Exhibit 99.1

 

INVESTOR CONTACT:		Donald J. MacLeod (716) 842-5138		FOR IMMEDIATE RELEASE: July 20, 2016
MEDIA CONTACT:		C. Michael Zabel
		(716) 842-5385

M&T BANK CORPORATION ANNOUNCES SECOND QUARTER RESULTS

BUFFALO, NEW YORK — M&T Bank Corporation (“M&T”)(NYSE: MTB) today reported its results of operations for the quarter ended June 30, 2016.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles (“GAAP”) for the second quarter of 2016 were $1.98, equal to the year-earlier period and up from $1.73 recorded in the first quarter of 2016. GAAP-basis net income in the recently completed quarter totaled $336 million, up 17% from $287 million in the second quarter of 2015 and 13% from $299 million in the initial 2016 quarter. GAAP-basis net income for the second quarter of 2016 expressed as an annualized rate of return on average assets and average common shareholders’ equity was 1.09% and 8.38%, respectively, compared with 1.18% and 9.37%, respectively, in the year-earlier quarter and .97% and 7.44%, respectively, in the first quarter of 2016.

Commenting on the recent quarter’s performance, Darren J. King, Executive Vice President and Chief Financial Officer, noted, “M&T’s second quarter performance reflects impressive loan growth in our commercial portfolios, continued strong credit quality and further improved operating efficiency, contributing to an 11% rise in diluted net operating earnings per share. Average balances of loans to commercial customers grew an annualized 11% from the first quarter, while levels of net

 

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charge-offs and nonperforming loans improved. During the quarter we received a non-objection from the Federal Reserve to our 2016 capital plan and proposed capital actions that include a common stock repurchase program and an increase in the common stock dividend.”

For the six-month period ended June 30, 2016, diluted earnings per common share were $3.71, improved 2% from $3.63 in the year-earlier period. GAAP-basis net income for the first half of 2016 totaled $635 million, 20% higher than $528 million in the corresponding 2015 period. Expressed as an annualized rate of return on average assets and average common shareholders’ equity, GAAP-basis net income in the six-month period ended June 30, 2016 was 1.03% and 7.91%, respectively, compared with 1.10% and 8.69%, respectively, in the similar 2015 period.

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, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T, since such items are considered by management to be “nonoperating” in nature. The amounts of such “nonoperating” expense 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.

 

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Diluted net operating earnings per common share were $2.07 in the recent quarter, up from $2.01 and $1.87 in the year-earlier quarter and the first quarter of 2016, respectively. Net operating income rose to $351 million in the second quarter of 2016, 21% above $290 million in the second quarter of 2015 and 10% higher than $320 million in the initial 2016 quarter. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity, net operating income was 1.18% and 12.68%, respectively, in the second quarter of 2016, 1.24% and 13.76%, respectively, in the second quarter of 2015 and 1.09% and 11.62%, respectively, in the first quarter of 2016.

Diluted net operating earnings per common share in the first six months of 2016 were $3.94, up 7% from $3.69 in the first half of 2015. Net operating income during the six-month period ended June 30, 2016 was $671 million, 25% higher than $536 million in the corresponding 2015 period. Net operating income expressed as an annualized rate of return on average tangible assets and average tangible common shareholders’ equity was 1.14% and 12.15%, respectively, in the first half of 2016, compared with 1.16% and 12.85%, respectively, in the first six months of 2015.

Taxable-equivalent Net Interest Income. Net interest income expressed on a taxable-equivalent basis totaled $870 million in the recent quarter, up 26% from $689 million in the second quarter of 2015. That improvement resulted predominantly from a 28% rise in average earning assets, which grew to $111.9 billion in the second quarter of 2016 from $87.3 billion in the year-earlier quarter. The growth in average earning assets reflects the November 2015 acquisition of Hudson City Bancorp, Inc. (“Hudson City”) that added approximately $17.2 billion in average loans in the recent quarter. The net interest margin in the second quarter of 2016 was 3.13%,

 

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compared with 3.17% in the year-earlier quarter. Taxable-equivalent net interest income and the net interest margin in the initial 2016 quarter were $878 million and 3.18%, respectively.    

Provision for Credit Losses/Asset Quality. The provision for credit losses was $32 million in the second quarter of 2016, compared with $30 million in the year-earlier quarter and $49 million in the initial 2016 quarter. Net charge-offs of loans were $24 million during the recent quarter, compared with $21 million in the second quarter of 2015 and $42 million in the first quarter of 2016. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .11% and .13% in the second quarters of 2016 and 2015, respectively, and .19% in the first quarter of 2016.

