01—Abstract
Summary
Summary of the 10-K filed February 28, 2006. Cited figures are marked; the original filing is the authoritative source.
M&T Bank Corporation, a New York bank holding company headquartered in Buffalo, reported net income of $782.2 milliona, or $6.73 diluted earnings per share, for 2005, up from $722.5 million, or $6.00 per diluted share, in 2004.
Total assets were $55.1 billionb at December 31, 2005, with deposits of $37.1 billion and stockholders' equity of $5.9 billion. Taxable-equivalent net interest income rose 3% to $1.81 billion, but the net interest margin narrowed to 3.77% from 3.88% as rising short-term rates flattened the yield curve. Net charge-offs fell to $77 million, or .19% of average loans, and the provision for credit losses declined to $88 million.
Noninterest income was essentially flat at $950 millionc, held back by a $29 million other-than-temporary impairment charge on FNMA and FHLMC preferred stock. Noninterest expense fell 2% to $1.49 billion. The company repurchased 4,891,800 shares in 2005 at an average cost of $104.18 per share and raised its quarterly dividend to $.45 per share in the second quarter of 2005, bringing full-year dividends to $1.75 per share.
Allied Irish Banks, p.l.c. held approximately 23.8%d of M&T's common stock at year-end 2005 following the April 2003 Allfirst acquisition. The Reorganization Agreement gives AIB board representation and certain governance protections, including limits on certain actions by M&T while AIB holds at least 15% of the shares. Both bank subsidiaries were rated well capitalized at year-end 2005.
02—Key points
Key Highlights
- Net income rose 8% to $782.2 million in 2005, and diluted EPS increased 12% to $6.73.
- Net interest margin narrowed 11 basis points to 3.77%, as rising short-term rates flattened the yield curve.
- Net charge-offs declined to $76.9 million (.19% of average loans) from $81.7 million in 2004, and the provision for credit losses fell to $88 million.
- Noninterest income was $950 million, including a $29 million other-than-temporary impairment charge on FNMA and FHLMC preferred stock.
- Noninterest expense declined 2% to $1.49 billion; the 2004 expense base included a $25 million charitable contribution.
- M&T repurchased 4,891,800 shares in 2005 at an average cost of $104.18 and paid $1.75 per share in dividends.
- AIB owned approximately 23.8% of M&T common stock at December 31, 2005, with board representation and governance rights under the Reorganization Agreement.
03—Questions
Frequently Asked Questions
How profitable was M&T Bank Corporation in 2005 compared with 2004?
Net income was $782.2 million, or $6.73 per diluted share, in 2005, compared with $722.5 million, or $6.00 per diluted share, in 2004. Return on average assets was 1.44% in 2005 versus 1.40% in 2004, and return on average common equity was 13.49% versus 12.67%.
What pressured the net interest margin in 2005?
The net interest margin declined to 3.77% from 3.88%, largely because rising short-term interest rates increased rates paid on interest-bearing liabilities more rapidly than yields on earning assets. The Federal Reserve raised its federal funds target rate eight times during 2005, flattening the yield curve.
How did credit quality trend?
Credit quality improved. Net charge-offs fell to $77 million from $82 million in 2004, nonperforming loans were $156 million or .39% of loans and leases at year-end 2005 versus .45% a year earlier, and the allowance for credit losses was $638 million, or 1.58% of loans and leases.
What is the significance of AIB's ownership in M&T?
AIB held approximately 23.8% of M&T's common stock at December 31, 2005, received from the 2003 Allfirst acquisition. AIB has the right to designate four directors to the M&T and M&T Bank boards while it holds at least 15% of the shares, and the Reorganization Agreement includes protective provisions and restrictions on AIB's own actions.
04—Continue