How did M&T's profitability change in 2001?

Net income was $378.1 million, up 32% from $286.2 million in 2000. Diluted earnings per share were $3.82, up from $3.44, and return on average assets was 1.23%. Cash net income, which excludes goodwill and core deposit intangible amortization and nonrecurring merger expenses, was $482.3 million.

What drove the growth in net interest income?

Average earning assets rose to $27.8 billion from $21.5 billion, largely from acquired loans and deposits. The net interest margin also widened to 4.23% from 4.02%, as short-term rates fell faster than longer-term rates during 2001.

Is M&T's credit quality deteriorating?

Credit costs increased. The provision for credit losses rose to $103.5 million from $38.0 million, and net charge-offs were .31% of average loans versus .16% in 2000. Nonperforming loans rose to $190.5 million, or .76% of loans, which the filing attributes to a weakened economy and two larger commercial loans totaling $40 million. The allowance for credit losses was $425.0 million, or 1.69% of total loans.

What is the impact of the change in goodwill accounting?

Effective January 1, 2002, M&T adopted SFAS No. 142 and stopped amortizing substantially all goodwill, which the filing says will have a material impact on future results. Amortization of core deposit and other intangibles is expected to be about $51 million in 2002. The company had not yet completed its transitional impairment test.

M&T Bank 10-K FY2001 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed February 28, 2002. Cited figures are marked; the original filing is the authoritative source.

M&T Bank Corporation (Buffalo, New York) reported net income of $378.1 million^a, or $3.82 per diluted share, for 2001, up 32% from $286.2 million in 2000.

Total assets were $31.5 billion^b at December 31, 2001, with deposits of $21.6 billion and stockholders' equity of $2.9 billion. Results were driven largely by growth from the Keystone Financial (October 2000) and Premier National Bancorp (February 2001) acquisitions. Taxable-equivalent net interest income rose 36% to $1.176 billion, and the net interest margin widened to 4.23% from 4.02%, helped by a steeper yield curve as the Federal Reserve cut its benchmark rate by 475 basis points during 2001.

Credit costs rose with the economy. The provision for credit losses increased to $103.5 million^c from $38.0 million, and net charge-offs reached $75.3 million, or .31% of average loans, versus .16% in 2000. Nonperforming loans rose to $190.5 million, or .76% of loans.

Noninterest income grew 47% to $477.4 million^d, and mortgage banking revenues increased 63% on favorable refinancing conditions. Noninterest expense also rose, and the efficiency ratio improved to 49.6% on an operating basis, from 50.2%. M&T's capital position remained strong, with all bank subsidiaries classified as well capitalized.

The Tier 1 risk-based capital ratio was 7.37% and the total risk-based capital ratio was 10.72%. The company repurchased 4,396,303 shares in 2001 for $324 million and paid dividends of $1.00 per share, up from $.625.

Effective January 1, 2002, M&T adopted SFAS No. 142, ceasing goodwill amortization, which the filing says will have a material impact on future results. The company had not yet completed its transitional impairment test.

02—Key points

Key Highlights

Net income rose 32% to $378.1 million in 2001; diluted EPS was $3.82, up 11% from $3.44.
Net interest margin widened to 4.23% from 4.02%, with taxable-equivalent net interest income up 36% to $1.176 billion.
Noninterest income increased 47% to $477.4 million, with mortgage banking revenues up 63% to $102.7 million.
Provision for credit losses more than doubled to $103.5 million; nonperforming loans reached $190.5 million, or .76% of loans.
Total assets were $31.5 billion at year-end 2001; the Premier (February 2001) and Keystone (October 2000) acquisitions contributed substantially to growth.
All bank subsidiaries were well capitalized, with a Tier 1 risk-based capital ratio of 7.37% and a total risk-based capital ratio of 10.72%.
Dividends per common share were $1.00 in 2001, up from $.625, and the company repurchased 4,396,303 shares for $324 million.

03—Questions

Frequently Asked Questions

How did M&T's profitability change in 2001?
Net income was $378.1 million, up 32% from $286.2 million in 2000. Diluted earnings per share were $3.82, up from $3.44, and return on average assets was 1.23%. Cash net income, which excludes goodwill and core deposit intangible amortization and nonrecurring merger expenses, was $482.3 million.
What drove the growth in net interest income?
Average earning assets rose to $27.8 billion from $21.5 billion, largely from acquired loans and deposits. The net interest margin also widened to 4.23% from 4.02%, as short-term rates fell faster than longer-term rates during 2001.
Is M&T's credit quality deteriorating?
Credit costs increased. The provision for credit losses rose to $103.5 million from $38.0 million, and net charge-offs were .31% of average loans versus .16% in 2000. Nonperforming loans rose to $190.5 million, or .76% of loans, which the filing attributes to a weakened economy and two larger commercial loans totaling $40 million. The allowance for credit losses was $425.0 million, or 1.69% of total loans.
What is the impact of the change in goodwill accounting?
Effective January 1, 2002, M&T adopted SFAS No. 142 and stopped amortizing substantially all goodwill, which the filing says will have a material impact on future results. Amortization of core deposit and other intangibles is expected to be about $51 million in 2002. The company had not yet completed its transitional impairment test.

04—Continue

← View all 10-K filings