M&T Bank Corporation (NYSE:MTB) announces first quarter 2024 results

Rhea-AI Summary

M&T Bank (NYSE:MTB) reported quarterly net income of $531 million, or $3.02 of diluted earnings per common share for the first quarter of 2024. The company's CET1 capital ratio increased to 11.07%, reflecting a strengthened capital position. Net interest margin narrowed to 3.52% due to higher liquidity and increased deposit and borrowing costs. Expenses were prudently managed, with a provision for credit losses reflecting elevated levels of criticized loans. Overall, M&T Bank had a solid start in 2024.

Positive

• The CET1 capital ratio increased to 11.07% at the end of the first quarter of 2024, up from 10.98% in the previous quarter.
• Net interest margin decreased to 3.52% in the recent quarter, reflecting higher liquidity and increased deposit and borrowing costs.
• Expenses were prudently managed, with a provision for credit losses reflecting elevated levels of criticized loans.
• M&T Bank reported a net income of $531 million for the first quarter of 2024, with diluted earnings per common share of $3.02.
• The company's effective tax rate was 20.0% in the first quarter of 2024, down from 22.9% in the previous quarter.
• Noninterest income remained largely unchanged in the first quarter of 2024 compared to the previous quarter.
• Noninterest expense decreased to $1.40 billion in the recent quarter from $1.45 billion in the fourth quarter of 2023.

Negative

• Net interest margin narrowed to 3.52% in the recent quarter.
• Provision for credit losses reflected elevated levels of criticized loans.
• Noninterest expense increased $37 million from the first quarter of 2023.
• FDIC assessments increased $30 million compared to the first quarter of 2023.

Insights

Financial Analyst

The reported first quarter net income of M&T Bank Corporation sits at $531 million, a notable decline from the previous year's $702 million. This drop signifies potential challenges in the bank's operating environment, which could be tied to macroeconomic factors such as interest rate fluctuations and competitive pressures in the banking sector. Despite this, a marginal improvement from the previous quarter's $482 million net income suggests some resilience.

Of interest to stakeholders is the bank's net interest margin (NIM), which has compressed from 4.04% in the previous year to 3.52%. This contraction could reflect the impact of rising interest rates on the bank's borrowing costs or changes in its asset mix. The efficiency ratio, an indicator of the bank's noninterest expense as a percentage of revenue, has deteriorated year-over-year from 55.5% to 60.8%, indicating increased costs relative to income.

On a positive note, the bank's Common Equity Tier 1 (CET1) capital ratio, an important measure of financial stability, has seen a slight uptick. This indicates a fortified balance sheet, which could be reassuring for investors concerned about the bank's ability to withstand potential financial stresses.

Market Research Analyst

Examining the performance of M&T Bank Corporation in the broader banking industry, the current trend of net income reduction may raise concerns among investors about the bank's growth prospects. The banking sector is highly sensitive to economic cycles and M&T's reported figures suggest it's navigating a complex landscape. Stable deposits alongside increased borrowings reflect strategic moves to maintain liquidity but could signal caution regarding future loan growth expectations.

The application of increased FDIC assessments due to heightened risk in the banking industry may have broader implications for the sector. Such costs could potentially be reflected across the industry, affecting investor sentiment. M&T's credit loss provisions have also risen significantly year-over-year, hinting at a more cautious outlook on credit risk management amid an uncertain economic climate.

Economic Analyst

From an economic standpoint, the provided results of M&T Bank Corporation offer a reading on the state of credit markets and commercial lending. The increased provision for credit losses, particularly in commercial real estate, underscores a potential softening in certain real estate markets. This could have wider economic implications, suggesting caution in these sectors and a need to monitor commercial loan performance closely.

The decline in net interest income year-over-year, despite an increase in average earning assets, points to a challenging interest rate environment that may compress bank margins further if rates continue to rise. Loan growth in certain sectors like commercial and industrial hints at underlying economic activity, but this is coupled with a decline in commercial real estate loans, perhaps reflecting a shift in the bank's risk appetite or broader economic trends.

BUFFALO, N.Y., April 15, 2024 /PRNewswire/ -- M&T Bank Corporation ("M&T" or "the Company") reports quarterly net income of $531 million or $3.02 of diluted earnings per common share.

(Dollars in millions, except per share data)		1Q24			4Q23			1Q23
Earnings Highlights
Net interest income		$        1,680			$        1,722			$        1,818
Taxable-equivalent adjustment		12			13			14
Net interest income - taxable-equivalent		1,692			1,735			1,832
Provision for credit losses		200			225			120
Noninterest income		580			578			587
Noninterest expense		1,396			1,450			1,359
Net income		531			482			702
Net income available to common shareholders - diluted		505			457			676
Diluted earnings per common share		3.02			2.74			4.01
Return on average assets - annualized		1.01	%		.92	%		1.40	%
Return on average common shareholders' equity - annualized		8.14			7.41			11.74
Average Balance Sheet
Total assets		$     211,478			$     208,752			$     202,599
Interest-bearing deposits at banks		30,647			30,153			24,312
Investment securities		28,587			27,490			27,622
Loans and leases, net of unearned discount		133,796			132,770			132,012
Deposits		164,065			164,713			161,537
Borrowings		16,001			13,057			11,505
Selected Ratios
(Amounts expressed as a percent, except per share data)
Net interest margin		3.52	%		3.61	%		4.04	%
Efficiency ratio		60.8			62.1			55.5
Net charge-offs to average total loans - annualized		.42			.44			.22
Allowance for credit losses to total loans		1.62			1.59			1.49
Nonaccrual loans to total loans		1.71			1.62			1.92
Common equity Tier 1 ("CET1") capital ratio (1)		11.07			10.98			10.16
Common shareholders' equity per share		$      150.90			$      150.15			$      140.88
(1) March 31, 2024 CET1 capital ratio is estimated.

