M&T Bank Corporation (NYSE:MTB) announces second quarter 2024 results

BUFFALO, N.Y., July 18, 2024 /PRNewswire/ -- M&T Bank Corporation ("M&T" or "the Company") reports quarterly net income of $655 million or $3.73 of diluted earnings per common share.

(Dollars in millions, except per share data)		2Q24		1Q24		2Q23
Earnings Highlights
Net interest income		$        1,718		$        1,680		$        1,799
Taxable-equivalent adjustment		13		12		14
Net interest income - taxable-equivalent		1,731		1,692		1,813
Provision for credit losses		150		200		150
Noninterest income		584		580		803
Noninterest expense		1,297		1,396		1,293
Net income		655		531		867
Net income available to common shareholders - diluted		626		505		841
Diluted earnings per common share		3.73		3.02		5.05
Return on average assets - annualized		1.24 %		1.01 %		1.70 %
Return on average common shareholders' equity - annualized		9.95		8.14		14.27
Average Balance Sheet
Total assets		$     211,981		$     211,478		$     204,376
Interest-bearing deposits at banks		29,294		30,647		23,617
Investment securities		29,695		28,587		28,623
Loans and leases, net of unearned discount		134,588		133,796		133,545
Deposits		163,491		164,065		159,399
Borrowings		16,452		16,001		15,055
Selected Ratios
(Amounts expressed as a percent, except per share data)
Net interest margin		3.59 %		3.52 %		3.91 %
Efficiency ratio		55.3		60.8		48.9
Net charge-offs to average total loans - annualized		.41		.42		.38
Allowance for credit losses to total loans		1.63		1.62		1.50
Nonaccrual loans to total loans		1.50		1.71		1.83
Common equity Tier 1 ("CET1") capital ratio (1)		11.44		11.08		10.59
Common shareholders' equity per share		$      153.57		$      150.90		$      143.41

(1) June 30, 2024 CET1 capital ratio is estimated.

 

Financial Highlights

• Highlighting the Company's strengthening capital position, the CET1 capital ratio increased for the fifth consecutive quarter to an estimated 11.44% at June 30, 2024, representing a 36 basis point increase from 11.08% at March 31, 2024.
• Net interest margin of 3.59% in the recent quarter widened from 3.52% in the first quarter of 2024 reflecting higher yields on investment securities as cash was deployed to those products, and stable deposit and borrowing costs.
• Growth in average commercial and industrial loans and consumer loans in the recent quarter was partially offset by a decline in average commercial real estate loans.
• Average customer deposits grew as funding shifted from wholesale sources to lower cost customer savings and interest-checking deposits during the recent quarter. Average borrowings rose in the second quarter of 2024 as compared with the first quarter of 2024 due to the issuance of senior notes and asset-backed notes at the end of the immediately preceding quarter, partially offset by lower average borrowings from the Federal Home Loan Bank ("FHLB") of New York.
• Provision for credit losses in the recent quarter reflects lower levels of criticized commercial real estate loans, partially offset by commercial and industrial and consumer loan growth.
• Lower noninterest expense in the second quarter of 2024 reflects seasonal salaries and employee benefit expenses recognized in 2024's initial quarter. The first and second quarters of 2024 include a $29 million and a $5 million estimated increase in the FDIC special assessment, respectively.

Chief Financial Officer Commentary

"Building on a strong start to the year, the second quarter results reflect a 24% increase in diluted earnings per common share from the first quarter. We continued to grow our commercial and industrial and consumer loan portfolios, while lessening our commercial real estate exposure. Credit metrics improved as both nonaccrual and total criticized loans declined sequentially. Liquidity and capital positions are exceptional, and we are pleased with the reduction in our stress capital buffer that becomes effective later this year. Our team continues to diligently deploy resources while controlling expense growth. We are grateful for our employees' commitment to our customers and communities which was again on full display in the first half of 2024 through various community events and volunteer engagements throughout our footprint."

- Daryl N. Bible, M&T's Chief Financial Officer

Contact:
Investor Relations:	Brian Klock	716.842.5138
Media Relations:	Frank Lentini	929.651.0447

 

Non-GAAP Measures (1)
						Change 2Q24 vs.				Change 2Q24 vs.
(Dollars in millions, except per share data)		2Q24		1Q24		1Q24		2Q23		2Q23
Net operating income		$            665		$            543		22 %		$            879		-24 %
Diluted net operating earnings per common share		3.79		3.09		23		5.12		-26
Annualized return on average tangible assets		1.31 %		1.08 %				1.80 %
Annualized return on average tangible common equity		15.27		12.67				22.73
Efficiency ratio		55.3		60.8				48.9
Tangible equity per common share		$       102.42		$         99.54		3		$         91.58		12

(1)  A reconciliation of non-GAAP measures is included in the tables that accompany this release.

 

M&T consistently provides supplemental reporting of its results on a "net operating" or "tangible" basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill and core deposit and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T (when incurred), since such items are considered by management to be "nonoperating" in nature.

Taxable-equivalent Net Interest Income
						Change 2Q24 vs.				Change 2Q24 vs.
(Dollars in millions)		2Q24		1Q24		1Q24		2Q23		2Q23
Average earning assets		$     193,676		$     193,135		— %		$     185,936		4 %
Average interest-bearing liabilities		132,209		131,451		1		118,274		12
Net interest income - taxable-equivalent		1,731		1,692		2		1,813		-5
Yield on average earning assets		5.82 %		5.74 %				5.46 %
Cost of interest-bearing liabilities		3.26		3.26				2.43
Net interest spread		2.56		2.48				3.03
Net interest margin		3.59		3.52				3.91

 

Taxable-equivalent net interest income increased $39 million, or 2%, from the first quarter of 2024.

