M&T BANK CORPORATION ANNOUNCES FIRST QUARTER RESULTS

Rhea-AI Summary

M&T Bank Corporation (MTB) reported a strong performance for Q1 2023, with net income soaring to $702 million, a 94% increase from $362 million in Q1 2022. Diluted earnings per share (EPS) rose 53% year-over-year to $4.01, though it dipped slightly from $4.29 in Q4 2022. The net interest income surged 102% to $1.832 billion, driven by a 33% rise in average earning assets primarily from the acquisition of People's United Financial. However, M&T recorded a provision for credit losses of $120 million, up from $10 million a year ago, indicating potential concerns over asset quality. The Common Equity Tier 1 ratio was 10.15%, down from the previous quarter. Despite these challenges, M&T's diversified banking model and prudent management continue to position it well for future growth.

Positive

• Net income increased 94% year-over-year to $702 million.
• Diluted EPS rose 53% to $4.01.
• Net interest income grew 102% to $1.832 billion.
• No merger-related expenses incurred in Q1 2023.

Negative

• Provision for credit losses increased to $120 million, compared to $10 million in Q1 2022.
• Net charge-offs of loans rose to $70 million from $7 million a year ago.
• Common Equity Tier 1 ratio decreased to 10.15% from 10.44% in Q4 2022.

BUFFALO, N.Y., April 17, 2023 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for the quarter ended March 31, 2023.

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") were $4.01 in the first quarter of 2023, compared with $2.62 in the year-earlier quarter and $4.29 in the fourth quarter of 2022. GAAP-basis net income was $702 million in the recent quarter, $362 million in the first quarter of 2022 and $765 million in the final 2022 quarter. GAAP-basis net income expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.40% and 11.74%, respectively, in the first quarter of 2023, compared with .97% and 8.55%, respectively, in the corresponding 2022 period and 1.53% and 12.59%, respectively, in the fourth quarter of 2022. Non-operating merger-related expenses associated with the April 1, 2022 acquisition of People's United Financial, Inc. ("People's United") totaled $17 million ($13 million after-tax effect, or $.10 of diluted earnings per common share) in 2022's first quarter and $45 million ($33 million after-tax effect, or $.20 of diluted earnings per common share) in the fourth quarter of 2022. M&T incurred no merger-related expenses in the first quarter of 2023.

Darren J. King, Chief Financial Officer, commenting on M&T's results noted, "The strength of M&T's diversified community banking model and prudent management have positioned M&T to continue to deliver for our customers. First quarter net income nearly doubled from the year-earlier quarter. These results reflect loan growth, steady credit quality, a strong liquidity position and, as in past years, seasonally higher salaries and employee benefits expense. M&T's estimated Common Equity Tier 1 ratio was 10.15% at March 31, 2023 compared with 10.44% at last year's end."

Earnings Highlights
														Change 1Q23 vs.
($ in millions, except per share data)		1Q23				1Q22				4Q22				1Q22				4Q22
Net income		$	702			$	362			$	765				94	%			-8	%
Net income available to common shareholders  ̶  diluted		$	676			$	340			$	739				99	%			-9	%
Diluted earnings per common share		$	4.01			$	2.62			$	4.29				53	%			-7	%
Annualized return on average assets			1.40	%			.97	%			1.53	%
Annualized return on average common equity			11.74	%			8.55	%			12.59	%

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

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

Diluted net operating earnings per common share were $4.09 in the first quarter of 2023, $2.73 in the year-earlier quarter and $4.57 in last year's fourth quarter. Net operating income was $715 million in 2023's initial quarter, compared with $376 million in the first quarter of 2022 and $812 million in the final quarter of 2022. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity was 1.49% and 19.00%, respectively, in the first quarter of 2023, compared with 1.04% and 12.44%, respectively, in the corresponding 2022 quarter and 1.70% and 21.29%, respectively, in the fourth quarter of 2022.

Taxable-equivalent Net Interest Income.   Net interest income expressed on a taxable-equivalent basis totaled $1.832 billion in the recent quarter, up 102% from $907 million earned in the first quarter of 2022. That improvement reflected a $45.4 billion or 33% increase in average earning assets, largely attributable to the acquisition of People's United, and a 139 basis point widening of the net interest margin to 4.04% from 2.65% resulting from a rising interest rate environment. In the fourth quarter of 2022, taxable-equivalent net interest income was $1.841 billion, the net interest margin was 4.06% and average earning assets were $179.9 billion. The modestly lower taxable-equivalent net interest income in the recent quarter as compared with 2022's fourth quarter is reflective of two fewer days in the first quarter of 2023 while the impact of the slightly lower net interest margin was offset by a $4.16 billion increase in average earning assets.