 

Financial Highlights

• The CET1 capital ratio increased 9 basis points to an estimated 11.07% at March 31, 2024, compared with 10.98% at December 31, 2023, highlighting the Company's improved capital position.
• Net interest margin of 3.52% in the recent quarter narrowed from 3.61% in the fourth quarter of 2023 reflecting higher liquidity, cash moving to investment securities and higher deposit and borrowing costs.
• Growth in average commercial and industrial and consumer loans in the recent quarter was partially offset by a decline in average commercial real estate loans.
• Average deposits remained stable with a slowing mix shift to higher cost deposits. Average borrowings rose in the first quarter of 2024 as compared with the fourth quarter of 2023 due to increased borrowings from the Federal Home Loan Bank ("FHLB") of New York and the issuance of senior notes.
• Provision for credit losses in the recent quarter reflects elevated levels of criticized commercial and industrial loans and loan growth.
• Expenses included $99 million of seasonal salaries and employee benefits expense and a $29 million estimated increase in the FDIC special assessment, reflecting the FDIC's higher loss estimate attributable to certain failed banks.

Chief Financial Officer Commentary

"We are off to a solid start in 2024 as we were able to grow certain sectors of our commercial and consumer loan portfolios, while continuing to shrink our commercial real estate exposure. Expenses were prudently managed in the recent quarter and our selective approach to allocating resources to our strategic priorities with utmost care has not wavered. M&T's liquidity and capital position strengthened, reflecting a stable deposit base, higher levels of borrowings and solid earnings after considering seasonal employee compensation expenses and an incremental FDIC special assessment. I thank my colleagues at M&T for their stewardship of shareholder capital and their continuous support of our mission to make a difference in the lives of our customers and the communities in which we serve."

- Daryl N. Bible, M&T's Chief Financial Officer

Contact:
Investor Relations:	Brian Klock	716.842.5138
Media Relations:	Frank Lentini	929.651.0447

 

Non-GAAP Measures (1)
								Change 1Q24 vs.						Change 1Q24 vs.
(Dollars in millions, except per share data)		1Q24			4Q23			4Q23			1Q23			1Q23
Net operating income		$            543			$            494			10	%		$            715			-24	%
Diluted net operating earnings per common share		3.09			2.81			10			4.09			-24
Annualized return on average tangible assets		1.08	%		.98	%					1.49	%
Annualized return on average tangible common equity		12.67			11.70						19.00
Efficiency ratio		60.8			62.1						55.5
Tangible equity per common share		$         99.54			$         98.54			1			$         88.81			12

____________________
(1)	A reconciliation of non-GAAP measures is included in the tables that accompany this release.

 

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.

Taxable-equivalent Net Interest Income
								Change 1Q24 vs.						Change 1Q24 vs.
(Dollars in millions)		1Q24			4Q23			4Q23			1Q23			1Q23
Average earning assets		$     193,135			$     190,536			1	%		$     184,069			5	%
Average interest-bearing liabilities		131,451			127,646			3			111,188			18
Net interest income  ̶  taxable-equivalent		1,692			1,735			-2			1,832			-8
Yield on average earning assets		5.74	%		5.73	%					5.16	%
Cost of interest-bearing liabilities		3.26			3.17						1.86
Net interest spread		2.48			2.56						3.30
Net interest margin		3.52			3.61						4.04

 

Taxable-equivalent net interest income decreased $43 million, or 2%, from the fourth quarter of 2023.

• Average borrowings rose $2.9 billion and the rate paid on such borrowings increased 13 basis points.
• Average interest-bearing deposits increased $861 million and the rates paid on such deposits rose 3 basis points.
• The yield on average loans and leases declined 1 basis point.
• Average investment securities increased $1.1 billion and the rates earned on those securities increased 17 basis points.

Taxable-equivalent net interest income decreased $140 million, or 8%, compared with the year-earlier first quarter.

• Average interest-bearing deposits rose $15.8 billion and the rates paid on those deposits increased 144 basis points.
• Average borrowings increased $4.5 billion and rates paid on such borrowings increased 64 basis points.
• Yields earned on average interest-bearing deposits at banks and average loans and leases increased 85 basis points and 62 basis points, respectively.
• Average interest-bearing deposits at banks and average loans and leases increased $6.3 billion and $1.8 billion, respectively.

