M&T Bank Corporation Announces 2020 Fourth Quarter And Full-Year Results

Rhea-AI Summary

M&T Bank Corporation (MTB) reported its 2020 financial results, showing diluted earnings per share of $3.52 in Q4 2020, down from $3.60 in Q4 2019. Net income for the quarter was $471 million, a 4% decrease year-over-year. For the full year, diluted EPS decreased to $9.94, while net income totaled $1.35 billion compared to $1.93 billion in 2019. The bank's net interest income for 2020 was $3.88 billion, down from $4.15 billion in 2019, impacted by a lower net interest margin of 3.16%. Nonaccrual loans rose to $1.89 billion, highlighting credit quality concerns amid the pandemic.

Positive

• Increased average earning assets by 19% year-over-year to $131.9 billion in Q4 2020.
• Strong growth in mortgage banking revenues, up 24% year-over-year.

Negative

• Net income fell by 4% in Q4 2020 compared to Q4 2019.
• Provision for credit losses surged to $800 million in 2020, up from $176 million in 2019.
• Nonaccrual loans increased to $1.89 billion, from $963 million a year earlier.

BUFFALO, N.Y., Jan. 21, 2021 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) today reported its results of operations for 2020.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") were $3.52 in the fourth quarter of 2020, compared with $3.60 in the year-earlier quarter and $2.75 in the third quarter of 2020. GAAP-basis net income was $471 million in the recent quarter, $493 million in the final quarter of 2019 and $372 million in the third 2020 quarter. GAAP-basis net income in the fourth quarter of 2020 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.30% and 12.07%, respectively, compared with 1.60% and 12.95%, respectively, in the corresponding 2019 period and 1.06% and 9.53%, respectively, in the third quarter of 2020. 

Darren J. King, M&T's Executive Vice President and Chief Financial Officer, commented, "In what has been an extremely challenging year, M&T responded quickly and effectively to take on those challenges while continuing to meet the needs of our customers through the extraordinary efforts of our employees.  Although the effects of the pandemic and the low interest rate environment impacted M&T's financial results in 2020, we were pleased with the growth experienced in the mortgage banking and trust businesses, as well as the role we played in providing our customers the opportunity to participate in the Paycheck Protection Program."

Earnings Highlights
														Change 4Q20 vs.
($ in millions, except per share data)		4Q20				4Q19				3Q20				4Q19				3Q20
Net income		$	471			$	493			$	372				-4	%			27	%
Net income available to common shareholders  ̶  diluted		$	452			$	473			$	353				-5	%			28	%
Diluted earnings per common share		$	3.52			$	3.60			$	2.75				-2	%			28	%
Annualized return on average assets			1.30	%			1.60	%			1.06	%
Annualized return on average common equity			12.07	%			12.95	%			9.53	%

For the years ended December 31, 2020 and 2019, diluted earnings per common share were $9.94 and $13.75, respectively. GAAP-basis net income in 2020 totaled $1.35 billion, compared with $1.93 billion in 2019. Expressed as a rate of return on average assets and average common shareholders' equity, GAAP-basis net income in 2020 was 1.00% and 8.72%, respectively, and 1.61% and 12.87%, respectively, in 2019.

Supplemental Reporting of Non-GAAP Results of Operations.  M&T consistently provides supplemental reporting of its results on a "net operating" or "tangible" basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill and core deposit and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T (when incurred), since such items are considered by management to be "nonoperating" in nature.  The amounts of such "nonoperating" expenses are presented in the tables that accompany this release.  Although "net operating income" as defined by M&T is not a GAAP measure, M&T's management believes that this information helps investors understand the effect of acquisition activity in reported results.

Diluted net operating earnings per common share were $3.54 in the final quarter of 2020, compared with $3.62 in the fourth quarter of 2019 and $2.77 in the third quarter of 2020.  Net operating income aggregated $473 million in the recent quarter, $496 million in the fourth quarter of 2019 and $375 million in 2020's third quarter.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income in the fourth quarter of 2020 was 1.35% and 17.53%, respectively, 1.67% and 19.08%, respectively, in the similar quarter of 2019 and 1.10% and 13.94%, respectively, in the third quarter of 2020.

Diluted net operating earnings per common share for the years ended December 31, 2020 and 2019 were $10.02 and $13.86, respectively.  Net operating income in 2020 was $1.36 billion, compared with $1.94 billion in 2019.  Net operating income expressed as a rate of return on average tangible assets and average tangible common shareholders' equity was 1.04% and 12.79%, respectively, in 2020 and 1.69% and 19.08%, respectively, in 2019.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis totaled $993 million in the recent quarter, compared with $1.01 billion in the fourth quarter of 2019. That decline resulted from a 64 basis point narrowing of the net interest margin, to 3.00% in the fourth quarter of 2020 from 3.64% in the year-earlier quarter, that was partially offset by the impact of a $21.3 billion or 19% increase in average earning assets to $131.9 billion in the recent quarter from $110.6 billion in the final quarter of 2019.   In the third quarter of 2020, taxable-equivalent net interest income was $947 million, the net interest margin was 2.95% and average earning assets were $127.7 billion.  During the recent quarter, $29 million of interest income was recognized from the accelerated amortization of deferred fees related to payments received on Paycheck Protection Program ("PPP") loans originated by M&T during 2020.  At December 31, 2020 and September 30, 2020, outstanding balances of PPP loans totaled $5.4 billion and $6.5 billion, respectively.  As compared with the final quarter of 2019, the recent quarter's narrowing of the net interest margin resulted largely from lower yields on loans and deposits held at the Federal Reserve Bank of New York, while the rise in average earning assets reflected higher balances of those same asset types. The improvement in the net interest margin in the recent quarter as compared with 2020's third quarter reflects a five basis point decline in average rates paid to customers on deposits, while the impacts of accelerated amortization of deferred PPP fees and increased levels of low-yielding balances held at the Federal Reserve Bank of New York were largely offsetting.  Taxable-equivalent net interest income for the full year of 2020 was $3.88 billion and in 2019 was $4.15 billion. The net interest margin was 3.16% in 2020 and 3.84% in 2019.