Taxable-equivalent Net Interest Income
														Change 1Q23 vs.
($ in millions)		1Q23				1Q22				4Q22				1Q22				4Q22
Average earning assets		$	184,069			$	138,624			$	179,914				33	%			2	%
Net interest income  ̶  taxable-equivalent		$	1,832			$	907			$	1,841				102	%			—
Net interest margin			4.04	%			2.65	%			4.06	%

Provision for Credit Losses/Asset Quality.  M&T recorded a provision for credit losses of $120 million in the first quarter of 2023, up from $10 million in the year-earlier quarter and $90 million in the fourth quarter of 2022. The higher levels of provision in the two most recent quarters as compared with 2022's first quarter reflect the impact of weaker forecasted economic conditions on several loan categories and higher outstanding loan balances on which to estimate credit losses. Charge-offs of loans, net of recoveries of previously charged-off loans, were $70 million in the first quarter of 2023, $7 million in the first quarter of 2022 and $40 million in 2022's fourth quarter. Net charge-offs expressed as an annualized percentage of average loans outstanding were .22% and .03% in the first quarters of 2023 and 2022, respectively, and .12% in the fourth quarter of 2022.

Nonaccrual loans were $2.56 billion or 1.92% of loans outstanding at March 31, 2023 compared with $2.44 billion or 1.85% at December 31, 2022 and $2.13 billion or 2.32% at March 31, 2022. The balance of nonaccrual loans at the end of the two most recent quarters as compared with March 31, 2022 reflects loans obtained in the acquisition of People's United that totaled $605 million and $572 million at March 31, 2023 and December 31, 2022, respectively. Assets taken in foreclosure of defaulted loans were $44 million at March 31, 2023, $24 million at March 31, 2022 and $41 million at December 31, 2022.

Allowance for Credit Losses.  For purposes of determining the adequacy of the allowance for credit losses M&T regularly performs comprehensive analyses of its loan portfolios and assesses forecasted economic conditions. As a result of those procedures and reflecting the impact of loan growth, the allowance for credit losses totaled $1.98 billion or 1.49% of loans outstanding at March 31, 2023 compared with $1.47 billion or 1.60% of loans outstanding at March 31, 2022 and $1.93 billion or 1.46% at December 31, 2022. The acquisition of People's United loans and leases resulted in a $341 million increase in the allowance for credit losses as of April 1, 2022, including $99 million related to PCD loans and $242 million related to non-PCD loans. Including the impact of the acquisition, M&T's allowance for credit losses was $1.81 billion on April 1, 2022, or 1.42% of then outstanding loans.

Asset Quality Metrics
														Change 1Q23 vs.
($ in millions)		1Q23				1Q22				4Q22				1Q22				4Q22
At end of quarter
Nonaccrual loans		$	2,557			$	2,134			$	2,439				20	%			5	%
Real estate and other foreclosed assets		$	44			$	24			$	41				89	%			8	%
Total nonperforming assets		$	2,601			$	2,158			$	2,480				21	%			5	%
Accruing loans past due 90 days or more (1)		$	407			$	777			$	491				-48	%			-17	%
Nonaccrual loans as % of loans outstanding			1.92	%			2.32	%			1.85	%
Allowance for credit losses		$	1,975			$	1,472			$	1,925				34	%			3	%
Allowance for credit losses as % of loans outstanding			1.49	%			1.60	%			1.46	%
For the period
Provision for credit losses		$	120			$	10			$	90				—				33	%
Net charge-offs		$	70			$	7			$	40				—				74	%
Net charge-offs as % of average loans (annualized)			.22	%			.03	%			.12	%

(1)	Predominantly government-guaranteed residential real estate loans.

Noninterest Income and Expense.  Noninterest income totaled $587 million in the first quarter of 2023, compared with $541 million in the year-earlier quarter. The increase reflects the impact from People's United (predominantly service charges on deposit accounts, credit-related fees and trust income), offset, in part, by a decline in mortgage banking revenues resulting from lower gains on sales of residential mortgage loans originated for sale and a decrease in residential mortgage servicing income, lower insurance revenues reflecting the sale of M&T Insurance Agency ("MTIA") in last year's fourth quarter and a reduced distribution from Bayview Lending Group LLC ("BLG") as compared with the year-earlier quarter. Noninterest income was $682 million in 2022's fourth quarter. The comparative decrease in the recent quarter was driven by the $136 million gain recorded on the sale of MTIA in the fourth quarter of 2022, partially offset by a $20 million distribution from BLG received in the first quarter of 2023.

