M&T Bank Corporation (NYSE:MTB) announces third quarter 2023 results

Rhea-AI Summary

M&T Bank Corporation reports net income of $690 million in 3Q23

Positive

• Net income of $690 million, an increase from $647 million in 3Q22
• Diluted earnings per common share of $3.98
• CET1 capital ratio increased to 10.94% at September 30, 2023
• Net interest margin of 3.79%
• Nonaccrual loans improved to 1.77% of loans outstanding
• Average deposits increased 2% from 2Q23

Negative

• Net interest income decreased to $1.79 billion in 3Q23 from $1.81 billion in 2Q23
• Noninterest income decreased by 30% in 3Q23 compared to 2Q23
• Noninterest expense remained relatively unchanged at $1.28 billion
• Trading account and non-hedging derivative gains decreased by 44%

BUFFALO, N.Y., Oct. 18, 2023 /PRNewswire/ -- M&T Bank Corporation ("M&T" or "the Company") reports net income of $690 million or $3.98 of diluted earnings per common share.

(Dollars in millions, except per share data)		3Q23				2Q23				3Q22
Earnings Highlights
Net interest income		$	1,775			$	1,799			$	1,679
Taxable-equivalent adjustment			15				14				12
Net interest income - taxable-equivalent			1,790				1,813				1,691
Provision for credit losses			150				150				115
Noninterest income			560				803				563
Noninterest expense			1,278				1,293				1,279
Net income			690				867				647
Net income available to common shareholders - diluted			664				841				621
Diluted earnings per common share			3.98				5.05				3.53
Return on average assets - annualized			1.33	%			1.70	%			1.28	%
Return on average common shareholders' equity - annualized			10.99	%			14.27	%			10.43	%
Average Balance Sheet
Total assets		$	205,791			$	204,376			$	201,131
Interest-bearing deposits at banks			26,657				23,617				30,752
Investment securities			27,993				28,623				23,945
Loans and leases, net of unearned discount			132,617				133,545				127,525
Deposits			162,688				159,399				167,271
Borrowings			12,585				15,055				4,194
Selected Ratios (Amounts expressed as a percent, except per share data)
Net interest margin			3.79	%			3.91	%			3.68	%
Efficiency ratio			53.7				48.9				53.6
Net charge-offs to average total loans - annualized			.29				.38				.20
Allowance for credit losses to total loans			1.55				1.50				1.46
Nonaccrual loans to total loans			1.77				1.83				1.89
Common equity Tier 1 ("CET1") capital ratio (1)			10.94				10.59				10.75
Common shareholders' equity per share		$	145.72			$	143.41			$	134.45

(1)	September 30, 2023 CET1 capital ratio is estimated.

Financial Highlights

• Capital position remains strong with the CET1 capital ratio increasing 35 basis points to an estimated 10.94% at September 30, 2023, compared with 10.59% at June 30, 2023.
• Net interest margin of 3.79% in the recent quarter narrowed from 3.91% in the second quarter of 2023 as increases to the rates paid on interest-bearing deposits outpaced the rise in yields on interest-earning assets.
• Average loans and leases in the third quarter of 2023 decreased 1% from the previous 2023 quarter reflecting a $714 million decline in average commercial real estate loan balances.
• The level of nonaccrual loans improved to 1.77% of loans outstanding at September 30, 2023, compared with 1.83% at June 30, 2023.
• Recent quarter net charge-offs of $96 million, or 29 basis points, were below the Company's long-term average net charge-off rate.
• Average deposits increased 2% from the second quarter of 2023 reflecting a higher demand for interest-bearing products.

Chief Financial Officer Commentary

"The third quarter results reflect the stability of M&T's diverse banking franchise and the ability to consistently generate capital for our shareholders while continuing to invest in the systems and resources needed to best serve our customers. Our customer deposit balances increased in the recent quarter as we continue to build upon our strong liquidity position. Our credit metrics reflect a decline in nonaccrual loans and net charge-offs that remain below M&T's long-term average. The comparative strength of our financial position in the industry will continue to enable us to improve the communities in which we serve and the lives of our customers. Thank you to our employees for their commitment to delivering for our customers each and every day."

- 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 3Q23 vs.								Change 3Q23 vs.
($ in millions, except per share data)		3Q23				2Q23				2Q23				3Q22				3Q22
Net operating income		$	702			$	879				-20	%		$	700				—
Diluted net operating earnings per common share		$	4.05			$	5.12				-21	%		$	3.83				6	%
Annualized return on average tangible assets			1.41	%			1.80	%							1.44	%
Annualized return on average tangible common equity			17.41	%			22.73	%							17.89	%
Efficiency ratio			53.7	%			48.9	%							53.6	%
Tangible equity per common share		$	93.99			$	91.58				3	%		$	84.28				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.

Merger-related expenses associated with the People's United Financial, Inc. ("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 and travel costs.
• An initial provision for credit losses of $242 million in the second quarter of 2022 on loans not deemed to be purchased credit deteriorated ("PCD") on the April 1, 2022 acquisition date of People's United.

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 nine months ended September 30, 2023.