• Average loans and leases increased $792 million and the yield on those loans and leases rose 6 basis points.
• Average investment securities increased $1.1 billion and the rates earned on those securities increased 31 basis points.
• Average interest-bearing deposits increased $307 million and the rates paid on such deposits declined 3 basis points. Average brokered deposits declined $1.2 billion in the recent quarter.
• Average borrowings rose $451 million and the rate paid on such borrowings increased 11 basis points.

Taxable-equivalent net interest income decreased $82 million, or 5%, compared with the year-earlier second quarter.

• Average interest-bearing deposits rose $12.5 billion and the rates paid on those deposits increased 88 basis points.
• Average borrowings increased $1.4 billion and rates paid on such borrowings increased 50 basis points.
• Average interest-bearing deposits at banks, average investment securities and average loans and leases increased $5.7 billion, $1.1 billion and $1.0 billion, respectively.
• Yields earned on average interest-bearing deposits at banks and average loans and leases each increased 36 basis points. The yield on investment securities increased 52 basis points.

Average Earning Assets
						Change 2Q24 vs.				Change 2Q24 vs.
(Dollars in millions)		2Q24		1Q24		1Q24		2Q23		2Q23
Interest-bearing deposits at banks		$      29,294		$      30,647		-4 %		$      23,617		24 %
Trading account		99		105		-6		151		-34
Investment securities		29,695		28,587		4		28,623		4
Loans and leases, net of unearned discount
Commercial and industrial		58,152		56,821		2		54,572		7
Real estate - commercial		31,458		32,696		-4		34,903		-10
Real estate - consumer		23,006		23,136		-1		23,781		-3
Consumer		21,972		21,143		4		20,289		8
Total loans and leases, net		134,588		133,796		1		133,545		1
Total earning assets		$    193,676		$    193,135		—		$    185,936		4

 

Average earning assets increased $541 million from the first quarter of 2024.

• Average interest-bearing deposits at banks decreased $1.4 billion reflecting purchases of investment securities and loan growth partially offset by higher long-term borrowings.
• Average investment securities increased $1.1 billion primarily due to purchases of fixed rate agency mortgage-backed and U.S. Treasury securities during the second quarter of 2024.
• Average loans and leases increased $792 million primarily reflective of growth in average commercial and industrial loans and leases of $1.3 billion and consumer loans of $829 million, partially offset by declines in average commercial real estate and residential real estate loans. The growth in commercial and industrial loans spanned most industry types.

Average earning assets increased $7.7 billion, or 4%, from the year-earlier second quarter.

• Average interest-bearing deposits at banks increased $5.7 billion reflecting a rise in average deposits and higher levels of average borrowings, partially offset by loan growth and purchases of investment securities.
• Average investment securities increased $1.1 billion reflecting purchases of fixed rate agency mortgage-backed and U.S. Treasury securities over the past six months.
• Average loans and leases increased $1.0 billion predominantly due to higher average commercial and industrial loans and leases of $3.6 billion, reflecting lending activities to financial and insurance industry customers, motor vehicle and recreational finance dealers and to the services industry, and consumer loans of $1.7 billion reflecting higher average recreational finance loans, partially offset by a $3.4 billion and a $775 million decline in average commercial real estate loans and residential real estate loans, respectively.

Average Interest-bearing Liabilities
						Change 2Q24 vs.				Change 2Q24 vs.
(Dollars in millions)		2Q24		1Q24		1Q24		2Q23		2Q23
Interest-bearing deposits
Savings and interest-checking deposits		$          95,955		$          94,867		1 %		$          87,210		10 %
Time deposits		19,802		20,583		-4		16,009		24
Total interest-bearing deposits		115,757		115,450		—		103,219		12
Short-term borrowings		4,962		6,228		-20		7,539		-34
Long-term borrowings		11,490		9,773		18		7,516		53
Total interest-bearing liabilities		$        132,209		$        131,451		1		$        118,274		12
Brokered savings and interest-checking    deposits		$             8,193		$             8,030		2 %		$             3,754		118 %
Brokered time deposits		3,826		5,193		-26		6,873		-44
Total brokered deposits		$          12,019		$          13,223		-9		$          10,627		13

 

Average interest-bearing liabilities increased $758 million, or 1%, from the first quarter of 2024.

• Average borrowings increased $451 million predominantly due to the issuance of senior notes and asset-backed notes at the end of the first quarter of 2024, partially offset by lower average borrowings from the FHLB of New York in the recent quarter.
• Average interest-bearing deposits increased $307 million, reflective of a $1.5 billion increase in average non-brokered deposits.

Average interest-bearing liabilities increased $13.9 billion, or 12%, from the second quarter of 2023.

• Average interest-bearing deposits rose $12.5 billion, including a $11.1 billion increase in average non-brokered deposits, reflecting customer demand for interest-bearing products amidst rising rates.
• Average borrowings increased $1.4 billion reflecting the issuances of senior notes and other long-term debt since the second quarter of 2023, partially offset by lower average short-term borrowings.

