (56 | ) | | | 306 | | | | — | | | | 811 | | | | 34,078 | | | | — | |
| Total other-than-temporary impairment (“OTTI”) losses | | | (64,232 | ) | | | (152,579 | ) | | | — | | | | (202,737 | ) | | | (158,325 | ) | | | — | |
| Portion of OTTI losses recognized in other comprehensive income (before taxes) | | | 17,199 | | | | — | | | | — | | | | 98,736 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Net OTTI losses recognized in earnings | | | (47,033 | ) | | | (152,579 | ) | | | — | | | | (104,001 | ) | | | (158,325 | ) | | | — | |
| Equity in earnings of Bayview Lending Group LLC | | | (10,912 | ) | | | (14,480 | ) | | | — | | | | (15,263 | ) | | | (28,766 | ) | | | — | |
| Other revenues from operations | | | 106,163 | | | | 72,812 | | | | 46 | | | | 242,695 | | | | 226,071 | | | | 7 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total other income | | | 278,226 | | | | 113,717 | | | | 145 | | | | 782,216 | | | | 697,562 | | | | 12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other expense | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 255,449 | | | | 236,678 | | | | 8 | | | | 754,793 | | | | 724,676 | | | | 4 | |
| Equipment and net occupancy | | | 58,195 | | | | 47,033 | | | | 24 | | | | 157,688 | | | | 141,050 | | | | 12 | |
| Printing, postage and supplies | | | 8,229 | | | | 8,443 | | | | -3 | | | | 28,878 | | | | 27,459 | | | | 5 | |
| Amortization of core deposit and other intangible assets | | | 16,924 | | | | 15,840 | | | | 7 | | | | 47,525 | | | | 50,938 | | | | -7 | |
| Deposit insurance | | | 21,124 | | | | 1,522 | | | | — | | | | 76,617 | | | | 4,595 | | | | — | |
| Other costs of operations | | | 140,135 | | | | 125,247 | | | | 12 | | | | 436,611 | | | | 331,459 | | | | 32 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total other expense | | | 500,056 | | | | 434,763 | | | | 15 | | | | 1,502,112 | | | | 1,280,177 | | | | 17 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 171,825 | | | | 66,193 | | | | 160 | | | | 318,133 | | | | 610,106 | | | | -48 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Applicable income taxes (benefit) | | | 44,161 | | | | (24,992 | ) | | | — | | | | 75,060 | | | | 156,460 | | | | -52 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 127,664 | | | | 91,185 | | | | 40 | % | | $ | 243,073 | | | | 453,646 | | | | -46 | % |
| | | | | | | | | | | | | | | | | | | | | |
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13-13-13-13-13
M&T BANK CORPORATION
Condensed Consolidated Balance Sheet
| | | | | | | | | | | | | |
| | | September 30 | | | | |
| Dollars in thousands | | 2009 | | | 2008 | | | Change | |
| | | | | | | | | | | | | |
| ASSETS | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Cash and due from banks | | $ | 1,356,508 | | | | 1,368,917 | | | | -1 | % |
| Interest-bearing deposits at banks | | | 54,443 | | | | 13,604 | | | | 300 | |
| Federal funds sold and agreements to resell securities | | | 17,206 | | | | 108,600 | | | | -84 | |
| Trading account assets | | | 497,064 | | | | 370,420 | | | | 34 | |
| Investment securities | | | 7,634,262 | | | | 8,433,441 | | | | -9 | |
| Loans and leases, net of unearned discount | | | 52,203,772 | | | | 48,693,543 | | | | 7 | |
| Less: allowance for credit losses | | | 867,874 | | | | 780,683 | | | | 11 | |
| | | | | | | | | | | |
| Net loans and leases | | | 51,335,898 | | | | 47,912,860 | | | | 7 | |
| Goodwill | | | 3,524,625 | | | | 3,192,128 | | | | 10 | |
| Core deposit and other intangible assets | | | 199,148 | | | | 198,554 | | | | — | |
