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

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.

 

M&T Bank Corporation

 

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