Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - M&T BANK CORP | d8ka.htm |
| EX-23.1 - EX-23.1 - M&T BANK CORP | dex231.htm |
Exhibit 99.2
M&T BANK CORPORATION
PRO FORMA CONDENSED COMBINED BALANCE SHEET
(DOLLARS IN THOUSANDS)
(UNAUDITED)
The following unaudited pro forma condensed combined balance sheet gives effect to the acquisition by M&T Bank Corporation (“M&T”) of Wilmington Trust Corporation (“Wilmington”) using the acquisition method of accounting assuming the acquisition was consummated on March 31, 2011. Wilmington was acquired by M&T on May 16, 2011.
| March 31, 2011 | ||||||||||||||||
| M&T | Wilmington | Pro forma adjustments |
Pro forma | |||||||||||||
| Assets |
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| Cash and due from banks |
$ | 972,005 | 166,707 | (330,000 | )(1) | $ | 808,712 | |||||||||
| Interest-bearing deposits and federal funds sold |
110,401 | 2,423,304 | 2,533,705 | |||||||||||||
| Trading account |
413,737 | — | 413,737 | |||||||||||||
| Investment securities |
6,507,165 | 539,062 | 8,927 | (2) | 7,055,154 | |||||||||||
| Loans and leases, net of unearned discount |
52,118,681 | 7,134,879 | (549,194 | )(3) | 58,704,366 | |||||||||||
| Allowance for credit losses |
(903,703 | ) | (409,461 | ) | 409,461 | (3) | (903,703 | ) | ||||||||
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| Loans and leases, net |
51,214,978 | 6,725,418 | (139,733 | )(3) | 57,800,663 | |||||||||||
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| Premises and equipment |
431,292 | 131,348 | 14,659 | (4) | 577,299 | |||||||||||
| Goodwill |
3,524,625 | 336,763 | (336,763 | )(5) | 3,524,625 | |||||||||||
| Core deposit and other intangible assets |
113,603 | 24,378 | 151,816 | (6) | 289,797 | |||||||||||
| Accrued interest and other assets |
4,593,402 | 381,186 | 423,817 | (7) | 5,398,405 | |||||||||||
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| Total assets |
$ | 67,881,208 | 10,728,166 | (207,277 | ) | $ | 78,402,097 | |||||||||
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| Liabilities and Shareholders’ Equity |
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| Interest-bearing deposits |
$ | 35,328,537 | 7,362,843 | 28,974 | (8) | $ | 42,720,354 | |||||||||
| Short-term borrowings |
504,676 | 86,359 | 591,035 | |||||||||||||
| Long-term borrowings |
7,305,420 | 595,537 | 55,107 | (9) | 7,956,064 | |||||||||||
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| Interest-bearing liabilities |
43,138,633 | 8,044,739 | 84,081 | 51,267,453 | ||||||||||||
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| Noninterest-bearing deposits |
15,219,562 | 1,476,726 | 16,696,288 | |||||||||||||
| Accrued interest and other liabilities |
1,015,495 | 390,403 | 54,453 | (10) | 1,460,351 | |||||||||||
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| Total liabilities |
59,373,690 | 9,911,868 | 138,534 | 69,424,092 | ||||||||||||
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| Preferred equity |
743,385 | 325,381 | (325,381 | )(1) | 743,385 | |||||||||||
| Common equity |
7,764,133 | 490,917 | (20,430 | )(1),(11) | 8,234,620 | |||||||||||
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| Total shareholders’ equity |
8,507,518 | 816,298 | (345,811 | ) | 8,978,005 | |||||||||||
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| Total liabilities and shareholders’ equity |
$ | 67,881,208 | 10,728,166 | (207,277 | ) | $ | 78,402,097 | |||||||||
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See accompanying notes to pro forma condensed combined financial statements.