Loans classified as nonaccrual totaled $849 million, or .96% of total loans outstanding at June 30, 2016, compared with $797 million or 1.17% a year earlier and $877 million or 1.00% at March 31, 2016. The higher level of nonaccrual loans at the two most recent quarter-ends as compared with June 30, 2015 reflects the normal migration of previously performing loans obtained in the acquisition of Hudson City that became over 90 days past due during the first half of 2016 and, as such, were not identifiable as purchased impaired as of the acquisition date. Assets taken in foreclosure of defaulted loans were $172 million at June 30, 2016, compared with $64 million at June 30, 2015 and $188 million at March 31, 2016. The higher level of such assets at the two most recent quarter-ends resulted from residential real estate properties associated with the Hudson City acquisition.

 

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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 $970 million at June 30, 2016 and $963 million at March 31, 2016, representing 1.10% of loans outstanding at each of those dates. The allowance was $930 million or 1.36% of loans at June 30, 2015. The decline in those ratios at the two most recent quarter-ends as compared with June 30, 2015 reflects the impact of residential mortgage loans obtained in the Hudson City acquisition.

Noninterest Income and Expense. Noninterest income totaled $448 million in the second quarter of 2016, compared with $497 million in the year-earlier quarter and $421 million in the first quarter of 2016. Reflected in noninterest income in the second quarter of 2015 was a $45 million pre-tax gain realized from the April 2015 sale of the trade processing business within the retirement services division. After considering the impact of that gain, total noninterest income in the recent quarter was little changed from the second quarter of 2015. As compared with the first quarter of 2016, the recent quarter’s 6% rise in noninterest income was largely due to higher trust income and mortgage banking revenues.

Noninterest expense in the second quarter of 2016 totaled $750 million, compared with $697 million in the year-earlier quarter and $776 million in the first quarter of 2016. Included in such amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets and merger-related expenses. Exclusive of those expenses, noninterest operating expenses were $726 million in the recent quarter, compared with $691 million in the second

 

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quarter of 2015 and $741 million in 2016’s initial quarter. The most significant factor for the higher level of operating expenses in the recent quarter as compared with the second quarter of 2015 was the impact of operations obtained in the Hudson City acquisition, which was partially offset by a $40 million cash contribution made to The M&T Charitable Foundation in the second 2015 quarter. As compared with the first quarter of 2016, the recent quarter’s lower level of operating expenses was due, in large part, to a decline in salaries and employee benefits, including stock-based compensation, which were seasonally higher in the initial 2016 period.

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 improved to 55.1% in the recent quarter from 58.2% in the second quarter of 2015 and 57.0% in the first quarter of 2016.

Balance Sheet. M&T had total assets of $123.8 billion at June 30, 2016 and $124.6 billion at March 31, 2016, up from $97.1 billion at June 30, 2015. Loans and leases, net of unearned discount, totaled $88.5 billion at the recent quarter-end, up $20.4 billion or 30% from $68.1 billion at June 30, 2015 and up an annualized 3% from $87.9 billion at March 31, 2016. During 2016’s second quarter, loans to commercial customers grew $1.2 billion, while residential real estate loans, largely comprised of mortgage loans obtained in the Hudson City acquisition, declined $769 million. As loans grew in the recent quarter, investment securities declined to $15.0 billion at June 30, 2016 from $15.5 billion at March 31, 2016. Investment securities totaled $14.8 billion at June 30, 2015. Total deposits rose to

 

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$94.7 billion at June 30, 2016 from $72.6 billion a year earlier and $94.2 billion at March 31, 2016.

Reflecting $3.1 billion of common equity issued in the acquisition of Hudson City, total shareholders’ equity rose $3.8 billion or 30% to $16.5 billion at June 30, 2016 from $12.7 billion a year earlier, representing 13.30% and 13.05%, respectively, of total assets. Common shareholders’ equity was $15.2 billion, or $96.49 per share, at June 30, 2016, up from $11.4 billion, or $85.90 per share, at June 30, 2015 and $15.1 billion, or $95.00 per share, at March 31, 2016. Tangible equity per common share rose 13% to $66.95 at the recent quarter-end from $59.39 a year earlier and was up 2% from $65.65 at March 31, 2016. 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 11.01% as of June 30, 2016.

In accordance with its 2015 capital plan, M&T repurchased 1,319,487 shares of common stock during the recent quarter at an average cost per share of $116.71, for a total cost of $154 million. In the aggregate, during the first six months of 2016, M&T repurchased 2,268,032 shares of common stock under that plan at an average cost per share of $111.99, for a total cost of $254 million.

