How did M&T perform financially in 2006?

M&T reported 2006 net income of $839 million, or $7.37 per diluted share, compared with $782 million, or $6.73 per diluted share, in 2005. Return on average assets was 1.50% in 2006, compared with 1.44% in 2005, and return on average common stockholders' equity was 13.89%, compared with 13.49%.

What drove changes in net interest income and margin?

Taxable-equivalent net interest income rose 1% to $1.84 billion as average earning assets grew 3% to $49.7 billion. The net interest margin declined 7 basis points to 3.70%, largely because short-term interest rates rose faster than yields on earning assets, after the Federal Reserve raised its benchmark rate 100 basis points during the first half of 2006.

What credit quality trends did M&T report?

The provision for credit losses declined to $80 million from $88 million, and net charge-offs were $68 million, or .16% of average loans, down from .19% in 2005. However, nonperforming loans increased to $224 million, or .52% of loans and leases, from $156 million, mainly due to four automobile dealer relationships totaling about $41 million.

What is the significance of Allied Irish Banks' ownership?

AIB held approximately 24.2% of M&T common stock at December 31, 2006, following M&T's 2003 acquisition of Allfirst. Under the Reorganization Agreement, AIB has the right to designate board members and committee representation while it holds at least 15% of M&T shares, and certain bylaw provisions protect AIB's rights until its ownership falls below 5%.

How much capital did M&T return to shareholders in 2006?

M&T paid common dividends of $249.8 million, or $2.25 per share, in 2006, up from $1.75 per share in 2005. The company also repurchased 3,259,000 shares of common stock during 2006 at a cost of $374 million, and through December 31, 2006 had repurchased 3,303,700 shares under its current plan.

M&T Bank 10-K FY2006 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed February 23, 2007. Cited figures are marked; the original filing is the authoritative source.

M&T Bank Corporation (NYSE: MTB) reported net income of $839 million^a, or $7.37 diluted earnings per share, for 2006, up 7% and 10% respectively from $782 million or $6.73 per diluted share in 2005.

Total assets were $57.1 billion^b at December 31, 2006, with deposits of $39.9 billion and stockholders' equity of $6.3 billion. Net interest income on a taxable-equivalent basis rose 1% to $1.84 billion, while the net interest margin declined to 3.70% from 3.77%, reflecting higher short-term interest rates. Noninterest income rose 10% to $1.05 billion, and the provision for credit losses fell to $80 million from $88 million, with net charge-offs of $68 million.

Nonperforming loans increased to $224 million^c, or .52% of loans and leases, from $156 million at year-end 2005, largely due to four relationships with automobile dealers totaling approximately $41 million. Management also noted the June 30, 2006 acquisition of 21 branch offices from Citibank, N.A. and the company's continued return of capital, with 3,259,000 shares repurchased in 2006 and common dividends declared of $2.25 per share.

Allied Irish Banks, p.l.c. held approximately 24.2%^d of M&T common stock at December 31, 2006 and retains board representation and governance protections under a 2003 reorganization agreement. The filing states that M&T and its bank subsidiaries met the requirements to be classified as well capitalized at year-end 2006, and management concluded that internal control over financial reporting was effective as of December 31, 2006.

02—Key points

Key Highlights

Net income of $839 million in 2006, up 7% from $782 million in 2005; diluted EPS of $7.37, up 10% from $6.73.
Total assets of $57.1 billion, deposits of $39.9 billion and stockholders' equity of $6.3 billion at December 31, 2006.
Net interest margin declined to 3.70% in 2006 from 3.77% in 2005, largely due to higher short-term interest rates; taxable-equivalent net interest income rose 1% to $1.84 billion.
Noninterest income rose 10% to $1.05 billion, aided by higher mortgage banking revenues, service charges, trust income and brokerage income, plus a $13 million gain on the call of an FHLB borrowing.
Nonperforming loans rose to $224 million (.52% of loans and leases) from $156 million, largely due to four automobile dealer relationships totaling about $41 million.
Dividends of $2.25 per common share in 2006, up from $1.75 in 2005; 3,259,000 shares repurchased during 2006 at an average cost of $114.72.
Allied Irish Banks, p.l.c. owned approximately 24.2% of M&T common stock at December 31, 2006 and retains board representation and governance rights under the Reorganization Agreement.

03—Questions

Frequently Asked Questions

How did M&T perform financially in 2006?
M&T reported 2006 net income of $839 million, or $7.37 per diluted share, compared with $782 million, or $6.73 per diluted share, in 2005. Return on average assets was 1.50% in 2006, compared with 1.44% in 2005, and return on average common stockholders' equity was 13.89%, compared with 13.49%.
What drove changes in net interest income and margin?
Taxable-equivalent net interest income rose 1% to $1.84 billion as average earning assets grew 3% to $49.7 billion. The net interest margin declined 7 basis points to 3.70%, largely because short-term interest rates rose faster than yields on earning assets, after the Federal Reserve raised its benchmark rate 100 basis points during the first half of 2006.
What credit quality trends did M&T report?
The provision for credit losses declined to $80 million from $88 million, and net charge-offs were $68 million, or .16% of average loans, down from .19% in 2005. However, nonperforming loans increased to $224 million, or .52% of loans and leases, from $156 million, mainly due to four automobile dealer relationships totaling about $41 million.
What is the significance of Allied Irish Banks' ownership?
AIB held approximately 24.2% of M&T common stock at December 31, 2006, following M&T's 2003 acquisition of Allfirst. Under the Reorganization Agreement, AIB has the right to designate board members and committee representation while it holds at least 15% of M&T shares, and certain bylaw provisions protect AIB's rights until its ownership falls below 5%.
How much capital did M&T return to shareholders in 2006?
M&T paid common dividends of $249.8 million, or $2.25 per share, in 2006, up from $1.75 per share in 2005. The company also repurchased 3,259,000 shares of common stock during 2006 at a cost of $374 million, and through December 31, 2006 had repurchased 3,303,700 shares under its current plan.

04—Continue

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