Provision for Credit Losses/Asset Quality
						Change 2Q24 vs.				Change 2Q24 vs.
(Dollars in millions)		2Q24		1Q24		1Q24		2Q23		2Q23
At end of quarter
Nonaccrual loans		$         2,024		$         2,302		-12 %		$         2,435		-17 %
Real estate and other foreclosed assets		33		38		-16		43		-23
Total nonperforming assets		2,057		2,340		-12		2,478		-17
Accruing loans past due 90 days or more (1)		233		297		-21		380		-39
Nonaccrual loans as % of loans outstanding		1.50 %		1.71 %				1.83 %
Allowance for credit losses		$         2,204		$         2,191		1		$         1,998		10
Allowance for credit losses as % of loans outstanding		1.63 %		1.62 %				1.50 %
For the period
Provision for credit losses		$             150		$             200		-25		$             150		—
Net charge-offs		137		138		-1		127		8
Net charge-offs as % of average loans (annualized)		.41 %		.42 %				.38 %

(1)  Predominantly government-guaranteed residential real estate loans.

 

M&T recorded a provision for credit losses of $150 million in each of the second quarters of 2024 and 2023, compared with $200 million in 2024's initial quarter. The lower provision for credit losses in the most recent quarter as compared with the first quarter of 2024 reflects lower commercial real estate loans, including criticized loans, and modest improvement in forecasted real estate prices, partially offset by growth in certain sectors of M&T's commercial and industrial and consumer loan portfolios. Net charge-offs totaled $137 million in 2024's second quarter as compared with $138 million in 2024's first quarter and $127 million in the year-earlier quarter.

Nonaccrual loans were $2.0 billion at June 30, 2024, $278 million lower than March 31, 2024 and $411 million lower than June 30, 2023, respectively. The lower level of nonaccrual loans at the recent quarter end as compared with the March 31, 2024 and June 30, 2023 was predominantly attributable to a decrease in commercial real estate nonaccrual loans. The decline in commercial real estate nonaccrual loans from the second quarter of 2023 was partially offset by an increase in commercial and industrial nonaccrual loans.

Noninterest Income
						Change 2Q24 vs.				Change 2Q24 vs.
(Dollars in millions)		2Q24		1Q24		1Q24		2Q23		2Q23
Mortgage banking revenues		$            106		$            104		1 %		$            107		-1 %
Service charges on deposit accounts		127		124		3		119		8
Trust income		170		160		6		172		-1
Brokerage services income		30		29		5		25		21
Trading account and other non-hedging derivative gains		7		9		-29		17		-61
Gain (loss) on bank investment securities		(8)		2		—		1		—
Other revenues from operations		152		152		—		362		-58
Total		$            584		$            580		1		$            803		-27

 

Noninterest income in the second quarter of 2024 increased $4 million, or 1%, from 2024's first quarter.

• Trust income increased $10 million due to seasonal tax service fees in the second quarter of 2024 of $4 million and higher revenues from the Company's global capital markets business.
• The loss on bank investment securities in the second quarter of 2024 reflected realized losses on sales of certain non-agency investment securities.
• Other revenues from operations in 2024's second quarter reflect increases in merchant discount and credit card fees, letter of credit and other credit-related fees and distributions from renewable energy and certain other tax credit investments. In the first quarter of 2024, other revenues from operations included a $25 million distribution from Bayview Lending Group LLC.

Noninterest income declined $219 million, or 27%, as compared with the year-earlier second quarter.

• Other revenues from operations declined $210 million predominantly due to the $225 million gain on the sale of the Collective Investment Trust ("CIT") business recognized in April 2023, partially offset by higher letter of credit and other credit-related fees and an increase in tax-exempt income from bank owned life insurance in the recent quarter.
• Trust income decreased $2 million. The Company recorded approximately $15 million of revenues from its CIT business in 2023 prior to its sale. That revenue decline was largely offset by higher sales and fees from the Company's global capital markets business.

Noninterest Expense
						Change 2Q24 vs.				Change 2Q24 vs.
(Dollars in millions)		2Q24		1Q24		1Q24		2Q23		2Q23
Salaries and employee benefits		$          764		$          833		-8 %		$          738		4 %
Equipment and net occupancy		125		129		-3		129		-3
Outside data processing and software		124		120		4		106		17
Professional and other services		91		85		6		100		-10
FDIC assessments		37		60		-38		28		32
Advertising and marketing		27		20		34		28		-5
Amortization of core deposit and other intangible assets		13		15		-15		15		-15
Other costs of operations		116		134		-13		149		-21
Total		$       1,297		$       1,396		-7		$       1,293		—

 

Noninterest expense aggregated $1.30 billion in the recent quarter, down from $1.40 billion in the first quarter of 2024.

• Salaries and employee benefits expense decreased $69 million reflecting seasonally higher stock-based compensation, payroll related-taxes and other employee benefits expense in the first quarter of 2024, partially offset by the full-quarter impact of annual merit increases awarded in the first quarter of 2024.
• FDIC assessments reflect estimated special assessment expense of $29 million and $5 million in the first quarter and second quarter of 2024, respectively, related to the FDIC's updated loss estimates associated with certain failed banks.
• Other costs of operations decreased $18 million reflecting lower expense associated with the Company's supplemental executive retirement savings plan and losses on lease terminations related to certain vacated properties in the first quarter of 2024.

Noninterest expense increased $4 million from the second quarter of 2023.

• Salaries and employee benefits expenses increased $26 million reflecting higher salaries expense from annual merit and other increases and a rise in incentive compensation, partially offset by lower employee staffing levels.
• Outside data processing and software rose $18 million due to higher software maintenance and licensing costs and data processing expenses.
• Other costs of operations decreased $33 million as a result of a decline in check fraud losses, credit card merchant expenses and costs associated with serviced loans.