Average Earning Assets
						Change 1Q24 vs.					Change 1Q24 vs.
(Dollars in millions)		1Q24		4Q23		4Q23			1Q23		1Q23
Interest-bearing deposits at banks		$      30,647		$      30,153		2	%		$      24,312		26	%
Trading account		105		123		-15			123		-14
Investment securities		28,587		27,490		4			27,622		3
Loans and leases, net of unearned discount
Commercial and industrial		56,821		55,420		3			52,510		8
Real estate - commercial		32,696		33,455		-2			35,245		-7
Real estate - consumer		23,136		23,339		-1			23,770		-3
Consumer		21,143		20,556		3			20,487		3
Total loans and leases, net		133,796		132,770		1			132,012		1
Total earning assets		$    193,135		$    190,536		1			$    184,069		5

 

Average earning assets increased $2.6 billion, or 1%, from the fourth quarter of 2023.

• Average interest-bearing deposits at banks increased $494 million reflecting higher levels of borrowings partially offset by the purchase of investment securities and loan growth.
• Average loans and leases increased $1.0 billion primarily reflective of growth in average commercial and industrial loans and leases and consumer loans, partially offset by declines in average commercial real estate and residential real estate loans. The growth in commercial and industrial loans spanned most industry types.
• Average investment securities rose $1.1 billion primarily due to purchases of U.S. Treasury notes and fixed rate mortgage-backed securities during the first quarter of 2024.

Average earning assets increased $9.1 billion, or 5%, from the year-earlier first quarter.

• Average interest-bearing deposits at banks increased $6.3 billion reflecting a rise in average deposits and higher levels of borrowings, partially offset by loan growth and purchases of investment securities.
• Average loans and leases increased $1.8 billion predominantly due to higher average commercial and industrial loans and leases of $4.3 billion reflecting lending activities to financial and insurance industry customers and motor vehicle and recreational finance dealers, partially offset by a $2.5 billion decline in average commercial real estate loans.
• Average investment securities increased $965 million due to the purchases of investment securities in 2023 and through the first quarter of 2024.

Average Interest-bearing Liabilities
								Change 1Q24 vs.						Change 1Q24 vs.
(Dollars in millions)		1Q24			4Q23			4Q23			1Q23			1Q23
Interest-bearing deposits
Savings and interest-checking deposits		$          94,867			$          93,365			2	%		$          88,053			8	%
Time deposits		20,583			21,224			-3			11,630			77
Total interest-bearing deposits		115,450			114,589			1			99,683			16
Short-term borrowings		6,228			5,156			21			4,994			25
Long-term borrowings		9,773			7,901			24			6,511			50
Total interest-bearing liabilities		$        131,451			$        127,646			3			$        111,188			18

 

Average interest-bearing liabilities increased $3.8 billion, or 3%, from the fourth quarter of 2023.

• Average borrowings increased $2.9 billion predominantly due to the issuance of senior notes in the first quarter of 2024 and higher levels of average borrowings from the FHLB of New York.
• Average interest-bearing deposits increased $861 million, reflective of a $1.6 billion increase in average non-brokered deposits.

Average interest-bearing liabilities increased $20.3 billion, or 18%, from the first quarter of 2023.

• Average interest-bearing deposits rose $15.8 billion, including a $10.6 billion increase in average non-brokered deposits, reflecting customer demand for interest-bearing products amidst rising rates.
• Average borrowings increased $4.5 billion reflecting the issuances of senior notes and other long-term debt since the first quarter of 2023 and increases in average borrowings from the FHLB of New York.

Provision for Credit Losses/Asset Quality
								Change 1Q24 vs.						Change 1Q24 vs.
(Dollars in millions)		1Q24			4Q23			4Q23			1Q23			1Q23
At end of quarter
Nonaccrual loans		$      2,302			$      2,166			6	%		$      2,557			-10	%
Real estate and other foreclosed assets		38			39			—			44			-13
Total nonperforming assets		2,340			2,205			6			2,601			-10
Accruing loans past due 90 days or more (1)		297			339			-12			407			-27
Nonaccrual loans as % of loans outstanding		1.71	%		1.62	%					1.92	%
Allowance for credit losses		$      2,191			$      2,129			3			$      1,975			11
Allowance for credit losses as % of loans outstanding		1.62	%		1.59	%					1.49	%
For the period
Provision for credit losses		$         200			$         225			-11			$         120			67
Net charge-offs		138			148			-7			70			97
Net charge-offs as % of average loans (annualized)		.42	%		.44	%					.22	%

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

 

M&T recorded a provision for credit losses of $200 million in the first quarter of 2024 and $225 million in the immediately preceding quarter, compared with $120 million in the first quarter of 2023. The comparatively higher provisions for credit losses in the most recent two quarters as compared with the first quarter of 2023 reflect declines in commercial real estate values and higher interest rates contributing to a deterioration in the performance of loans to commercial borrowers, including nonautomotive dealers and healthcare facilities, as well as growth in certain sectors of M&T's commercial and industrial and consumer loan portfolios. Net charge-offs totaled $138 million in 2024's first quarter as compared with $148 million in 2023's final quarter and $70 million in the year-earlier quarter. The lower level of net charge-offs in the first quarter of 2024 as compared with the preceding quarter included a decline in commercial real estate loan net charge-offs, partially offset by an increase in net charge-offs of commercial and industrial and consumer loans. As compared with year-earlier first quarter, the recent quarter net charge-offs reflect higher levels of commercial and industrial and consumer loan net charge-offs.