M&T BANK CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
The following unaudited pro forma condensed combined statement of income for the year ended December 31, 2010 gives effect to M&T’s acquisition of Wilmington using the acquisition method of accounting assuming the acquisition was consummated on January 1, 2010. Wilmington was acquired by M&T on May 16, 2011.
| For the year ended December 31, 2010 | ||||||||||||||||
| M&T | Wilmington | Pro forma adjustments |
Pro forma | |||||||||||||
| Interest income |
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| Loans and leases, including fees |
$ | 2,394,082 | 343,340 | (19,614 | )(12) | $ | 2,717,808 | |||||||||
| Investment securities |
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| Fully taxable |
324,695 | 21,250 | (3,816 | )(13) | 342,129 | |||||||||||
| Exempt from federal taxes |
9,869 | 331 | 16 | (13) | 10,216 | |||||||||||
| Other |
1,149 | 1,676 | 2,825 | |||||||||||||
| Total interest income |
2,729,795 | 366,597 | (23,414 | ) | 3,072,978 | |||||||||||
| Interest expense |
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| Deposits |
187,685 | 55,501 | (17,620 | )(14) | 225,566 | |||||||||||
| Short-term borrowings |
3,006 | 1,995 | 5,001 | |||||||||||||
| Long-term borrowings |
271,578 | 31,992 | (14,487 | )(15) | 289,083 | |||||||||||
| Total interest expense |
462,269 | 89,488 | (32,107 | ) | 519,650 | |||||||||||
| Net interest income |
2,267,526 | 277,109 | 8,693 | 2,553,328 | ||||||||||||
| Provision for credit losses |
368,000 | 699,674 | 1,067,674 | |||||||||||||
| Net interest income after provision for credit losses |
1,899,526 | (422,565 | ) | 8,693 | 1,485,654 | |||||||||||
| Other income |
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| Mortgage banking revenues |
184,625 | 4,736 | 189,361 | |||||||||||||
| Service charges on deposit accounts |
478,133 | 29,737 | 507,870 | |||||||||||||
| Trust income |
122,613 | 371,854 | 494,467 | |||||||||||||
| Brokerage services income |
49,669 | 12,353 | 62,022 | |||||||||||||
| Trading account and foreign exchange gains |
27,286 | — | 27,286 | |||||||||||||
| Gain on bank investment securities |
2,770 | 3,757 | 6,527 | |||||||||||||
| Net other-than-temporary impairment losses recognized in earnings |
(86,281 | ) | (37,877 | ) | (124,158 | ) | ||||||||||
| Equity in earnings of Bayview Lending Group LLC |
(25,768 | ) | — | (25,768 | ) | |||||||||||
| Other revenue from operations |
355,053 | 18,741 | 373,794 | |||||||||||||
| Total other income |
1,108,100 | 403,301 | 1,511,401 | |||||||||||||
(continued)
M&T BANK CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
| For the year ended December 31, 2010 | ||||||||||||||||
| M&T | Wilmington | Pro forma adjustments |
Pro forma | |||||||||||||
| Other expense |
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| Salaries and employee benefits |
$ | 999,709 | 296,456 | $ | 1,296,165 | |||||||||||
| Equipment and net occupancy |
216,064 | 64,087 | 526 | (16) | 280,677 | |||||||||||
| Printing, postage and supplies |
33,847 | 8,535 | 42,382 | |||||||||||||
| Amortization of core deposit and other intangible assets |
58,103 | 6,595 | 24,570 | (17) | 89,268 | |||||||||||
| FDIC assessments |
79,324 | 23,462 | 102,786 | |||||||||||||
| Other costs of operations |
527,790 | 249,175 | 776,965 | |||||||||||||
| Total other expense |
1,914,837 | 648,310 | 25,096 | 2,588,243 | ||||||||||||
| Income before income taxes and noncontrolling interest |
1,092,789 | (667,574 | ) | (16,403 | ) | 408,812 | ||||||||||
| Income taxes |
356,628 | 51,655 | (295,862 | )(18),(19) | 112,421 | |||||||||||
| Net income before noncontrolling interest |
736,161 | (719,229 | ) | 279,459 | 296,391 | |||||||||||
| Net income attributable to noncontrolling interest |
— | (905 | ) | (905 | ) | |||||||||||
| Net income |
736,161 | (720,134 | ) | 279,459 | 295,486 | |||||||||||
| Dividends and amortization on preferred stock and income attributable to unvested stock-based compensation awards |
(60,335 | ) | (18,205 | ) | (78,540 | ) | ||||||||||
| Net income available to common shareholders |
$ | 675,826 | (738,339 | ) | 279,459 | $ | 216,946 | |||||||||
| Net income per common share |
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| Basic |
$ | 5.72 | $ | 1.77 | ||||||||||||
| Diluted |
$ | 5.69 | $ | 1.76 | ||||||||||||
| Average common shares outstanding |
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| Basic |
118,190,783 | 4,694,486 | (20) | 122,885,269 | ||||||||||||
| Diluted |
118,842,860 | 4,694,486 | (20) | 123,537,346 | ||||||||||||
See accompanying notes to pro forma condensed combined financial statements.