Income Taxes

The Company's effective income tax rate was 23.4% in the second quarter of 2024, compared with 20.0% and 25.2% in the first quarter of 2024 and second quarter of 2023, respectively. The first quarter of 2024 income tax expense reflects a net discrete tax benefit related to the resolution of a tax matter inherited from the acquisition of People's United Financial, Inc.

Capital
		2Q24		1Q24		2Q23
CET1		11.44 %	(1)	11.08 %		10.59 %
Tier 1 capital		13.22	(1)	12.38		11.91
Total capital		14.87	(1)	14.04		13.71
Tangible capital – common		8.55		8.03		7.63

(1)  June 30, 2024 capital ratios are estimated.

 

M&T's capital ratios remained well above the minimum set forth by regulatory requirements. The Company issued $750 million par value of Perpetual 7.5% Non-Cumulative Preferred Stock (Series J) in May 2024. Cash dividends declared on M&T's common and preferred stock totaled $228 million and $27 million, respectively, for the quarter ended June 30, 2024. M&T's current stress capital buffer is 4.0%. In June 2024, the Federal Reserve released the results of its most recent supervisory stress tests. Based on those results, M&T's stress capital buffer is estimated to be 3.8% effective October 1, 2024.

The CET1 capital ratio for M&T was estimated at 11.44% as of June 30, 2024. M&T's total risk-weighted assets at June 30, 2024 are estimated to be $155 billion.

Conference Call

Investors will have an opportunity to listen to M&T's conference call to discuss second quarter financial results today at 8:00 a.m. Eastern Time. Those wishing to participate in the call may dial [phone]. International participants, using any applicable international calling codes, may dial [phone]. Callers should reference M&T Bank Corporation or the conference ID #MTBQ224. The conference call will be webcast live through M&T's website at https://ir.mtb.com/events-presentations. A replay of the call will be available through Thursday July 25, 2024 by calling [phone], or [phone] for international participants. No conference ID or passcode is required. The event will also be archived and available by 3:00 p.m. today on M&T's website at https://ir.mtb.com/events-presentations.

About M&T

M&T is a financial holding company headquartered in Buffalo, New York. M&T's principal banking subsidiary, M&T Bank, provides banking products and services in 12 states across the eastern U.S. from Maine to Virginia and Washington, D.C. Trust-related services are provided in select markets in the U.S. and abroad by M&T's Wilmington Trust-affiliated companies and by M&T Bank. For more information on M&T Bank, visit www.mtb.com.

Forward-Looking Statements

This news release and related conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the rules and regulations of the SEC. Any statement that does not describe historical or current facts is a forward-looking statement, including statements based on current expectations, estimates and projections about M&T's business, and management's beliefs and assumptions.

Statements regarding the potential effects of events or factors specific to M&T and/or the financial industry as a whole, as well as national and global events generally, on M&T's business, financial condition, liquidity and results of operations may constitute forward-looking statements. Such statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond M&T's control.

Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," or "potential," by future conditional verbs such as "will," "would," "should," "could," or "may," or by variations of such words or by similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and may cause actual outcomes to differ materially from what is expressed or forecasted.

While there can be no assurance that any list of risks and uncertainties is complete, important factors that could cause actual outcomes and results to differ materially from those contemplated by forward-looking statements include the following, without limitation: economic conditions and growth rates, including inflation and market volatility; events and developments in the financial services industry, including industry conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, loan concentrations by type and industry, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; levels of client deposits; ability to contain costs and expenses; changes in M&T's credit ratings; the impact of the People's United Financial, Inc. acquisition; domestic or international political developments and other geopolitical events, including international conflicts and hostilities; changes and trends in the securities markets; common shares outstanding and 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; federal, state or local legislation and/or regulations affecting the financial services industry, or M&T and its subsidiaries individually or collectively, including tax policy; regulatory supervision and oversight, including monetary policy and capital requirements; governmental and public policy changes; political conditions, either nationally or in the states in which M&T and its subsidiaries do business; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board, regulatory agencies or legislation; increasing price, product and service competition by competitors, including new entrants; technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products and services; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition, divestment and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

These are representative of the factors that could affect the outcome of the forward-looking statements. In addition, as noted, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, and other factors.

M&T provides further detail regarding these risks and uncertainties in its Form 10-K for the year ended December 31, 2023, including in the Risk Factors section of such report, as well as in other SEC filings. Forward-looking statements speak only as of the date they are made, and M&T assumes no duty and does not undertake to update forward-looking statements.

