01—Abstract
Summary
Summary of the 10-K filed February 21, 2024. Cited figures are marked; the original filing is the authoritative source.
M&T Bank Corporation (MTB) reported net income of $2.74 billiona for 2023, up from $1.99 billion in 2022, with diluted earnings per share of $15.79 versus $11.53.
Taxable-equivalent net interest income rose 22% to $7.17 billionb, driven by a 44 basis point widening of the net interest margin to 3.83%, and the year included one additional quarter of operations acquired from People's United (acquired April 1, 2022). Net income also benefited from a $225 million pre-tax gain on the sale of the CIT business, partly offset by a $197 million FDIC special assessment and a $645 million provision for credit losses (up from $517 million). Credit quality showed pressure concentrated in commercial real estate.
Criticized investor-owned commercial real estate loans rose to $8.8 billionc, or 27% of such loans, from $7.9 billion or 22% a year earlier. Nonaccrual loans to total loans were 1.62% at year-end, down from 1.85%, and the allowance for credit losses reached $2.13 billion, or 1.59% of loans. Net charge-offs increased to $441 million from $160 million.
Management reported that the company reduced its relative concentration of investor-owned commercial real estate loans during 2023. Capital and liquidity remained strong. Shareholders' equity was $27.0 billiond, or 12.94% of total assets, and tangible common equity to tangible assets was 8.20%.
The stress capital buffer declined to 4.0% from 4.7% effective October 1, 2023. Total deposits were $163.3 billion, and the company repurchased $600 million of common stock during 2023. Uninsured deposits were estimated at $67.0 billion.
02—Key points
Key Highlights
- Net income rose to $2.74 billion ($15.79 diluted EPS) from $1.99 billion ($11.53) in 2022; net operating income was $2.79 billion ($16.08 diluted net operating EPS).
- Taxable-equivalent net interest income increased 22% to $7.17 billion; net interest margin widened 44 basis points to 3.83%.
- Provision for credit losses increased to $645 million from $517 million, reflecting commercial real estate value declines and higher rates affecting commercial borrowers.
- Criticized investor-owned commercial real estate loans increased to $8.8 billion, or 27% of such loans, from 22% at December 31, 2022.
- Other expense rose to $5.38 billion, including a $197 million FDIC special assessment recorded in the fourth quarter of 2023.
- Shareholders' equity totaled $27.0 billion (12.94% of total assets); the stress capital buffer decreased to 4.0% effective October 1, 2023.
- M&T repurchased 3,838,157 common shares for $600 million in 2023 and declared common dividends of $5.20 per share versus $4.80 in 2022.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 21, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $1.48B$8.18B | −81.9% |
| Interest Expense | $3.11B$425.00M | +631.5% |
| Net Income | $2.74B$1.99B | +37.6% |
| EPS (Basic) | $15.85$11.59 | +36.8% |
| EPS (Diluted) | $15.79$11.53 | +36.9% |
| Shares Outstanding (Basic) | 166.36M163.17M | +2.0% |
| Shares Outstanding (Diluted) | 167.00M164.03M | +1.8% |
05—Questions
Frequently Asked Questions
What drove the increase in M&T's 2023 net income?
Net income increased to $2.74 billion from $1.99 billion. The filing attributes the higher result mainly to a 22% rise in taxable-equivalent net interest income, reflecting a 44 basis point widening of the net interest margin to 3.83% and one additional quarter of People's United operations. Noninterest income also rose 7% to $2.53 billion, including a $225 million pre-tax gain on the CIT divestiture.
How significant are the commercial real estate credit concerns?
The filing shows elevated stress in this segment. Criticized investor-owned commercial real estate loans reached $8.8 billion, or 27% of such loans, up from 22% a year earlier. Net charge-offs rose to $441 million from $160 million, and the allowance for credit losses increased to $2.13 billion, with a reserve of 4.37% on office-secured loans.
What were the one-time items affecting 2023 results?
Results included a $225 million pre-tax gain ($157 million after tax) from the April 2023 sale of the CIT business and a $197 million pre-tax FDIC special assessment ($146 million after tax) recorded in the fourth quarter. The company reported no merger-related expenses in 2023, compared with $338 million in 2022.
How strong is M&T's capital position?
Shareholders' equity was $27.0 billion at year-end, and the tangible common equity to tangible assets ratio was 8.20%. The consolidated CET1 ratio was 10.98% and the total capital ratio was 13.99%. The stress capital buffer declined to 4.0% from 4.7%, so the CET1 requirement is 8.5%.
What is the company's capital return activity?
M&T repurchased 3,838,157 common shares in 2023 for a total cost of $600 million, including the excise tax. Common dividends declared totaled $5.20 per share, compared with $4.80 in 2022, and $100 million in preferred dividends was declared. About $1.2 billion remained under the $3.0 billion repurchase authorization.
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