Taxable-equivalent Net Interest Income
														Change 4Q20 vs.
($ in millions)		4Q20				4Q19				3Q20				4Q19				3Q20
Average earning assets		$	131,916			$	110,581			$	127,689				19	%			3	%
Net interest income  ̶  taxable-equivalent		$	993			$	1,014			$	947				-2	%			5	%
Net interest margin			3.00	%			3.64	%			2.95	%

Provision for Credit Losses/Asset Quality.  The provision for credit losses totaled $75 million in the fourth quarter of 2020, compared with $54 million in the year-earlier quarter and $150 million in 2020's third quarter. The provision was $800 million for the year ended December 31, 2020, compared with $176 million in 2019.  The significantly higher level of the provision in 2020 reflected projections of expected credit losses under the provisions of new accounting guidance that became effective on January 1, 2020. Those projections included estimates of the economic impact of the COVID-19 pandemic. Prior to 2020, the provision for credit losses reflected incurred losses only.  Net loan charge-offs were $97 million during the recent quarter, compared with $41 million in the final quarter of 2019 and $30 million in the third quarter of 2020. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .39% and .18% in the final quarters of 2020 and 2019, respectively, and .12% in the third quarter of 2020. Net loan charge-offs during 2020 and 2019 aggregated $247 million and $144 million, respectively, representing .26% and .16%, respectively, of average loans outstanding.

Loans classified as nonaccrual rose to $1.89 billion or 1.92% of total loans outstanding at December 31, 2020 from $1.24 billion or 1.26% of total loans at September 30, 2020.  That significant increase reflected the continuing impact of the pandemic on borrowers' ability to make contractual payments on their loans, particularly loans collateralized by hotels.  Of the $653 million rise in nonaccrual loans during the fourth quarter of 2020, $530 million were associated with hotels.  Nonaccrual loans outstanding at December 31, 2019 were $963 million or 1.06% of total loans. The adoption of the new accounting guidance previously mentioned resulted in an increase in nonaccrual loans on January 1, 2020 of $171 million.  Assets taken in foreclosure of defaulted loans were $35 million at December 31, 2020, $86 million at December 31, 2019 and $50 million at  September 30, 2020.

Allowance for Credit Losses.  M&T regularly performs detailed analyses of individual borrowers and portfolios for purposes of assessing the adequacy of the allowance for credit losses. As a result of those analyses, the allowance for credit losses totaled $1.74 billion or 1.76% of loans outstanding at December 31, 2020, compared with $1.05 billion or 1.16% at December 31, 2019, $1.76 billion or 1.79% at September 30, 2020 and $1.18 billion or 1.30% as of January 1, 2020 following adoption of the current expected credit loss accounting rules. The adoption of the amended accounting guidance resulted in an increase to the allowance of $132 million on January 1, 2020. The allowance at December 31, 2020 and September 30, 2020 represented 1.86% and 1.91%, respectively, of total loans on those dates, excluding outstanding balances of PPP loans.

Asset Quality Metrics
														Change 4Q20 vs.
($ in millions)		4Q20				4Q19				3Q20				4Q19				3Q20
At end of quarter
Nonaccrual loans		$	1,893			$	963			$	1,240				97	%			53	%
Real estate and other foreclosed assets		$	35			$	86			$	50				-60	%			-30	%
Total nonperforming assets		$	1,928			$	1,049			$	1,290				84	%			49	%
Accruing loans past due 90 days or more (1)		$	859			$	519			$	527				66	%			63	%
Nonaccrual loans as % of loans outstanding			1.92	%			1.06	%			1.26	%
Allowance for credit losses		$	1,736			$	1,051			$	1,759				65	%			-1	%
Allowance for credit losses as % of loans outstanding			1.76	%			1.16	%			1.79	%
For the period
Provision for credit losses		$	75			$	54			$	150				39	%			-50	%
Net charge-offs		$	97			$	41			$	30				135	%			227	%
Net charge-offs as % of average loans (annualized)			.39	%			.18	%			.12	%

(1)	Predominantly government-guaranteed residential real estate loans. Prior to 2020, excludes loans acquired at a discount.

Noninterest Income and Expense.  Noninterest income was $551 million in the fourth quarter of 2020 and $521 million in each of the year-earlier quarter and the third quarter of 2020. The improvement when compared with the final 2019 quarter resulted largely from a $30 million distribution from Bayview Lending Group LLC and  higher mortgage banking revenues. Partially offsetting those factors were declines in service charges on deposit accounts, loan syndication fees and trading account and foreign exchange gains. The higher income in the recent quarter as compared with the third quarter of 2020 predominantly reflects the distribution from Bayview Lending Group LLC and increased commercial mortgage banking revenues, partially offset by a decline in residential mortgage banking revenues.