Taxable-equivalent Net Interest Income
										Change 3Q23 vs.								Change 3Q23 vs.
($ in millions)		3Q23				2Q23				2Q23				3Q22				3Q22
Average earning assets		$	187,403			$	185,936				1	%		$	182,382				3	%
Average interest-bearing liabilities		$	121,388			$	118,274				3	%		$	98,604				23	%
Net interest income - taxable-equivalent		$	1,790			$	1,813				-1	%		$	1,691				6	%
Yield on average earning assets			5.62	%			5.46	%							3.90	%
Cost of interest-bearing liabilities			2.83	%			2.43	%							0.41	%
Net interest spread			2.79	%			3.03	%							3.49	%
Net interest margin			3.79	%			3.91	%							3.68	%

Taxable-equivalent net interest income decreased $23 million, or 1%, from the second quarter of 2023.

• Average interest-bearing deposits increased $5.6 billion and the rates paid on such deposits rose 52 basis points.
• Average short-term borrowings declined $2.2 billion.
• The yield on average outstanding loans and leases increased 17 basis points.
• Average interest-bearing deposits at banks increased $3.0 billion.

Taxable-equivalent net interest income increased $99 million, or 6%, compared with the year-earlier quarter.

• Yields earned on average loans and leases and interest-bearing deposits at banks increased 164 basis points and 317 basis points, respectively.
• Average loans and leases increased $5.1 billion.
• Rates paid on interest-bearing deposits increased 225 basis points.
• Average borrowings increased $8.4 billion.

 

Provision for Credit Losses/Asset Quality
										Change 3Q23 vs.								Change 3Q23 vs.
($ in millions)		3Q23				2Q23				2Q23				3Q22				3Q22
At end of quarter
Nonaccrual loans		$	2,342			$	2,435				-4	%		$	2,429				-4	%
Real estate and other foreclosed assets			37				43				-13	%			37				—
Total nonperforming assets		$	2,379			$	2,478				-4	%		$	2,466				-4	%
Accruing loans past due 90 days or more (1)		$	354			$	380				-7	%		$	477				-26	%
Nonaccrual loans as % of loans outstanding			1.77	%			1.83	%							1.89	%
Allowance for credit losses		$	2,052			$	1,998				3	%		$	1,876				9	%
Allowance for credit losses as % of loans outstanding			1.55	%			1.50	%							1.46	%
For the period
Provision for credit losses		$	150			$	150				—			$	115				30	%
Net charge-offs		$	96			$	127				-24	%		$	63				52	%
Net charge-offs as % of average loans (annualized)			.29	%			.38	%							.20	%

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

M&T recorded a provision for credit losses of $150 million in each of the third and second quarters of 2023 compared with $115 million in the third quarter of 2022. The comparatively higher provisions for credit losses in the most recent two quarters compared with the third quarter of 2022 reflect a softening of commercial real estate values. Net charge-offs totaled $96 million in 2023's third quarter, compared with $127 million in 2023's second quarter and $63 million in the year-earlier quarter reflective of variability in the timing and amount of commercial real estate charge-offs.

Nonaccrual loans were $2.34 billion at September 30, 2023, $94 million lower than June 30, 2023 and $87 million lower than September 30, 2022. Those declines are reflective of lower levels of hospitality-related commercial real estate nonaccrual loans.

Noninterest Income
										Change 3Q23 vs.								Change 3Q23 vs.
($ in millions)		3Q23				2Q23				2Q23				3Q22				3Q22
Mortgage banking revenues		$	105			$	107				-2	%		$	83				26	%
Service charges on deposit accounts			121				119				2	%			115				5	%
Trust income			155				172				-10	%			187				-17	%
Brokerage services income			27				25				7	%			21				28	%
Trading account and non-hedging derivative gains			9				17				-44	%			5				85	%
Gain (loss) on bank investment securities			—				1				—				(1)				—
Other revenues from operations			143				362				-61	%			153				-7	%
Total		$	560			$	803				-30	%		$	563				-1	%

Noninterest income in the third quarter of 2023 decreased $244 million, or 30%, as compared with 2023's second quarter.

• Other revenues from operations decreased $219 million reflecting a $225 million gain on sale of the Company's Collective Investment Trust ("CIT") business in the second quarter of 2023.
• Trust income declined $17 million, predominantly reflective of one month of revenues associated with the CIT business recognized prior to its sale in the second quarter of 2023.
• Trading account and non-hedging derivative gains decreased $7 million from the second quarter due to a decline in customer interest rate swap revenues and market conditions.

Noninterest income decreased $3 million, or less than 1%, as compared with the year-earlier third quarter.

• Trust income decreased $31 million reflecting lower revenues associated with the CIT business as a result of its sale in April 2023.
• Other revenues from operations declined $11 million due to lower insurance income reflecting the sale of M&T Insurance Agency in December 2022.
• Mortgage banking revenues increased $21 million due to higher servicing income related to the bulk purchase of residential mortgage loan servicing rights in the first quarter of 2023 and higher gains on sales of residential mortgage loans. The Company returned to originating for sale the majority of its newly originated residential mortgage loans in the first quarter of 2023.