Nonaccrual loans were $2.3 billion at March 31, 2024, $136 million higher than December 31, 2023 but $255 million lower than March 31, 2023. The higher level of nonaccrual loans at the recent quarter end as compared with the immediately preceding quarter end was largely attributable to an increase in commercial and industrial nonaccrual loans partially offset by a decrease in commercial real estate nonaccrual loans. The decrease in nonaccrual loans at March 31, 2024 as compared with year-earlier quarter was predominantly due to lower levels of commercial real estate nonaccrual loans, including net charge-offs, and residential real estate nonaccrual loans, partially offset by a rise in commercial and industrial nonaccrual loans.

Noninterest Income
								Change 1Q24 vs.						Change 1Q24 vs.
(Dollars in millions)		1Q24			4Q23			4Q23			1Q23			1Q23
Mortgage banking revenues		$            104			$            112			-7	%		$               85			23	%
Service charges on deposit accounts		124			121			2			113			9
Trust income		160			159			1			194			-17
Brokerage services income		29			26			10			24			20
Trading account and non-hedging derivative gains		9			11			-19			12			-21
Gain (loss) on bank investment securities		2			4			-35			—			—
Other revenues from operations		152			145			4			159			-5
Total		$            580			$            578			—			$            587			-1

 

Noninterest income in the first quarter of 2024 was largely unchanged from 2023's fourth quarter.

• Other revenues from operations increased $7 million resulting from a $25 million distribution from Bayview Lending Group LLC ("BLG") received in the first quarter of 2024 partially offset by declines in letter of credit and other credit-related fees, lower income earned from bank owned life insurance and a decline in merchant discount and credit card fees.
• Mortgage banking revenues decreased $8 million reflecting a decline in gains on sale of commercial mortgage loans as a result of decreased origination volume, partially offset by higher residential mortgage banking revenues.

Noninterest income declined $7 million, or 1%, as compared with the year-earlier first quarter.

• Trust income decreased $34 million reflecting lower revenues associated with the Company's Collective Investment Trust ("CIT") business of approximately $45 million following its sale in April 2023, partially offset by $11 million of higher revenues mainly attributable to higher sales and fees from the Company's global capital markets business.
• Other revenues from operations declined $7 million reflecting lower gains on the sale of leased equipment.
• Mortgage banking revenues rose $19 million due to higher servicing income related to the bulk purchase of residential mortgage loan servicing rights at the end of the first quarter of 2023.
• Service charges on deposit accounts increased $11 million predominantly due to a rise in commercial service charges.
• Brokerage services income increased $5 million due to higher annuity sales.

Noninterest Expense
								Change 1Q24 vs.						Change 1Q24 vs.
(Dollars in millions)		1Q24			4Q23			4Q23			1Q23			1Q23
Salaries and employee benefits		$          833			$          724			15	%		$          808			3	%
Equipment and net occupancy		129			134			-4			127			2
Outside data processing and software		120			114			5			106			13
Professional and other services		85			99			-13			125			-31
FDIC assessments		60			228			-74			30			101
Advertising and marketing		20			26			-21			31			-35
Amortization of core deposit and other intangible assets		15			15			—			17			-13
Other costs of operations		134			110			21			115			16
Total		$       1,396			$       1,450			-4			$       1,359			3

 

Noninterest expense aggregated $1.40 billion in the recent quarter, down from $1.45 billion in the fourth quarter of 2023.

• FDIC assessments reflect a $197 million estimated special assessment in the fourth quarter of 2023 and $29 million of estimated incremental special assessment expense recorded in the first quarter of 2024 for the FDIC's updated loss estimates associated with certain failed banks.
• Professional and other services expenses decreased $14 million reflecting the timing and level of consulting and legal-related fees.
• Salaries and employee benefits expense increased $109 million reflecting annual merit increases and $99 million of seasonally higher stock-based compensation, payroll-related taxes and other employee benefits expense.
• Other costs of operations increased $24 million reflecting higher costs associated with the Company's supplemental executive retirement savings plan, losses on lease terminations related to certain vacated properties and incremental charitable contributions as compared with the fourth quarter of 2023.

Noninterest expense increased $37 million from the first quarter of 2023.

• FDIC assessments increased $30 million reflecting the $29 million of estimated incremental special assessment expense recorded in the first quarter of 2024.
• Salaries and employee benefits expenses increased $25 million reflecting higher salaries expense due to annual merit and other increases and a rise in incentive compensation, partially offset by lower staffing levels.
• Other costs of operations increased $19 million as a result of higher amortization of capitalized servicing assets predominantly due to the bulk purchase of residential mortgage loan servicing rights at the end of the first quarter of 2023.
• Outside data processing and software increased $14 million due to higher software licensing and maintenance fees.
• Professional and other services expense declined $40 million reflecting lower sub-advisory fees as a result of the sale of the CIT business.
• Advertising and marketing expense decreased $11 million reflecting a general reduction in those related activities.

Income Taxes

The Company's effective tax rate was 20.0% in the first quarter of 2024, compared with 22.9% and 24.2% in the fourth quarter of 2023 and first quarter of 2023, respectively. The first quarter of 2024 income tax expense reflects a net discrete tax benefit related to the resolution of a tax matter inherited from the acquisition of People's United Financial, Inc.