Noninterest Income
														Change 4Q20 vs.
($ in millions)		4Q20				4Q19				3Q20				4Q19				3Q20
Mortgage banking revenues		$	140			$	118			$	153				19	%			-8	%
Service charges on deposit accounts			96				111				91				-14	%			5	%
Trust income			151				151				150				—				1	%
Brokerage services income			12				12				12				3	%			5	%
Trading account and foreign exchange gains			7				17				4				-57	%			79	%
Gain (loss) on bank investment securities			2				(6)				3				—				-42	%
Other revenues from operations			143				118				108				21	%			33	%
Total		$	551			$	521			$	521				6	%			6	%

Noninterest income improved to $2.09 billion in 2020 from $2.06 billion in 2019. A 24% rise in mortgage banking revenues, higher trust income and increased income from Bayview Lending Group LLC were partially offset by declines in service charges on deposit accounts, trading account and foreign exchange gains and loan syndication fees.

Noninterest expense totaled $845 million in the final quarter of 2020, compared with $824 million in the corresponding quarter of 2019 and $827 million in the third quarter of 2020.  Excluding expenses considered to be nonoperating in nature, such as amortization of core deposit and other intangible assets, noninterest operating expenses were $842 million in the recent quarter, $819 million in the fourth quarter of 2019 and $823 million in 2020's third quarter. Significant factors contributing to the higher level of noninterest expenses in the recent quarter as compared with the year-earlier quarter were higher costs for salaries and employee benefits, changes  in the valuation allowance for capitalized residential mortgage servicing rights and $14 million of expenses related to the planned transition of the support for M&T's retail brokerage and advisory business to the platform of LPL Financial, partially offset by lower costs for professional and outside services, advertising and marketing, and travel and entertainment. The valuation allowance for capitalized residential mortgage servicing rights was increased by $3 million in the fourth quarter of 2020, compared with a reduction in the allowance of $16 million in the final 2019 quarter.  When compared with the third quarter of 2020, the recent quarter increase in noninterest expenses largely reflected expenses for the retail brokerage and advisory business support transition and higher costs for advertising and marketing.

Noninterest Expense
														Change 4Q20 vs.
($ in millions)		4Q20				4Q19				3Q20				4Q19				3Q20
Salaries and employee benefits		$	476			$	469			$	479				1	%			-1	%
Equipment and net occupancy			84				83				81				2	%			4	%
Outside data processing and software			68				62				65				10	%			5	%
FDIC assessments			15				12				12				22	%			25	%
Advertising and marketing			18				27				12				-34	%			50	%
Printing, postage and supplies			9				10				9				-12	%			-12	%
Amortization of core deposit and other intangible assets			3				4				4				-27	%			-20	%
Other costs of operations			172				157				165				10	%			4	%
Total		$	845			$	824			$	827				3	%			2	%

For the year ended December 31, 2020, noninterest expense aggregated $3.39 billion, compared with $3.47 billion in 2019. Noninterest operating expenses were $3.37 billion and $3.45 billion in 2020 and 2019, respectively. Contributing to the lower level of such expenses in 2020 were decreased costs for professional and outside services, legal-related matters, advertising and marketing, travel and entertainment, and a $48 million charge in the second quarter of 2019 associated with the sale of an equity investment in an asset manager. Those factors were partially offset by higher costs for salaries and employee benefits, outside data processing and software, increases to the valuation allowance for capitalized residential mortgage servicing rights and the transition expenses noted earlier.

The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities), measures the relationship of operating expenses to revenues.  M&T's efficiency ratio was 54.6% in the fourth quarter of 2020, 53.1% in the year-earlier quarter and 56.2% in the third quarter of 2020. The efficiency ratio for the full year 2020 was 56.3%, compared with 55.7% in 2019.

Balance Sheet.  M&T had total assets of $142.6 billion at December 31, 2020, compared with $119.9 billion and $138.6 billion at December 31, 2019 and September 30, 2020, respectively. Loans and leases, net of unearned discount, were $98.5 billion at December 31, 2020, up from $90.9 billion at December 31, 2019 and $98.4 billion at September 30, 2020. The increase in total loans and leases at the recent quarter-end as compared with the fourth quarter of 2019 was driven largely by growth in commercial loans of $3.7 billion and commercial real estate loans of $2.1 billion. The commercial loan growth reflects loans originated as part of the PPP, which totaled $5.4 billion at December 31, 2020. Total deposits rose to $119.8 billion at the recent quarter-end, compared with $94.8 billion at December 31, 2019 and $115.2 billion at September 30, 2020. The higher levels of deposits at the two most recent quarter-ends as compared with December 31, 2019 reflect increased commercial and consumer deposits, as well as higher deposits associated with residential mortgage servicing activities.

Total shareholders' equity was $16.2 billion, or 11.35% of total assets at December 31, 2020, $15.7 billion, or 13.11% at December 31, 2019 and $16.1 billion, or 11.61% at September 30, 2020. Common shareholders' equity was $14.9 billion, or $116.39 per share, at December 31, 2020, compared with $14.5 billion, or $110.78 per share, a year-earlier and $14.9 billion, or $115.75 per share, at September 30, 2020. Tangible equity per common share was $80.52 at December 31, 2020, $75.44 at December 31, 2019 and $79.85 at September 30, 2020. In the calculation of tangible equity per common share, common shareholders' equity is reduced by the carrying values of goodwill and core deposit and other intangible assets, net of applicable deferred tax balances.  M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under regulatory capital rules was approximately 10.0% at December 31, 2020, up from 9.81% three months earlier and 9.73% at December 31, 2019.

Conference Call.  Investors will have an opportunity to listen to M&T's conference call to discuss fourth quarter financial results today at 11:00 a.m. Eastern Time.  Those wishing to participate in the call may dial (877) 780-2276.  International participants, using any applicable international calling codes, may dial (973) 582-2700.  Callers should reference M&T Bank Corporation or the conference ID #1884289.  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 Thursday, January 28, 2021 by calling (800) 585-8367, or (404) 537-3406 for international participants, and by making reference to the ID #1884289.  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.