Noninterest Income
														Change 1Q23 vs.
($ in millions)		1Q23				1Q22				4Q22				1Q22				4Q22
Mortgage banking revenues		$	85			$	109			$	82				-22	%			4	%
Service charges on deposit accounts			113				102				106				12	%			7	%
Trust income			194				169				195				15	%			-1	%
Brokerage services income			24				20				22				19	%			7	%
Trading account and non-hedging derivative gains			12				5				14				117	%			-17	%
Gain (loss) on bank investment securities			—				(1)				(4)				—				—
Other revenues from operations			159				137				267				17	%			-40	%
Total		$	587			$	541			$	682				9	%			-14	%

Trust income associated with M&T's Collective Investment Trust business that is expected to be sold in the current quarter totaled approximately $45 million in the first quarter of 2023, compared with $42 million in each of the first and fourth quarters of 2022. After considering expenses, the results of operations of that business were not material to M&T's net income in each of those periods. In addition to expenses associated with those operations, professional services expense associated with the pending sale was $5 million in the recent quarter.

Noninterest expense totaled $1.359 billion in the first quarter of 2023, compared with $960 million in the similar quarter of 2022 and $1.408 billion in the fourth quarter of 2022. Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets and merger-related expenses, noninterest operating expenses were $1.342 billion in the recent quarter, $941 million in the first quarter of 2022 and $1.346 billion in 2022's fourth quarter. The higher level of operating expenses in the recent quarter as compared with the year-earlier quarter reflects the impact of operations obtained in the People's United acquisition, higher salaries and employee benefits expense, including incentive compensation, a rise in outside data processing and software costs, advertising and marketing expenses, FDIC assessments and professional services. The decline of operating expenses in the recent quarter as compared with the fourth quarter of 2022 reflects a $135 million contribution to The M&T Charitable Foundation recorded in the 2022 quarter, partially offset by higher salaries and employee benefits expense, including approximately $99 million of seasonally higher stock-based compensation, payroll-related taxes and other employee benefits expense. Those seasonal expenses totaled $74 million in the first quarter of 2022.

 

Noninterest Expense
														Change 1Q23 vs.
($ in millions)		1Q23				1Q22				4Q22				1Q22				4Q22
Salaries and employee benefits		$	808			$	578			$	697				40	%			16	%
Equipment and net occupancy			127				86				137				48	%			-7	%
Outside data processing and software			106				80				108				33	%			-2	%
FDIC assessments			30				16				24				91	%			24	%
Advertising and marketing			31				16				32				94	%			-5	%
Printing, postage and supplies			14				10				15				40	%			-6	%
Amortization of core deposit and other intangible assets			17				1				18				—				-2	%
Other costs of operations			226				173				377				30	%			-40	%
Total		$	1,359			$	960			$	1,408				42	%			-3	%

The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities), measures the relationship of operating expenses to revenues. M&T's efficiency ratio was 55.5% in the first quarter of 2023, 64.9% in the year-earlier quarter and 53.3% in the fourth quarter of 2022.

Balance Sheet.  M&T had total assets of $203.0 billion at March 31, 2023, compared with $149.9 billion and $200.7 billion at March 31, 2022 and December 31, 2022, respectively. Loans and leases, net of unearned discount, were $132.9 billion at March 31, 2023, compared with $91.8 billion at March 31, 2022 and $131.6 billion at December 31, 2022. The higher level of loans and leases at the recent quarter-end and December 31, 2022 as compared with March 31, 2022 is largely a reflection of balances associated with the acquisition of People's United. Also reflective of that acquisition, total deposits were $159.1 billion at the recent quarter-end and $163.5 billion at December 31, 2022, compared with $126.3 billion at March 31, 2022. The three percent decline in total deposits since December 31, 2022 includes the impact of seasonal decreases and customer use of off-balance sheet investment products.

Total shareholders' equity was $25.4 billion or 12.50% of total assets at March 31, 2023, $17.9 billion or 11.93% at March 31, 2022 and $25.3 billion or 12.61% at December 31, 2022. Common shareholders' equity was $23.4 billion, or $140.88 per share, at March 31, 2023, compared with $16.1 billion, or $124.93 per share, a year earlier and $23.3 billion, or $137.68 per share, at December 31, 2022. Tangible equity per common share was $88.81 at March 31, 2023, $89.33 at March 31, 2022 and $86.59 at December 31, 2022. In the calculation of tangible equity per common share, common shareholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances. M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under regulatory capital rules was approximately 10.15% at March 31, 2023, compared with 10.44% three months earlier.

