M&T Bank Corporation Announces Third Quarter Results

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Oct 17, 2014, 08:08 ET

BUFFALO, N.Y., Oct. 17, 2014 /PRNewswire/ -- M&T Bank Corporation ("M&T")(NYSE: MTB) today reported its results of operations for the quarter ended September 30, 2014.

GAAP Results of Operations. Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the third quarter of 2014 were $1.91, compared with $2.11 in the year-earlier quarter and $1.98 in the second quarter of 2014. GAAP-basis net income in the recently completed quarter aggregated $275 million, compared with $294 million and $284 million in the third quarter of 2013 and the second quarter of 2014, respectively. GAAP-basis net income for the third quarter of 2014 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.17% and 9.18%, respectively, compared with 1.39% and 11.06%, respectively, in the year-earlier quarter and 1.27% and 9.79%, respectively, in 2014's second quarter. Reflected in last year's third quarter profits were after-tax gains of $34 million from loan securitization transactions that added $.26 of diluted earnings per common share to that quarter's results.

Commenting on M&T's financial performance for the recent quarter, Rene F. Jones, Vice Chairman and Chief Financial Officer, noted, "Revenue levels were largely unchanged in comparison with the linked quarter. Average loans grew modestly and fee income declined slightly from the strong second quarter performance. Most important was the substantial progress we have made on our key initiatives related to strengthening M&T's BSA/AML, compliance and risk management infrastructure. That progress led to the continuation of an elevated level of operating expenses, but we firmly believe that our decision to invest in these initiatives is money well-spent. Significantly, credit quality remained quite strong, as reflected in lower levels of nonperforming loans and net charge-offs when compared with the previous quarter."

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 gains and expenses associated with merging acquired operations into M&T, since such items are considered by management to be "nonoperating" in nature. Although "net operating income" as defined by M&T is not a GAAP measure, M&T's management believes that this information helps investors understand the effect of acquisition activity in reported results.

Diluted net operating earnings per common share were $1.94 in the third quarter of 2014, compared with $2.16 and $2.02 in the year-earlier quarter and the second quarter of 2014, respectively. Net operating income during the recent quarter was $280 million, compared with $301 million in the third quarter of 2013 and $290 million in 2014's second quarter. Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.24% and 13.80%, respectively, in the recent quarter, compared with 1.48% and 17.64%, respectively, in the third quarter of 2013 and 1.35% and 14.92%, respectively, in the second quarter of 2014.

Taxable-equivalent Net Interest Income. Net interest income expressed on a taxable-equivalent basis totaled $675 million in each of the second and third quarters of 2014. A 17 basis point decline in the net interest margin to 3.23% in the recent quarter was offset by a $3.2 billion increase in average earning assets, including a $1.8 billion rise in average investment securities. Taxable-equivalent net interest income in the recent quarter was down $4 million from $679 million in the year-earlier period reflecting a 38 basis point decline of the net interest margin from 3.61% in the third quarter of 2013 that was substantially offset by an $8.1 billion rise in average earning assets, including $5.8 billion of investment securities. In each quarterly comparison, the decline in the net interest margin was attributable to increased lower-yielding balances of investment securities and deposits held at the Federal Reserve Bank of New York combined with continuing downward pressure on yields earned on loans. The growth in investment securities resulted from progress made in response to new regulatory liquidity requirements that were recently finalized and will become effective for M&T in January 2016.

Provision for Credit Losses/Asset Quality. The provision for credit losses was $29 million in the recent quarter, compared with $48 million in the third quarter of 2013 and $30 million in 2014's second quarter. Net charge-offs of loans were $28 million during 2014's third quarter, compared with $48 million and $29 million in the third quarter of 2013 and second quarter of 2014, respectively. Expressed as an annualized percentage of average loans outstanding, net charge-offs were .17% and .29% in the third quarter of 2014 and 2013, respectively, and .18% in the second quarter of 2014.

Loans classified as nonaccrual declined to $848 million, or 1.29% of total loans outstanding at September 30, 2014, improved from $916 million or 1.44% at September 30, 2013 and $880 million or 1.36% at June 30, 2014. Assets taken in foreclosure of defaulted loans totaled $68 million at September 30, 2014, compared with $89 million and $60 million at September 30, 2013 and June 30, 2014, respectively.

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 totaled $919 million or 1.40% of loans outstanding at September 30, 2014, compared with $916 million or 1.44% at September 30, 2013 and $918 million or 1.42% at June 30, 2014.