Conference Call. Investors will have an opportunity to listen to M&T’s conference call to discuss second quarter financial results today at 11:00 a.m. Eastern Time. Those wishing to participate in the call may dial (877)780-2276. International

 

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participants, using any applicable international calling codes, may dial (973)582-2700. Callers should reference M&T Bank Corporation or the conference ID# 38736794. The conference call will be webcast live through M&T’s website at http://ir.mandtbank.com/events.cfm. A replay of the call will be available through Saturday, July 23, 2016 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID# 38736794. The event will also be archived and available by 7:00 p.m. today on M&T’s website at http://ir.mandtbank.com/events.cfm.

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 contains 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. 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

 

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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; legislation affecting the financial services industry as a whole, and M&T and its subsidiaries individually or collectively, including tax legislation; 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 or regulatory agencies; 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

 

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its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other Future Factors.

 

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Financial Highlights

 

		Three months ended June 30												Six months ended June 30
Amounts in thousands, except per share		2016				2015				Change				2016				2015				Change
Performance
Net income		$	336,031				286,688				17	%		$	634,559				528,301				20	%
Net income available to common shareholders			312,974				263,481				19	%			588,707				482,313				22	%
Per common share:
Basic earnings		$	1.98				1.99				-1	%		$	3.72				3.65				2	%
Diluted earnings			1.98				1.98				—				3.71				3.63				2	%
Cash dividends		$	.70				.70				—			$	1.40				1.40				—
Common shares outstanding:
Average—diluted (1)			158,341				133,116				19	%			158,761				132,944				19	%
Period end (2)			157,917				133,099				19	%			157,917				133,099				19	%
Return on (annualized):
Average total assets			1.09	%			1.18	%							1.03	%			1.10	%
Average common shareholders’ equity			8.38	%			9.37	%							7.91	%			8.69	%
Taxable-equivalent net interest income		$	870,341				689,148				26	%		$	1,748,637				1,354,574				29	%
Yield on average earning assets			3.51	%			3.52	%							3.53	%			3.53	%
Cost of interest-bearing liabilities			.56	%			.55	%							.55	%			.56	%
Net interest spread			2.95	%			2.97	%							2.98	%			2.97	%
Contribution of interest-free funds			.18	%			.20	%							.17	%			.20	%
Net interest margin			3.13	%			3.17	%							3.15	%			3.17	%
Net charge-offs to average total net loans (annualized)			.11	%			.13	%							.15	%			.17	%
Net operating results (3)
Net operating income		$	350,604				290,341				21	%		$	670,668				536,117				25	%
Diluted net operating earnings per common share			2.07				2.01				3	%			3.94				3.69				7	%
Return on (annualized):
Average tangible assets			1.18	%			1.24	%							1.14	%			1.16	%
Average tangible common equity			12.68	%			13.76	%							12.15	%			12.85	%
Efficiency ratio			55.06	%			58.23	%							56.03	%			59.79	%
		At June 30
Loan quality		2016				2015				Change
Nonaccrual loans		$	848,855				797,146				6	%
Real estate and other foreclosed assets			172,473				63,734				171	%
Total nonperforming assets		$	1,021,328				860,880				19	%
Accruing loans past due 90 days or more (4)		$	298,449				238,568				25	%
Government guaranteed loans included in totals above:
Nonaccrual loans		$	52,486				58,259				-10	%
Accruing loans past due 90 days or more			269,962				206,775				31	%
Renegotiated loans		$	211,159				197,145				7	%
Accruing loans acquired at a discount past due 90 days or more (5)		$	68,591				78,591				-13	%
Purchased impaired loans (6):
Outstanding customer balance		$	1,040,678				312,507				233	%
Carrying amount			662,059				169,240				291	%
Nonaccrual loans to total net loans			.96	%			1.17	%
Allowance for credit losses to total loans			1.10	%			1.36	%

 

(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 on page 18.

(4)	Excludes loans acquired at a discount.

(5)	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)	Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.

 

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Financial Highlights, Five Quarter Trend

 