M&T BANK CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
The following unaudited pro forma condensed combined statement of income for the three months ended March 31, 2011 gives effect to M&T’s acquisition of Wilmington using the acquisition method of accounting assuming the acquisition was consummated on January 1, 2010. Wilmington was acquired by M&T on May 16, 2011.
| For the three months ended March 31, 2011 | ||||||||||||||||
| M&T | Wilmington | Pro forma adjustments |
Pro forma | |||||||||||||
| Interest income |
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| Loans and leases, including fees |
$ | 594,032 | 68,946 | (3,987 | )(12) | $ | 658,991 | |||||||||
| Investment securities |
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| Fully taxable |
70,662 | 4,176 | (931 | )(13) | 73,907 | |||||||||||
| Exempt from federal taxes |
2,346 | 111 | 4 | (13) | 2,461 | |||||||||||
| Other |
443 | 1,160 | 1,603 | |||||||||||||
| Total interest income |
667,483 | 74,393 | (4,914 | ) | 736,962 | |||||||||||
| Interest expense |
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| Deposits |
38,906 | 13,900 | (3,503 | )(14) | 49,303 | |||||||||||
| Short-term borrowings |
492 | 59 | 551 | |||||||||||||
| Long-term borrowings |
59,281 | 8,209 | (3,491 | )(15) | 63,999 | |||||||||||
| Total interest expense |
98,679 | 22,168 | (6,994 | ) | 113,853 | |||||||||||
| Net interest income |
568,804 | 52,225 | 2,080 | 623,109 | ||||||||||||
| Provision for credit losses |
75,000 | 41,334 | 116,334 | |||||||||||||
| Net interest income after provision for credit losses |
493,804 | 10,891 | 2,080 | 506,775 | ||||||||||||
| Other income |
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| Mortgage banking revenues |
45,156 | 758 | 45,914 | |||||||||||||
| Service charges on deposit accounts |
109,731 | 6,791 | 116,522 | |||||||||||||
| Trust income |
29,321 | 94,304 | 123,625 | |||||||||||||
| Brokerage services income |
14,296 | 2,881 | 17,177 | |||||||||||||
| Trading account and foreign exchange gains |
8,279 | — | 8,279 | |||||||||||||
| Gain on bank investment securities |
39,353 | — | 39,353 | |||||||||||||
| Net other-than-temporary impairment losses recognized in earnings |
(16,041 | ) | (4,986 | ) | (21,027 | ) | ||||||||||
| Equity in earnings of Bayview Lending Group LLC |
(6,678 | ) | — | (6,678 | ) | |||||||||||
| Other revenue from operations |
91,003 | 4,217 | 95,220 | |||||||||||||
| Total other income |
314,420 | 103,965 | 418,385 | |||||||||||||
(continued)
M&T BANK CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
| For the three months ended March 31, 2011 | ||||||||||||||||
| M&T | Wilmington | Pro forma adjustments |
Pro forma | |||||||||||||
| Other expense |
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| Salaries and employee benefits |
$ | 266,090 | 78,153 | $ | 344,243 | |||||||||||
| Equipment and net occupancy |
56,663 | 17,378 | 132 | (16) | 74,173 | |||||||||||
| Printing, postage and supplies |
9,202 | 2,026 | 11,228 | |||||||||||||
| Amortization of core deposit and other intangible assets |
12,314 | 1,510 | 5,000 | (17) | 18,824 | |||||||||||
| FDIC assessments |
19,094 | 8,697 | 27,791 | |||||||||||||
| Other costs of operations |
136,208 | 40,015 | 176,223 | |||||||||||||
| Total other expense |
499,571 | 147,779 | 5,132 | 652,482 | ||||||||||||
| Income before income taxes |
308,653 | (32,923 | ) | (3,052 | ) | 272,678 | ||||||||||
| Income taxes |
102,380 | 623 | (1,746 | )(18),(19) | 101,257 | |||||||||||
| Net income |
206,273 | (33,546 | ) | (1,306 | ) | 171,421 | ||||||||||
| Dividends and amortization on preferred stock and income attributable to unvested stock-based compensation awards |
(16,160 | ) | (4,551 | ) | (20,711 | ) | ||||||||||
| Net income available to common shareholders |
$ | 190,113 | (38,097 | ) | (1,306 | ) | $ | 150,710 | ||||||||
| Net income per common share |
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| Basic |
$ | 1.59 | $ | 1.22 | ||||||||||||
| Diluted |
$ | 1.59 | $ | 1.21 | ||||||||||||
| Average common shares outstanding |
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| Basic |
119,200,788 | 4,694,486 | (20) | 123,895,274 | ||||||||||||
| Diluted |
119,852,340 | 4,694,486 | (20) | 124,546,826 | ||||||||||||
See accompanying notes to pro forma condensed combined financial statements.