M&T repurchased 3,838,157 shares of its common stock in accordance with its capital plan during the recent quarter at an average cost per share of $154.76 resulting in a total cost, including the share repurchase excise tax, of $600 million, compared with 3,664,887 shares at an average cost per share of $163.72 and total cost of $600 million in the fourth quarter of 2022. No share repurchases occurred in the first quarter of 2022.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss first quarter financial results today at 11:00 a.m. Eastern Time. Those wishing to participate in the call may dial (800) 225-9448. International participants, using any applicable international calling codes, may dial (203) 518-9708. Callers should reference M&T Bank Corporation or the conference ID #MTBQ123. The conference call will be webcast live through M&T's website at https://ir.mtb.com/events-presentations. A replay of the call will be available through Monday April 24, 2023 by calling (800) 753-6121, or (402) 220-2676 for international participants. No conference ID or passcode is required. The event will also be archived and available by 3:00 p.m. today on M&T's website at https://ir.mtb.com/events-presentations.

About M&T. M&T is a financial holding company headquartered in Buffalo, New York. M&T's principal banking subsidiary, M&T Bank, provides banking products and services in 12 states across the eastern U.S. from Maine to Virginia and Washington, D.C. Trust-related services are provided in select markets in the U.S. and abroad by M&T's Wilmington Trust-affiliated companies and by M&T Bank. For more information on M&T Bank, visit www.mtb.com.

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

Statements regarding the potential effects of events or factors specific to M&T and/or the financial industry as a whole, as well as national and global events generally, including economic conditions, on M&T's business, financial condition, liquidity and results of operations may constitute forward-looking statements. Such statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond M&T's control. Statements regarding M&T's expectations, including statements regarding expected financial results, prospects, targets, goals and outlook, are also forward-looking statements.

Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," or "potential," by future conditional verbs such as "will," "would," "should," "could," or "may," or by variations of such words or by similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("future factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

Examples of future factors include: the impact of the People's United transaction (as described in the next paragraph); economic conditions including inflation and market volatility; international conflicts, domestic or international political developments and other geopolitical 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 of 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 and/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; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition, divestment and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

In addition, future factors related to the acquisition of People's United include, among others: the possibility that the anticipated benefits of the transaction will not be realized when expected or at all; potential adverse reactions or changes to business, customer or employee relationships; M&T's success in executing its business plans and strategies and managing the risks involved in the foregoing; the results and costs of integration efforts; the business, economic and political conditions in the markets in which M&T and its subsidiaries operate; the outcome of any legal proceedings that may be instituted against M&T or its subsidiaries; and other factors related to the acquisition that may affect future results of M&T.

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

M&T provides further detail regarding these risks and uncertainties in its Form 10-K for the year ended December 31, 2022, including in the Risk Factors section of such report, as well as in other SEC filings. Forward-looking statements speak only as of the date made and M&T does not assume any duty and does not undertake to update forward-looking statements.

 

INVESTOR CONTACT:		Brian Klock
		(716) 842-5138
MEDIA CONTACT:		Maya Dillon
		(646) 735-1958

 

Financial Highlights
	Three months ended
	March 31
Amounts in thousands, except per share	2023				2022				Change
Performance
Net income	$	701,624				362,174				94	%
Net income available to common shareholders		675,511				339,590				99	%
Per common share:
Basic earnings	$	4.03				2.63				53	%
Diluted earnings		4.01				2.62				53	%
Cash dividends	$	1.30				1.20				8	%
Common shares outstanding:
Average - diluted (1)		168,410				129,416				30	%
Period end (2)		165,865				129,080				28	%
Return on (annualized):
Average total assets		1.40	%			.97	%
Average common shareholders' equity		11.74	%			8.55	%
Taxable-equivalent net interest income	$	1,831,726				907,408				102	%
Yield on average earning assets		5.16	%			2.72	%
Cost of interest-bearing liabilities		1.86	%			.13	%
Net interest spread		3.30	%			2.59	%
Contribution of interest-free funds		.74	%			.06	%
Net interest margin		4.04	%			2.65	%
Net charge-offs to average total net loans (annualized)		.22	%			.03	%
Net operating results (3)
Net operating income	$	714,935				375,999				90	%
Diluted net operating earnings per common share		4.09				2.73				50	%
Return on (annualized):
Average tangible assets		1.49	%			1.04	%
Average tangible common equity		19.00	%			12.44	%
Efficiency ratio		55.5	%			64.9	%
	At March 31
Loan quality	2023				2022				Change
Nonaccrual loans	$	2,556,799				2,134,231				20	%
Real estate and other foreclosed assets		44,567				23,524				89	%
Total nonperforming assets	$	2,601,366				2,157,755				21	%
Accruing loans past due 90 days or more (4)	$	407,457				776,751				-48	%
Government guaranteed loans included in totals above:
Nonaccrual loans	$	42,102				46,151				-9	%
Accruing loans past due 90 days or more		306,049				689,831				-56	%
Nonaccrual loans to total net loans		1.92	%			2.32	%
Allowance for credit losses to total loans		1.49	%			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 expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. Reconciliations of net income with net operating income appear herein.
(4)	Predominantly residential real estate loans.