Noninterest Income and Expense. Noninterest income totaled $451 million in the recent quarter, little changed from $456 million in the second quarter of 2014, but down from $477 million in the third quarter of 2013 when $56 million of pre-tax gains from loan securitization transactions were realized. Excluding those gains, noninterest income in the year-earlier quarter aggregated $421 million. The improvement in the recent quarter as compared with 2013's third quarter, exclusive of the gains from securitizations, resulted predominantly from higher residential mortgage banking revenues associated with loan servicing activities.

Noninterest expenses in the third quarter of 2014 totaled $679 million, compared with $659 million in the year-earlier quarter and $681 million in the second quarter of 2014. Included in such amounts are expenses considered to be nonoperating in nature consisting of amortization of core deposit and other intangible assets. Exclusive of those expenses, noninterest operating expenses were $672 million in each of the two most recent quarters and $648 million in the third quarter of 2013. The higher level of operating expenses in the recent quarter as compared with the year-earlier period was predominantly attributable to increased costs for professional services and salaries associated with BSA/AML activities, compliance, capital planning and stress testing, and risk management initiatives.

The efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities), measures the relationship of operating expenses to revenues. M&T's efficiency ratio was 59.7% in the recent quarter, 59.4% in the second quarter of 2014 and 56.0% in 2013's third quarter.

Balance Sheet. M&T had total assets of $97.2 billion at September 30, 2014, up 15% from $84.4 billion a year earlier. Investment securities were $13.3 billion at the recent quarter-end, up $5.0 billion or 61% from September 30, 2013. M&T added investment securities during 2013 and 2014 through purchase and loan securitization transactions in order to enhance its liquidity position in response to new regulatory requirements. Loans and leases, net of unearned discount, totaled $65.6 billion at September 30, 2014, $1.9 billion or 3% above $63.7 billion a year earlier. Total deposits rose 12% to $74.3 billion at the recent quarter-end from $66.6 billion at September 30, 2013.

Total shareholders' equity also rose 12% to $12.3 billion at September 30, 2014 from $11.0 billion a year earlier, representing 12.68% and 13.05%, respectively, of total assets. Common shareholders' equity was $11.1 billion, or $83.99 per share, at September 30, 2014, compared with $10.1 billion, or $77.81 per share, at September 30, 2013. Tangible equity per common share rose 13% to $57.10 at September 30, 2014 from $50.32 at September 30, 2013. Common shareholders' equity per share and tangible equity per common share were $82.86 and $55.89, respectively, at June 30, 2014. 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's estimated Tier 1 common ratio, a regulatory capital measure, continued to increase and was 9.77% at September 30, 2014, compared with 9.08% and 9.63% at September 30, 2013 and June 30, 2014, respectively. M&T estimates that the ratio of Common Equity Tier 1 to risk-weighted assets under the capital rules approved in July 2013 on a fully phased-in basis was approximately 9.52% as of September 30, 2014.

Conference Call. Investors will have an opportunity to listen to M&T's conference call to discuss third quarter financial results today at 11:00 a.m. Eastern Time. Those wishing to participate in the call may dial (877)780-2276. International participants, using any applicable international calling codes, may dial (973)582-2700. Callers should reference M&T Bank Corporation or the conference ID #15231149. 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 until October 20, 2014 by calling (800)585-8367, or (404)537-3406 for international participants, and by making reference to ID #15231149. 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, Pennsylvania, Maryland, Virginia, West Virginia, Delaware 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 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 its subsidiaries do business, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other Future Factors.

INVESTOR CONTACT: Donald J. MacLeod
(716) 842-5138

MEDIA CONTACT: C. Michael Zabel
(716) 842-5385

M&T BANK CORPORATION
Financial Highlights
		Three months ended							Nine months ended
Amounts in thousands,		September 30							September 30
except per share		2014		2013		Change			2014		2013		Change

Performance

Net income	$	275,344		294,479		-6	%	$	788,697		917,058		-14	%
Net income available to common shareholders		251,917		275,356		-9	%		724,344		859,000		-16	%

Per common share:
Basic earnings	$	1.92		2.13		-10	%	$	5.54		6.69		-17	%
Diluted earnings		1.91		2.11		-9	%		5.50		6.64		-17	%
Cash dividends	$	.70		.70		-		$	2.10		2.10		-

Common shares outstanding:
Average - diluted (1)		132,128		130,265		1	%		131,698		129,312		2	%
Period end (2)		132,142		130,241		1	%		132,142		130,241		1	%