Financial Highlights

	Three months ended						Six months ended
	June 30,						June 30,
(Dollars in millions, except per share, shares in thousands)	2024		2023		Change		2024		2023		Change
Performance
Net income	$         655		$         867		-25 %		$       1,186		$       1,569		-24 %
Net income available to common shareholders	626		841		-26		1,131		1,516		-25
Per common share:
Basic earnings	3.75		5.07		-26		6.79		9.09		-25
Diluted earnings	3.73		5.05		-26		6.76		9.06		-25
Cash dividends	1.35		1.30		4		2.65		2.60		2
Common shares outstanding:
Average - diluted (1)	167,659		166,320		1		167,372		167,359		—
Period end (2)	167,225		165,894		1		167,225		165,894		1
Return on (annualized):
Average total assets	1.24 %		1.70 %				1.13 %		1.55 %
Average common shareholders' equity	9.95		14.27				9.05		13.02
Taxable-equivalent net interest income	$       1,731		$       1,813		-5		$       3,423		$       3,645		-6
Yield on average earning assets	5.82 %		5.46 %				5.78 %		5.31 %
Cost of interest-bearing liabilities	3.26		2.43				3.26		2.15
Net interest spread	2.56		3.03				2.52		3.16
Contribution of interest-free funds	1.03		.88				1.04		.81
Net interest margin	3.59		3.91				3.56		3.97
Net charge-offs to average total net loans (annualized)	.41		.38				.41		.30
Net operating results (3)
Net operating income	$         665		$         879		-24		$       1,208		$       1,594		-24
Diluted net operating earnings per common share	3.79		5.12		-26		6.89		9.21		-25
Return on (annualized):
Average tangible assets	1.31 %		1.80 %				1.20 %		1.65 %
Average tangible common equity	15.27		22.73				13.99		20.90
Efficiency ratio	55.3		48.9				58.0		52.0
	At June 30,
Loan quality	2024		2023		Change
Nonaccrual loans	$       2,024		$       2,435		-17 %
Real estate and other foreclosed assets	33		43		-23
Total nonperforming assets	$       2,057		$       2,478		-17
Accruing loans past due 90 days or more (4)	$         233		$         380		-39
Government guaranteed loans included in totals above:
Nonaccrual loans	$           64		$           40		61
Accruing loans past due 90 days or more	215		294		-27
Nonaccrual loans to total loans	1.50 %		1.83 %
Allowance for credit losses to total loans	1.63		1.50
Additional information
Period end common stock price	$     151.36		$     123.76		22
Domestic banking offices	957		996		-4
Full time equivalent employees	22,110		22,946		-4

(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 appears herein.
(4)	Predominantly residential real estate loans.

 

Financial Highlights, Five Quarter Trend
	Three months ended
	June 30,		March 31,		December 31,		September 30,		June 30,
(Dollars in millions, except per share, shares in thousands)	2024		2024		2023		2023		2023
Performance
Net income	$             655		$             531		$             482		$             690		$             867
Net income available to common shareholders	626		505		457		664		841
Per common share:
Basic earnings	3.75		3.04		2.75		4.00		5.07
Diluted earnings	3.73		3.02		2.74		3.98		5.05
Cash dividends	1.35		1.30		1.30		1.30		1.30
Common shares outstanding:
Average - diluted (1)	167,659		167,084		166,731		166,570		166,320
Period end (2)	167,225		166,724		166,149		165,970		165,894
Return on (annualized):
Average total assets	1.24 %		1.01 %		.92 %		1.33 %		1.70 %
Average common shareholders' equity	9.95		8.14		7.41		10.99		14.27
Taxable-equivalent net interest income	$           1,731		$           1,692		$           1,735		$           1,790		$           1,813
Yield on average earning assets	5.82 %		5.74 %		5.73 %		5.62 %		5.46 %
Cost of interest-bearing liabilities	3.26		3.26		3.17		2.83		2.43
Net interest spread	2.56		2.48		2.56		2.79		3.03
Contribution of interest-free funds	1.03		1.04		1.05		1.00		.88
Net interest margin	3.59		3.52		3.61		3.79		3.91
Net charge-offs to average total net loans (annualized)	.41		.42		.44		.29		.38
Net operating results (3)
Net operating income	$             665		$             543		$             494		$             702		$             879
Diluted net operating earnings per common share	3.79		3.09		2.81		4.05		5.12
Return on (annualized):
Average tangible assets	1.31 %		1.08 %		.98 %		1.41 %		1.80 %
Average tangible common equity	15.27		12.67		11.70		17.41		22.73
Efficiency ratio	55.3		60.8		62.1		53.7		48.9
	June 30,		March 31,		December 31,		September 30,		June 30,
Loan quality	2024		2024		2023		2023		2023
Nonaccrual loans	$           2,024		$           2,302		$           2,166		$           2,342		$           2,435
Real estate and other foreclosed assets	33		38		39		37		43
Total nonperforming assets	$           2,057		$           2,340		$           2,205		$           2,379		$           2,478
Accruing loans past due 90 days or more (4)	$             233		$             297		$             339		$             354		$             380
Government guaranteed loans included in totals above:
Nonaccrual loans	$               64		$               62		$               53		$               40		$               40
Accruing loans past due 90 days or more	215		244		298		269		294
Nonaccrual loans to total loans	1.50 %		1.71 %		1.62 %		1.77 %		1.83 %
Allowance for credit losses to total loans	1.63		1.62		1.59		1.55		1.50
Additional information
Period end common stock price	$         151.36		$         145.44		$         137.08		$         126.45		$         123.76
Domestic banking offices	957		958		961		967		996
Full time equivalent employees	22,110		21,927		21,980		22,424		22,946

(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 appears herein.
(4)	Predominantly residential real estate loans.

 