		Three months ended
		June 30,				March 31,				December 31,				September 30,				June 30,
Amounts in thousands, except per share		2016				2016				2015				2015				2015
Performance
Net income		$	336,031				298,528				270,965				280,401				286,688
Net income available to common shareholders			312,974				275,748				248,059				257,346				263,481
Per common share:
Basic earnings		$	1.98				1.74				1.65				1.94				1.99
Diluted earnings			1.98				1.73				1.65				1.93				1.98
Cash dividends		$	.70				.70				.70				.70				.70
Common shares outstanding:
Average—diluted (1)			158,341				159,181				150,718				133,376				133,116
Period end (2)			157,917				159,156				159,600				133,311				133,099
Return on (annualized):
Average total assets			1.09	%			.97	%			.93	%			1.13	%			1.18	%
Average common shareholders’ equity			8.38	%			7.44	%			7.22	%			8.93	%			9.37	%
Taxable-equivalent net interest income		$	870,341				878,296				813,401				699,075				689,148
Yield on average earning assets			3.51	%			3.54	%			3.48	%			3.48	%			3.52	%
Cost of interest-bearing liabilities			.56	%			.53	%			.54	%			.55	%			.55	%
Net interest spread			2.95	%			3.01	%			2.94	%			2.93	%			2.97	%
Contribution of interest-free funds			.18	%			.17	%			.18	%			.21	%			.20	%
Net interest margin			3.13	%			3.18	%			3.12	%			3.14	%			3.17	%
Net charge-offs to average total net loans (annualized)			.11	%			.19	%			.18	%			.24	%			.13	%
Net operating results (3)
Net operating income		$	350,604				320,064				337,613				282,907				290,341
Diluted net operating earnings per common share			2.07				1.87				2.09				1.95				2.01
Return on (annualized):
Average tangible assets			1.18	%			1.09	%			1.21	%			1.18	%			1.24	%
Average tangible common equity			12.68	%			11.62	%			13.26	%			12.98	%			13.76	%
Efficiency ratio			55.06	%			57.00	%			55.53	%			57.05	%			58.23	%
		June 30,				March 31,				December 31,				September 30,				June 30,
Loan quality		2016				2016				2015				2015				2015
Nonaccrual loans		$	848,855				876,691				799,409				787,098				797,146
Real estate and other foreclosed assets			172,473				188,004				195,085				66,144				63,734
Total nonperforming assets		$	1,021,328				1,064,695				994,494				853,242				860,880
Accruing loans past due 90 days or more (4)		$	298,449				336,170				317,441				231,465				238,568
Government guaranteed loans included in totals above:
Nonaccrual loans		$	52,486				49,688				47,052				48,955				58,259
Accruing loans past due 90 days or more			269,962				279,340				276,285				193,998				206,775
Renegotiated loans		$	211,159				200,771				182,865				189,639				197,145
Accruing loans acquired at a discount past due 90 days or more (5)		$	68,591				61,767				68,473				80,827				78,591
Purchased impaired loans (6):
Outstanding customer balance		$	1,040,678				1,124,776				1,204,004				278,979				312,507
Carrying amount			662,059				715,874				768,329				149,421				169,240
Nonaccrual loans to total net loans			.96	%			1.00	%			.91	%			1.15	%			1.17	%
Allowance for credit losses to total loans			1.10	%			1.10	%			1.09	%			1.36	%			1.36	%

 

(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 on page 19.

(4)	Excludes loans acquired at a discount.

(5)	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)	Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.

 

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Condensed Consolidated Statement of Income

 

		Three months ended June 30												Six months ended June 30
Dollars in thousands		2016				2015				Change				2016				2015				Change
Interest income		$	970,621				760,354				28	%		$	1,943,455				1,498,441				30	%
Interest expense			106,802				77,226				38				207,672				155,725				33
Net interest income			863,819				683,128				26				1,735,783				1,342,716				29
Provision for credit losses			32,000				30,000				7				81,000				68,000				19
Net interest income after provision for credit losses			831,819				653,128				27				1,654,783				1,274,716				30
Other income
Mortgage banking revenues			89,383				102,602				-13				171,446				204,203				-16
Service charges on deposit accounts			103,872				105,257				-1				206,277				207,601				-1
Trust income			120,450				118,598				2				231,527				242,332				-4
Brokerage services income			16,272				16,861				-3				32,276				32,322				—
Trading account and foreign exchange gains			13,222				6,046				119				20,680				12,277				68
Gain (loss) on bank investment securities			264				(10	)			—				268				(108	)			—
Other revenues from operations			104,791				147,673				-29				206,713				238,603				-13
Total other income			448,254				497,027				-10				869,187				937,230				-7
Other expense
Salaries and employee benefits			398,675				361,657				10				830,460				751,550				10
Equipment and net occupancy			75,724				66,852				13				149,902				133,322				12
Printing, postage and supplies			9,907				9,305				6				21,893				18,895				16
Amortization of core deposit and other intangible assets			11,418				5,965				91				23,737				12,758				86
FDIC assessments			22,370				10,801				107				47,595				21,461				122
Other costs of operations			231,801				242,048				-4				452,403				445,017				2
Total other expense			749,895				696,628				8				1,525,990				1,383,003				10
Income before income taxes			530,178				453,527				17				997,980				828,943				20
Applicable income taxes			194,147				166,839				16				363,421				300,642				21
Net income		$	336,031				286,688				17	%		$	634,559				528,301				20	%

 

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Condensed Consolidated Statement of Income, Five Quarter Trend

 