Return on (annualized):
Average total assets		1.17	%	1.39	%				1.17	%	1.48	%
Average common shareholders' equity		9.18	%	11.06	%				9.07	%	11.98	%

Taxable-equivalent net interest income	$	674,900		679,213		-1	%	$	2,012,241		2,025,517		-1	%

Yield on average earning assets		3.59	%	3.98	%				3.72	%	4.07	%
Cost of interest-bearing liabilities		.54	%	.58	%				.53	%	.61	%
Net interest spread		3.05	%	3.40	%				3.19	%	3.46	%
Contribution of interest-free funds		.18	%	.21	%				.19	%	.22	%
Net interest margin		3.23	%	3.61	%				3.38	%	3.68	%

Net charge-offs to average total
net loans (annualized)		.17	%	.29	%				.19	%	.29	%

Net operating results (3)

Net operating income	$	279,838		300,968		-7	%	$	804,974		946,838		-15	%
Diluted net operating earnings per common share		1.94		2.16		-10	%		5.62		6.87		-18	%
Return on (annualized):
Average tangible assets		1.24	%	1.48	%				1.25	%	1.59	%
Average tangible common equity		13.80	%	17.64	%				13.84	%	19.66	%
Efficiency ratio		59.67	%	56.03	%				60.96	%	54.27	%



		At September 30
Loan quality		2014		2013		Change

Nonaccrual loans	$	847,784		915,871		-7	%
Real estate and other foreclosed assets		67,629		89,203		-24	%
Total nonperforming assets	$	915,413		1,005,074		-9	%

Accruing loans past due 90 days or more (4)	$	312,990		339,792		-8	%

Government guaranteed loans included in totals
above:
Nonaccrual loans	$	68,586		68,519		-	%
Accruing loans past due 90 days or more		265,333		320,732		-17	%

Renegotiated loans	$	209,099		259,301		-19	%

Acquired accruing loans past due 90 days or more (5)	$	132,147		153,585		-14	%

Purchased impaired loans (6):
Outstanding customer balance	$	429,915		648,118		-34	%
Carrying amount		236,662		357,337		-34	%

Nonaccrual loans to total net loans		1.29	%	1.44	%

Allowance for credit losses to total loans		1.40	%	1.44	%


(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) Excludes acquired loans.
(5) Acquired loans that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.
(6) Accruing loans that were impaired at acquisition date and recorded at fair value.

M&T BANK CORPORATION
Financial Highlights, Five Quarter Trend
		Three months ended
Amounts in thousands,		September 30,		June 30,		March 31,		December 31,		September 30,
except per share		2014		2014		2014		2013		2013

Performance

Net income	$	275,344		284,336		229,017		221,422		294,479
Net income available to common shareholders		251,917		260,695		211,731		203,451		275,356

Per common share:
Basic earnings	$	1.92		1.99		1.63		1.57		2.13
Diluted earnings		1.91		1.98		1.61		1.56		2.11
Cash dividends	$	.70		.70		.70		.70		.70

Common shares outstanding:
Average - diluted (1)		132,128		131,828		131,126		130,464		130,265
Period end (2)		132,142		131,953		131,431		130,564		130,241

Return on (annualized):
Average total assets		1.17	%	1.27	%	1.07	%	1.03	%	1.39	%
Average common shareholders' equity		9.18	%	9.79	%	8.22	%	7.99	%	11.06	%

Taxable-equivalent net interest income	$	674,900		674,963		662,378		672,683		679,213

Yield on average earning assets		3.59	%	3.73	%	3.87	%	3.92	%	3.98	%
Cost of interest-bearing liabilities		.54	%	.51	%	.55	%	.56	%	.58	%
Net interest spread		3.05	%	3.22	%	3.32	%	3.36	%	3.40	%
Contribution of interest-free funds		.18	%	.18	%	.20	%	.20	%	.21	%
Net interest margin		3.23	%	3.40	%	3.52	%	3.56	%	3.61	%

Net charge-offs to average total
net loans (annualized)		.17	%	.18	%	.20	%	.26	%	.29	%

Net operating results (3)

Net operating income	$	279,838		289,974		235,162		227,797		300,968
Diluted net operating earnings per common share		1.94		2.02		1.66		1.61		2.16
Return on (annualized):
Average tangible assets		1.24	%	1.35	%	1.15	%	1.11	%	1.48	%
Average tangible common equity		13.80	%	14.92	%	12.76	%	12.67	%	17.64	%
Efficiency ratio		59.67	%	59.39	%	63.95	%	65.48	%	56.03	%