 

Financial Highlights, Five Quarter Trend
	Three months ended
	March 31,				December 31,				September 30,				June 30,				March 31,
Amounts in thousands, except per share	2023				2022				2022				2022				2022
Performance
Net income	$	701,624				765,371				646,596				217,522				362,174
Net income available to common shareholders		675,511				739,126				620,554				192,236				339,590
Per common share:
Basic earnings	$	4.03				4.32				3.55				1.08				2.63
Diluted earnings		4.01				4.29				3.53				1.08				2.62
Cash dividends	$	1.30				1.20				1.20				1.20				1.20
Common shares outstanding:
Average - diluted (1)		168,410				172,149				175,682				178,277				129,416
Period end (2)		165,865				169,285				172,900				175,969				129,080
Return on (annualized):
Average total assets		1.40	%			1.53	%			1.28	%			.42	%			.97	%
Average common shareholders' equity		11.74	%			12.59	%			10.43	%			3.21	%			8.55	%
Taxable-equivalent net interest income	$	1,831,726				1,840,759				1,690,518				1,422,443				907,408
Yield on average earning assets		5.16	%			4.60	%			3.90	%			3.12	%			2.72	%
Cost of interest-bearing liabilities		1.86	%			.98	%			.41	%			.20	%			.13	%
Net interest spread		3.30	%			3.62	%			3.49	%			2.92	%			2.59	%
Contribution of interest-free funds		.74	%			.44	%			.19	%			.09	%			.06	%
Net interest margin		4.04	%			4.06	%			3.68	%			3.01	%			2.65	%
Net charge-offs to average total net loans (annualized)		.22	%			.12	%			.20	%			.16	%			.03	%
Net operating results (3)
Net operating income	$	714,935				812,359				700,030				577,622				375,999
Diluted net operating earnings per common share		4.09				4.57				3.83				3.10				2.73
Return on (annualized):
Average tangible assets		1.49	%			1.70	%			1.44	%			1.16	%			1.04	%
Average tangible common equity		19.00	%			21.29	%			17.89	%			14.41	%			12.44	%
Efficiency ratio		55.5	%			53.3	%			53.6	%			58.3	%			64.9	%
	March 31,				December 31,				September 30,				June 30,				March 31,
Loan quality	2023				2022				2022				2022				2022
Nonaccrual loans	$	2,556,799				2,438,435				2,429,326				2,633,005				2,134,231
Real estate and other foreclosed assets		44,567				41,375				37,031				28,692				23,524
Total nonperforming assets	$	2,601,366				2,479,810				2,466,357				2,661,697				2,157,755
Accruing loans past due 90 days or more (4)	$	407,457				491,018				476,503				523,662				776,751
Government guaranteed loans included in totals above:
Nonaccrual loans	$	42,102				43,536				44,797				46,937				46,151
Accruing loans past due 90 days or more		306,049				363,409				423,371				467,834				689,831
Nonaccrual loans to total net loans		1.92	%			1.85	%			1.89	%			2.05	%			2.32	%
Allowance for credit losses to total loans		1.49	%			1.46	%			1.46	%			1.42	%			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 expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. Reconciliations of net income with net operating income appear herein.
(4)	Predominantly residential real estate loans.

 

Condensed Consolidated Statement of Income
		Three months ended
		March 31
Dollars in thousands		2023				2022				Change
Interest income		$	2,326,985				928,256				151	%
Interest expense			508,721				24,082				—
Net interest income			1,818,264				904,174				101
Provision for credit losses			120,000				10,000				—
Net interest income after provision for credit losses			1,698,264				894,174				90
Other income
Mortgage banking revenues			84,985				109,148				-22
Service charges on deposit accounts			113,546				101,507				12
Trust income			193,802				169,213				15
Brokerage services income			24,041				20,190				19
Trading account and non-hedging      derivative gains			11,675				5,369				117
Gain (loss) on bank investment securities			(416)				(743)				—
Other revenues from operations			159,500				136,203				17
Total other income			587,133				540,887				9
Other expense
Salaries and employee benefits			807,942				577,520				40
Equipment and net occupancy			126,904				85,812				48
Outside data processing and software			105,780				79,719				33
FDIC assessments			29,758				15,576				91
Advertising and marketing			31,063				16,024				94
Printing, postage and supplies			14,183				10,150				40
Amortization of core deposit and other      intangible assets			17,208				1,256				—
Other costs of operations			226,392				173,684				30
Total other expense			1,359,230				959,741				42
Income before income taxes			926,167				475,320				95
Applicable income taxes			224,543				113,146				98
Net income		$	701,624				362,174				94	%

 