| Other assets | | | 4,378,296 | | | | 3,648,691 | | | | 20 | |
| | | | | | | | | | | |
| Total assets | | $ | 68,997,450 | | | | 65,247,215 | | | | 6 | % |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Noninterest-bearing deposits at U.S. offices | | $ | 12,730,083 | | | | 8,332,060 | | | | 53 | % |
| Other deposits at U.S. offices | | | 32,813,698 | | | | 28,408,485 | | | | 16 | |
| Deposits at foreign office | | | 1,318,070 | | | | 5,760,748 | | | | -77 | |
| | | | | | | | | | | |
| Total deposits | | | 46,861,851 | | | | 42,501,293 | | | | 10 | |
| Short-term borrowings | | | 2,927,268 | | | | 2,929,242 | | | | — | |
| Accrued interest and other liabilities | | | 1,241,576 | | | | 918,029 | | | | 35 | |
| Long-term borrowings | | | 10,354,392 | | | | 12,481,967 | | | | -17 | |
| | | | | | | | | | | |
| Total liabilities | | | 61,385,087 | | | | 58,830,531 | | | | 4 | |
| Stockholders’ equity: | | | | | | | | | | | | |
| Preferred | | | 727,748 | | | | — | | | | — | |
| Common (1) | | | 6,884,615 | | | | 6,416,684 | | | | 7 | |
| | | | | | | | | | | |
| Total stockholders’ equity | | | 7,612,363 | | | | 6,416,684 | | | | 19 | |
| | | | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 68,997,450 | | | | 65,247,215 | | | | 6 | % |
| | | | | | | | | | | |
| | |
| (1) | | Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $419.3 million at September 30, 2009 and $462.1 million at September 30, 2008. |
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14-14-14-14-14
M&T BANK CORPORATION
Condensed Consolidated Average Balance Sheet
and Annualized Taxable-equivalent Rates
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | | | | | Nine months ended | | | | | |
| | | September 30 | | | | | | | September 30 | | | | | |
| Dollars in millions | | 2009 | | | 2008 | | | Change in | | | 2009 | | | 2008 | | | Change in | |
| | | Balance | | | Rate | | | Balance | | | Rate | | | balance | | | Balance | | | Rate | | | Balance | | | Rate | | | balance | |
| ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits at banks | | $ | 66 | | | | .04 | % | | | 9 | | | | 1.09 | % | | | — | % | | $ | 43 | | | | .06 | % | | | 9 | | | | 1.32 | % | | | 363 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal funds sold and agreements to resell securities | | | 11 | | | | .58 | | | | 102 | | | | 2.01 | | | | -89 | | | | 62 | | | | .25 | | | | 110 | | | | 2.38 | | | | -44 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trading account assets | | | 83 | | | | .82 | | | | 80 | | | | 1.81 | | | | 4 | | | | 92 | | | | .76 | | | | 73 | | | | 1.40 | | | | 26 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment securities | | | 8,420 | | | | 4.81 | | | | 9,303 | | | | 5.01 | | | | -9 | | | | 8,472 | | | | 4.84 | | | | 9,000 | | | | 5.10 | | | | -6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans and leases, net of unearned discount | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial, financial, etc. | | | 13,801 | | | | 3.78 | | | | 13,882 | | | | 5.09 | | | | -1 | | | | 13,965 | | | | 3.76 | | | | 13,664 | | | | 5.42 | | | | 2 | |
| Real estate — commercial | | | 20,843 | | | | 4.48 | | | | 18,557 | | | | 5.62 | | | | 12 | | | | 19,793 | | | | 4.45 | | | | 18,348 | | | | 5.91 | | | | 8 | |
| Real estate — consumer | | | 5,429 | | | | 5.43 | | | | 4,964 | | | | 6.01 | | | | 9 | | | | 5,243 | | | | 5.47 | | | | 5,653 | | | | 6.08 | | | | -7 | |
