01—Abstract
Summary
Summary of the 10-Q filed November 5, 2024. Cited figures are marked; the original filing is the authoritative source.
M&T Bank Corporation reported net income of $721 milliona for the third quarter of 2024, up from $655 million in the second quarter of 2024, and $1.907 billion for the first nine months of 2024, down from $2.259 billion in the 2023 period.
Diluted earnings per common share were $4.02b for the quarter and $10.78 for the nine months. The nine-month decline primarily reflects a $225 million gain on the April 2023 sale of the CIT business in the prior-year period, along with a 33 basis-point narrowing of the net interest margin to 3.58% from 3.91%. Net interest margin improved to 3.62% in the third quarter from 3.59% in the second quarter, and the provision for credit losses fell to $120 million from $150 million.
Credit quality metrics improved on a sequential basis. Nonaccrual loans declined to $1.926 billionc at September 30, 2024 from $2.024 billion at June 30, 2024, and criticized investor-owned commercial real estate loans totaled $6.7 billion, down from $7.6 billion. Total deposits were $164.6 billion and total assets were $211.8 billion at quarter end.
Shareholders' equity rose to $28.9 billiond, reflecting a $733 million issuance of Series J preferred stock and the $350 million redemption of Series E preferred stock. M&T repurchased 1,190,054 common shares in the third quarter for $200 million.
The company's CET1 ratio was 11.54% at September 30, 2024. The filing notes that the Federal Reserve's stress capital buffer of 3.8% became effective on October 1, 2024, and that the FOMC reduced the federal funds target rate by 50 basis points in September 2024.
02—Key points
Key Highlights
- Third-quarter net income of $721 million rose 10% from $655 million in the second quarter of 2024; diluted EPS was $4.02 versus $3.73.
- Net interest margin expanded 3 basis points to 3.62% in the third quarter, while the nine-month margin narrowed 33 basis points to 3.58% from 3.91%.
- Provision for credit losses decreased to $120 million in the third quarter from $150 million in the second quarter; nine-month provision rose to $470 million from $420 million.
- Nonaccrual loans declined to $1.926 billion at September 30, 2024 from $2.024 billion at June 30, 2024, and criticized commercial real estate loans fell by $2.1 billion from December 31, 2023.
- Series J preferred stock issuance of $733 million (75,000 shares at 7.5%) was completed in May 2024, and Series E preferred stock was redeemed for $350 million in August 2024.
- M&T repurchased 1,190,054 common shares for $200 million in the third quarter, with no repurchases in the first or second quarter of 2024.
- CET1 ratio was 11.54% at September 30, 2024; tangible common equity per share increased to $107.97 from $93.99 a year earlier.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 5, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $394.00M$360.00M | +9.4% |
| Net Income | $721.00M$690.00M | +4.5% |
| EPS (Basic) | $4.04$4.00 | +1.0% |
| EPS (Diluted) | $4.02$3.98 | +1.0% |
| Shares Outstanding (Basic) | 166.67M165.91M | +0.5% |
| Shares Outstanding (Diluted) | 167.57M166.57M | +0.6% |
05—Questions
Frequently Asked Questions
Why did net income decline on a year-to-date basis despite a stronger third quarter?
Nine-month net income of $1.907 billion was $352 million lower than the $2.259 billion reported in the same 2023 period. The filing attributes the decline mainly to the absence of the $225 million pre-tax gain on the April 2023 CIT business sale, the 33 basis-point margin compression from higher deposit and borrowing costs, and a $50 million rise in the provision for credit losses. Other expense also increased, although excluding $34 million of FDIC special assessment expense, it rose $32 million.
Are credit conditions improving?
The filing shows sequential improvement. Nonaccrual loans fell to $1.926 billion from $2.024 billion in the second quarter, and accruing loans past due 90 days or more rose to $288 million from $233 million. Criticized investor-owned commercial real estate loans declined to $6.7 billion, or 23% of such loans, from $7.6 billion, or 26%, at June 30, 2024. Management cited a decline in criticized commercial real estate and commercial and industrial loans as the main driver of the lower provision in the quarter.
How did the company's capital position change during the quarter?
Total shareholders' equity increased to $28.876 billion from $28.424 billion at June 30, 2024. Preferred stock fell to $2.394 billion after the Series E redemption, and common shareholders' equity rose to $26.482 billion. M&T's CET1 ratio was 11.54%, and its stress capital buffer became 3.8% on October 1, 2024, down from 4.0% at September 30, 2024.
What drove the change in deposits and funding mix?
Average brokered time deposits fell 45% to $2.1 billion in the quarter, and average short-term borrowings declined 19%. Average noninterest-bearing deposits fell over the year as customers shifted funds to interest-bearing products in a high-rate environment. The company also issued $650 million of asset-backed notes in August 2024 and $850 million of senior notes in March 2024 to diversify wholesale funding.
06—Continue