Capital
		1Q24				4Q23				1Q23
CET1		11.07	%		(1)	10.98	%			10.16	%
Tier 1 capital		12.37			(1)	12.29				11.48
Total capital		14.03			(1)	13.99				13.28
Tangible capital – common		8.03				8.20				7.58

____________________
(1)	March 31, 2024 capital ratios are estimated.

 

M&T's capital ratios remained well above the minimum set forth by regulatory requirements. Cash dividends declared on M&T's common and preferred stock totaled $219 million and $25 million, respectively, for the quarter ended March 31, 2024. M&T did not repurchase any shares of its common stock in the first quarter of 2024 or the fourth quarter of 2023. In the first quarter of 2023, M&T repurchased 3,838,157 shares of its common stock in accordance with its capital plan for a total cost, including the share repurchase excise tax, of $600 million.

The CET1 capital ratio for M&T was estimated at 11.07% as of March 31, 2024. M&T's total risk-weighted assets at March 31, 2024 are estimated to be $155 billion.

Conference Call

Investors will have an opportunity to listen to M&T's conference call to discuss first quarter financial results today at 8:00 a.m. Eastern Time. Those wishing to participate in the call may dial (800) 347-7315. International participants, using any applicable international calling codes, may dial (785) 424-1755. Callers should reference M&T Bank Corporation or the conference ID #MTBQ124. 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 22, 2024 by calling (800) 839-2385, or (402) 220-7203 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, on M&T's business, financial condition, liquidity and results of operations may constitute forward-looking statements. Such statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond M&T's control.

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

While there can be no assurance that any list of risks and uncertainties is complete, important factors that could cause actual outcomes and results to differ materially from those contemplated by forward-looking statements include the following, without limitation: economic conditions and growth rates, including inflation and market volatility; events and developments in the financial services industry, including industry conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, loan concentrations by type and industry, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; levels of client deposits; ability to contain costs and expenses; changes in M&T's credit ratings; the impact of the People's United Financial, Inc. acquisition; domestic or international political developments and other geopolitical events, including international conflicts and hostilities; changes and trends in the securities markets; common shares outstanding and 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; federal, state or local legislation and/or regulations affecting the financial services industry, 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; political conditions, either nationally or in the states in which M&T and its subsidiaries do business; 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; 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; 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.

These are representative of the factors that could affect the outcome of the forward-looking statements. In addition, as noted, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, and other factors.

M&T provides further detail regarding these risks and uncertainties in its Form 10-K for the year ended December 31, 2023, 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 M&T assumes no duty and does not undertake to update forward-looking statements.

Financial Highlights

 

		Three months ended
		March 31,
(Dollars in millions, except per share, shares in thousands)		2024			2023			Change
Performance
Net income		$        531			$        702			-24	%
Net income available to common shareholders		505			676			-25
Per common share:
Basic earnings		3.04			4.03			-25
Diluted earnings		3.02			4.01			-25
Cash dividends		1.30			1.30			—
Common shares outstanding:
Average - diluted (1)		167,084			168,410			-1
Period end (2)		166,724			165,865			1
Return on (annualized):
Average total assets		1.01	%		1.40	%
Average common shareholders' equity		8.14			11.74
Taxable-equivalent net interest income		$      1,692			$      1,832			-8
Yield on average earning assets		5.74	%		5.16	%
Cost of interest-bearing liabilities		3.26			1.86
Net interest spread		2.48			3.30
Contribution of interest-free funds		1.04			.74
Net interest margin		3.52			4.04
Net charge-offs to average total net loans (annualized)		.42			.22
Net operating results (3)
Net operating income		$        543			$        715			-24
Diluted net operating earnings per common share		3.09			4.09			-24
Return on (annualized):
Average tangible assets		1.08	%		1.49	%
Average tangible common equity		12.67			19.00
Efficiency ratio		60.8			55.5
		At March 31,
Loan quality		2024			2023			Change
Nonaccrual loans		$      2,302			$      2,557			-10	%
Real estate and other foreclosed assets		38			44			-13
Total nonperforming assets		$      2,340			$      2,601			-10
Accruing loans past due 90 days or more (4)		$        297			$        407			-27
Government guaranteed loans included in totals above:
Nonaccrual loans		$          62			$          42			47
Accruing loans past due 90 days or more		244			306			-20
Nonaccrual loans to total loans		1.71	%		1.92	%
Allowance for credit losses to total loans		1.62			1.49