| Consumer | | | 12,247 | | | | 5.37 | | | | 11,074 | | | | 6.31 | | | | 11 | | | | 11,578 | | | | 5.47 | | | | 11,192 | | | | 6.54 | | | | 3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total loans and leases, net | | | 52,320 | | | | 4.58 | | | | 48,477 | | | | 5.65 | | | | 8 | | | | 50,579 | | | | 4.60 | | | | 48,857 | | | | 5.94 | | | | 4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total earning assets | | | 60,900 | | | | 4.60 | | | | 57,971 | | | | 5.54 | | | | 5 | | | | 59,248 | | | | 4.62 | | | | 58,049 | | | | 5.80 | | | | 2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Goodwill | | | 3,525 | | | | | | | | 3,192 | | | | | | | | 10 | | | | 3,349 | | | | | | | | 3,193 | | | | | | | | 5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core deposit and other intangible assets | | | 208 | | | | | | | | 206 | | | | | | | | 1 | | | | 191 | | | | | | | | 222 | | | | | | | | -14 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other assets | | | 4,521 | | | | | | | | 3,628 | | | | | | | | 25 | | | | 4,196 | | | | | | | | 3,734 | | | | | | | | 12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 69,154 | | | | | | | | 64,997 | | | | | | | | 6 | % | | $ | 66,984 | | | | | | | | 65,198 | | | | | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW accounts | | $ | 541 | | | | .21 | | | | 484 | | | | .54 | | | | 12 | % | | $ | 531 | | | | .22 | | | | 493 | | | | .62 | | | | 8 | % |
| Savings deposits | | | 23,367 | | | | .37 | | | | 18,191 | | | | 1.29 | | | | 28 | | | | 22,358 | | | | .54 | | | | 17,710 | | | | 1.40 | | | | 26 | |
| Time deposits | | | 9,246 | | | | 2.17 | | | | 9,318 | | | | 3.08 | | | | -1 | | | | 8,943 | | | | 2.49 | | | | 9,649 | | | | 3.57 | | | | -7 | |
| Deposits at foreign office | | | 1,444 | | | | .13 | | | | 3,837 | | | | 1.94 | | | | -62 | | | | 1,788 | | | | .15 | | | | 4,322 | | | | 2.45 | | | | -59 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing deposits | | | 34,598 | | | | .84 | | | | 31,830 | | | | 1.88 | | | | 9 | | | | 33,620 | | | | 1.03 | | | | 32,174 | | | | 2.18 | | | | 4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-term borrowings | | | 2,663 | | | | .26 | | | | 5,392 | | | | 2.08 | | | | -51 | | | | 3,114 | | | | .26 | | | | 6,468 | | | | 2.73 | | | | -52 | |
| Long-term borrowings | | | 11,008 | | | | 2.80 | | | | 12,666 | | | | 4.23 | | | | -13 | | | | 11,376 | | | | 3.17 | | | | 11,452 | | | | 4.57 | | | | -1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing liabilities | | | 48,269 | | | | 1.26 | | | | 49,888 | | | | 2.50 | | | | -3 | | | | 48,110 | | | | 1.49 | | | | 50,094 | | | | 2.80 | | | | -4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing deposits | | | 12,122 | | | | | | | | 7,673 | | | | | | | | 58 | | | | 10,416 | | | | | | | | 7,562 | | | | | | | | 38 | |
| |
| Other liabilities | | | 1,242 | | | | | | | | 1,021 | | | | | | | | 22 | | | | 1,313 | | | | | | | | 1,077 | | | | | | | | 22 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities | | | 61,633 | | | | | | | | 58,582 | | | | | | | | 5 | | | | 59,839 | | | | | | | | 58,733 | | | | | | | | 2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stockholders’ equity | | | 7,521 | | | | | | | | 6,415 | | | | | | | | 17 | | | | 7,145 | | | | | | | | 6,465 | | | | | | | | 11 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 69,154 | | | | | | | | 64,997 | | | | | | | | 6 | % | | $ | 66,984 | | | | | | | | 65,198 | | | | | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest spread | | | | | | | 3.34 | | | | | | | | 3.04 | | | | | | | | | | | | 3.13 | | | | | | | | 3.00 | | | | | |