 

Noninterest Expense
										Change 3Q23 vs.								Change 3Q23 vs.
($ in millions)		3Q23				2Q23				2Q23				3Q22				3Q22
Salaries and employee benefits		$	727			$	738				-1	%		$	736				-1	%
Equipment and net occupancy			131				129				2	%			127				3	%
Outside data processing and software			111				106				4	%			95				16	%
FDIC assessments			29				28				5	%			28				4	%
Advertising and marketing			23				28				-19	%			21				7	%
Printing, postage and supplies			14				14				-2	%			15				-5	%
Amortization of core deposit and other intangible assets			15				15				—				18				-19	%
Other costs of operations			228				235				-3	%			239				-4	%
Total		$	1,278			$	1,293				-1	%		$	1,279				—

Noninterest expense aggregated $1.28 billion in the recent quarter, down from $1.29 billion in the second quarter of 2023. Excluding the amortization of core deposit and other intangible assets considered to be nonoperating in nature, noninterest operating expenses decreased $15 million, or 1%, to $1.26 billion in the recent quarter from $1.28 billion in the immediately preceding quarter.

• Salaries and employee benefits expense decreased $11 million reflecting lower average headcount and lower expenses for contracted resources and overtime.
• Other costs of operations decreased $6 million reflecting lower sub-advisory fees as a result of the sale of the CIT business in April 2023 and a decline in legal-related expenses, partially offset by losses associated with certain retail banking activities.

Noninterest expense decreased $2 million from the third quarter of 2022. Noninterest operating expenses aggregated $1.21 billion in the third quarter of 2022 after excluding $53 million of merger-related expenses associated with the People's United acquisition and $18 million of amortization of core deposit and other intangible assets. Noninterest operating expenses increased $55 million, or 5%, from the prior year third quarter inclusive of the following:

• Other costs of operations increased $23 million resulting from the amortization of the bulk purchase of residential mortgage loan servicing rights purchased in March 2023 and losses associated with certain retail banking activities, partially offset by lower professional and other outside services expenses reflecting lower sub-advisory fees as a result of the sale of the CIT business.
• Outside data processing and software costs increased $18 million, or 19%, primarily due to higher software maintenance costs, offshore processing and data processing fees.

 

Average Earning Assets
										Change 3Q23 vs.								Change 3Q23 vs.
($ in millions)		3Q23				2Q23				2Q23				3Q22				3Q22
Interest-bearing deposits at banks		$	26,657			$	23,617				13	%		$	30,752				-13	%
Federal funds sold and agreements to resell securities			—				—				—				29				-100	%
Trading account			136				151				-9	%			131				4	%
Investment securities			27,993				28,623				-2	%			23,945				17	%
Loans and leases, net of unearned discount
Commercial, financial, etc.			44,625				44,531				—				38,321				16	%
Real estate - commercial			44,230				44,944				-2	%			46,282				-4	%
Real estate - consumer			23,573				23,781				-1	%			22,962				3	%
Consumer			20,189				20,289				—				19,960				1	%
Total loans and leases, net			132,617				133,545				-1	%			127,525				4	%
Total earning assets		$	187,403			$	185,936				1	%		$	182,382				3	%

Average earning assets increased $1.5 billion, or 1%, from the second quarter of 2023.

• Average interest-bearing deposits at banks increased $3.0 billion due to increased liquidity from a rise in average deposits and a decline in average loan and investment securities balances.
• Average loans and leases decreased $928 million primarily reflective of a $714 million decline in average balances of commercial real estate loans.
• Average investment securities declined $630 million primarily due to pay downs of fixed rate mortgage-backed securities.

Average earning assets increased $5.0 billion, or 3%, from the year-earlier third quarter.

• Average loans and leases increased $5.1 billion predominantly due to higher average outstanding balances of commercial and industrial loans and leases reflecting lending activities to financial and insurance industry customers and motor vehicle and recreational finance dealers, partially offset by a $2.1 billion decline in average commercial real estate loans.
• Average investment securities increased $4.0 billion due to the purchases of additional investment securities in the fourth quarter of 2022 and the first quarter of 2023.
• Average interest-bearing deposits at banks decreased $4.1 billion reflecting lower deposits, incremental loan balances and purchases of investment securities, partially offset by higher borrowings.

 

Average Interest-bearing Liabilities
										Change 3Q23 vs.								Change 3Q23 vs.
($ in millions)		3Q23				2Q23				2Q23				3Q22				3Q22
Interest-bearing deposits
Savings and interest-checking deposits		$	89,274			$	87,210				2	%		$	89,360				—
Time deposits			19,528				16,009				22	%			5,050				287	%
Total interest-bearing deposits			108,802				103,219				5	%			94,410				15	%
Short-term borrowings			5,346				7,539				-29	%			913				485	%
Long-term borrowings			7,240				7,516				-4	%			3,281				121	%
Total interest-bearing liabilities		$	121,388			$	118,274				3	%		$	98,604				23	%

Average interest-bearing liabilities increased $3.1 billion, or 3%, from the second quarter of 2023.

• Average interest-bearing deposits increased $5.6 billion, including a $3.3 billion increase in average non-brokered deposits.
• Average borrowings decreased $2.5 billion predominantly due to lower levels of short-term borrowings from the Federal Home Loan Bank ("FHLB") of New York.

Average interest-bearing liabilities increased $22.8 billion, or 23%, from the third quarter of 2022.

• Average interest-bearing deposits increased $14.4 billion, including a $5.3 billion increase in average non-brokered deposits.
• Average borrowings increased $8.4 billion predominantly due to issuances of long-term senior notes totaling $3.5 billion in the first quarter of 2023 and increases in short-term borrowings from the FHLB of New York.

