01—Abstract
Summary
Summary of the 10-Q filed August 5, 2024. Cited figures are marked; the original filing is the authoritative source.
M&T Bank Corporation's Form 10-Q for the quarter ended June 30, 2024 reports net income of $655 milliona for the second quarter of 2024, compared with $867 million in the second quarter of 2023, and $1.19 billion for the six months ended June 30, 2024, compared with $1.57 billion a year earlier.
Diluted earnings per common share were $3.73b for the quarter and $6.76 for the first half. The decline in the year-to-date figures reflects a narrowing of the net interest margin to 3.56% from 3.97%, an absence of the $225 million gain on the April 2023 sale of the CIT business, and a $34 million FDIC special assessment in 2024. Compared with the first quarter of 2024, second-quarter net income rose $124 million, with the net interest margin expanding to 3.59% from 3.52% and the provision for credit losses falling to $150 million from $200 million.
Credit metrics were mixed. Nonaccrual loans declined to $2.02 billionc at June 30, 2024 from $2.17 billion at December 31, 2023, and the allowance for credit losses rose to $2.20 billion, or 1.63% of loans and leases. Criticized investor-owned commercial real estate loans totaled $7.6 billion, or 26% of such loans.
Net charge-offs were $137 milliond in the quarter, equal to an annualized 0.41% of average loans. Total criticized commercial and industrial and commercial real estate loans were $12.1 billion, or 13.5% of those loan categories, down from 14.3% at March 31, 2024. Funding and capital were also in focus.
Total deposits fell to $159.9 billion from $163.3 billion at year-end 2023, while long-term borrowings rose to $11.3 billion from $8.2 billion, including a $2.0 billion FHLB advance and $850 million of senior notes issued in March 2024. M&T issued $733 million of Series J preferred stock in May 2024 and announced its intention to redeem all 350,000 shares of Series E preferred stock on August 15, 2024.
Shareholders' equity was $28.4 billion, and the CET1 ratio was 11.45%. M&T's stress capital buffer is estimated at 3.8%, effective October 1, 2024.
02—Key points
Key Highlights
- Second-quarter 2024 net income was $655 million ($3.73 diluted EPS), down from $867 million in the second quarter of 2023 but up from $531 million in the first quarter of 2024.
- Six-month net income was $1.19 billion, down 24% from $1.57 billion, reflecting a 41 basis-point narrowing of the net interest margin to 3.56% and the absence of the $225 million CIT divestiture gain.
- Net interest margin improved to 3.59% in Q2 2024 from 3.52% in Q1 2024, as yields on earning assets rose while the cost of interest-bearing liabilities stayed flat.
- Nonaccrual loans fell to $2.02 billion at June 30, 2024 from $2.17 billion at December 31, 2023, while the allowance for credit losses increased to $2.20 billion, or 1.63% of loans and leases.
- Total deposits declined to $159.9 billion from $163.3 billion at December 31, 2023, while long-term borrowings increased to $11.3 billion from $8.2 billion.
- M&T issued $733 million of Series J preferred stock in May 2024 and announced plans to redeem all 350,000 shares of Series E preferred stock on August 15, 2024.
- CET1 ratio was 11.45% at June 30, 2024; the stress capital buffer is estimated at 3.8%, effective October 1, 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 5, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $388.00M$376.00M | +3.2% |
| Interest Expense | $1.07B$717.00M | +49.4% |
| Net Income | $655.00M$867.00M | −24.5% |
| EPS (Basic) | $3.75$5.07 | −26.0% |
| EPS (Diluted) | $3.73$5.05 | −26.1% |
| Shares Outstanding (Basic) | 166.95M165.84M | +0.7% |
| Shares Outstanding (Diluted) | 167.66M166.32M | +0.8% |
05—Questions
Frequently Asked Questions
How did M&T's profitability change in the second quarter of 2024?
Net income was $655 million in the second quarter of 2024, versus $867 million a year earlier and $531 million in the first quarter of 2024. Diluted EPS was $3.73, compared with $5.05 in the second quarter of 2023. Sequential improvement was driven by a $39 million rise in taxable-equivalent net interest income, a $50 million decline in the provision for credit losses, and a $99 million decline in other expense.
Why did net interest income decline in the first half of 2024?
Taxable-equivalent net interest income fell to $3.42 billion from $3.64 billion in the first half of 2023. The filing attributes this to a 41 basis-point narrowing of the net interest margin to 3.56%, as higher deposit and borrowing costs outpaced increased yields on earning assets. Average brokered deposits and borrowings also rose.
How is M&T's credit quality trending?
Nonaccrual loans declined to $2.02 billion at June 30, 2024 from $2.17 billion at December 31, 2023, and net charge-offs were $137 million in the quarter, or 0.41% of average loans. The allowance for credit losses rose to 1.63% of loans and leases from 1.59% at year-end 2023. Criticized investor-owned commercial real estate loans remained elevated at $7.6 billion, or 26% of such loans.
What changes did M&T make to its funding and capital structure?
M&T shifted funding toward longer-term borrowings, including a $2.0 billion FHLB advance and $850 million of senior notes issued in March 2024. Brokered time deposits fell to $2.4 billion from $6.1 billion at year-end 2023. M&T issued $733 million of Series J preferred stock in May 2024 and announced redemption of its Series E preferred stock on August 15, 2024.
06—Continue