Condensed Consolidated Statement of Income
	Three months ended						Six months ended
	June 30,						June 30,
(Dollars in millions)	2024		2023		Change		2024		2023		Change
Interest income	$     2,789		$     2,516		11 %		$     5,534		$     4,843		14 %
Interest expense	1,071		717		50		2,136		1,226		74
Net interest income	1,718		1,799		-5		3,398		3,617		-6
Provision for credit losses	150		150		—		350		270		30
Net interest income after provision for credit losses	1,568		1,649		-5		3,048		3,347		-9
Other income
Mortgage banking revenues	106		107		-1		210		192		9
Service charges on deposit accounts	127		119		8		251		232		8
Trust income	170		172		-1		330		366		-10
Brokerage services income	30		25		21		59		49		21
Trading account and other non-hedging      derivative gains	7		17		-61		16		28		-44
Gain (loss) on bank investment securities	(8)		1		—		(6)		1		—
Other revenues from operations	152		362		-58		304		522		-42
Total other income	584		803		-27		1,164		1,390		-16
Other expense
Salaries and employee benefits	764		738		4		1,597		1,546		3
Equipment and net occupancy	125		129		-3		254		256		-1
Outside data processing and software	124		106		17		244		212		15
Professional and other services	91		100		-10		176		225		-22
FDIC assessments	37		28		32		97		58		67
Advertising and marketing	27		28		-5		47		59		-20
Amortization of core deposit and other      intangible assets	13		15		-15		28		32		-14
Other costs of operations	116		149		-21		250		264		-5
Total other expense	1,297		1,293		—		2,693		2,652		2
Income before income taxes	855		1,159		-26		1,519		2,085		-27
Applicable income taxes	200		292		-32		333		516		-36
Net income	$        655		$        867		-25 %		$     1,186		$     1,569		-24 %

 

Condensed Consolidated Statement of Income, Five Quarter Trend
	Three months ended
	June 30,		March 31,		December 31,		September 30,		June 30,
(Dollars in millions)	2024		2024		2023		2023		2023
Interest income	$         2,789		$         2,745		$         2,740		$         2,641		$         2,516
Interest expense	1,071		1,065		1,018		866		717
Net interest income	1,718		1,680		1,722		1,775		1,799
Provision for credit losses	150		200		225		150		150
Net interest income after provision for credit losses	1,568		1,480		1,497		1,625		1,649
Other income
Mortgage banking revenues	106		104		112		105		107
Service charges on deposit accounts	127		124		121		121		119
Trust income	170		160		159		155		172
Brokerage services income	30		29		26		27		25
Trading account and other non-hedging      derivative gains	7		9		11		9		17
Gain (loss) on bank investment securities	(8)		2		4		—		1
Other revenues from operations	152		152		145		143		362
Total other income	584		580		578		560		803
Other expense
Salaries and employee benefits	764		833		724		727		738
Equipment and net occupancy	125		129		134		131		129
Outside data processing and software	124		120		114		111		106
Professional and other services	91		85		99		89		100
FDIC assessments	37		60		228		29		28
Advertising and marketing	27		20		26		23		28
Amortization of core deposit and other      intangible assets	13		15		15		15		15
Other costs of operations	116		134		110		153		149
Total other expense	1,297		1,396		1,450		1,278		1,293
Income before income taxes	855		664		625		907		1,159
Applicable income taxes	200		133		143		217		292
Net income	$            655		$            531		$            482		$            690		$            867

  

Condensed Consolidated Balance Sheet
	June 30,
(Dollars in millions)	2024		2023		Change
ASSETS
Cash and due from banks	$         1,778		$         1,848		-4 %
Interest-bearing deposits at banks	24,792		27,107		-9
Trading account	99		137		-28
Investment securities	29,894		27,917		7
Loans and leases, net of unearned discount:
Commercial and industrial	60,027		54,699		10
Real estate - commercial	29,532		34,634		-15
Real estate - consumer	23,003		23,762		-3
Consumer	22,440		20,249		11
Total loans and leases, net	135,002		133,344		1
Less: allowance for credit losses	2,204		1,998		10
Net loans and leases	132,798		131,346		1
Goodwill	8,465		8,465		—
Core deposit and other intangible assets	119		177		-32
Other assets	10,910		10,675		2
Total assets	$     208,855		$     207,672		1 %
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$       47,729		$       54,938		-13 %
Interest-bearing deposits	112,181		107,120		5
Total deposits	159,910		162,058		-1
Short-term borrowings	4,764		7,908		-40
Accrued interest and other liabilities	4,438		4,488		-1
Long-term borrowings	11,319		7,417		53
Total liabilities	180,431		181,871		-1
Shareholders' equity:
Preferred	2,744		2,011		36
Common	25,680		23,790		8
Total shareholders' equity	28,424		25,801		10
Total liabilities and shareholders' equity	$     208,855		$     207,672		1 %

 

Condensed Consolidated Balance Sheet, Five Quarter Trend
	June 30,		March 31,		December 31,		September 30,		June 30,
(Dollars in millions)	2024		2024		2023		2023		2023
ASSETS
Cash and due from banks	$         1,778		$         1,695		$         1,731		$         1,769		$         1,848
Interest-bearing deposits at banks	24,792		32,144		28,069		30,114		27,107
Trading account	99		99		106		137		137
Investment securities	29,894		28,496		26,897		27,336		27,917
Loans and leases, net of unearned discount:
Commercial and industrial	60,027		57,897		57,010		54,891		54,699
Real estate - commercial	29,532		32,416		33,003		33,741		34,634
Real estate - consumer	23,003		23,076		23,264		23,448		23,762
Consumer	22,440		21,584		20,791		20,275		20,249
Total loans and leases, net	135,002		134,973		134,068		132,355		133,344
Less: allowance for credit losses	2,204		2,191		2,129		2,052		1,998
Net loans and leases	132,798		132,782		131,939		130,303		131,346
Goodwill	8,465		8,465		8,465		8,465		8,465
Core deposit and other intangible assets	119		132		147		162		177
Other assets	10,910		11,324		10,910		10,838		10,675
Total assets	$     208,855		$     215,137		$     208,264		$     209,124		$     207,672
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$       47,729		$       50,578		$       49,294		$       53,787		$       54,938
Interest-bearing deposits	112,181		116,618		113,980		110,341		107,120
Total deposits	159,910		167,196		163,274		164,128		162,058
Short-term borrowings	4,764		4,795		5,316		6,731		7,908
Accrued interest and other liabilities	4,438		4,527		4,516		4,946		4,488
Long-term borrowings	11,319		11,450		8,201		7,123		7,417
Total liabilities	180,431		187,968		181,307		182,928		181,871
Shareholders' equity:
Preferred	2,744		2,011		2,011		2,011		2,011
Common	25,680		25,158		24,946		24,185		23,790
Total shareholders' equity	28,424		27,169		26,957		26,196		25,801
Total liabilities and shareholders' equity	$     208,855		$     215,137		$     208,264		$     209,124		$     207,672