____________________
(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 appears 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,
(Dollars in millions, except per share, shares in thousands)	2024			2023			2023			2023			2023
Performance
Net income	$            531			$            482			$            690			$            867			$            702
Net income available to common shareholders	505			457			664			841			676
Per common share:
Basic earnings	3.04			2.75			4.00			5.07			4.03
Diluted earnings	3.02			2.74			3.98			5.05			4.01
Cash dividends	1.30			1.30			1.30			1.30			1.30
Common shares outstanding:
Average - diluted (1)	167,084			166,731			166,570			166,320			168,410
Period end (2)	166,724			166,149			165,970			165,894			165,865
Return on (annualized):
Average total assets	1.01	%		.92	%		1.33	%		1.70	%		1.40	%
Average common shareholders' equity	8.14			7.41			10.99			14.27			11.74
Taxable-equivalent net interest income	$          1,692			$          1,735			$          1,790			$          1,813			$          1,832
Yield on average earning assets	5.74	%		5.73	%		5.62	%		5.46	%		5.16	%
Cost of interest-bearing liabilities	3.26			3.17			2.83			2.43			1.86
Net interest spread	2.48			2.56			2.79			3.03			3.30
Contribution of interest-free funds	1.04			1.05			1.00			.88			.74
Net interest margin	3.52			3.61			3.79			3.91			4.04
Net charge-offs to average total net loans (annualized)	.42			.44			.29			.38			.22
Net operating results (3)
Net operating income	$            543			$            494			$            702			$            879			$            715
Diluted net operating earnings per common share	3.09			2.81			4.05			5.12			4.09
Return on (annualized):
Average tangible assets	1.08	%		.98	%		1.41	%		1.80	%		1.49	%
Average tangible common equity	12.67			11.70			17.41			22.73			19.00
Efficiency ratio	60.8			62.1			53.7			48.9			55.5
	March 31,			December 31,			September 30,			June 30,			March 31,
Loan quality	2024			2023			2023			2023			2023
Nonaccrual loans	$          2,302			$          2,166			$          2,342			$          2,435			$          2,557
Real estate and other foreclosed assets	38			39			37			43			44
Total nonperforming assets	$          2,340			$          2,205			$          2,379			$          2,478			$          2,601
Accruing loans past due 90 days or more (4)	$            297			$            339			$            354			$            380			$            407
Government guaranteed loans included in totals above:
Nonaccrual loans	$               62			$               53			$               40			$               40			$               42
Accruing loans past due 90 days or more	244			298			269			294			306
Nonaccrual loans to total loans	1.71	%		1.62	%		1.77	%		1.83	%		1.92	%
Allowance for credit losses to total loans	1.62			1.59			1.55			1.50			1.49

____________________
(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 appears herein.
(4)	Predominantly residential real estate loans.

 

Condensed Consolidated Statement of Income
	Three months ended
	March 31,
(Dollars in millions)	2024			2023			Change
Interest income	$     2,745			$     2,327			18	%
Interest expense	1,065			509			109
Net interest income	1,680			1,818			-8
Provision for credit losses	200			120			67
Net interest income after provision for credit losses	1,480			1,698			-13
Other income
Mortgage banking revenues	104			85			23
Service charges on deposit accounts	124			113			9
Trust income	160			194			-17
Brokerage services income	29			24			20
Trading account and non-hedging      derivative gains	9			12			-21
Gain (loss) on bank investment securities	2			—			—
Other revenues from operations	152			159			-5
Total other income	580			587			-1
Other expense
Salaries and employee benefits	833			808			3
Equipment and net occupancy	129			127			2
Outside data processing and software	120			106			13
Professional and other services	85			125			-31
FDIC assessments	60			30			101
Advertising and marketing	20			31			-35
Amortization of core deposit and other      intangible assets	15			17			-13
Other costs of operations	134			115			16
Total other expense	1,396			1,359			3
Income before income taxes	664			926			-28
Applicable income taxes	133			224			-41
Net income	$        531			$        702			-24	%

 

Condensed Consolidated Statement of Income, Five Quarter Trend
		Three months ended
		March 31,		December 31,		September 30,		June 30,		March 31,
(Dollars in millions)		2024		2023		2023		2023		2023
Interest income		$         2,745		$         2,740		$         2,641		$         2,516		$         2,327
Interest expense		1,065		1,018		866		717		509
Net interest income		1,680		1,722		1,775		1,799		1,818
Provision for credit losses		200		225		150		150		120
Net interest income after provision for credit losses		1,480		1,497		1,625		1,649		1,698
Other income
Mortgage banking revenues		104		112		105		107		85
Service charges on deposit accounts		124		121		121		119		113
Trust income		160		159		155		172		194
Brokerage services income		29		26		27		25		24
Trading account and non-hedging      derivative gains		9		11		9		17		12
Gain (loss) on bank investment securities		2		4		—		1		—
Other revenues from operations		152		145		143		362		159
Total other income		580		578		560		803		587
Other expense
Salaries and employee benefits		833		724		727		738		808
Equipment and net occupancy		129		134		131		129		127
Outside data processing and software		120		114		111		106		106
Professional and other services		85		99		89		100		125
FDIC assessments		60		228		29		28		30
Advertising and marketing		20		26		23		28		31
Amortization of core deposit and other      intangible assets		15		15		15		15		17
Other costs of operations		134		110		153		149		115
Total other expense		1,396		1,450		1,278		1,293		1,359
Income before income taxes		664		625		907		1,159		926
Applicable income taxes		133		143		217		292		224
Net income		$            531		$            482		$            690		$            867		$            702

  