		Three months ended
		June 30,				March 31,				December 31,				September 30,				June 30,
Dollars in thousands		2016				2016				2015				2015				2015
Interest income		$	970,621				972,834				902,377				770,026				760,354
Interest expense			106,802				100,870				95,333				77,199				77,226
Net interest income			863,819				871,964				807,044				692,827				683,128
Provision for credit losses			32,000				49,000				58,000				44,000				30,000
Net interest income after provision for credit losses			831,819				822,964				749,044				648,827				653,128
Other income
Mortgage banking revenues			89,383				82,063				87,500				84,035				102,602
Service charges on deposit accounts			103,872				102,405				105,748				107,259				105,257
Trust income			120,450				111,077				114,564				113,744				118,598
Brokerage services income			16,272				16,004				15,546				16,902				16,861
Trading account and foreign exchange gains			13,222				7,458				9,938				8,362				6,046
Gain (loss) on bank investment securities			264				4				(22	)			—				(10	)
Other revenues from operations			104,791				101,922				114,834				109,397				147,673
Total other income			448,254				420,933				448,108				439,699				497,027
Other expense
Salaries and employee benefits			398,675				431,785				434,413				363,567				361,657
Equipment and net occupancy			75,724				74,178				70,747				68,470				66,852
Printing, postage and supplies			9,907				11,986				10,905				8,691				9,305
Amortization of core deposit and other intangible assets			11,418				12,319				9,576				4,090				5,965
FDIC assessments			22,370				25,225				19,562				11,090				10,801
Other costs of operations			231,801				220,602				240,910				197,908				242,048
Total other expense			749,895				776,095				786,113				653,816				696,628
Income before income taxes			530,178				467,802				411,039				434,710				453,527
Applicable income taxes			194,147				169,274				140,074				154,309				166,839
Net income		$	336,031				298,528				270,965				280,401				286,688

 

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15 -15-15-15-15

M&T BANK CORPORATION

 

Condensed Consolidated Balance Sheet

 

		June 30
Dollars in thousands		2016				2015				Change
ASSETS
Cash and due from banks		$	1,284,442				1,347,858				-5	%
Interest-bearing deposits at banks			8,474,839				4,045,852				109
Federal funds sold			—				3,000				-100
Trading account assets			506,131				277,009				83
Investment securities			14,963,084				14,751,637				1
Loans and leases:
Commercial, financial, etc.			21,469,242				20,111,028				7
Real estate—commercial			30,711,230				28,442,488				8
Real estate—consumer			24,530,249				8,444,542				190
Consumer			11,811,277				11,133,194				6
Total loans and leases, net of unearned discount			88,521,998				68,131,252				30
Less: allowance for credit losses			970,496				929,987				4
Net loans and leases			87,551,502				67,201,265				30
Goodwill			4,593,112				3,513,325				31
Core deposit and other intangible assets			116,531				22,269				423
Other assets			6,330,943				5,917,861				7
Total assets		$	123,820,584				97,080,076				28	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits		$	30,700,066				27,674,588				11	%
Interest-bearing deposits			63,756,514				44,787,590				42
Deposits at Cayman Islands office			193,523				167,441				16
Total deposits			94,650,103				72,629,619				30
Short-term borrowings			407,123				153,299				166
Accrued interest and other liabilities			1,963,093				1,453,249				35
Long-term borrowings			10,328,751				10,175,912				2
Total liabilities			107,349,070				84,412,079				27
Shareholders’ equity:
Preferred			1,231,500				1,231,500				—
Common (1)			15,240,014				11,436,497				33
Total shareholders’ equity			16,471,514				12,667,997				30
Total liabilities and shareholders’ equity		$	123,820,584				97,080,076				28	%

 

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $101.0 million at June 30, 2016 and $217.5 million at June 30, 2015.

 

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16 -16-16-16-16

M&T BANK CORPORATION

 

Condensed Consolidated Balance Sheet, Five Quarter Trend

 