		September 30,		June 30,		March 31,		December 31,		September 30,
Loan quality		2014		2014		2014		2013		2013

Nonaccrual loans	$	847,784		880,134		890,893		874,156		915,871
Real estate and other foreclosed assets		67,629		59,793		59,407		66,875		89,203
Total nonperforming assets	$	915,413		939,927		950,300		941,031		1,005,074

Accruing loans past due 90 days or more (4)	$	312,990		289,016		307,017		368,510		339,792

Government guaranteed loans included in totals above:

Nonaccrual loans	$	68,586		81,817		75,959		63,647		68,519
Accruing loans past due 90 days or more		265,333		275,846		291,418		297,918		320,732

Renegotiated loans	$	209,099		270,223		257,889		257,092		259,301

Acquired accruing loans past due 90 days or more (5)	$	132,147		134,580		120,996		130,162		153,585

Purchased impaired loans (6):
Outstanding customer balance	$	429,915		504,584		534,331		579,975		648,118
Carrying amount		236,662		282,517		303,388		330,792		357,337

Nonaccrual loans to total net loans		1.29	%	1.36	%	1.39	%	1.36	%	1.44	%

Allowance for credit losses to total loans		1.40	%	1.42	%	1.43	%	1.43	%	1.44	%

(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) Excludes acquired loans.
(5) Acquired loans that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.
(6) Accruing loans that were impaired at acquisition date and recorded at fair value.

M&T BANK CORPORATION
Condensed Consolidated Statement of Income

		Three months ended					Nine months ended
		September 30					September 30
Dollars in thousands		2014	2013	Change			2014	2013	Change

Interest income	$	743,023	742,686	-	%	$	2,200,265	2,222,868	-1	%
Interest expense		73,964	69,578	6			205,659	216,123	-5

Net interest income		669,059	673,108	-1			1,994,606	2,006,745	-1

Provision for credit losses		29,000	48,000	-40			91,000	143,000	-36

Net interest income after
provision for credit losses		640,059	625,108	2			1,903,606	1,863,745	2

Other income
Mortgage banking revenues		93,532	64,731	44			269,237	249,096	8
Service charges on deposit accounts		110,071	113,839	-3			321,637	336,505	-4
Trust income		128,671	123,801	4			379,816	370,132	3
Brokerage services income		17,416	16,871	3			51,403	49,840	3
Trading account and foreign exchange gains		6,988	8,987	-22			21,477	27,138	-21
Gain on bank investment securities		-	-	-			-	56,457	-
Other-than-temporary impairment losses
recognized in earnings		-	-	-			-	(9,800)	-
Equity in earnings of Bayview Lending Group LLC		(4,114)	(3,881)	-			(12,623)	(9,990)	-
Other revenues from operations		98,547	153,040	-36			296,683	349,581	-15
Total other income		451,111	477,388	-6			1,327,630	1,418,959	-6

Other expense
Salaries and employee benefits		348,776	339,332	3			1,059,815	1,019,019	4
Equipment and net occupancy		67,713	66,220	2			206,964	195,657	6
Printing, postage and supplies		9,184	9,752	-6			29,320	30,749	-5
Amortization of core deposit and other
intangible assets		7,358	10,628	-31			26,654	36,473	-27
FDIC assessments		13,193	14,877	-11			43,836	52,010	-16
Other costs of operations		233,060	217,817	7			696,160	558,905	25
Total other expense		679,284	658,626	3			2,062,749	1,892,813	9

Income before income taxes		411,886	443,870	-7			1,168,487	1,389,891	-16

Applicable income taxes		136,542	149,391	-9			379,790	472,833	-20

Net income	$	275,344	294,479	-6	%	$	788,697	917,058	-14	%

M&T BANK CORPORATION
Condensed Consolidated Statement of Income, Five Quarter Trend

		Three months ended
		September 30,	June 30,	March 31,	December 31,	September 30,
Dollars in thousands		2014	2014	2014	2013	2013

Interest income	$	743,023	734,290	722,952	734,466	742,686
Interest expense		73,964	65,176	66,519	67,982	69,578

Net interest income		669,059	669,114	656,433	666,484	673,108

Provision for credit losses		29,000	30,000	32,000	42,000	48,000

Net interest income after
provision for credit losses		640,059	639,114	624,433	624,484	625,108