 

Capital
		3Q23				2Q23				3Q22
CET1			10.94	%	(1)		10.59	%			10.75	%
Tier 1 capital			12.27	%	(1)		11.91	%			12.13	%
Total capital			13.99	%	(1)		13.71	%			13.96	%
Tangible capital – common			7.78	%			7.63	%			7.70	%

(1)	September 30, 2023 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 $217 million and $25 million, respectively, for the quarter ended September 30, 2023. M&T did not repurchase any shares of its common stock in the third quarter of 2023.

The CET1 capital ratio for M&T was estimated at 10.94% as of September 30, 2023. M&T's total risk-weighted assets at September 30, 2023 are estimated to be $152 billion.

Capital regulations require buffers in addition to the minimum risk-based capital ratios noted above. M&T is subject to a stress capital buffer requirement that is determined through the Federal Reserve's supervisory stress tests and M&T's bank subsidiaries are subject to a 2.5% capital conservation buffer requirement. The buffer requirement must be composed entirely of CET1. In June 2023, the Federal Reserve released the results of its most recent supervisory stress tests. Based on those results, on October 1, 2023, M&T's stress capital buffer of 4.0% became effective.

M&T repurchased 3,282,449 shares of its common stock at an average cost per share of $182.79 resulting in a total cost of $600 million in 2022's third quarter. There were no share repurchases in the second or third quarters of 2023.

Conference Call

Investors will have an opportunity to listen to M&T's conference call to discuss third quarter financial results today at 10:00 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 #MTBQ323. The conference call will be webcast live through M&T's website at https://ir.mtb.com/events-presentations. A replay of the call will be available through Wednesday October 25, 2023 by calling (800) 839-5631, or (402) 220-2558 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.

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

Examples of Future Factors include: the impact of M&T's acquisition of People's United (as described in the next paragraph); events and developments in the financial services industry, including legislation, regulations and other governmental actions as well as business conditions affecting the industry and/or M&T and its subsidiaries, individually or collectively; economic conditions, including inflation and market volatility; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; regulatory supervision and oversight, including monetary policy and capital requirements; domestic or international political developments and other geopolitical events, including international conflicts; governmental and public policy changes, including tax policy; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board, regulatory agencies or legislation; increasing price, product and service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products and services; containing costs and expenses; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition, divestment and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

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

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

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

 

Financial Highlights
	Three months ended												Nine months ended
	September 30												September 30
Dollars in millions, except per share, shares in thousands	2023				2022				Change				2023				2022				Change
Performance
Net income	$	690				647				7	%		$	2,259				1,226				84	%
Net income available to common shareholders		664				621				7	%			2,180				1,152				89	%
Per common share:
Basic earnings	$	4.00				3.55				13	%		$	13.09				7.18				82	%
Diluted earnings		3.98				3.53				13	%			13.05				7.14				83	%
Cash dividends		1.30				1.20				8	%			3.90				3.60				8	%
Common shares outstanding:
Average - diluted (1)		166,570				175,682				-5	%			167,093				161,295				4	%
Period end (2)		165,970				172,900				-4	%			165,970				172,900				-4	%
Return on (annualized):
Average total assets		1.33	%			1.28	%							1.48	%			.87	%
Average common shareholders' equity		10.99	%			10.43	%							12.33	%			7.24	%
Taxable-equivalent net interest income	$	1,790				1,691				6	%		$	5,434				4,020				35	%
Yield on average earning assets		5.62	%			3.90	%							5.41	%			3.30	%
Cost of interest-bearing liabilities		2.83	%			.41	%							2.39	%			.27	%
Net interest spread		2.79	%			3.49	%							3.02	%			3.03	%
Contribution of interest-free funds		1.00	%			.19	%							.89	%			.12	%
Net interest margin		3.79	%			3.68	%							3.91	%			3.15	%
Net charge-offs to average total net loans (annualized)		.29	%			.20	%							.30	%			.14	%
Net operating results (3)
Net operating income	$	702				700				—			$	2,295				1,654				39	%
Diluted net operating earnings per common share		4.05				3.83				6	%			13.26				9.78				36	%
Return on (annualized):
Average tangible assets		1.41	%			1.44	%							1.57	%			1.23	%
Average tangible common equity		17.41	%			17.89	%							19.70	%			15.13	%
Efficiency ratio		53.7	%			53.6	%							52.6	%			58.1	%
	At September 30
Loan quality	2023				2022				Change
Nonaccrual loans	$	2,342				2,429				-4	%
Real estate and other foreclosed assets		37				37				—
Total nonperforming assets	$	2,379				2,466				-4	%
Accruing loans past due 90 days or more (4)	$	354				477				-26	%
Government guaranteed loans included in totals above:
Nonaccrual loans	$	40				45				-11	%
Accruing loans past due 90 days or more		269				423				-37	%
Nonaccrual loans to total net loans		1.77	%			1.89	%
Allowance for credit losses to total loans		1.55	%			1.46	%