| Contribution of interest-free funds | | | | | | | .27 | | | | | | | | .35 | | | | | | | | | | | | .28 | | | | | | | | .38 | | | | | |
| Net interest margin | | | | | | | 3.61 | % | | | | | | | 3.39 | % | | | | | | | | | | | 3.41 | % | | | | | | | 3.38 | % | | | | |
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15-15-15-15-15
M&T BANK CORPORATION
Reconciliation of Quarterly GAAP to Non-GAAP Measures
| | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Nine months ended | |
| | | September 30 | | | June 30 | | | September 30 | |
| | | 2009 | | | 2008 | | | 2009 | | | 2009 | | | 2008 | |
Income statement data | | | | | | | | | | | | | | | | | | | | |
| In thousands, except per share | | | | | | | | | | | | | | | | | | | | |
Net income | | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 127,664 | | | | 91,185 | | | | 51,188 | | | | 243,073 | | | | 453,646 | |
| Amortization of core deposit and other intangible assets (1) | | | 10,270 | | | | 9,624 | | | | 9,247 | | | | 28,854 | | | | 30,961 | |
| Merger-related gain (1) | | | (17,684 | ) | | | — | | | | — | | | | (17,684 | ) | | | — | |
| Merger-related expenses (1) | | | 8,511 | | | | — | | | | 40,370 | | | | 50,357 | | | | 2,160 | |
| | | | | | | | | | | | | | | | |
| Net operating income | | $ | 128,761 | | | | 100,809 | | | | 100,805 | | | | 304,600 | | | | 486,767 | |
| | | | | | | | | | | | | | | | |
Earnings per common share | | | | | | | | | | | | | | | | | | | | |
| Diluted earnings per common share | | $ | .97 | | | | .82 | | | | .36 | | | | 1.84 | | | | 4.09 | |
| Amortization of core deposit and other intangible assets (1) | | | .09 | | | | .09 | | | | .08 | | | | .25 | | | | .28 | |
| Merger-related gain (1) | | | (.15 | ) | | | — | | | | — | | | | (.15 | ) | | | — | |
| Merger-related expenses (1) | | | .07 | | | | — | | | | .35 | | | | .43 | | | | .02 | |
| | | | | | | | | | | | | | | | |
| Diluted net operating earnings per common share | | $ | .98 | | | | .91 | | | | .79 | | | | 2.37 | | | | 4.39 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Balance sheet data | | | | | | | | | | | | | | | | | | | | |
| In millions | | | | | | | | | | | | | | | | | | | | |
Average assets | | | | | | | | | | | | | | | | | | | | |
| Average assets | | $ | 69,154 | | | | 64,997 | | | | 66,984 | | | | 66,984 | | | | 65,198 | |
| Goodwill | | | (3,525 | ) | | | (3,192 | ) | | | (3,326 | ) | | | (3,349 | ) | | | (3,193 | ) |
| Core deposit and other intangible assets | | | (208 | ) | | | (206 | ) | | | (188 | ) | | | (191 | ) | | | (222 | ) |
| Deferred taxes | | | 41 | | | | 28 | | | | 30 | | | | 31 | | | | 31 | |
| | | | | | | | | | | | | | | | |
| Average tangible assets | | $ | 65,462 | | | | 61,627 | | | | 63,500 | | | | 63,475 | | | | 61,814 | |
| | | | | | | | | | | | | | | | |
Average common equity | | | | | | | | | | | | | | | | | | | | |
| Average common equity | | $ | 6,794 | | | | 6,415 | | | | 6,491 | | | | 6,501 | | | | 6,465 | |
| Goodwill | | | (3,525 | ) | | | (3,192 | ) | | | (3,326 | ) | | | (3,349 | ) | | | (3,193 | ) |
| Core deposit and other intangible assets | | | (208 | ) | | | (206 | ) | | | (188 | ) | | | (191 | ) | | | (222 | ) |
| Deferred taxes | | | 41 | | | | 28 | | | | 30 | | | | 31 | | | | 31 | |
| | | | | | | | | | | | | | | | |
| Average tangible common equity | | $ | 3,102 | | | | 3,045 | | | | 3,007 | | | | 2,992 | | | | 3,081 | |
| | | | | | | | | | | | | | | | |
| | |
| (1) | | After any related tax effect. |
###
