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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
Commission File Number 1-9861
_______________________
M&T BANK CORPORATION
(Exact name of registrant as specified in its charter)
_______________________
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New York | | 16-0968385 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | |
One M&T Plaza Buffalo, New York | | 14203 |
(Address of principal executive offices) | | (Zip Code) |
Registrant's telephone number, including area code:
(716) 635-4000
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered |
Common Stock, $0.50 par value | MTB | New York Stock Exchange |
Perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series H | MTBPrH | New York Stock Exchange |
Perpetual 7.500% Non-Cumulative Preferred Stock, Series J | MTBPrJ | New York Stock Exchange |
_____________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | |
Large accelerated filer | x | | Accelerated filer | o |
Non-accelerated filer | o | | Smaller reporting company | o |
Emerging growth company | o | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No
Number of shares of the registrant's Common Stock, $0.50 par value, outstanding as of the close of business on November 1, 2024: 165,921,158 shares.
M&T BANK CORPORATION
FORM 10-Q
For the Quarterly Period Ended September 30, 2024
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Table of Contents of Information Required in Report | | Page |
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GLOSSARY OF TERMS
The following listing includes acronyms and terms used throughout the document.
| | | | | |
Term | Definition |
2023 Annual Report | Form 10-K for the year ended December 31, 2023 |
Bayview Financial | Bayview Financial Holdings, L.P. together with its affiliates |
BLG | Bayview Lending Group, LLC |
Capital Rules | Capital adequacy standards established by the federal banking agencies |
CET1 | Common Equity Tier 1 |
CIT | Collective Investment Trust |
Company | M&T Bank Corporation and its consolidated subsidiaries |
DUS | Delegated Underwriting and Servicing |
Executive ALCO Committee | Executive Asset-Liability Liquidity Capital Committee of M&T |
FDIC | Federal Deposit Insurance Corporation |
Federal Reserve | Board of Governors of the Federal Reserve System |
FHLB | Federal Home Loan Bank |
FOMC | Federal Open Market Committee |
FRB | Federal Reserve Bank |
GAAP | Accounting principles generally accepted in the U.S. |
GDP | Gross Domestic Product |
Junior subordinated debentures | Fixed and variable rate junior subordinated deferrable interest debentures |
LTV | Loan-to-value |
M&T | M&T Bank Corporation |
M&T Bank | Manufacturers and Traders Trust Company |
People’s United | People’s United Financial, Inc. |
RWA | Risk-weighted assets |
SCB | Stress capital buffer |
SEC | Securities and Exchange Commission |
SOFR | Secured Overnight Financing Rate |
U.S. | United States of America |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Unaudited)
| | | | | | | | | | | |
(Dollars in millions, except per share) | September 30, 2024 | | December 31, 2023 |
Assets | | | |
Cash and due from banks | $ | 2,216 | | | $ | 1,731 | |
Interest-bearing deposits at banks | 24,417 | | | 28,069 | |
| | | |
Trading account | 102 | | | 106 | |
Investment securities: | | | |
Available for sale (cost: $16,658 at September 30, 2024; $10,691 at December 31, 2023) | 16,727 | | | 10,440 | |
Held to maturity (fair value: $13,709 at September 30, 2024; $14,308 at December 31, 2023) | 14,503 | | | 15,330 | |
Equity and other securities (cost: $1,090 at September 30, 2024; $1,125 at December 31, 2023) | 1,097 | | | 1,127 | |
Total investment securities | 32,327 | | | 26,897 | |
| | | |
| | | |
Loans and leases, net of unearned discount of $1,043 at September 30, 2024 and $868 at December 31, 2023 | 135,920 | | | 134,068 | |
Allowance for credit losses | (2,204) | | | (2,129) | |
Loans and leases, net | 133,716 | | | 131,939 | |
Premises and equipment | 1,694 | | | 1,739 | |
Goodwill | 8,465 | | | 8,465 | |
Core deposit and other intangible assets | 107 | | | 147 | |
Accrued interest and other assets | 8,741 | | | 9,171 | |
Total assets | $ | 211,785 | | | $ | 208,264 | |
Liabilities | | | |
Noninterest-bearing deposits | $ | 47,344 | | | $ | 49,294 | |
Savings and interest-checking deposits | 100,698 | | | 93,221 | |
Time deposits | 16,512 | | | 20,759 | |
Total deposits | 164,554 | | | 163,274 | |
Short-term borrowings | 2,605 | | | 5,316 | |
Accrued interest and other liabilities | 4,167 | | | 4,516 | |
Long-term borrowings | 11,583 | | | 8,201 | |
Total liabilities | 182,909 | | | 181,307 | |
Shareholders' equity | | | |
Preferred stock, $1.00 par, 20,000,000 shares authorized; Issued and outstanding: Liquidation preference of $1,000 per share: 350,000 shares at December 31, 2023; Liquidation preference of $10,000 per share: 215,000 shares at September 30, 2024 and 140,000 shares at December 31, 2023; Liquidation preference of $25 per share: 10,000,000 shares at September 30, 2024 and December 31, 2023 | 2,394 | | | 2,011 | |
Common stock, $0.50 par, 250,000,000 shares authorized, 179,436,779 shares issued at September 30, 2024 and December 31, 2023 | 90 | | | 90 | |
Common stock issuable, 11,559 shares at September 30, 2024; 12,217 shares at December 31, 2023 | 1 | | | 1 | |
Additional paid-in capital | 9,986 | | | 10,020 | |
Retained earnings | 18,659 | | | 17,524 | |
Accumulated other comprehensive income (loss), net | (27) | | | (459) | |
Treasury stock — common, at cost — 13,291,005 shares at September 30, 2024; 13,300,298 shares at December 31, 2023 | (2,227) | | | (2,230) | |
Total shareholders’ equity | 28,876 | | | 26,957 | |
Total liabilities and shareholders’ equity | $ | 211,785 | | | $ | 208,264 | |
See accompanying notes to financial statements.