Condensed Consolidated Balance Sheet
	March 31,
(Dollars in millions)	2024		2023		Change
ASSETS
Cash and due from banks	$         1,695		$         1,818		-7	%
Interest-bearing deposits at banks	32,144		22,306		44
Trading account	99		165		-40
Investment securities	28,496		28,443		—
Loans and leases, net of unearned discount:
Commercial and industrial	57,897		53,934		7
Real estate - commercial	32,416		34,897		-7
Real estate - consumer	23,076		23,790		-3
Consumer	21,584		20,317		6
Total loans and leases, net	134,973		132,938		2
Less: allowance for credit losses	2,191		1,975		11
Net loans and leases	132,782		130,963		1
Goodwill	8,465		8,490		—
Core deposit and other intangible assets	132		192		-31
Other assets	11,324		10,579		7
Total assets	$     215,137		$     202,956		6	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$       50,578		$       59,955		-16	%
Interest-bearing deposits	116,618		99,120		18
Total deposits	167,196		159,075		5
Short-term borrowings	4,795		6,995		-31
Accrued interest and other liabilities	4,527		4,046		12
Long-term borrowings	11,450		7,463		53
Total liabilities	187,968		177,579		6
Shareholders' equity:
Preferred	2,011		2,011		—
Common	25,158		23,366		8
Total shareholders' equity	27,169		25,377		7
Total liabilities and shareholders' equity	$     215,137		$     202,956		6	%

 

Condensed Consolidated Balance Sheet, Five Quarter Trend
	March 31,		December 31,		September 30,		June 30,		March 31,
(Dollars in millions)	2024		2023		2023		2023		2023
ASSETS
Cash and due from banks	$         1,695		$         1,731		$         1,769		$         1,848		$         1,818
Interest-bearing deposits at banks	32,144		28,069		30,114		27,107		22,306
Trading account	99		106		137		137		165
Investment securities	28,496		26,897		27,336		27,917		28,443
Loans and leases, net of unearned discount:
Commercial and industrial	57,897		57,010		54,891		54,699		53,934
Real estate - commercial	32,416		33,003		33,741		34,634		34,897
Real estate - consumer	23,076		23,264		23,448		23,762		23,790
Consumer	21,584		20,791		20,275		20,249		20,317
Total loans and leases, net	134,973		134,068		132,355		133,344		132,938
Less: allowance for credit losses	2,191		2,129		2,052		1,998		1,975
Net loans and leases	132,782		131,939		130,303		131,346		130,963
Goodwill	8,465		8,465		8,465		8,465		8,490
Core deposit and other intangible assets	132		147		162		177		192
Other assets	11,324		10,910		10,838		10,675		10,579
Total assets	$     215,137		$     208,264		$     209,124		$     207,672		$     202,956
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$       50,578		$       49,294		$       53,787		$       54,938		$       59,955
Interest-bearing deposits	116,618		113,980		110,341		107,120		99,120
Total deposits	167,196		163,274		164,128		162,058		159,075
Short-term borrowings	4,795		5,316		6,731		7,908		6,995
Accrued interest and other liabilities	4,527		4,516		4,946		4,488		4,046
Long-term borrowings	11,450		8,201		7,123		7,417		7,463
Total liabilities	187,968		181,307		182,928		181,871		177,579
Shareholders' equity:
Preferred	2,011		2,011		2,011		2,011		2,011
Common	25,158		24,946		24,185		23,790		23,366
Total shareholders' equity	27,169		26,957		26,196		25,801		25,377
Total liabilities and shareholders' equity	$     215,137		$     208,264		$     209,124		$     207,672		$     202,956

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates
	Three months ended															Change in balance
	March 31,					December 31,					March 31,					March 31, 2024 from
	2024					2023					2023					December 31,			March 31,
(Dollars in millions)	Balance		Rate			Balance		Rate			Balance		Rate			2023			2023
ASSETS
Interest-bearing deposits at banks	$  30,647		5.49	%		$  30,153		5.48	%		$  24,312		4.64	%		2	%		26	%
Federal funds sold and agreements to      resell securities	—		5.80			—		5.79			—		4.89			-78			-92
Trading account	105		3.42			123		3.80			123		2.32			-15			-14
Investment securities	28,587		3.30			27,490		3.13			27,622		3.00			4			3
Loans and leases, net of unearned discount:
Commercial and industrial	56,821		6.99			55,420		7.01			52,510		6.30			3			8
Real estate - commercial	32,696		6.36			33,455		6.54			35,245		5.89			-2			-7
Real estate - consumer	23,136		4.28			23,339		4.25			23,770		3.96			-1			-3
Consumer	21,143		6.54			20,556		6.42			20,487		5.67			3			3
Total loans and leases, net	133,796		6.32			132,770		6.33			132,012		5.70			1			1
Total earning assets	193,135		5.74			190,536		5.73			184,069		5.16			1			5
Goodwill	8,465					8,465					8,490					—			—
Core deposit and other intangible assets	140					154					201					-10			-30
Other assets	9,738					9,597					9,839					1			-1
Total assets	$  211,478					$  208,752					$  202,599					1	%		4	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Savings and interest-checking deposits	$  94,867		2.61			$  93,365		2.58			$  88,053		1.28			2	%		8	%
Time deposits	20,583		4.41			21,224		4.30			11,630		3.11			-3			77
Total interest-bearing deposits	115,450		2.93			114,589		2.90			99,683		1.49			1			16
Short-term borrowings	6,228		5.42			5,156		5.27			4,994		4.69			21			25
Long-term borrowings	9,773		5.81			7,901		5.70			6,511		5.27			24			50
Total interest-bearing liabilities	131,451		3.26			127,646		3.17			111,188		1.86			3			18
Noninterest-bearing deposits	48,615					50,124					61,854					-3			-21
Other liabilities	4,393					4,482					4,180					-2			5
Total liabilities	184,459					182,252					177,222					1			4
Shareholders' equity	27,019					26,500					25,377					2			6
Total liabilities and shareholders' equity	$  211,478					$  208,752					$  202,599					1	%		4	%
Net interest spread			2.48					2.56					3.30
Contribution of interest-free funds			1.04					1.05					.74
Net interest margin			3.52	%				3.61	%				4.04	%