M&T is a financial holding company headquartered in Buffalo, New York.  M&T's principal banking subsidiary, M&T Bank, operates banking offices in New York, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Virginia, West Virginia and the District of Columbia.  Trust-related services are provided by M&T's Wilmington Trust-affiliated companies and by M&T Bank.

Forward-Looking Statements.  This news release and related conference call may contain forward-looking statements that are based on current expectations, estimates and projections about M&T's business, management's beliefs and assumptions made by management.  Any statement that does not describe historical or current facts is a forward-looking statement, including statements regarding the potential effects of the Coronavirus Disease 2019 ("COVID-19") pandemic on M&T's business, financial condition, liquidity and results of operations. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.  

Future Factors include changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; risks and uncertainties relating to the impact of the COVID-19 pandemic; the impact of changes in market values on trust-related revenues; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation or regulation; regulatory supervision and oversight, including monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board, regulatory agencies or legislation; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

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

Further, statements about the potential effects of the COVID-19 pandemic on M&T's business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond M&T's control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on customers, clients, third parties and M&T.

M&T provides further detail regarding these risks and uncertainties in its 2019 Form 10-K and subsequent Form 10-Qs, including in the respective Risk Factors sections of such reports, as well as in subsequent 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												Year ended
		December 31												December 31
Amounts in thousands, except per share		2020				2019				Change				2020				2019				Change
Performance
Net income		$	471,140				493,066				-4	%		$	1,353,152				1,929,149				-30	%
Net income available to common shareholders			451,869				473,372				-5	%			1,279,068				1,849,511				-31	%
Per common share:
Basic earnings		$	3.52				3.60				-2	%		$	9.94				13.76				-28	%
Diluted earnings			3.52				3.60				-2	%			9.94				13.75				-28	%
Cash dividends		$	1.10				1.10				—			$	4.40				4.10				7	%
Common shares outstanding:
Average - diluted (1)			128,379				131,549				-2	%			128,704				134,462				-4	%
Period end (2)			128,333				130,589				-2	%			128,333				130,589				-2	%
Return on (annualized):
Average total assets			1.30	%			1.60	%							1.00	%			1.61	%
Average common shareholders' equity			12.07	%			12.95	%							8.72	%			12.87	%
Taxable-equivalent net interest income		$	993,252				1,014,225				-2	%		$	3,883,605				4,153,127				-6	%
Yield on average earning assets			3.15	%			4.27	%							3.43	%			4.53	%
Cost of interest-bearing liabilities			.25	%			.97	%							.43	%			1.05	%
Net interest spread			2.90	%			3.30	%							3.00	%			3.48	%
Contribution of interest-free funds			.10	%			.34	%							.16	%			.36	%
Net interest margin			3.00	%			3.64	%							3.16	%			3.84	%
Net charge-offs to average total net loans (annualized)			.39	%			.18	%							.26	%			.16	%
Net operating results (3)
Net operating income		$	473,453				496,237				-5	%		$	1,364,145				1,943,508				-30	%
Diluted net operating earnings per common share			3.54				3.62				-2	%			10.02				13.86				-28	%
Return on (annualized):
Average tangible assets			1.35	%			1.67	%							1.04	%			1.69	%
Average tangible common equity			17.53	%			19.08	%							12.79	%			19.08	%
Efficiency ratio			54.6	%			53.1	%							56.3	%			55.7	%
		At December 31
Loan quality		2020				2019				Change
Nonaccrual loans		$	1,893,299				963,112				97	%
Real estate and other foreclosed assets			34,668				85,646				-60	%
Total nonperforming assets		$	1,927,967				1,048,758				84	%
Accruing loans past due 90 days or more (4)		$	859,208				518,728				66	%
Government guaranteed loans included in totals above:
Nonaccrual loans		$	48,820				50,891				-4	%
Accruing loans past due 90 days or more			798,121				479,829				66	%
Renegotiated loans		$	238,994				234,424				2	%
Accruing loans acquired at a discount past due 90 days or more (5)		N/A					39,632				—
Purchased impaired loans (6):
Outstanding customer balance		N/A					415,413				—
Carrying amount		N/A					227,545				—
Nonaccrual loans to total net loans			1.92	%			1.06	%
Allowance for credit losses to total loans			1.76	%			1.16	%

(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. Prior to 2020, excludes loans acquired at a discount.
(5)	Prior to 2020, loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.
(6)	Prior to 2020, accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.

 