 

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates
	Three months ended												Change in balance				Six months ended
	June 30,				March 31,				June 30,				June 30, 2024 from				June 30,								Change
(Dollars in millions)	2024				2024				2023				March 31,		June 30,		2024				2023				in
	Balance		Rate		Balance		Rate		Balance		Rate		2024		2023		Balance		Rate		Balance		Rate		balance
ASSETS
Interest-bearing deposits at banks	$   29,294		5.50 %		$   30,647		5.49 %		$   23,617		5.14 %		-4 %		24 %		$   29,971		5.50 %		$   23,963		4.89 %		25 %
Trading account	99		3.47		105		3.42		151		2.66		-6		-34		102		3.45		136		2.50		-25
Investment securities	29,695		3.61		28,587		3.30		28,623		3.09		4		4		29,141		3.46		28,126		3.04		4
Loans and leases, net of unearned discount:
Commercial and industrial	58,152		7.04		56,821		6.99		54,572		6.63		2		7		57,486		7.01		53,531		6.47		7
Real estate - commercial	31,458		6.38		32,696		6.36		34,903		6.38		-4		-10		32,077		6.37		35,089		6.14		-9
Real estate - consumer	23,006		4.32		23,136		4.28		23,781		4.10		-1		-3		23,071		4.30		23,775		4.03		-3
Consumer	21,972		6.61		21,143		6.54		20,289		5.88		4		8		21,558		6.58		20,388		5.77		6
Total loans and leases, net	134,588		6.38		133,796		6.32		133,545		6.02		1		1		134,192		6.35		132,783		5.87		1
Total earning assets	193,676		5.82		193,135		5.74		185,936		5.46		—		4		193,406		5.78		185,008		5.31		5
Goodwill	8,465				8,465				8,473				—		—		8,465				8,482				—
Core deposit and other intangible assets	126				140				185				-10		-32		133				192				-31
Other assets	9,714				9,738				9,782				—		-1		9,725				9,810				-1
Total assets	$   211,981				$   211,478				$   204,376				— %		4 %		$   211,729				$   203,492				4 %
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Savings and interest-checking deposits	$   95,955		2.59 %		$   94,867		2.61 %		$   87,210		1.69 %		1 %		10 %		$   95,411		2.60 %		$   87,629		1.49 %		9 %
Time deposits	19,802		4.41		20,583		4.41		16,009		3.77		-4		24		20,192		4.41		13,832		3.49		46
Total interest-bearing deposits	115,757		2.90		115,450		2.93		103,219		2.02		—		12		115,603		2.91		101,461		1.76		14
Short-term borrowings	4,962		5.62		6,228		5.42		7,539		5.11		-20		-34		5,595		5.51		6,273		4.94		-11
Long-term borrowings	11,490		5.83		9,773		5.81		7,516		5.43		18		53		10,631		5.82		7,017		5.36		52
Total interest-bearing liabilities	132,209		3.26		131,451		3.26		118,274		2.43		1		12		131,829		3.26		114,751		2.15		15
Noninterest-bearing deposits	47,734				48,615				56,180				-2		-15		48,175				59,001				-18
Other liabilities	4,293				4,393				4,237				-2		1		4,343				4,208				3
Total liabilities	184,236				184,459				178,691				—		3		184,347				177,960				4
Shareholders' equity	27,745				27,019				25,685				3		8		27,382				25,532				7
Total liabilities and      shareholders' equity	$   211,981				$   211,478				$   204,376				— %		4 %		$   211,729				$   203,492				4 %
Net interest spread			2.56				2.48				3.03								2.52				3.16
Contribution of interest-free funds			1.03				1.04				.88								1.04				.81
Net interest margin			3.59 %				3.52 %				3.91 %								3.56 %				3.97 %

 