		June 30,				March 31,				December 31,				September 30,				June 30,
Dollars in thousands		2016				2016				2015				2015				2015
ASSETS
Cash and due from banks		$	1,284,442				1,178,175				1,368,040				1,249,704				1,347,858
Interest-bearing deposits at banks			8,474,839				9,545,181				7,594,350				4,713,266				4,045,852
Federal funds sold			—				—				—				—				3,000
Trading account assets			506,131				467,987				273,783				340,710				277,009
Investment securities			14,963,084				15,467,320				15,656,439				14,494,539				14,751,637
Loans and leases:
Commercial, financial, etc.			21,469,242				21,226,577				20,422,338				20,233,177				20,111,028
Real estate—commercial			30,711,230				29,713,293				29,197,311				28,720,537				28,442,488
Real estate—consumer			24,530,249				25,299,638				26,270,103				8,211,062				8,444,542
Consumer			11,811,277				11,632,958				11,599,747				11,375,472				11,133,194
Total loans and leases, net of unearned discount			88,521,998				87,872,466				87,489,499				68,540,248				68,131,252
Less: allowance for credit losses			970,496				962,752				955,992				933,798				929,987
Net loans and leases			87,551,502				86,909,714				86,533,507				67,606,450				67,201,265
Goodwill			4,593,112				4,593,112				4,593,112				3,513,325				3,513,325
Core deposit and other intangible assets			116,531				127,949				140,268				18,179				22,269
Other assets			6,330,943				6,336,194				6,628,385				5,860,889				5,917,861
Total assets		$	123,820,584				124,625,632				122,787,884				97,797,062				97,080,076
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits		$	30,700,066				29,709,218				29,110,635				28,189,330				27,674,588
Interest-bearing deposits			63,756,514				64,338,571				62,677,036				44,549,028				44,787,590
Deposits at Cayman Islands office			193,523				166,787				170,170				206,185				167,441
Total deposits			94,650,103				94,214,576				91,957,841				72,944,543				72,629,619
Short-term borrowings			407,123				1,766,826				2,132,182				173,783				153,299
Accrued interest and other liabilities			1,963,093				1,948,142				1,870,714				1,582,513				1,453,249
Long-term borrowings			10,328,751				10,341,035				10,653,858				10,174,289				10,175,912
Total liabilities			107,349,070				108,270,579				106,614,595				84,875,128				84,412,079
Shareholders’ equity:
Preferred			1,231,500				1,231,500				1,231,500				1,231,500				1,231,500
Common (1)			15,240,014				15,123,553				14,941,789				11,690,434				11,436,497
Total shareholders’ equity			16,471,514				16,355,053				16,173,289				12,921,934				12,667,997
Total liabilities and shareholders’ equity		$	123,820,584				124,625,632				122,787,884				97,797,062				97,080,076

 

(1)	Reflects accumulated other comprehensive loss, net of applicable income tax effect, of $101.0 million at June 30, 2016, $150.2 million at March 31, 2016, $251.6 million at December 31, 2015, $163.5 million at September 30, 2015 and $217.5 million at June 30, 2015.

 

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17 -17-17-17-17

M&T BANK CORPORATION

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates

 

		Three months ended																								Change in balance June 30, 2016 from								Six months ended June 30																Change in balance
		June 30,								June 30,								March 31,
Dollars in millions		2016								2015								2016								June 30,				March 31,				2016								2015
		Balance				Rate				Balance				Rate				Balance				Rate				2015				2016				Balance				Rate				Balance				Rate
ASSETS
Interest-bearing deposits at banks		$	8,711				.51	%			5,326				.25	%			8,193				.51	%			64	%			6	%		$	8,452				.51	%			5,200				.25	%			63	%
Federal funds sold			—				—				39				.10				1				.77				-100				-100				—				—				68				.10				-100
Trading account assets			92				1.58				103				.92				85				1.78				-11				8				88				1.68				91				1.76				-3
Investment securities			14,914				2.49				14,195				2.68				15,348				2.60				5				-3				15,131				2.55				13,787				2.67				10
Loans and leases, net of unearned discount
Commercial, financial, etc.			21,450				3.47				19,973				3.18				20,717				3.39				7				4				21,083				3.43				19,717				3.19				7
Real estate—commercial			30,134				4.09				28,208				4.19				29,426				4.16				7				2				29,780				4.12				27,904				4.18				7
Real estate—consumer			24,858				3.94				8,447				4.19				25,859				3.93				194				-4				25,359				3.94				8,509				4.17				198
Consumer			11,713				4.55				11,042				4.46				11,582				4.55				6				1				11,648				4.55				11,002				4.48				6
Total loans and leases, net			88,155				3.99				67,670				3.96				87,584				3.99				30				1				87,870				3.99				67,132				3.97				31
Total earning assets			111,872				3.51				87,333				3.52				111,211				3.54				28				1				111,541				3.53				86,278				3.53				29
Goodwill			4,593								3,514								4,593								31				—				4,593								3,520								31
Core deposit and other intangible assets			122								25								134								388				-9				128								28								354
Other assets			7,119								6,726								7,314								6				-3				7,217								6,924								4
Total assets		$	123,706								97,598								123,252								27	%			—	%		$	123,479								96,750								28	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits
Interest-checking deposits		$	1,332				.12				1,333				.11				1,359				.12				—	%			-2	%		$	1,345				.12				1,228				.11				10	%
Savings deposits			50,515				.16				41,712				.10				48,976				.13				21				3				49,746				.15				41,619				.10				20
Time deposits			12,755				.85				2,948				.50				12,999				.75				333				-2				12,877				.80				2,982				.50				332
Deposits at Cayman Islands office			182				.40				212				.28				187				.42				-14				-3				185				.41				218				.27				-15
Total interest-bearing deposits			64,784				.30				46,205				.13				63,521				.26				40				2				64,153				.28				46,047				.13				39
Short-term borrowings			1,078				.43				195				.07				2,082				.42				452				-48				1,579				.42				196				.07				707
Long-term borrowings			10,297				2.27				10,164				2.47				10,528				2.21				1				-2				10,413				2.24				10,000				2.55				4
Total interest-bearing liabilities			76,159				.56				56,564				.55				76,131				.53				35				—				76,145				.55				56,243				.56				35
Noninterest-bearing deposits			29,249								26,753								28,870								9				1				29,059								26,285								11
Other liabilities			1,921								1,645								1,972								17				-3				1,947								1,674								16
Total liabilities			107,329								84,962								106,973								26				—				107,151								84,202								27
Shareholders’ equity			16,377								12,636								16,279								30				1				16,328								12,548								30
Total liabilities and shareholders’ equity		$	123,706								97,598								123,252								27	%			—	%		$	123,479								96,750								28	%
Net interest spread							2.95								2.97								3.01																2.98								2.97
Contribution of interest-free funds							.18								.20								.17																.17								.20
Net interest margin							3.13	%							3.17	%							3.18	%															3.15	%							3.17	%