  

Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
		Three months ended
		March 31,			December 31,			September 30,			June 30,			March 31,
		2024			2023			2023			2023			2023
(Dollars in millions, except per share)
Income statement data
Net income
Net income		$                     531			$                     482			$                     690			$                     867			$                     702
Amortization of core deposit and other intangible assets (1)		12			12			12			12			13
Net operating income		$                     543			$                     494			$                     702			$                     879			$                     715
Earnings per common share
Diluted earnings per common share		$                    3.02			$                    2.74			$                    3.98			$                    5.05			$                    4.01
Amortization of core deposit and other intangible assets (1)		.07			.07			.07			.07			.08
Diluted net operating earnings per common share		$                    3.09			$                    2.81			$                    4.05			$                    5.12			$                    4.09
Other expense
Other expense		$                  1,396			$                  1,450			$                  1,278			$                  1,293			$                  1,359
Amortization of core deposit and other intangible assets		(15)			(15)			(15)			(15)			(17)
Noninterest operating expense		$                  1,381			$                  1,435			$                  1,263			$                  1,278			$                  1,342
Efficiency ratio
Noninterest operating expense (numerator)		$                  1,381			$                  1,435			$                  1,263			$                  1,278			$                  1,342
Taxable-equivalent net interest income		$                  1,692			$                  1,735			$                  1,790			$                  1,813			$                  1,832
Other income		580			578			560			803			587
Less:  Gain (loss) on bank investment securities		2			4			—			1			—
Denominator		$                  2,270			$                  2,309			$                  2,350			$                  2,615			$                  2,419
Efficiency ratio		60.8	%		62.1	%		53.7	%		48.9	%		55.5	%
Balance sheet data
Average assets
Average assets		$             211,478			$             208,752			$             205,791			$             204,376			$             202,599
Goodwill		(8,465)			(8,465)			(8,465)			(8,473)			(8,490)
Core deposit and other intangible assets		(140)			(154)			(170)			(185)			(201)
Deferred taxes		33			39			43			46			49
Average tangible assets		$             202,906			$             200,172			$             197,199			$             195,764			$             193,957
Average common equity
Average total equity		$               27,019			$               26,500			$               26,020			$               25,685			$               25,377
Preferred stock		(2,011)			(2,011)			(2,011)			(2,011)			(2,011)
Average common equity		25,008			24,489			24,009			23,674			23,366
Goodwill		(8,465)			(8,465)			(8,465)			(8,473)			(8,490)
Core deposit and other intangible assets		(140)			(154)			(170)			(185)			(201)
Deferred taxes		33			39			43			46			49
Average tangible common equity		$               16,436			$               15,909			$               15,417			$               15,062			$               14,724
At end of quarter
Total assets
Total assets		$             215,137			$             208,264			$             209,124			$             207,672			$             202,956
Goodwill		(8,465)			(8,465)			(8,465)			(8,465)			(8,490)
Core deposit and other intangible assets		(132)			(147)			(162)			(177)			(192)
Deferred taxes		34			37			41			44			47
Total tangible assets		$             206,574			$             199,689			$             200,538			$             199,074			$             194,321
Total common equity
Total equity		$               27,169			$               26,957			$               26,197			$               25,801			$               25,377
Preferred stock		(2,011)			(2,011)			(2,011)			(2,011)			(2,011)
Common equity		25,158			24,946			24,186			23,790			23,366
Goodwill		(8,465)			(8,465)			(8,465)			(8,465)			(8,490)
Core deposit and other intangible assets		(132)			(147)			(162)			(177)			(192)
Deferred taxes		34			37			41			44			47
Total tangible common equity		$               16,595			$               16,371			$               15,600			$               15,192			$               14,731

____________________
(1)	After any related tax effect.

 

 

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SOURCE M&T Bank Corporation

FAQ

What was M&T Bank 's net income for the first quarter of 2024?

M&T Bank reported a quarterly net income of $531 million for the first quarter of 2024.

What was the CET1 capital ratio for M&T Bank at the end of the first quarter of 2024?

The CET1 capital ratio for M&T Bank was 11.07% at the end of the first quarter of 2024.

What was the net interest margin for M&T Bank in the recent quarter?

The net interest margin for M&T Bank narrowed to 3.52% in the recent quarter.

How did M&T Bank manage its expenses in the first quarter of 2024?

M&T Bank prudently managed its expenses in the first quarter of 2024.

What was the provision for credit losses for M&T Bank in the recent quarter?

The provision for credit losses for M&T Bank reflected elevated levels of criticized loans in the recent quarter.