Financial Highlights, Five Quarter Trend
		Three months ended
		December 31,				September 30,				June 30,				March 31,				December 31,
Amounts in thousands, except per share		2020				2020				2020				2020				2019
Performance
Net income		$	471,140				372,136				241,054				268,822				493,066
Net income available to common shareholders			451,869				353,400				223,099				250,701				473,372
Per common share:
Basic earnings		$	3.52				2.75				1.74				1.93				3.60
Diluted earnings			3.52				2.75				1.74				1.93				3.60
Cash dividends		$	1.10				1.10				1.10				1.10				1.10
Common shares outstanding:
Average - diluted (1)			128,379				128,355				128,333				129,755				131,549
Period end (2)			128,333				128,303				128,294				128,282				130,589
Return on (annualized):
Average total assets			1.30	%			1.06	%			.71	%			.90	%			1.60	%
Average common shareholders' equity			12.07	%			9.53	%			6.13	%			7.00	%			12.95	%
Taxable-equivalent net interest income		$	993,252				947,114				961,371				981,868				1,014,225
Yield on average earning assets			3.15	%			3.13	%			3.38	%			4.18	%			4.27	%
Cost of interest-bearing liabilities			.25	%			.30	%			.40	%			.83	%			.97	%
Net interest spread			2.90	%			2.83	%			2.98	%			3.35	%			3.30	%
Contribution of interest-free funds			.10	%			.12	%			.15	%			.30	%			.34	%
Net interest margin			3.00	%			2.95	%			3.13	%			3.65	%			3.64	%
Net charge-offs to average total net loans (annualized)			.39	%			.12	%			.29	%			.22	%			.18	%
Net operating results (3)
Net operating income		$	473,453				375,029				243,958				271,705				496,237
Diluted net operating earnings per common share			3.54				2.77				1.76				1.95				3.62
Return on (annualized):
Average tangible assets			1.35	%			1.10	%			.74	%			0.94	%			1.67	%
Average tangible common equity			17.53	%			13.94	%			9.04	%			10.39	%			19.08	%
Efficiency ratio			54.6	%			56.2	%			55.7	%			58.9	%			53.1	%
		December 31,				September 30,				June 30,				March 31,				December 31,
Loan quality		2020				2020				2020				2020				2019
Nonaccrual loans		$	1,893,299				1,239,972				1,156,650				1,061,748				963,112
Real estate and other foreclosed assets			34,668				49,872				66,763				83,605				85,646
Total nonperforming assets		$	1,927,967				1,289,844				1,223,413				1,145,353				1,048,758
Accruing loans past due 90 days or more (4)		$	859,208				527,258				535,755				530,317				518,728
Government guaranteed loans included in totals above:
Nonaccrual loans		$	48,820				45,975				51,165				50,561				50,891
Accruing loans past due 90 days or more			798,121				505,446				454,269				464,243				479,829
Renegotiated loans		$	238,994				242,581				234,768				232,439				234,424
Accruing loans acquired at a discount past due 90 days or         more (5)		N/A				N/A				N/A				N/A					39,632
Purchased impaired loans (6):
Outstanding customer balance		N/A				N/A				N/A				N/A					415,413
Carrying amount		N/A				N/A				N/A				N/A					227,545
Nonaccrual loans to total net loans			1.92	%			1.26	%			1.18	%			1.13	%			1.06	%
Allowance for credit losses to total loans			1.76	%			1.79	%			1.68	%			1.47	%			1.16	%

(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. Prior to 2020, excludes loans acquired at a discount.
(5)	Prior to 2020, loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.
(6)	Prior to 2020, accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.

 

Condensed Consolidated Statement of Income
		Three months ended												Year ended
		December 31												December 31
Dollars in thousands		2020				2019				Change				2020				2019				Change
Interest income		$	1,038,890				1,185,902				-12	%		$	4,192,712				4,879,593				-14	%
Interest expense			49,610				177,069				-72				326,395				749,329				-56
Net interest income			989,280				1,008,833				-2				3,866,317				4,130,264				-6
Provision for credit losses			75,000				54,000			39					800,000				176,000				355
Net interest income after provision for credit losses			914,280				954,833				-4				3,066,317				3,954,264				-22
Other income
Mortgage banking revenues			140,441				118,134				19				566,641				457,770				24
Service charges on deposit accounts			95,817				110,987				-14				370,788				432,978				-14
Trust income			151,314				151,525				—				601,884				572,608				5
Brokerage services income			12,234				11,891				3				47,428				48,922				-3
Trading account and foreign exchange gains			7,204				16,717				-57				40,536				62,044				-35
Gain (loss) on bank investment securities			1,619				(6,452)				—				(9,421)				18,037				—
Other revenues from operations			142,621				118,238				21				470,588				469,320				—
Total other income			551,250				521,040				6				2,088,444				2,061,679				1
Other expense
Salaries and employee benefits			476,110				469,080				1				1,950,692				1,900,797				3
Equipment and net occupancy			84,228				82,892				2				322,037				324,079				-1
Outside data processing and software			68,034				61,720				10				258,480				229,731				13
FDIC assessments			15,204				12,431				22				53,803				41,535				30
Advertising and marketing			17,832				27,063				-34				61,904				93,472				-34
Printing, postage and supplies			8,335				9,513				-12				39,869				39,893				—
Amortization of core deposit and other    intangible assets			3,129				4,305				-27				14,869				19,490				-24
Other costs of operations			172,136				156,679				10				683,586				819,685				-17
Total other expense			845,008				823,683				3				3,385,240				3,468,682				-2
Income before income taxes			620,522				652,190				-5				1,769,521				2,547,261				-31
Applicable income taxes			149,382				159,124				-6				416,369				618,112				-33
Net income		$	471,140				493,066				-4	%		$	1,353,152				1,929,149				-30	%

 