(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
	September 30,				June 30,				March 31,				December 31,				September 30,
Dollars in millions, except per share, shares in thousands	2023				2023				2023				2022				2022
Performance
Net income	$	690				867				702				765				647
Net income available to common shareholders		664				841				676				739				621
Per common share:
Basic earnings	$	4.00				5.07				4.03				4.32				3.55
Diluted earnings		3.98				5.05				4.01				4.29				3.53
Cash dividends		1.30				1.30				1.30				1.20				1.20
Common shares outstanding:
Average - diluted (1)		166,570				166,320				168,410				172,149				175,682
Period end (2)		165,970				165,894				165,865				169,285				172,900
Return on (annualized):
Average total assets		1.33	%			1.70	%			1.40	%			1.53	%			1.28	%
Average common shareholders' equity		10.99	%			14.27	%			11.74	%			12.59	%			10.43	%
Taxable-equivalent net interest income	$	1,790				1,813				1,832				1,841				1,691
Yield on average earning assets		5.62	%			5.46	%			5.16	%			4.60	%			3.90	%
Cost of interest-bearing liabilities		2.83	%			2.43	%			1.86	%			.98	%			.41	%
Net interest spread		2.79	%			3.03	%			3.30	%			3.62	%			3.49	%
Contribution of interest-free funds		1.00	%			.88	%			.74	%			.44	%			.19	%
Net interest margin		3.79	%			3.91	%			4.04	%			4.06	%			3.68	%
Net charge-offs to average total net loans (annualized)		.29	%			.38	%			.22	%			.12	%			.20	%
Net operating results (3)
Net operating income	$	702				879				715				812				700
Diluted net operating earnings per common share		4.05				5.12				4.09				4.57				3.83
Return on (annualized):
Average tangible assets		1.41	%			1.80	%			1.49	%			1.70	%			1.44	%
Average tangible common equity		17.41	%			22.73	%			19.00	%			21.29	%			17.89	%
Efficiency ratio		53.7	%			48.9	%			55.5	%			53.3	%			53.6	%
	September 30,				June 30,				March 31,				December 31,				September 30,
Loan quality	2023				2023				2023				2022				2022
Nonaccrual loans	$	2,342				2,435				2,557				2,439				2,429
Real estate and other foreclosed assets		37				43				44				41				37
Total nonperforming assets	$	2,379				2,478				2,601				2,480				2,466
Accruing loans past due 90 days or more (4)	$	354				380				407				491				477
Government guaranteed loans included in totals above:
Nonaccrual loans	$	40				40				42				44				45
Accruing loans past due 90 days or more		269				294				306				363				423
Nonaccrual loans to total net loans		1.77	%			1.83	%			1.92	%			1.85	%			1.89	%
Allowance for credit losses to total loans		1.55	%			1.50	%			1.49	%			1.46	%			1.46	%

(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												Nine months ended
		September 30												September 30
Dollars in millions		2023				2022				Change				2023				2022				Change
Interest income		$	2,641				1,782				48	%		$	7,484				4,175				79	%
Interest expense			866				103				742				2,091				180				—
Net interest income			1,775				1,679				6				5,393				3,995				35
Provision for credit losses			150				115				30				420				427				-2
Net interest income after provision for credit losses			1,625				1,564				4				4,973				3,568				39
Other income
Mortgage banking revenues			105				83				26				297				275				8
Service charges on deposit accounts			121				115				5				354				341				4
Trust income			155				187				-17				521				546				-4
Brokerage services income			27				21				28				76				65				16
Trading account and non-hedging      derivative gains			9				5				85				38				13				197
Gain (loss) on bank investment securities			—				(1)				—				—				(2)				—
Other revenues from operations			143				153				-7				664				437				52
Total other income			560				563				-1				1,950				1,675				16
Other expense
Salaries and employee benefits			727				736				-1				2,273				2,090				9
Equipment and net occupancy			131				127				3				387				338				14
Outside data processing and software			111				95				16				323				269				20
FDIC assessments			29				28				4				87				66				31
Advertising and marketing			23				21				7				82				58				42
Printing, postage and supplies			14				15				-5				42				40				5
Amortization of core deposit and other      intangible assets			15				18				-19				47				38				24
Other costs of operations			228				239				-4				689				743				-7
Total other expense			1,278				1,279				—				3,930				3,642				8
Income before income taxes			907				848				7				2,993				1,601				87
Applicable income taxes			217				201				8				734				375				96
Net income		$	690				647				7	%		$	2,259				1,226				84	%

 

Condensed Consolidated Statement of Income, Five Quarter Trend
		Three months ended
		September 30,				June 30,				March 31,				December 31,				September 30,
Dollars in millions		2023				2023				2023				2022				2022
Interest income		$	2,641				2,516				2,327				2,072				1,782
Interest expense			866				717				509				245				103
Net interest income			1,775				1,799				1,818				1,827				1,679
Provision for credit losses			150				150				120				90				115
Net interest income after provision for credit losses			1,625				1,649				1,698				1,737				1,564
Other income
Mortgage banking revenues			105				107				85				82				83
Service charges on deposit accounts			121				119				113				106				115
Trust income			155				172				194				195				187
Brokerage services income			27				25				24				22				21
Trading account and non-hedging      derivative gains			9				17				12				14				5
Gain (loss) on bank investment securities			—				1				—				(3)				(1)
Other revenues from operations			143				362				159				266				153
Total other income			560				803				587				682				563
Other expense
Salaries and employee benefits			727				738				808				697				736
Equipment and net occupancy			131				129				127				137				127
Outside data processing and software			111				106				106				108				95
FDIC assessments			29				28				30				24				28
Advertising and marketing			23				28				31				32				21
Printing, postage and supplies			14				14				14				15				15
Amortization of core deposit and other      intangible assets			15				15				17				18				18
Other costs of operations			228				235				226				377				239
Total other expense			1,278				1,293				1,359				1,408				1,279
Income before income taxes			907				1,159				926				1,011				848
Applicable income taxes			217				292				224				246				201
Net income		$	690				867				702				765				647