Other income
Mortgage banking revenues		93,532	95,656	80,049	82,169	64,731
Service charges on deposit accounts		110,071	107,368	104,198	110,436	113,839
Trust income		128,671	129,893	121,252	125,876	123,801
Brokerage services income		17,416	17,487	16,500	15,807	16,871
Trading account and foreign exchange gains		6,988	8,042	6,447	13,690	8,987
Equity in earnings of Bayview Lending Group LLC		(4,114)	(4,055)	(4,454)	(6,136)	(3,881)
Other revenues from operations		98,547	102,021	96,115	104,404	153,040
Total other income		451,111	456,412	420,107	446,246	477,388

Other expense
Salaries and employee benefits		348,776	339,713	371,326	336,159	339,332
Equipment and net occupancy		67,713	68,084	71,167	68,670	66,220
Printing, postage and supplies		9,184	9,180	10,956	8,808	9,752
Amortization of core deposit and other
intangible assets		7,358	9,234	10,062	10,439	10,628
FDIC assessments		13,193	15,155	15,488	17,574	14,877
Other costs of operations		233,060	239,828	223,272	301,422	217,817
Total other expense		679,284	681,194	702,271	743,072	658,626

Income before income taxes		411,886	414,332	342,269	327,658	443,870

Applicable income taxes		136,542	129,996	113,252	106,236	149,391

Net income	$	275,344	284,336	229,017	221,422	294,479

M&T BANK CORPORATION
Condensed Consolidated Balance Sheet

		September 30
Dollars in thousands		2014	2013	Change

ASSETS

Cash and due from banks	$	1,445,877	1,941,944	-26	%

Interest-bearing deposits at banks		7,676,064	1,925,811	299

Federal funds sold and agreements
to resell securities		77,766	117,809	-34

Trading account assets		296,913	371,370	-20

Investment securities		13,348,368	8,309,773	61

Loans and leases:

Commercial, financial, etc.		19,112,009	17,911,149	7
Real estate - commercial		26,942,847	26,345,267	2
Real estate - consumer		8,663,408	9,228,003	-6
Consumer		10,854,095	10,174,623	7
Total loans and leases, net of unearned discount		65,572,359	63,659,042	3
Less: allowance for credit losses		918,633	916,370	-

Net loans and leases		64,653,726	62,742,672	3

Goodwill		3,524,625	3,524,625	-

Core deposit and other intangible assets		42,197	79,290	-47
		.	.
Other assets		6,162,806	5,414,191	14

Total assets	$	97,228,342	84,427,485	15	%


LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits	$	27,440,524	24,150,771	14	%

Interest-bearing deposits		46,659,442	42,084,860	11

Deposits at Cayman Islands office		241,536	316,510	-24

Total deposits		74,341,502	66,552,141	12

Short-term borrowings		164,609	246,019	-33

Accrued interest and other liabilities		1,327,524	1,491,797	-11

Long-term borrowings		9,061,391	5,121,326	77

Total liabilities		84,895,026	73,411,283	16

Shareholders' equity:

Preferred		1,231,500	879,010	40
Common (1)		11,101,816	10,137,192	10

Total shareholders' equity		12,333,316	11,016,202	12

Total liabilities and shareholders' equity	$	97,228,342	84,427,485	15	%


(1) Reflects accumulated other comprehensive income, net of applicable income tax effect, of $12.5 million at September 30, 2014, and accumulated other comprehensive loss, net of applicable income tax effect, $198.1 million at September 30, 2013.

M&T BANK CORPORATION
Condensed Consolidated Balance Sheet, Five Quarter Trend

		September 30,	June 30,	March 31,	December 31,	September 30,
Dollars in thousands		2014	2014	2014	2013	2013

ASSETS

Cash and due from banks	$	1,445,877	1,827,197	1,671,052	1,573,361	1,941,944

Interest-bearing deposits at banks		7,676,064	3,032,530	3,299,185	1,651,138	1,925,811

Federal funds sold and agreements to resell securities		77,766	90,239	92,066	99,573	117,809

Trading account assets		296,913	313,325	314,807	376,131	371,370

Investment securities		13,348,368	12,120,195	10,364,249	8,796,497	8,309,773

Loans and leases:

Commercial, financial, etc.		19,112,009	19,105,892	18,896,070	18,705,216	17,911,149
Real estate - commercial		26,942,847	26,374,274	26,104,086	26,148,208	26,345,267
Real estate - consumer		8,663,408	8,656,766	8,774,095	8,928,221	9,228,003
Consumer		10,854,095	10,610,761	10,360,827	10,291,514	10,174,623
Total loans and leases, net of unearned discount.		65,572,359	64,747,693	64,135,078	64,073,159	63,659,042
Less: allowance for credit losses		918,633	917,666	916,768	916,676	916,370

Net loans and leases		64,653,726	63,830,027	63,218,310	63,156,483	62,742,672

Goodwill		3,524,625	3,524,625	3,524,625	3,524,625	3,524,625

Core deposit and other intangible assets		42,197	49,555	58,789	68,851	79,290

Other assets		6,162,806	6,047,309	5,987,277	5,915,732	5,414,191

Total assets	$	97,228,342	90,835,002	88,530,360	85,162,391	84,427,485


LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits	$	27,440,524	26,088,763	25,244,200	24,661,007	24,150,771

Interest-bearing deposits		46,659,442	43,502,602	43,207,286	42,134,859	42,084,860

Deposits at Cayman Islands office		241,536	237,890	247,880	322,746	316,510

Total deposits		74,341,502	69,829,255	68,699,366	67,118,612	66,552,141

Short-term borrowings		164,609	161,631	230,209	260,455	246,019

Accrued interest and other liabilities		1,327,524	1,283,430	1,462,725	1,368,922	1,491,797

Long-term borrowings		9,061,391	7,391,931	6,251,197	5,108,870	5,121,326

Total liabilities		84,895,026	78,666,247	76,643,497	73,856,859	73,411,283

Shareholders' equity:

Preferred		1,231,500	1,231,500	1,231,500	881,500	879,010
Common (1)		11,101,816	10,937,255	10,655,363	10,424,032	10,137,192

Total shareholders' equity		12,333,316	12,168,755	11,886,863	11,305,532	11,016,202

Total liabilities and shareholders' equity	$	97,228,342	90,835,002	88,530,360	85,162,391	84,427,485


(1) Reflects accumulated other comprehensive income, net of applicable income tax effect, of $12.5 million at September 30, 2014 and $40.3 million at June 30, 2014, and accumulated other comprehensive loss, net of applicable income tax effect, of $25.3 million at March 31, 2014, $64.2 million at December 31, 2013 and $198.1 million at September 30, 2013.

M&T BANK CORPORATION
Condensed Consolidated Average Balance Sheet
and Annualized Taxable-equivalent Rates

		Three months ended									Change in balance						Nine months ended
		September 30,			September 30,			June 30,			September 30, 2014 from						September 30
Dollars in millions		2014			2013			2014			September 30,		June 30,			2014			2013			Change in
		Balance	Rate		Balance	Rate		Balance	Rate		2013		2014			Balance	Rate		Balance	Rate		balance
ASSETS

Interest-bearing deposits at banks	$	5,083	.25	%	2,646	.25	%	4,080	.25	%	92	%	25	%	$	4,091	.25	%	1,866	.24	%	119	%

Federal funds sold and agreements
to resell securities		80	.07		117	.08		90	.07		-32		-12			90	.07		133	.09		-32

Trading account assets		70	1.65		67	1.27		84	1.25		4		-17			75	1.83		76	2.10		-2

Investment securities		12,780	2.89		6,979	3.31		10,959	3.19		83		17			11,015	3.11		6,030	3.33		83

Loans and leases, net of unearned discount
Commercial, financial, etc.		18,889	3.29		17,798	3.50		18,978	3.34		6		-			18,783	3.33		17,615	3.59		7
Real estate - commercial		26,487	4.19		26,129	4.51		26,140	4.22		1		1			26,258	4.27		26,033	4.55		1
Real estate - consumer		8,634	4.17		9,636	4.17		8,746	4.36		-10		-1			8,740	4.24		10,522	4.10		-17
Consumer		10,753	4.52		11,295	4.57		10,479	4.52		-5		3			10,512	4.54		11,389	4.61		-8
Total loans and leases, net		64,763	4.00		64,858	4.21		64,343	4.05		-		1			64,293	4.06		65,559	4.26		-2

Total earning assets		82,776	3.59		74,667	3.98		79,556	3.73		11		4			79,564	3.72		73,664	4.07		8

Goodwill		3,525			3,525			3,525			-		-			3,525			3,525			-

Core deposit and other intangible assets		45			84			53			-46		-15			54			96			-44