Condensed Consolidated Statement of Income, Five Quarter Trend
		Three months ended
		December 31,				September 30,				June 30,				March 31,				December 31,
Dollars in thousands		2020				2020				2020				2020				2019
Interest income		$	1,038,890				1,001,161				1,032,242				1,120,419				1,185,902
Interest expense			49,610				58,066				75,105				143,614				177,069
Net interest income			989,280				943,095				957,137				976,805				1,008,833
Provision for credit losses			75,000				150,000				325,000				250,000				54,000
Net interest income after provision for credit losses			914,280				793,095				632,137				726,805				954,833
Other income
Mortgage banking revenues			140,441				153,267				145,024				127,909				118,134
Service charges on deposit accounts			95,817				91,355				77,455				106,161				110,987
Trust income			151,314				149,937				151,882				148,751				151,525
Brokerage services income			12,234				11,602				10,463				13,129				11,891
Trading account and foreign exchange gains			7,204				4,026				8,290				21,016				16,717
Gain (loss) on bank investment securities			1,619				2,773				6,969				(20,782)				(6,452)
Other revenues from operations			142,621				107,601				87,190				133,176				118,238
Total other income			551,250				520,561				487,273				529,360				521,040
Other expense
Salaries and employee benefits			476,110				478,897				458,842				536,843				469,080
Equipment and net occupancy			84,228				81,080				77,089				79,640				82,892
Outside data processing and software			68,034				64,660				61,376				64,410				61,720
FDIC assessments			15,204				12,121				14,207				12,271				12,431
Advertising and marketing			17,832				11,855				9,842				22,375				27,063
Printing, postage and supplies			8,335				9,422				11,260				10,852				9,513
Amortization of core deposit and other intangible assets			3,129				3,914				3,913				3,913				4,305
Other costs of operations			172,136				164,825				170,513				176,112				156,679
Total other expense			845,008				826,774				807,042				906,416				823,683
Income before income taxes			620,522				486,882				312,368				349,749				652,190
Applicable income taxes			149,382				114,746				71,314				80,927				159,124
Net income		$	471,140				372,136				241,054				268,822				493,066

 

Condensed Consolidated Balance Sheet
		December 31
Dollars in thousands		2020				2019				Change
ASSETS
Cash and due from banks		$	1,552,743				1,432,805				8		%
Interest-bearing deposits at banks			23,663,810				7,190,154				229
Federal funds sold			—				3,500				—
Trading account			1,068,581				470,129				127
Investment securities			7,045,697				9,497,251				-26
Loans and leases:
Commercial, financial, etc.			27,574,564				23,838,168				16
Real estate - commercial			37,637,889				35,541,914				6
Real estate - consumer			16,752,993				16,156,094				4
Consumer			16,570,421				15,386,693				8
Total loans and leases, net of unearned discount			98,535,867				90,922,869				8
Less: allowance for credit losses			1,736,387				1,051,071				65
Net loans and leases			96,799,480				89,871,798				8
Goodwill			4,593,112				4,593,112				—
Core deposit and other intangible assets			14,165				29,034				-51
Other assets			7,863,517				6,784,974				16
Total assets		$	142,601,105				119,872,757				19		%
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits		$	47,572,884				32,396,407				47		%
Interest-bearing deposits			71,580,750				60,689,618				18
Deposits at Cayman Islands office			652,104				1,684,044				-61
Total deposits			119,805,738				94,770,069				26
Short-term borrowings			59,482				62,363				-5
Accrued interest and other liabilities			2,166,409				2,337,490				-7
Long-term borrowings			4,382,193				6,986,186				-37
Total liabilities			126,413,822				104,156,108				21
Shareholders' equity:
Preferred			1,250,000				1,250,000				—
Common			14,937,283				14,466,649				3
Total shareholders' equity			16,187,283				15,716,649				3
Total liabilities and shareholders' equity		$	142,601,105				119,872,757				19		%

 

Condensed Consolidated Balance Sheet, Five Quarter Trend
		December 31,				September 30,				June 30,				March 31,				December 31,
Dollars in thousands		2020				2020				2020				2020				2019
ASSETS
Cash and due from banks		$	1,552,743				1,489,232				1,354,815				1,298,192				1,432,805
Interest-bearing deposits at banks			23,663,810				20,197,937				20,888,341				8,896,307				7,190,154
Federal funds sold			—				—				—				—				3,500
Trading account			1,068,581				1,215,573				1,293,534				1,224,291				470,129
Investment securities			7,045,697				7,723,004				8,454,344				8,956,590				9,497,251
Loans and leases:
Commercial, financial, etc.			27,574,564				27,891,648				29,203,862				26,243,648				23,838,168
Real estate - commercial			37,637,889				37,582,084				37,159,451				36,684,106				35,541,914
Real estate - consumer			16,752,993				16,663,708				15,611,462				15,643,014				16,156,094
Consumer			16,570,421				16,309,608				15,782,773				15,571,507				15,386,693
Total loans and leases, net of unearned discount			98,535,867				98,447,048				97,757,548				94,142,275				90,922,869
Less: allowance for credit losses			1,736,387				1,758,505				1,638,236				1,384,366				1,051,071
Net loans and leases			96,799,480				96,688,543				96,119,312				92,757,909				89,871,798
Goodwill			4,593,112				4,593,112				4,593,112				4,593,112				4,593,112
Core deposit and other intangible assets			14,165				17,294				21,208				25,121				29,034
Other assets			7,863,517				6,702,048				6,812,303				6,826,311				6,784,974
Total assets		$	142,601,105				138,626,743				139,536,969				124,577,833				119,872,757
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits		$	47,572,884				44,201,670				45,397,843				35,554,715				32,396,407
Interest-bearing deposits			71,580,750				70,061,680				68,701,832				63,410,672				60,689,618
Deposits at Cayman Islands office			652,104				899,989				868,284				1,217,921				1,684,044
Total deposits			119,805,738				115,163,339				114,967,959				100,183,308				94,770,069
Short-term borrowings			59,482				46,123				52,298				59,180				62,363
Accrued interest and other liabilities			2,166,409				1,857,383				2,250,316				2,198,116				2,337,490
Long-term borrowings			4,382,193				5,458,885				6,321,291				6,321,435				6,986,186
Total liabilities			126,413,822				122,525,730				123,591,864				108,762,039				104,156,108
Shareholders' equity:
Preferred			1,250,000				1,250,000				1,250,000				1,250,000				1,250,000
Common			14,937,283				14,851,013				14,695,105				14,565,794				14,466,649
Total shareholders' equity			16,187,283				16,101,013				15,945,105				15,815,794				15,716,649
Total liabilities and shareholders' equity		$	142,601,105				138,626,743				139,536,969				124,577,833				119,872,757