  

Condensed Consolidated Balance Sheet
		September 30
Dollars in millions		2023				2022				Change
ASSETS
Cash and due from banks		$	1,769				2,256				-22		%
Interest-bearing deposits at banks			30,114				25,392				19
Trading account			137				130				6
Investment securities			27,336				24,604				11
Loans and leases:
Commercial, financial, etc.			45,058				38,808				16
Real estate - commercial			43,574				46,139				-6
Real estate - consumer			23,448				23,074				2
Consumer			20,275				20,205				—
Total loans and leases, net of unearned discount			132,355				128,226				3
Less: allowance for credit losses			2,052				1,876				9
Net loans and leases			130,303				126,350				3
Goodwill			8,465				8,501				—
Core deposit and other intangible assets			162				227				-29
Other assets			10,838				10,495				3
Total assets		$	209,124				197,955				6		%
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits		$	53,787				73,023				-26		%
Interest-bearing deposits			110,341				90,822				21
Total deposits			164,128				163,845				—
Short-term borrowings			6,731				918				633
Accrued interest and other liabilities			4,946				4,477				10
Long-term borrowings			7,123				3,459				106
Total liabilities			182,928				172,699				6
Shareholders' equity:
Preferred			2,011				2,011				—
Common			24,185				23,245				4
Total shareholders' equity			26,196				25,256				4
Total liabilities and shareholders' equity		$	209,124				197,955				6		%

  

Condensed Consolidated Balance Sheet, Five Quarter Trend
	September 30,				June 30,				March 31,				December 31,				September 30,
Dollars in millions	2023				2023				2023				2022				2022
ASSETS
Cash and due from banks	$	1,769				1,848				1,818				1,517				2,256
Interest-bearing deposits at banks		30,114				27,107				22,306				24,959				25,392
Federal funds sold and agreements to resell      securities		—				—				—				3				—
Trading account		137				137				165				118				130
Investment securities		27,336				27,917				28,443				25,211				24,604
Loans and leases:
Commercial, financial, etc.		45,058				44,684				43,758				41,850				38,808
Real estate - commercial		43,574				44,649				45,073				45,365				46,139
Real estate - consumer		23,448				23,762				23,790				23,756				23,074
Consumer		20,275				20,249				20,317				20,593				20,205
Total loans and leases, net of unearned discount		132,355				133,344				132,938				131,564				128,226
Less: allowance for credit losses		2,052				1,998				1,975				1,925				1,876
Net loans and leases		130,303				131,346				130,963				129,639				126,350
Goodwill		8,465				8,465				8,490				8,490				8,501
Core deposit and other intangible assets		162				177				192				209				227
Other assets		10,838				10,675				10,579				10,584				10,495
Total assets	$	209,124				207,672				202,956				200,730				197,955
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	53,787				54,938				59,955				65,502				73,023
Interest-bearing deposits		110,341				107,120				99,120				98,013				90,822
Total deposits		164,128				162,058				159,075				163,515				163,845
Short-term borrowings		6,731				7,908				6,995				3,555				918
Accrued interest and other liabilities		4,946				4,488				4,046				4,377				4,477
Long-term borrowings		7,123				7,417				7,463				3,965				3,459
Total liabilities		182,928				181,871				177,579				175,412				172,699
Shareholders' equity:
Preferred		2,011				2,011				2,011				2,011				2,011
Common		24,185				23,790				23,366				23,307				23,245
Total shareholders' equity		26,196				25,801				25,377				25,318				25,256
Total liabilities and shareholders' equity	$	209,124				207,672				202,956				200,730				197,955