Condensed Consolidated Statement of Income, Five Quarter Trend
		Three months ended
		March 31,				December 31,				September 30,				June 30,				March 31,
Dollars in thousands		2023				2022				2022				2022				2022
Interest income		$	2,326,985				2,072,209				1,781,513				1,465,142				928,256
Interest expense			508,721				244,835				102,822				53,425				24,082
Net interest income			1,818,264				1,827,374				1,678,691				1,411,717				904,174
Provision for credit losses			120,000				90,000				115,000				302,000				10,000
Net interest income after provision for credit losses			1,698,264				1,737,374				1,563,691				1,109,717				894,174
Other income
Mortgage banking revenues			84,985				81,521				83,041				82,926				109,148
Service charges on deposit accounts			113,546				105,714				115,213				124,170				101,507
Trust income			193,802				194,843				186,577				190,084				169,213
Brokerage services income			24,041				22,463				21,086				24,138				20,190
Trading account and non-hedging      derivative gains			11,675				14,043				5,081				2,293				5,369
Gain (loss) on bank investment securities			(416)				(3,773)				(1,108)				(62)				(743)
Other revenues from operations			159,500				266,726				153,189				147,551				136,203
Total other income			587,133				681,537				563,079				571,100				540,887
Other expense
Salaries and employee benefits			807,942				697,276				736,354				776,201				577,520
Equipment and net occupancy			126,904				136,732				127,117				124,655				85,812
Outside data processing and software			105,780				107,886				95,068				93,820				79,719
FDIC assessments			29,758				24,008				28,105				22,585				15,576
Advertising and marketing			31,063				32,691				21,398				20,635				16,024
Printing, postage and supplies			14,183				15,082				14,768				15,570				10,150
Amortization of core deposit and other      intangible assets			17,208				17,600				18,384				18,384				1,256
Other costs of operations			226,392				377,013				238,059				331,304				173,684
Total other expense			1,359,230				1,408,288				1,279,253				1,403,154				959,741
Income before income taxes			926,167				1,010,623				847,517				277,663				475,320
Applicable income taxes			224,543				245,252				200,921				60,141				113,146
Net income		$	701,624				765,371				646,596				217,522				362,174

 

Condensed Consolidated Balance Sheet
		March 31
Dollars in thousands		2023				2022				Change
ASSETS
Cash and due from banks		$	1,817,740				1,411,460				29		%
Interest-bearing deposits at banks			22,306,425				36,025,382				-38
Trading account			165,216				46,854				253
Investment securities			28,443,209				9,356,832				204
Loans and leases:
Commercial, financial, etc.			43,758,361				23,496,017				86
Real estate - commercial			45,072,541				34,553,558				30
Real estate - consumer			23,789,945				15,595,879				53
Consumer			20,316,845				18,162,938				12
Total loans and leases, net of unearned discount			132,937,692				91,808,392				45
Less: allowance for credit losses			1,975,110				1,472,359				34
Net loans and leases			130,962,582				90,336,033				45
Goodwill			8,490,089				4,593,112				85
Core deposit and other intangible assets			192,166				2,742				—
Other assets			10,578,980				8,091,137				31
Total assets		$	202,956,407				149,863,552				35		%
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits		$	59,955,033				58,520,366				2		%
Interest-bearing deposits			99,120,207				67,798,347				46
Total deposits			159,075,240				126,318,713				26
Short-term borrowings			6,995,302				50,307				—
Accrued interest and other liabilities			4,045,804				2,174,925				86
Long-term borrowings			7,462,890				3,443,587				117
Total liabilities			177,579,236				131,987,532				35
Shareholders' equity:
Preferred			2,010,600				1,750,000				15
Common			23,366,571				16,126,020				45
Total shareholders' equity			25,377,171				17,876,020				42
Total liabilities and shareholders' equity		$	202,956,407				149,863,552				35		%

 