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates
		Three months ended																Change in balance						Year ended
		December 31,						December 31,					September 30,					December 31, 2020 from						December 31,											Change
Dollars in millions		2020						2019					2020					December 31,			September 30,			2020						2019					in
		Balance			Rate			Balance		Rate			Balance		Rate			2019			2020			Balance			Rate			Balance		Rate			balance
ASSETS
Interest-bearing deposits at banks		$	22,206		.10	%		8,944		1.65	%		16,440		.10	%		148	%		35	%		$	15,329		.21	%		6,783		2.08	%		126	%
Federal funds sold and agreements
to resell securities			3,799		.12			1,279		1.68			5,113		.13			197			-26				2,717		.26			327		1.68			—
Trading account			50		1.97			70		4.36			50		1.62			-30			—				53		2.10			68		2.72			-22
Investment securities			7,195		2.25			10,044		2.51			7,876		1.95			-28			-9				8,165		2.16			11,550		2.50			-29
Loans and leases, net of unearned
discount
Commercial, financial, etc.			27,713		3.56			23,548		4.36			28,333		3.05			18			-2				27,520		3.42			23,306		4.80			18
Real estate - commercial			37,707		4.15			35,039		5.06			37,243		4.19			8			1				36,986		4.39			34,885		5.21			6
Real estate - consumer			16,761		3.56			16,330		4.15			16,558		3.69			3			1				16,215		3.82			16,665		4.25			-3
Consumer			16,485		4.78			15,327		5.26			16,076		4.76			8			3				15,884		4.92			14,638		5.43			9
Total loans and leases, net			98,666		4.01			90,244		4.77			98,210		3.89			9			—				96,605		4.13			89,494		4.99			8
Total earning assets			131,916		3.15			110,581		4.27			127,689		3.13			19			3				122,869		3.43			108,222		4.53			14
Goodwill			4,593					4,593					4,593					—			—				4,593					4,593					—
Core deposit and other intangible
assets			16					31					19					-50			-19				21					38					-44
Other assets			8,038					7,349					7,880					9			2				7,997					6,731					19
Total assets		$	144,563					122,554					140,181					18	%		3	%		$	135,480					119,584					13	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Savings and interest-checking
deposits		$	69,133		.11			57,103		.66			65,848		.14			21	%		5	%		$	63,590		.23			54,610		.67			16	%
Time deposits			4,113		.97			6,015		1.58			4,715		1.22			-32			-13				4,960		1.34			6,309		1.51			-21
Deposits at Cayman Islands
office			826		.11			1,716		1.14			957		.10			-52			-14				1,117		.36			1,367		1.60			-18
Total interest-bearing
deposits			74,072		.16			64,834		.76			71,520		.21			14			4				69,667		.31			62,286		.78			12
Short-term borrowings			64		.01			675		1.86			62		.01			-91			3				62		.05			1,059		2.34			-94
Long-term borrowings			5,294		1.47			6,941		2.83			5,499		1.51			-24			-4				5,803		1.88			7,703		3.11			-25
Total interest-bearing liabilities			79,430		.25			72,450		.97			77,081		.30			10			3				75,532		.43			71,048		1.05			6
Noninterest-bearing deposits			46,904					32,069					44,786					46			5				41,683					30,763					35
Other liabilities			2,016					2,203					2,241					-8			-10				2,274					2,055					11
Total liabilities			128,350					106,722					124,108					20			3				119,489					103,866					15
Shareholders' equity			16,213					15,832					16,073					2			1				15,991					15,718					2
Total liabilities and
shareholders' equity		$	144,563					122,554					140,181					18	%		3	%		$	135,480					119,584					13	%
Net interest spread					2.90					3.30					2.83												3.00					3.48
Contribution of interest-free funds					.10					.34					.12												.16					.36
Net interest margin					3.00	%				3.64	%				2.95	%											3.16	%				3.84	%

 

Reconciliation of Quarterly GAAP to Non-GAAP Measures
		Three months ended								Year ended
		December 31								December 31
		2020				2019				2020				2019
Income statement data
In thousands, except per share
Net income
Net income		$	471,140				493,066				1,353,152				1,929,149
Amortization of core deposit and other intangible assets (1)			2,313				3,171				10,993				14,359
Net operating income		$	473,453				496,237				1,364,145				1,943,508
Earnings per common share
Diluted earnings per common share		$	3.52				3.60				9.94				13.75
Amortization of core deposit and other intangible assets (1)			.02				.02				.08				.11
Diluted net operating earnings per common share		$	3.54				3.62				10.02				13.86
Other expense
Other expense		$	845,008				823,683				3,385,240				3,468,682
Amortization of core deposit and other intangible assets			(3,129)				(4,305)				(14,869)				(19,490)
Noninterest operating expense		$	841,879				819,378				3,370,371				3,449,192
Efficiency ratio
Noninterest operating expense (numerator)		$	841,879				819,378				3,370,371				3,449,192
Taxable-equivalent net interest income			993,252				1,014,225				3,883,605				4,153,127
Other income			551,250				521,040				2,088,444				2,061,679
Less:  Gain (loss) on bank investment securities			1,619				(6,452)				(9,421)				18,037
Denominator		$	1,542,883				1,541,717				5,981,470				6,196,769
Efficiency ratio			54.6	%			53.1	%			56.3	%			55.7	%
Balance sheet data
In millions
Average assets
Average assets		$	144,563				122,554				135,480				119,584
Goodwill			(4,593)				(4,593)				(4,593)				(4,593)
Core deposit and other intangible assets			(16)				(31)				(21)				(38)
Deferred taxes			4				8				5				10
Average tangible assets		$	139,958				117,938				130,871				114,963
Average common equity
Average total equity		$	16,213				15,832				15,991				15,718
Preferred stock			(1,250)				(1,250)				(1,250)				(1,272)
Average common equity			14,963				14,582				14,741				14,446
Goodwill			(4,593)				(4,593)				(4,593)				(4,593)
Core deposit and other intangible assets			(16)				(31)				(21)				(38)
Deferred taxes			4				8				5				10
Average tangible common equity		$	10,358				9,966				10,132				9,825
At end of quarter
Total assets
Total assets		$	142,601				119,873
Goodwill			(4,593)				(4,593)
Core deposit and other intangible assets			(14)				(29)
Deferred taxes			4				7
Total tangible assets		$	137,998				115,258
Total common equity
Total equity		$	16,187				15,717
Preferred stock			(1,250)				(1,250)
Common equity			14,937				14,467
Goodwill			(4,593)				(4,593)
Core deposit and other intangible assets			(14)				(29)
Deferred taxes			4				7
Total tangible common equity		$	10,334				9,852