M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
(Dollars in millions, except per share, shares in thousands) | 2024 | | 2023 | | 2024 | | 2023 |
Interest income | | | | | | | |
Loans and leases, including fees | $ | 2,153 | | | $ | 2,062 | | | $ | 6,378 | | | $ | 5,910 | |
Investment securities: | | | | | | | |
Fully taxable | 267 | | | 198 | | | 723 | | | 579 | |
Exempt from federal taxes | 16 | | | 17 | | | 48 | | | 50 | |
Deposits at banks | 348 | | | 363 | | | 1,167 | | | 942 | |
Other | 1 | | | 1 | | | 3 | | | 3 | |
Total interest income | 2,785 | | | 2,641 | | | 8,319 | | | 7,484 | |
Interest expense | | | | | | | |
Savings and interest-checking deposits | 655 | | | 494 | | | 1,888 | | | 1,140 | |
Time deposits | 180 | | | 202 | | | 622 | | | 441 | |
Short-term borrowings | 57 | | | 69 | | | 210 | | | 223 | |
Long-term borrowings | 167 | | | 101 | | | 475 | | | 287 | |
Total interest expense | 1,059 | | | 866 | | | 3,195 | | | 2,091 | |
Net interest income | 1,726 | | | 1,775 | | | 5,124 | | | 5,393 | |
Provision for credit losses | 120 | | | 150 | | | 470 | | | 420 | |
Net interest income after provision for credit losses | 1,606 | | | 1,625 | | | 4,654 | | | 4,973 | |
Other income | | | | | | | |
Mortgage banking revenues | 109 | | | 105 | | | 319 | | | 297 | |
Service charges on deposit accounts | 132 | | | 121 | | | 383 | | | 354 | |
Trust income | 170 | | | 155 | | | 500 | | | 521 | |
Brokerage services income | 32 | | | 27 | | | 91 | | | 76 | |
Trading account and other non-hedging derivative gains | 13 | | | 9 | | | 29 | | | 38 | |
Gain (loss) on bank investment securities | (2) | | | — | | | (8) | | | — | |
Other revenues from operations | 152 | | | 143 | | | 456 | | | 664 | |
Total other income | 606 | | | 560 | | | 1,770 | | | 1,950 | |
Other expense | | | | | | | |
Salaries and employee benefits | 775 | | | 727 | | | 2,372 | | | 2,273 | |
Equipment and net occupancy | 125 | | | 131 | | | 379 | | | 387 | |
Outside data processing and software | 123 | | | 111 | | | 367 | | | 323 | |
Professional and other services | 88 | | | 89 | | | 264 | | | 314 | |
FDIC assessments | 25 | | | 29 | | | 122 | | | 87 | |
Advertising and marketing | 27 | | | 23 | | | 74 | | | 82 | |
Amortization of core deposit and other intangible assets | 12 | | | 15 | | | 40 | | | 47 | |
Other costs of operations | 128 | | | 153 | | | 378 | | | 417 | |
Total other expense | 1,303 | | | 1,278 | | | 3,996 | | | 3,930 | |
Income before taxes | 909 | | | 907 | | | 2,428 | | | 2,993 | |
Income taxes | 188 | | | 217 | | | 521 | | | 734 | |
Net income | $ | 721 | | | $ | 690 | | | $ | 1,907 | | | $ | 2,259 | |
Net income available to common shareholders | | | | | | | |
Basic | $ | 674 | | | $ | 664 | | | $ | 1,805 | | | $ | 2,180 | |
Diluted | 674 | | | 664 | | | 1,805 | | | 2,180 | |
Net income per common share | | | | | | | |
Basic | 4.04 | | | 4.00 | | | 10.83 | | | 13.09 | |
Diluted | 4.02 | | | 3.98 | | | 10.78 | | | 13.05 | |
Average common shares outstanding | | | | | | | |
Basic | 166,671 | | 165,909 | | 166,694 | | 166,488 |
Diluted | 167,567 | | 166,570 | | 167,437 | | 167,093 |
See accompanying notes to financial statements.