NOTES TO PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS (Unaudited)
| (1) | Purchase by M&T of $330,000,000 of preferred stock previously issued by Wilmington to the U.S. Department of Treasury. |
| (2) | Adjustment to reflect estimated fair value of acquired investment securities. |
| (3) | Adjustment to record acquired loans at estimated fair value. |
| (4) | Adjustment to record acquired premises and equipment at estimated fair value. |
| (5) | Adjustment to eliminate Wilmington’s goodwill. There was no acquired goodwill in this business combination. |
| (6) | Adjustment to record incremental core deposit and other intangible assets. |
| (7) | Adjustments to reverse Wilmington’s deferred tax valuation allowance of $292,742,000, as M&T expects to be able to realize deferred tax assets that Wilmington was unable to utilize. Other adjustments include the recording of the deferred tax-effects of acquisition accounting adjustments of $145,817,000 and other miscellaneous acquisition accounting adjustments of ($14,742,000). |
| (8) | Adjustment to record assumed interest-bearing deposits at estimated fair value. |
| (9) | Adjustment to record assumed long-term borrowings at estimated fair value. |
| (10) | Adjustments to record the estimated liability for change-of-control agreements with former Wilmington employees of $48,000,000 and other miscellaneous adjustments of $6,453,000. |
| (11) | Reflects the issuance of 4,694,486 shares of M&T common stock of $405,557,000, the elimination of Wilmington’s March 31, 2011 common equity of ($490,917,000), and the resulting gain recognized on the transaction of $64,930,000. The net adjustment of ($20,430,000) reflects the discount on redeemed preferred stock of ($4,619,000) (see note (1)) and the net effect of acquisition accounting adjustments on assets and liabilities of ($15,811,000). |
NOTES TO PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS (Unaudited), Continued
| (Dollars in thousands) | ||||||||||||||
| Year
ended December 31, 2011 |
Three months ended March 31, 2011 |
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| (12) | Net amortization of premiums and discounts on acquired loans and leases using a level-yield method over the estimated remaining terms to maturity of the loans and leases. | $ | (19,614 | ) | $ | (3,987 | ) | |||||||
| (13) | Reflects the amortization of premiums and discounts on acquired securities using the level-yield method over the estimated remaining term to maturity. | |||||||||||||
| Fully taxable | (3,816 | ) | (931 | ) | ||||||||||
| Exempt from federal taxes | 16 | 4 | ||||||||||||
| (14) | Amortization of the fair value adjustments related to deposits using the effective interest method over the remaining terms to maturity of the deposits. | (17,620 | ) | (3,503 | ) | |||||||||
| (15) | Amortization of the fair value adjustments related to long-term borrowings using the effective interest method over the remaining terms to maturity of the borrowings. | (14,487 | ) | (3,491 | ) | |||||||||
| (16) | Adjustments to depreciation expense related to fair value adjustments to premises and equipment. | 526 | 132 | |||||||||||
| (17) | Incremental amortization on an accelerated basis for core deposit and other intangible assets. | |||||||||||||
| Estimated life | ||||||||||||||
| Core deposit intangible |
7 years | 13,698 | 2,935 | |||||||||||
| Other intangible assets |
5 to 7 years | 10,872 | 2,065 | |||||||||||
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| 24,570 | 5,000 | |||||||||||||
| (18) | Income tax expense on pro forma adjustments above computed at a 39.25% combined tax rate. | (6,438 | ) | (1,198 | ) | |||||||||
| (19) | Reflects reversal of income tax expenses related to the establishment of a deferred tax valuation allowance by Wilmington in the respective periods (see note (7)). | (289,424 | ) | (548 | ) | |||||||||
| (20) | The pro forma net income per common share amounts and average common shares outstanding include the effect of the adjustments described above and the issuance of 4,694,486 shares of M&T common stock. | |||||||||||||