Other assets		6,899			5,735			6,739			20		2			6,809			5,815			17

Total assets	$	93,245			84,011			89,873			11	%	4	%	$	89,952			83,100			8	%



LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing deposits
NOW accounts	$	1,037	.15		924	.14		1,026	.13		12	%	1	%	$	1,017	.13		919	.14		11	%
Savings deposits		41,056	.11		36,990	.15		39,478	.11		11		4			39,640	.12		36,287	.15		9
Time deposits		3,227	.47		3,928	.62		3,350	.46		-18		-4			3,345	.46		4,190	.70		-20
Deposits at Cayman Islands office		325	.20		392	.22		339	.21		-17		-4			348	.21		524	.20		-34
Total interest-bearing deposits		45,645	.14		42,234	.19		44,193	.14		8		3			44,350	.14		41,920	.21		6

Short-term borrowings		181	.04		299	.08		220	.05		-39		-17			222	.05		425	.12		-48
Long-term borrowings		8,547	2.69		5,010	3.89		6,525	3.05		71		31			6,999	3.02		4,918	4.09		42

Total interest-bearing liabilities		54,373	.54		47,543	.58		50,938	.51		14		7			51,571	.53		47,263	.61		9

Noninterest-bearing deposits		25,127			23,998			25,466			5		-1			24,915			23,570			6

Other liabilities		1,498			1,589			1,430			-6		5			1,486			1,676			-11

Total liabilities		80,998			73,130			77,834			11		4			77,972			72,509			8

Shareholders' equity		12,247			10,881			12,039			13		2			11,980			10,591			13

Total liabilities and shareholders' equity	$	93,245			84,011			89,873			11	%	4	%	$	89,952			83,100			8	%


Net interest spread			3.05			3.40			3.22								3.19			3.46
Contribution of interest-free funds			.18			.21			.18								.19			.22
Net interest margin			3.23	%		3.61	%		3.40	%							3.38	%		3.68	%

M&T BANK CORPORATION
Reconciliation of Quarterly GAAP to Non-GAAP Measures


		Three months ended					Nine months ended
		September 30					September 30
		2014		2013			2014		2013
Income statement data
In thousands, except per share
*Net income*
Net income	$	275,344		294,479		$	788,697		917,058
Amortization of core deposit and other
intangible assets (1)		4,494		6,489			16,277		22,269
Merger-related expenses (1)		-		-			-		7,511
Net operating income	$	279,838		300,968		$	804,974		946,838
*Earnings per common share*
Diluted earnings per common share	$	1.91		2.11		$	5.50		6.64
Amortization of core deposit and other
intangible assets (1)		.03		.05			.12		.17
Merger-related expenses (1)		-		-			-		.06
Diluted net operating earnings per common share	$	1.94		2.16		$	5.62		6.87
*Other expense*
Other expense	$	679,284		658,626		$	2,062,749		1,892,813
Amortization of core deposit and other
intangible assets		(7,358)		(10,628)			(26,654)		(36,473)
Merger-related expenses		-		-			-		(12,364)
Noninterest operating expense	$	671,926		647,998		$	2,036,095		1,843,976
*Merger-related expenses*
Salaries and employee benefits	$	-		-		$	-		836
Equipment and net occupancy		-		-			-		690
Printing, postage and supplies		-		-			-		1,825
Other costs of operations		-		-			-		9,013
Total	$	-		-		$	-		12,364
*Efficiency ratio*
Noninterest operating expense (numerator)	$	671,926		647,998		$	2,036,095		1,843,976
Taxable-equivalent net interest income		674,900		679,213			2,012,241		2,025,517
Other income		451,111		477,388			1,327,630		1,418,959
Less: Gain on bank investment securities		-		-			-		56,457
Net OTTI losses recognized in earnings		-		-			-		(9,800)
Denominator	$	1,126,011		1,156,601		$	3,339,871		3,397,819
Efficiency ratio		59.67	%	56.03	%		60.96	%	54.27	%


Balance sheet data
In millions
*Average assets*
Average assets	$	93,245		84,011		$	89,952		83,100
Goodwill		(3,525)		(3,525)			(3,525)		(3,525)
Core deposit and other intangible assets		(45)		(84)			(54)		(96)
Deferred taxes		14		25			17		28
Average tangible assets	$	89,689		80,427		$	86,390		79,507
*Average common equity*
Average total equity	$	12,247		10,881		$	11,980		10,591
Preferred stock		(1,232)		(878)			(1,179)		(876)
Average common equity		11,015		10,003			10,801		9,715
Goodwill		(3,525)		(3,525)			(3,525)		(3,525)
Core deposit and other intangible assets		(45)		(84)			(54)		(96)
Deferred taxes		14		25			17		28
Average tangible common equity	$	7,459		6,419		$	7,239		6,122