 

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18 -18-18-18-18

M&T BANK CORPORATION

 

Reconciliation of Quarterly GAAP to Non-GAAP Measures

 

		Three months ended June 30								Six months ended June 30
		2016				2015				2016				2015
Income statement data
In thousands, except per share
Net income
Net income		$	336,031				286,688			$	634,559				528,301
Amortization of core deposit and other intangible assets (1)			6,936				3,653				14,424				7,816
Merger-related expenses (1)			7,637				—				21,685				—
Net operating income		$	350,604				290,341			$	670,668				536,117
Earnings per common share
Diluted earnings per common share		$	1.98				1.98			$	3.71				3.63
Amortization of core deposit and other intangible assets (1)			.04				.03				.09				.06
Merger-related expenses (1)			.05				—				.14				—
Diluted net operating earnings per common share		$	2.07				2.01			$	3.94				3.69
Other expense
Other expense		$	749,895				696,628			$	1,525,990				1,383,003
Amortization of core deposit and other intangible assets			(11,418	)			(5,965	)			(23,737	)			(12,758	)
Merger-related expenses			(12,593	)			—				(35,755	)			—
Noninterest operating expense		$	725,884				690,663			$	1,466,498				1,370,245
Merger-related expenses
Salaries and employee benefits		$	60				—			$	5,334				—
Equipment and net occupancy			339				—				1,278				—
Printing, postage and supplies			545				—				1,482				—
Other costs of operations			11,649				—				27,661				—
Total		$	12,593				—			$	35,755				—
Efficiency ratio
Noninterest operating expense (numerator)		$	725,884				690,663			$	1,466,498				1,370,245
Taxable-equivalent net interest income			870,341				689,148				1,748,637				1,354,574
Other income			448,254				497,027				869,187				937,230
Less: Gain (loss) on bank investment securities			264				(10	)			268				(108	)
Denominator		$	1,318,331				1,186,185			$	2,617,556				2,291,912
Efficiency ratio			55.06	%			58.23	%			56.03	%			59.79	%
Balance sheet data
In millions
Average assets
Average assets		$	123,706				97,598			$	123,479				96,750
Goodwill			(4,593	)			(3,514	)			(4,593	)			(3,520	)
Core deposit and other intangible assets			(122	)			(25	)			(128	)			(28	)
Deferred taxes			48				8				50				9
Average tangible assets		$	119,039				94,067			$	118,808				93,211
Average common equity
Average total equity		$	16,377				12,636			$	16,328				12,548
Preferred stock			(1,232	)			(1,232	)			(1,232	)			(1,232	)
Average common equity			15,145				11,404				15,096				11,316
Goodwill			(4,593	)			(3,514	)			(4,593	)			(3,520	)
Core deposit and other intangible assets			(122	)			(25	)			(128	)			(28	)
Deferred taxes			48				8				50				9
Average tangible common equity		$	10,478				7,873			$	10,425				7,777
At end of quarter
Total assets
Total assets		$	123,821				97,080
Goodwill			(4,593	)			(3,513	)
Core deposit and other intangible assets			(117	)			(22	)
Deferred taxes			46				7
Total tangible assets		$	119,157				93,552
Total common equity
Total equity		$	16,472				12,668
Preferred stock			(1,232	)			(1,232	)
Undeclared dividends—cumulative preferred stock			(3	)			(3	)
Common equity, net of undeclared cumulative preferred dividends			15,237				11,433
Goodwill			(4,593	)			(3,513	)
Core deposit and other intangible assets			(117	)			(22	)
Deferred taxes			46				7
Total tangible common equity		$	10,573				7,905

 

(1)	After any related tax effect.