M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
(Dollars in millions) | 2024 | | 2023 | | 2024 | | 2023 |
Net income | $ | 721 | | | $ | 690 | | | $ | 1,907 | | | $ | 2,259 | |
Other comprehensive income (loss), net of tax and reclassification adjustments: | | | | | | | |
Net unrealized gains (losses) on investment securities | 230 | | | (3) | | | 238 | | | (2) | |
Cash flow hedges adjustments | 291 | | | (70) | | | 196 | | | (146) | |
Defined benefit plans liability adjustments | (1) | | | (1) | | | (4) | | | (4) | |
Other | 4 | | | (3) | | | 2 | | | — | |
Total other comprehensive income (loss) | 524 | | | (77) | | | 432 | | | (152) | |
Total comprehensive income | $ | 1,245 | | | $ | 613 | | | $ | 2,339 | | | $ | 2,107 | |
See accompanying notes to financial statements.
M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
| | | | | | | | | | | |
| Nine Months Ended September 30, |
(Dollars in millions) | 2024 | | 2023 |
Cash flows from operating activities | | | |
Net income | $ | 1,907 | | | $ | 2,259 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Provision for credit losses | 470 | | | 420 | |
Depreciation and amortization of premises and equipment | 235 | | | 227 | |
Amortization of capitalized servicing rights | 104 | | | 94 | |
Amortization of core deposit and other intangible assets | 40 | | | 47 | |
Provision for deferred income taxes | (13) | | | (40) | |
Asset write-downs | 7 | | | 3 | |
Net gain on sales of assets | (3) | | | (244) | |
Net change in accrued interest receivable, payable | (149) | | | 232 | |
Net change in other accrued income and expense | 166 | | | 208 | |
Net change in loans originated for sale | (544) | | | (257) | |
Net change in trading account and other non-hedging derivative assets and liabilities | (286) | | | 156 | |
Net cash provided by operating activities | 1,934 | | | 3,105 | |
Cash flows from investing activities | | | |
Proceeds from sales of investment securities: | | | |
Available for sale | 58 | | | — | |
Equity and other securities | 436 | | | 809 | |
Proceeds from maturities of investment securities: | | | |
Available for sale | 5,255 | | | 513 | |
Held to maturity | 844 | | | 924 | |
Purchases of investment securities: | | | |
Available for sale | (11,156) | | | (344) | |
Held to maturity | — | | | (2,948) | |
Equity and other securities | (398) | | | (1,049) | |
Net increase in loans and leases | (1,740) | | | (850) | |
Net (increase) decrease in interest-bearing deposits at banks | 3,652 | | | (5,156) | |
Capital expenditures, net | (131) | | | (168) | |
Net decrease in loan servicing advances | 186 | | | 305 | |
Other, net | 151 | | | (593) | |
Net cash used by investing activities | (2,843) | | | (8,557) | |
Cash flows from financing activities | | | |
Net increase in deposits | 1,277 | | | 608 | |
Net increase (decrease) in short-term borrowings | (2,711) | | | 3,176 | |
Proceeds from long-term borrowings | 4,003 | | | 4,032 | |
Payments on long-term borrowings | (678) | | | (781) | |
Proceeds from issuance of Series J preferred stock | 733 | | | — | |
Redemption of Series E preferred stock | (350) | | | — | |
Purchases of treasury stock | (198) | | | (594) | |
Dividends paid — common | (671) | | | (652) | |
Dividends paid — preferred | (107) | | | (83) | |
Other, net | 96 | | | (5) | |
Net cash provided by financing activities | 1,394 | | | 5,701 | |
Net increase in cash, cash equivalents and restricted cash | 485 | | | 249 | |
Cash, cash equivalents and restricted cash at beginning of period | 1,731 | | | 1,520 | |
Cash, cash equivalents and restricted cash at end of period | $ | 2,216 | | | $ | 1,769 | |
Supplemental disclosure of cash flow information | | | |
Interest received during the period | $ | 8,323 | | | $ | 7,429 | |
Interest paid during the period | 3,294 | | | 1,779 | |
Income taxes paid during the period | 240 | | | 431 | |
Supplemental schedule of noncash investing and financing activities | | | |
Real estate acquired in settlement of loans | 30 | | | 17 | |
Additions to right-of-use assets under operating leases | 62 | | | 88 | |
See accompanying notes to financial statements.
M&T BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in millions, except per share) | Preferred Stock | | Common Stock | | Common Stock Issuable | | Additional Paid-in Capital | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss), Net | | Treasury Stock | | Total |
Three Months Ended September 30, 2024 | | | | | | | | | | | | | | | |
Balance — July 1, 2024 | $ | 2,744 | | | $ | 90 | | | $ | 1 | | | $ | 9,976 | | | $ | 18,211 | | | $ | (551) | | | $ | (2,047) | | | $ | 28,424 | |
Total comprehensive income | — | | | — | | | — | | | — | | | 721 | | | 524 | | | — | | | 1,245 | |
Redemption of Series E preferred stock | (350) | | | — | | |