M&T Bank Corporation Announces 2016 Fourth Quarter And Full-Year Results

BUFFALO, N.Y., Jan. 19, 2017

GAAP Results of Operations.  Diluted earnings per common share measured in accordance with generally accepted accounting principles ("GAAP") for the fourth quarter of 2016 were $1.98, up 20% from $1.65 in the year-earlier quarter.  GAAP-basis net income in the recent quarter aggregated $331 million, 22% higher than $271 million in the fourth quarter of 2015.  Diluted earnings per common share and GAAP-basis net income were $2.10 and $350 million, respectively, in the third quarter of 2016.  GAAP-basis net income for the final quarter of 2016 expressed as an annualized rate of return on average assets and average common shareholders' equity was 1.05% and 8.13%, respectively, compared with .93% and 7.22%, respectively, in the year-earlier quarter and 1.12% and 8.68%, respectively, in 2016's third quarter. 

In the fourth and third quarters of 2016, M&T sold its holdings of collateralized debt obligations in response to the provisions of the so-called "Volcker Rule" realizing pre-tax gains of $2 million and $28 million, respectively.  During the fourth quarter of 2016, M&T made a $30 million tax-deductible cash contribution to The M&T Charitable Foundation.  The after-tax impact of that contribution reduced the recent quarter's net income by $18 million, or $.12 of diluted earnings per common share.

Commenting on M&T's financial performance, Darren J. King, Executive Vice President and Chief Financial Officer, noted, "We are pleased with the recent quarter's results which were highlighted by an annualized 15% growth rate in M&T's commercial loan portfolios and a 3 basis point widening of the net interest margin as compared with the third quarter.  Expenses remained well-controlled in the quarter.   Consistent with recent performance, net charge-offs as a percentage of loans were below M&T's long-term average."

Earnings Highlights
														Change 4Q 2016 vs. ARIVA.DE Börsen-Geflüster Kurse M&T Bank Corporation 147,51 $ +0,42%
($ in millions, except per share data)		4Q16				4Q15				3Q16				4Q15				3Q16
Net income		$	331			$	271			$	350				22	%			-6	%
Net income available to common shareholders - diluted		$	308			$	248			$	327				24	%			-6	%
Diluted earnings per common share		$	1.98			$	1.65			$	2.10				20	%			-6	%
Annualized return on average assets			1.05	%			.93	%			1.12	%
Annualized return on average common equity			8.13	%			7.22	%			8.68	%

For the year ended December 31, 2016, diluted earnings per common share were $7.78, up 8% from $7.18 in 2015.  GAAP-basis net income for 2016 aggregated $1.32 billion, 22% higher than $1.08 billion in 2015.  Expressed as a rate of return on average assets, GAAP-basis net income was 1.06% in each of 2016 and 2015 while the rate of return on average common shareholders' equity was 8.16% in 2016 and 8.32% in 2015.

Supplemental Reporting of Non-GAAP Results of Operations.  M&T consistently provides supplemental reporting of its results on a "net operating" or "tangible" basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T, since such items are considered by management to be "nonoperating" in nature.  The amounts of such "nonoperating" expenses are presented in the tables that accompany this release.  Although "net operating income" as defined by M&T is not a GAAP measure, M&T's management believes that this information helps investors understand the effect of acquisition activity in reported results.

Diluted net operating earnings per common share were $2.01 in the fourth quarter of 2016, compared with $2.09 in the year-earlier quarter and $2.13 in the third quarter of 2016.  Net operating income during the recent quarter was $336 million, compared with $338 million in the fourth quarter of 2015 and $356 million in 2016's third quarter.  The combined impact of the securities transactions and the charitable contribution noted earlier increased net operating income in the third quarter and decreased such income in the fourth quarter of 2016 by $17 million, or $.11 per diluted common share.  Expressed as an annualized rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.10% and 11.93%, respectively, in the recent quarter, compared with 1.21% and 13.26%, respectively, in the fourth quarter of 2015 and 1.18% and 12.77%, respectively, in the third quarter of 2016.

For the year ended December 31, 2016, diluted net operating earnings per common share were $8.08, up 4% from $7.74 in 2015.  Net operating income in 2016 rose 18% to $1.36 billion from $1.16 billion in 2015.  Expressed as a rate of return on average tangible assets and average tangible common shareholders' equity, net operating income was 1.14% and 12.25%, respectively, in 2016 and 1.18% and 13.00%, respectively, in 2015.

Taxable-equivalent Net Interest Income.  Net interest income expressed on a taxable-equivalent basis totaled $883 million in the fourth quarter of 2016, up 9% from $813 million in the year-earlier quarter.  Contributing to that improvement was a 10% increase in average earning assets, which grew to $114.3 billion in the recent quarter from $103.6 billion in the fourth quarter of 2015.  The growth in earning assets was predominantly the result of higher average loans, which rose to $90.0 billion in the recent quarter, up $8.9 billion, or 11%, from the fourth quarter of 2015.  Partially offsetting the favorable impact of the asset growth was a 4 basis point narrowing of the net interest margin to 3.08% in the recent quarter from 3.12% in the fourth quarter of 2015.  The narrowing reflects higher rates paid on interest-bearing time deposits associated with the acquisition of Hudson City Bancorp, Inc. ("Hudson City").  Taxable-equivalent net interest income in the recent quarter was 2% higher than $865 million in the third quarter of 2016.  The improvement resulted from a $1.4 billion increase in average earning assets, due to growth in average balances of investment securities and loans, and a 3 basis point widening of the net interest margin from 3.05% in the third quarter of 2016.  That widening reflects the impact of higher interest rates resulting from actions initiated in December by the Federal Reserve to increase its target federal funds rate.

Taxable-equivalent Net Interest Income
														Change 4Q 2016 vs.
($ in millions)		4Q16				4Q15				3Q16				4Q15				3Q16
Average earning assets		$	114,254			$	103,587			$	112,864				10	%			1	%
Net interest income - taxable equivalent		$	883			$	813			$	865				9	%			2	%
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