Condensed Consolidated Balance Sheet, Five Quarter Trend
	March 31,				December 31,				September 30,				June 30,				March 31,
Dollars in thousands	2023				2022				2022				2022				2022
ASSETS
Cash and due from banks	$	1,817,740				1,517,244				2,255,810				1,688,274				1,411,460
Interest-bearing deposits at banks		22,306,425				24,958,719				25,391,528				33,437,454				36,025,382
Federal funds sold and agreements to resell      securities		—				3,000				—				250,250				—
Trading account		165,216				117,847				129,672				133,855				46,854
Investment securities		28,443,209				25,210,871				24,603,765				22,801,717				9,356,832
Loans and leases:
Commercial, financial, etc.		43,758,361				41,850,566				38,807,949				39,108,676				23,496,017
Real estate - commercial		45,072,541				45,364,571				46,138,665				46,795,139				34,553,558
Real estate - consumer		23,789,945				23,755,947				23,074,280				22,767,107				15,595,879
Consumer		20,316,845				20,593,079				20,204,693				19,815,198				18,162,938
Total loans and leases, net of unearned discount		132,937,692				131,564,163				128,225,587				128,486,120				91,808,392
Less: allowance for credit losses		1,975,110				1,925,331				1,875,591				1,823,790				1,472,359
Net loans and leases		130,962,582				129,638,832				126,349,996				126,662,330				90,336,033
Goodwill		8,490,089				8,490,089				8,501,357				8,501,357				4,593,112
Core deposit and other intangible assets		192,166				209,374				226,974				245,358				2,742
Other assets		10,578,980				10,583,865				10,496,377				10,312,294				8,091,137
Total assets	$	202,956,407				200,729,841				197,955,479				204,032,889				149,863,552
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	59,955,033				65,501,860				73,023,271				72,375,515				58,520,366
Interest-bearing deposits		99,120,207				98,013,008				90,822,117				97,982,881				67,798,347
Total deposits		159,075,240				163,514,868				163,845,388				170,358,396				126,318,713
Short-term borrowings		6,995,302				3,554,951				917,806				1,119,321				50,307
Accrued interest and other liabilities		4,045,804				4,377,495				4,476,456				3,743,278				2,174,925
Long-term borrowings		7,462,890				3,964,537				3,459,336				3,017,363				3,443,587
Total liabilities		177,579,236				175,411,851				172,698,986				178,238,358				131,987,532
Shareholders' equity:
Preferred		2,010,600				2,010,600				2,010,600				2,010,600				1,750,000
Common		23,366,571				23,307,390				23,245,893				23,783,931				16,126,020
Total shareholders' equity		25,377,171				25,317,990				25,256,493				25,794,531				17,876,020
Total liabilities and shareholders' equity	$	202,956,407				200,729,841				197,955,479				204,032,889				149,863,552

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates
		Three months ended																								Change in balance
		March 31,								March 31,								December 31,								March 31, 2023 from
Dollars in millions		2023								2022								2022								March 31,				December 31,
		Balance				Rate				Balance				Rate				Balance				Rate				2022				2022
ASSETS
Interest-bearing deposits at banks		$	24,312				4.64		%		38,693				.19		%		25,089				3.75		%		-37		%		-3		%
Federal funds sold and agreements to resell       securities			—				4.89				—				.71				—				4.32				—				-41
Trading account			123				2.32				48				1.61				122				2.13				155				—
Investment securities			27,622				3.00				7,724				2.06				25,297				2.77				258				9
Loans and leases, net of unearned discount
Commercial, financial, etc.			42,428				6.46				23,305				3.61				40,038				5.76				82				6
Real estate - commercial			45,327				5.82				34,957				3.86				45,690				5.06				30				-1
Real estate - consumer			23,770				3.96				15,870				3.55				23,334				3.92				50				2
Consumer			20,487				5.67				18,027				4.23				20,344				5.28				14				1
Total loans and leases, net			132,012				5.70				92,159				3.85				129,406				5.12				43				2
Total earning assets			184,069				5.16				138,624				2.72				179,914				4.60				33				2
Goodwill			8,490								4,593								8,494								85				—
Core deposit and other intangible assets			201								3								218								—				-8
Other assets			9,839								8,428								9,966								17				-1
Total assets		$	202,599								151,648								198,592								34		%		2		%
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Savings and interest-checking deposits		$	88,053				1.28				67,267				.04				87,068				.76				31		%		1		%
Time deposits			11,630				3.11				2,647				.21				6,182				1.29				339				88
Total interest-bearing deposits			99,683				1.49				69,914				.05				93,250				.80				43				7
Short-term borrowings			4,994				4.69				56				.01				1,632				3.24				—				206
Long-term borrowings			6,511				5.27				3,442				1.88				3,753				4.65				89				73
Total interest-bearing liabilities			111,188				1.86				73,412				.13				98,635				.98				51				13
Noninterest-bearing deposits			61,854								58,141								70,218								6				-12
Other liabilities			4,180								2,201								4,393								90				-5
Total liabilities			177,222								133,754								173,246								32				2
Shareholders' equity			25,377								17,894								25,346								42				—
Total liabilities and shareholders' equity		$	202,599								151,648								198,592								34		%		2		%
Net interest spread							3.30								2.59								3.62
Contribution of interest-free funds							.74								.06								.44
Net interest margin							4.04		%						2.65		%						4.06		%

 

Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
		Three months ended
		March 31,				December 31,				September 30,				June 30,				March 31,
		2023				2022				2022				2022				2022
Income statement data
In thousands, except per share
Net income
Net income		$	701,624				765,371				646,596				217,522				362,174
Amortization of core deposit and other intangible assets (1)			13,311				13,559				14,141				14,138				933
Merger-related expenses (1)			—				33,429				39,293				345,962				12,892
Net operating income		$	714,935				812,359				700,030				577,622				375,999
Earnings per common share
Diluted earnings per common share		$	4.01				4.29				3.53				1.08				2.62
Amortization of core deposit and other intangible assets (1)			.08				.08				.08				.08				.01
Merger-related expenses (1)			—				.20				.22				1.94				.10
Diluted net operating earnings per common share		$	4.09				4.57				3.83				3.10				2.73
Other expense
Other expense		$	1,359,230				1,408,288				1,279,253				1,403,154				959,741
Amortization of core deposit and other intangible assets			(17,208)				(17,600)				(18,384)				(18,384)				(1,256)
Merger-related expenses			—				(45,113)				(53,027)				(222,809)				(17,372)
Noninterest operating expense		$	1,342,022				1,345,575				1,207,842				1,161,961				941,113
Merger-related expenses
Salaries and employee benefits		$	—				3,670				13,094				85,299				87
Equipment and net occupancy			—				2,294				2,106				502				1,807
Outside data processing and software			—				2,193				2,277				716				252
Advertising and marketing			—				5,258				2,177				1,199				628
Printing, postage and supplies			—				2,953				651				2,460				722
Other costs of operations			—				28,745				32,722				132,633				13,876
Other expense			—				45,113				53,027				222,809				17,372
Provision for credit losses			—				—				—				242,000				—
Total		$	—				45,113				53,027				464,809				17,372
Efficiency ratio
Noninterest operating expense (numerator)		$	1,342,022				1,345,575				1,207,842				1,161,961				941,113
Taxable-equivalent net interest income		$	1,831,726				1,840,759				1,690,518				1,422,443				907,408
Other income			587,133				681,537				563,079				571,100				540,887
Less:  Gain (loss) on bank investment securities			(416)				(3,773)				(1,108)				(62)				(743)
Denominator		$	2,419,275				2,526,069				2,254,705				1,993,605				1,449,038
Efficiency ratio			55.5	%			53.3	%			53.6	%			58.3	%			64.9	%
Balance sheet data
In millions
Average assets
Average assets		$	202,599				198,592				201,131				208,865				151,648
Goodwill			(8,490)				(8,494)				(8,501)				(8,501)				(4,593)
Core deposit and other intangible assets			(201)				(218)				(236)				(254)				(3)
Deferred taxes			49				54				56				60				1
Average tangible assets		$	193,957				189,934				192,450				200,170				147,053
Average common equity
Average total equity		$	25,377				25,346				25,665				26,090				17,894
Preferred stock			(2,011)				(2,011)				(2,011)				(2,011)				(1,750)
Average common equity			23,366				23,335				23,654				24,079				16,144
Goodwill			(8,490)				(8,494)				(8,501)				(8,501)				(4,593)
Core deposit and other intangible assets			(201)				(218)				(236)				(254)				(3)
Deferred taxes			49				54				56				60				1
Average tangible common equity		$	14,724				14,677				14,973				15,384				11,549
At end of quarter
Total assets
Total assets		$	202,956				200,730				197,955				204,033				149,864
Goodwill			(8,490)				(8,490)				(8,501)				(8,501)				(4,593)
Core deposit and other intangible assets			(192)				(209)				(227)				(245)				(3)
Deferred taxes			47				51				54				57				1
Total tangible assets		$	194,321				192,082				189,281				195,344				145,269
Total common equity
Total equity		$	25,377				25,318				25,256				25,795				17,876
Preferred stock			(2,011)				(2,011)				(2,011)				(2,011)				(1,750)
Common equity			23,366				23,307				23,245				23,784				16,126
Goodwill			(8,490)				(8,490)				(8,501)				(8,501)				(4,593)
Core deposit and other intangible assets			(192)				(209)				(227)				(245)				(3)
Deferred taxes			47				51				54				57				1
Total tangible common equity		$	14,731				14,659				14,571				15,095				11,531

(1)	After any related tax effect.

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SOURCE M&T Bank Corporation

FAQ

What were M&T Bank's earnings for Q1 2023?

M&T Bank reported net income of $702 million for Q1 2023, a 94% increase from Q1 2022.

How did M&T Bank's diluted EPS change in Q1 2023?

Diluted earnings per share for M&T Bank rose 53% to $4.01 in Q1 2023.

What were the main drivers of M&T Bank's net interest income in Q1 2023?

Net interest income increased by 102% to $1.832 billion, primarily due to a 33% rise in average earning assets from the People's United acquisition.

What is the current Common Equity Tier 1 ratio for M&T Bank?

As of March 31, 2023, M&T's Common Equity Tier 1 ratio was 10.15%.

What was the provision for credit losses for M&T Bank in Q1 2023?

M&T Bank reported a provision for credit losses of $120 million in Q1 2023.