 

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19 -19-19-19-19

M&T BANK CORPORATION

 

Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend

 

		Three months ended
		June 30, 2016				March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015
Income statement data
In thousands, except per share
Net income
Net income		$	336,031				298,528				270,965				280,401				286,688
Amortization of core deposit and other intangible assets (1)			6,936				7,488				5,828				2,506				3,653
Merger-related expenses (1)			7,637				14,048				60,820				—				—
Net operating income		$	350,604				320,064				337,613				282,907				290,341
Earnings per common share
Diluted earnings per common share		$	1.98				1.73				1.65				1.93				1.98
Amortization of core deposit and other intangible assets (1)			.04				.05				.04				.02				.03
Merger-related expenses (1)			.05				.09				.40				—				—
Diluted net operating earnings per common share		$	2.07				1.87				2.09				1.95				2.01
Other expense
Other expense		$	749,895				776,095				786,113				653,816				696,628
Amortization of core deposit and other intangible assets			(11,418	)			(12,319	)			(9,576	)			(4,090	)			(5,965	)
Merger-related expenses			(12,593	)			(23,162	)			(75,976	)			—				—
Noninterest operating expense		$	725,884				740,614				700,561				649,726				690,663
Merger-related expenses
Salaries and employee benefits		$	60				5,274				51,287				—				—
Equipment and net occupancy			339				939				3				—				—
Printing, postage and supplies			545				937				504				—				—
Other costs of operations			11,649				16,012				24,182				—				—
Other expense			12,593				23,162				75,976				—				—
Provision for credit losses			—				—				21,000				—				—
Total		$	12,593				23,162				96,976				—				—
Efficiency ratio
Noninterest operating expense (numerator)		$	725,884				740,614				700,561				649,726				690,663
Taxable-equivalent net interest income			870,341				878,296				813,401				699,075				689,148
Other income			448,254				420,933				448,108				439,699				497,027
Less: Gain (loss) on bank investment securities			264				4				(22	)			—				(10	)
Denominator		$	1,318,331				1,299,225				1,261,531				1,138,774				1,186,185
Efficiency ratio			55.06	%			57.00	%			55.53	%			57.05	%			58.23	%
Balance sheet data
In millions
Average assets
Average assets		$	123,706				123,252				115,052				98,515				97,598
Goodwill			(4,593	)			(4,593	)			(4,218	)			(3,513	)			(3,514	)
Core deposit and other intangible assets			(122	)			(134	)			(101	)			(20	)			(25	)
Deferred taxes			48				52				39				7				8
Average tangible assets		$	119,039				118,577				110,772				94,989				94,067
Average common equity
Average total equity		$	16,377				16,279				15,007				12,787				12,636
Preferred stock			(1,232	)			(1,232	)			(1,232	)			(1,232	)			(1,232	)
Average common equity			15,145				15,047				13,775				11,555				11,404
Goodwill			(4,593	)			(4,593	)			(4,218	)			(3,513	)			(3,514	)
Core deposit and other intangible assets			(122	)			(134	)			(101	)			(20	)			(25	)
Deferred taxes			48				52				39				7				8
Average tangible common equity		$	10,478				10,372				9,495				8,029				7,873
At end of quarter
Total assets
Total assets		$	123,821				124,626				122,788				97,797				97,080
Goodwill			(4,593	)			(4,593	)			(4,593	)			(3,513	)			(3,513	)
Core deposit and other intangible assets			(117	)			(128	)			(140	)			(18	)			(22	)
Deferred taxes			46				50				54				6				7
Total tangible assets		$	119,157				119,955				118,109				94,272				93,552
Total common equity
Total equity		$	16,472				16,355				16,173				12,922				12,668
Preferred stock			(1,232	)			(1,232	)			(1,232	)			(1,232	)			(1,232	)
Undeclared dividends—cumulative preferred stock			(3	)			(3	)			(2	)			(3	)			(3	)
Common equity, net of undeclared cumulative preferred dividends			15,237				15,120				14,939				11,687				11,433
Goodwill			(4,593	)			(4,593	)			(4,593	)			(3,513	)			(3,513	)
Core deposit and other intangible assets			(117	)			(128	)			(140	)			(18	)			(22	)
Deferred taxes			46				50				54				6				7
Total tangible common equity		$	10,573				10,449				10,260				8,162				7,905

 

(1)	After any related tax effect.

 

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