At end of quarter
*Total assets*
Total assets	$	97,228		84,427
Goodwill		(3,525)		(3,525)
Core deposit and other intangible assets		(42)		(79)
Deferred taxes		13		24
Total tangible assets	$	93,674		80,847
*Total common equity*
Total equity	$	12,333		11,016
Preferred stock		(1,232)		(879)
Undeclared dividends - cumulative preferred stock		(2)		(4)
Common equity, net of undeclared cumulative
preferred dividends		11,099		10,133
Goodwill		(3,525)		(3,525)
Core deposit and other intangible assets		(42)		(79)
Deferred taxes		13		24
Total tangible common equity	$	7,545		6,553


(1) After any related tax effect.

M&T BANK CORPORATION
Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend



		Three months ended
		September 30,		June 30,		March 31,		December 31,		September 30,
		2014		2014		2014		2013		2013
Income statement data
In thousands, except per share
*Net income*
Net income	$	275,344		284,336		229,017		221,422		294,479
Amortization of core deposit and other
intangible assets (1)		4,494		5,638		6,145		6,375		6,489
Net operating income	$	279,838		289,974		235,162		227,797		300,968
*Earnings per common share*
Diluted earnings per common share	$	1.91		1.98		1.61		1.56		2.11
Amortization of core deposit and other
intangible assets (1)		.03		.04		.05		.05		.05
Diluted net operating earnings per common share	$	1.94		2.02		1.66		1.61		2.16
*Other expense*
Other expense	$	679,284		681,194		702,271		743,072		658,626
Amortization of core deposit and other
intangible assets		(7,358)		(9,234)		(10,062)		(10,439)		(10,628)
Noninterest operating expense	$	671,926		671,960		692,209		732,633		647,998
*Efficiency ratio*
Noninterest operating expense (numerator)	$	671,926		671,960		692,209		732,633		647,998
Taxable-equivalent net interest income		674,900		674,963		662,378		672,683		679,213
Other income		451,111		456,412		420,107		446,246		477,388
Denominator	$	1,126,011		1,131,375		1,082,485		1,118,929		1,156,601
Efficiency ratio		59.67	%	59.39	%	63.95	%	65.48	%	56.03	%


Balance sheet data
In millions
*Average assets*
Average assets	$	93,245		89,873		86,665		85,330		84,011
Goodwill		(3,525)		(3,525)		(3,525)		(3,525)		(3,525)
Core deposit and other intangible assets		(45)		(53)		(64)		(74)		(84)
Deferred taxes		14		16		20		23		25
Average tangible assets	$	89,689		86,311		83,096		81,754		80,427
*Average common equity*
Average total equity	$	12,247		12,039		11,648		11,109		10,881
Preferred stock		(1,232)		(1,231)		(1,072)		(881)		(878)
Average common equity		11,015		10,808		10,576		10,228		10,003
Goodwill		(3,525)		(3,525)		(3,525)		(3,525)		(3,525)
Core deposit and other intangible assets		(45)		(53)		(64)		(74)		(84)
Deferred taxes		14		16		20		23		25
Average tangible common equity	$	7,459		7,246		7,007		6,652		6,419

At end of quarter
*Total assets*
Total assets	$	97,228		90,835		88,530		85,162		84,427
Goodwill		(3,525)		(3,525)		(3,525)		(3,525)		(3,525)
Core deposit and other intangible assets		(42)		(49)		(59)		(69)		(79)
Deferred taxes		13		15		19		21		24
Total tangible assets	$	93,674		87,276		84,965		81,589		80,847
*Total common equity*
Total equity	$	12,333		12,169		11,887		11,306		11,016
Preferred stock		(1,232)		(1,232)		(1,232)		(882)		(879)
Undeclared dividends - cumulative preferred stock		(2)		(3)		(3)		(3)		(4)
Common equity, net of undeclared cumulative
preferred dividends		11,099		10,934		10,652		10,421		10,133
Goodwill		(3,525)		(3,525)		(3,525)		(3,525)		(3,525)
Core deposit and other intangible assets		(42)		(49)		(59)		(69)		(79)
Deferred taxes		13		15		19		21		24
Total tangible common equity	$	7,545		7,375		7,087		6,848		6,553


(1) After any related tax effect.