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates
		Three months ended																								Change in balance								Nine months ended
		September 30,								June 30,								September 30,								September 30, 2023 from								September 30																Change
Dollars in millions		2023								2023								2022								June 30,				September 30,				2023								2022								in
		Balance				Rate				Balance				Rate				Balance				Rate				2023				2022				Balance				Rate				Balance				Rate				balance
ASSETS
Interest-bearing deposits at banks		$	26,657				5.40		%		23,617				5.14		%		30,752				2.23		%		13		%		-13		%	$	24,871				5.07		%		36,248				1.00		%		-31		%
Federal funds sold and agreements to resell      securities			—				5.79				—				5.53				29				.55				-99				-100				—				5.34				93				.42				-100
Trading account			136				4.05				151				2.66				131				1.78				-9				4				136				3.02				105				1.24				29
Investment securities			27,993				3.14				28,623				3.09				23,945				2.62				-2				17				28,081				3.08				18,077				2.51				55
Loans and leases, net of unearned discount
Commercial, financial, etc.			44,625				7.01				44,531				6.79				38,321				4.87				—				16				43,870				6.76				33,203				4.24				32
Real estate - commercial			44,230				6.41				44,944				6.25				46,282				4.49				-2				-4				44,830				6.16				42,864				4.09				5
Real estate - consumer			23,573				4.14				23,781				4.10				22,962				3.84				-1				3				23,707				4.06				20,557				3.69				15
Consumer			20,189				6.16				20,289				5.88				19,960				4.76				—				1				20,320				5.90				19,267				4.43				5
Total loans and leases, net			132,617				6.19				133,545				6.02				127,525				4.55				-1				4				132,727				5.98				115,891				4.14				15
Total earning assets			187,403				5.62				185,936				5.46				182,382				3.90				1				3				185,815				5.41				170,414				3.30				9
Goodwill			8,465								8,473								8,501								—				—				8,476								7,214								17
Core deposit and other intangible assets			170								185								236								-8				-28				185								165								12
Other assets			9,753								9,782								10,012								—				-3				9,790								9,602								2
Total assets		$	205,791								204,376								201,131								1		%		2		%	$	204,266								187,395								9		%
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Savings and interest-checking deposits		$	89,274				2.20				87,210				1.69				89,360				.31				2		%		—		%	$	88,184				1.73				84,006				.16				5		%
Time deposits			19,528				4.09				16,009				3.77				5,050				.09				22				287				15,751				3.74				4,401				.11				258
Total interest-bearing deposits			108,802				2.54				103,219				2.02				94,410				.29				5				15				103,935				2.03				88,407				.16				18
Short-term borrowings			5,346				5.16				7,539				5.11				913				1.16				-29				485				5,961				5.01				701				1.16				750
Long-term borrowings			7,240				5.52				7,516				5.43				3,281				3.67				-4				121				7,092				5.42				3,335				2.69				113
Total interest-bearing liabilities			121,388				2.83				118,274				2.43				98,604				.41				3				23				116,988				2.39				92,443				.27				27
Noninterest-bearing deposits			53,886								56,180								72,861								-4				-26				57,277								68,406								-16
Other liabilities			4,497								4,237								4,001								6				12				4,305								3,301								30
Total liabilities			179,771								178,691								175,466								1				2				178,570								164,150								9
Shareholders' equity			26,020								25,685								25,665								1				1				25,696								23,245								11
Total liabilities and shareholders' equity		$	205,791								204,376								201,131								1		%		2		%	$	204,266								187,395								9		%
Net interest spread							2.79								3.03								3.49																3.02								3.03
Contribution of interest-free funds							1.00								.88								.19																.89								.12
Net interest margin							3.79		%						3.91		%						3.68		%														3.91		%						3.15		%

 

Reconciliation of Quarterly GAAP to Non-GAAP Measures
		Three months ended								Nine months ended
		September 30								September 30
		2023				2022				2023				2022
Income statement data
In millions, except per share
Net income
Net income		$	690				647			$	2,259				1,226
Amortization of core deposit and other intangible assets (1)			12				14				36				29
Merger-related expenses (1)			—				39				—				399
Net operating income		$	702				700				2,295				1,654
Earnings per common share
Diluted earnings per common share		$	3.98				3.53			$	13.05				7.14
Amortization of core deposit and other intangible assets (1)			.07				.08				.21				.18
Merger-related expenses (1)			—				.22				—				2.46
Diluted net operating earnings per common share		$	4.05				3.83				13.26				9.78
Other expense
Other expense		$	1,278				1,279			$	3,929				3,642
Amortization of core deposit and other intangible assets			(15)				(18)				(47)				(38)
Merger-related expenses			—				(53)				—				(293)
Noninterest operating expense		$	1,263				1,208			$	3,882				3,311
Merger-related expenses
Salaries and employee benefits		$	—				13			$	—				99
Equipment and net occupancy			—				2				—				4
Outside data processing and software			—				2				—				3
Advertising and marketing			—				2				—				4
Printing, postage and supplies			—				1				—				4
Other costs of operations			—				33				—				179
Other expense			—				53				—				293
Provision for credit losses			—				—				—				242
Total		$	—				53			$	—				535
Efficiency ratio
Noninterest operating expense (numerator)		$	1,263				1,208			$	3,882				3,311
Taxable-equivalent net interest income		$	1,790				1,691			$	5,434				4,020
Other income			560				563				1,950				1,675
Less:  Gain (loss) on bank investment securities			—				(1)				—				(2)
Denominator		$	2,350				2,255			$	7,384				5,697
Efficiency ratio			53.7	%			53.6	%			52.6	%			58.1	%
Balance sheet data
In millions
Average assets
Average assets		$	205,791				201,131			$	204,266				187,395
Goodwill			(8,465)				(8,501)				(8,476)				(7,214)
Core deposit and other intangible assets			(170)				(236)				(185)				(165)
Deferred taxes			43				56				46				38
Average tangible assets		$	197,199				192,450			$	195,651				180,054
Average common equity
Average total equity		$	26,020				25,665			$	25,696				23,245
Preferred stock			(2,011)				(2,011)				(2,011)				(1,925)
Average common equity			24,009				23,654				23,685				21,320
Goodwill			(8,465)				(8,501)				(8,476)				(7,214)
Core deposit and other intangible assets			(170)				(236)				(185)				(165)
Deferred taxes			43				56				46				38
Average tangible common equity		$	15,417				14,973			$	15,070				13,979
At end of quarter
Total assets
Total assets		$	209,124				197,955
Goodwill			(8,465)				(8,501)
Core deposit and other intangible assets			(162)				(227)
Deferred taxes			41				54
Total tangible assets		$	200,538				189,281
Total common equity
Total equity		$	26,197				25,256
Preferred stock			(2,011)				(2,011)
Common equity			24,186				23,245
Goodwill			(8,465)				(8,501)
Core deposit and other intangible assets			(162)				(227)
Deferred taxes			41				54
Total tangible common equity		$	15,600				14,571

(1)	After any related tax effect.