Reconciliation of Quarterly GAAP to Non-GAAP Measures
	Three months ended				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
(Dollars in millions, except per share)
Income statement data
Net income
Net income	$       655		$       867		$    1,186		$    1,569
Amortization of core deposit and other intangible assets (1)	10		12		22		25
Net operating income	$       665		$       879		$    1,208		$    1,594
Earnings per common share
Diluted earnings per common share	$      3.73		$      5.05		$      6.76		$      9.06
Amortization of core deposit and other intangible assets (1)	.06		.07		.13		.15
Diluted net operating earnings per common share	$      3.79		$      5.12		$      6.89		$      9.21
Other expense
Other expense	$    1,297		$    1,293		$    2,693		$    2,652
Amortization of core deposit and other intangible assets	(13)		(15)		(28)		(32)
Noninterest operating expense	$    1,284		$    1,278		$    2,665		$    2,620
Efficiency ratio
Noninterest operating expense (numerator)	$    1,284		$    1,278		$    2,665		$    2,620
Taxable-equivalent net interest income	$    1,731		$    1,813		$    3,423		$    3,645
Other income	584		803		1,164		1,390
Less:  Gain (loss) on bank investment securities	(8)		1		(6)		1
Denominator	$    2,323		$    2,615		$    4,593		$    5,034
Efficiency ratio	55.3 %		48.9 %		58.0 %		52.0 %
Balance sheet data
Average assets
Average assets	$ 211,981		$ 204,376		$ 211,729		$ 203,492
Goodwill	(8,465)		(8,473)		(8,465)		(8,482)
Core deposit and other intangible assets	(126)		(185)		(133)		(192)
Deferred taxes	30		46		32		47
Average tangible assets	$ 203,420		$ 195,764		$ 203,163		$ 194,865
Average common equity
Average total equity	$  27,745		$  25,685		$  27,382		$  25,532
Preferred stock	(2,405)		(2,011)		(2,208)		(2,011)
Average common equity	25,340		23,674		25,174		23,521
Goodwill	(8,465)		(8,473)		(8,465)		(8,482)
Core deposit and other intangible assets	(126)		(185)		(133)		(192)
Deferred taxes	30		46		32		47
Average tangible common equity	$  16,779		$  15,062		$  16,608		$  14,894
At end of quarter
Total assets
Total assets	$ 208,855		$ 207,672
Goodwill	(8,465)		(8,465)
Core deposit and other intangible assets	(119)		(177)
Deferred taxes	31		44
Total tangible assets	$ 200,302		$ 199,074
Total common equity
Total equity	$  28,424		$  25,801
Preferred stock	(2,744)		(2,011)
Common equity	25,680		23,790
Goodwill	(8,465)		(8,465)
Core deposit and other intangible assets	(119)		(177)
Deferred taxes	31		44
Total tangible common equity	$  17,127		$  15,192

(1) After any related tax effect.

  

Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend
	Three months ended
	June 30,		March 31,		December 31,		September 30,		June 30,
	2024		2024		2023		2023		2023
(Dollars in millions, except per share)
Income statement data
Net income
Net income	$                     655		$                     531		$                     482		$                     690		$                     867
Amortization of core deposit and other intangible assets (1)	10		12		12		12		12
Net operating income	$                     665		$                     543		$                     494		$                     702		$                     879
Earnings per common share
Diluted earnings per common share	$                    3.73		$                    3.02		$                    2.74		$                    3.98		$                    5.05
Amortization of core deposit and other intangible assets (1)	.06		.07		.07		.07		.07
Diluted net operating earnings per common share	$                    3.79		$                    3.09		$                    2.81		$                    4.05		$                    5.12
Other expense
Other expense	$                  1,297		$                  1,396		$                  1,450		$                  1,278		$                  1,293
Amortization of core deposit and other intangible assets	(13)		(15)		(15)		(15)		(15)
Noninterest operating expense	$                  1,284		$                  1,381		$                  1,435		$                  1,263		$                  1,278
Efficiency ratio
Noninterest operating expense (numerator)	$                  1,284		$                  1,381		$                  1,435		$                  1,263		$                  1,278
Taxable-equivalent net interest income	$                  1,731		$                  1,692		$                  1,735		$                  1,790		$                  1,813
Other income	584		580		578		560		803
Less:  Gain (loss) on bank investment securities	(8)		2		4		—		1
Denominator	$                  2,323		$                  2,270		$                  2,309		$                  2,350		$                  2,615
Efficiency ratio	55.3 %		60.8 %		62.1 %		53.7 %		48.9 %
Balance sheet data
Average assets
Average assets	$             211,981		$             211,478		$             208,752		$             205,791		$             204,376
Goodwill	(8,465)		(8,465)		(8,465)		(8,465)		(8,473)
Core deposit and other intangible assets	(126)		(140)		(154)		(170)		(185)
Deferred taxes	30		33		39		43		46
Average tangible assets	$             203,420		$             202,906		$             200,172		$             197,199		$             195,764
Average common equity
Average total equity	$               27,745		$               27,019		$               26,500		$               26,020		$               25,685
Preferred stock	(2,405)		(2,011)		(2,011)		(2,011)		(2,011)
Average common equity	25,340		25,008		24,489		24,009		23,674
Goodwill	(8,465)		(8,465)		(8,465)		(8,465)		(8,473)
Core deposit and other intangible assets	(126)		(140)		(154)		(170)		(185)
Deferred taxes	30		33		39		43		46
Average tangible common equity	$               16,779		$               16,436		$               15,909		$               15,417		$               15,062
At end of quarter
Total assets
Total assets	$             208,855		$             215,137		$             208,264		$             209,124		$             207,672
Goodwill	(8,465)		(8,465)		(8,465)		(8,465)		(8,465)
Core deposit and other intangible assets	(119)		(132)		(147)		(162)		(177)
Deferred taxes	31		34		37		41		44
Total tangible assets	$             200,302		$             206,574		$             199,689		$             200,538		$             199,074
Total common equity
Total equity	$               28,424		$               27,169		$               26,957		$               26,197		$               25,801
Preferred stock	(2,744)		(2,011)		(2,011)		(2,011)		(2,011)
Common equity	25,680		25,158		24,946		24,186		23,790
Goodwill	(8,465)		(8,465)		(8,465)		(8,465)		(8,465)
Core deposit and other intangible assets	(119)		(132)		(147)		(162)		(177)
Deferred taxes	31		34		37		41		44
Total tangible common equity	$               17,127		$               16,595		$               16,371		$               15,600		$               15,192

(1) After any related tax effect.

 

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SOURCE M&T Bank Corporation

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