(1)	After any related tax effect.

 

Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
		Three months ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
Income statement data
In thousands, except per share
Net income
Net income		$	471,140				372,136				241,054				268,822				493,066
Amortization of core deposit and other intangible assets (1)			2,313				2,893				2,904				2,883				3,171
Net operating income		$	473,453				375,029				243,958				271,705				496,237
Earnings per common share
Diluted earnings per common share		$	3.52				2.75				1.74				1.93				3.60
Amortization of core deposit and other intangible assets (1)			.02				.02				.02				.02				.02
Diluted net operating earnings per common share		$	3.54				2.77				1.76				1.95				3.62
Other expense
Other expense		$	845,008				826,774				807,042				906,416				823,683
Amortization of core deposit and other intangible assets			(3,129)				(3,914)				(3,913)				(3,913)				(4,305)
Noninterest operating expense		$	841,879				822,860				803,129				902,503				819,378
Efficiency ratio
Noninterest operating expense (numerator)		$	841,879				822,860				803,129				902,503				819,378
Taxable-equivalent net interest income			993,252				947,114				961,371				981,868				1,014,225
Other income			551,250				520,561				487,273				529,360				521,040
Less:  Gain (loss) on bank investment securities			1,619				2,773				6,969				(20,782)				(6,452)
Denominator		$	1,542,883				1,464,902				1,441,675				1,532,010				1,541,717
Efficiency ratio			54.6	%			56.2	%			55.7	%			58.9	%			53.1	%
Balance sheet data
In millions
Average assets
Average assets		$	144,563				140,181				136,446				120,585				122,554
Goodwill			(4,593)				(4,593)				(4,593)				(4,593)				(4,593)
Core deposit and other intangible assets			(16)				(19)				(23)				(27)				(31)
Deferred taxes			4				5				6				7				8
Average tangible assets		$	139,958				135,574				131,836				115,972				117,938
Average common equity
Average total equity		$	16,213				16,073				15,953				15,720				15,832
Preferred stock			(1,250)				(1,250)				(1,250)				(1,250)				(1,250)
Average common equity			14,963				14,823				14,703				14,470				14,582
Goodwill			(4,593)				(4,593)				(4,593)				(4,593)				(4,593)
Core deposit and other intangible assets			(16)				(19)				(23)				(27)				(31)
Deferred taxes			4				5				6				7				8
Average tangible common equity		$	10,358				10,216				10,093				9,857				9,966
At end of quarter
Total assets
Total assets		$	142,601				138,627				139,537				124,578				119,873
Goodwill			(4,593)				(4,593)				(4,593)				(4,593)				(4,593)
Core deposit and other intangible assets			(14)				(17)				(21)				(25)				(29)
Deferred taxes			4				4				5				6				7
Total tangible assets		$	137,998				134,021				134,928				119,966				115,258
Total common equity
Total equity		$	16,187				16,101				15,945				15,816				15,717
Preferred stock			(1,250)				(1,250)				(1,250)				(1,250)				(1,250)
Common equity			14,937				14,851				14,695				14,566				14,467
Goodwill			(4,593)				(4,593)				(4,593)				(4,593)				(4,593)
Core deposit and other intangible assets			(14)				(17)				(21)				(25)				(29)
Deferred taxes			4				4				5				6				7
Total tangible common equity		$	10,334				10,245				10,086				9,954				9,852

(1)	After any related tax effect.

 

INVESTOR CONTACT:			Donald J. MacLeod
			(716) 842-5138
MEDIA CONTACT:			C. Michael Zabel
			(716) 842-5385

 

 

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SOURCE M&T Bank Corporation

FAQ

What were M&T Bank Corporation's earnings in Q4 2020?

M&T Bank Corporation reported diluted earnings per share of $3.52 in Q4 2020.

How much net income did M&T Bank Corporation generate in 2020?

M&T Bank Corporation generated net income of $1.35 billion in 2020.

What was the net interest income for M&T Bank Corporation in 2020?

The net interest income for M&T Bank Corporation in 2020 was $3.88 billion.

What is the status of nonaccrual loans for M&T Bank Corporation?

Nonaccrual loans for M&T Bank Corporation rose to $1.89 billion by the end of 2020.

How did the provision for credit losses change for M&T Bank Corporation in 2020?

The provision for credit losses increased significantly to $800 million in 2020, up from $176 million in 2019.