  

Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
		Three months ended
		September 30,				June 30,				March 31,				December 31,				September 30,
		2023				2023				2023				2022				2022
Income statement data
In millions, except per share
Net income
Net income		$	690				867				702				765				647
Amortization of core deposit and other intangible assets (1)			12				12				13				14				14
Merger-related expenses (1)			—				—				—				33				39
Net operating income		$	702				879				715				812				700
Earnings per common share
Diluted earnings per common share		$	3.98				5.05				4.01				4.29				3.53
Amortization of core deposit and other intangible assets (1)			.07				.07				.08				.08				.08
Merger-related expenses (1)			—				—				—				.20				.22
Diluted net operating earnings per common share		$	4.05				5.12				4.09				4.57				3.83
Other expense
Other expense		$	1,278				1,293				1,359				1,408				1,279
Amortization of core deposit and other intangible assets			(15)				(15)				(17)				(18)				(18)
Merger-related expenses			—				—				—				(45)				(53)
Noninterest operating expense		$	1,263				1,278				1,342				1,345				1,208
Merger-related expenses
Salaries and employee benefits		$	—				—				—				4				13
Equipment and net occupancy			—				—				—				2				2
Outside data processing and software			—				—				—				2				2
Advertising and marketing			—				—				—				5				2
Printing, postage and supplies			—				—				—				3				1
Other costs of operations			—				—				—				29				33
Other expense			—				—				—				45				53
Provision for credit losses			—				—				—				—				—
Total		$	—				—				—				45				53
Efficiency ratio
Noninterest operating expense (numerator)		$	1,263				1,278				1,342				1,345				1,208
Taxable-equivalent net interest income		$	1,790				1,813				1,832				1,841				1,691
Other income			560				803				587				682				563
Less:  Gain (loss) on bank investment securities			—				1				—				(3)				(1)
Denominator		$	2,350				2,615				2,419				2,526				2,255
Efficiency ratio			53.7	%			48.9	%			55.5	%			53.3	%			53.6	%
Balance sheet data
In millions
Average assets
Average assets		$	205,791				204,376				202,599				198,592				201,131
Goodwill			(8,465)				(8,473)				(8,490)				(8,494)				(8,501)
Core deposit and other intangible assets			(170)				(185)				(201)				(218)				(236)
Deferred taxes			43				46				49				54				56
Average tangible assets		$	197,199				195,764				193,957				189,934				192,450
Average common equity
Average total equity		$	26,020				25,685				25,377				25,346				25,665
Preferred stock			(2,011)				(2,011)				(2,011)				(2,011)				(2,011)
Average common equity			24,009				23,674				23,366				23,335				23,654
Goodwill			(8,465)				(8,473)				(8,490)				(8,494)				(8,501)
Core deposit and other intangible assets			(170)				(185)				(201)				(218)				(236)
Deferred taxes			43				46				49				54				56
Average tangible common equity		$	15,417				15,062				14,724				14,677				14,973
At end of quarter
Total assets
Total assets		$	209,124				207,672				202,956				200,730				197,955
Goodwill			(8,465)				(8,465)				(8,490)				(8,490)				(8,501)
Core deposit and other intangible assets			(162)				(177)				(192)				(209)				(227)
Deferred taxes			41				44				47				51				54
Total tangible assets		$	200,538				199,074				194,321				192,082				189,281
Total common equity
Total equity		$	26,197				25,801				25,377				25,318				25,256
Preferred stock			(2,011)				(2,011)				(2,011)				(2,011)				(2,011)
Common equity			24,186				23,790				23,366				23,307				23,245
Goodwill			(8,465)				(8,465)				(8,490)				(8,490)				(8,501)
Core deposit and other intangible assets			(162)				(177)				(192)				(209)				(227)
Deferred taxes			41				44				47				51				54
Total tangible common equity		$	15,600				15,192				14,731				14,659				14,571

(1)	After any related tax effect.

 

 

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SOURCE M&T Bank Corporation

FAQ

What is M&T Bank Corporation's net income for 3Q23?

M&T Bank Corporation reported a net income of $690 million in 3Q23.

What is the diluted earnings per common share for M&T Bank Corporation?

The diluted earnings per common share for M&T Bank Corporation is $3.98.

What is the CET1 capital ratio for M&T Bank Corporation?

The CET1 capital ratio for M&T Bank Corporation increased to 10.94% at September 30, 2023.

What is the net interest margin for M&T Bank Corporation?

The net interest margin for M&T Bank Corporation is 3.79%.

What is the percentage of nonaccrual loans to loans outstanding for M&T Bank Corporation?

The percentage of nonaccrual loans to loans outstanding for M&T Bank Corporation improved to 1.77%.

How much did average deposits increase by for M&T Bank Corporation?

Average deposits increased by 2% from 2Q23 for M&T Bank Corporation.