How did M&T's core earnings perform in the first quarter of 2024?

Net income was $531 million, or $3.02 per diluted share, and net operating income, which excludes after-tax intangible amortization, was $543 million, or $3.09 per diluted share. Both figures were lower than the first quarter of 2023, when net income was $702 million and net operating income was $715 million.

What drove the decline in net interest margin?

The filing attributes the narrowing of the net interest margin to 3.52% from 3.61% in the fourth quarter of 2023 to higher liquidity, cash moving into investment securities, and higher deposit and borrowing costs. Average borrowings rose $2.9 billion from the fourth quarter, largely due to senior note issuance and higher Federal Home Loan Bank of New York borrowings.

Are credit quality trends deteriorating?

The provision for credit losses rose to $200 million from $120 million a year earlier, and net charge-offs were $138 million, or 0.42% of average loans on an annualized basis, compared with 0.22% in the first quarter of 2023. Nonaccrual loans were $2.3 billion, or 1.71% of total loans, compared with 1.92% a year earlier. The filing cites declines in commercial real estate values and higher rates affecting commercial borrowers as the main drivers.

How did the FDIC special assessment affect results?

The first quarter included $29 million of estimated incremental FDIC special assessment expense tied to the FDIC's updated loss estimates for certain failed banks. The fourth quarter of 2023 included a $197 million estimated special assessment, so FDIC assessments were $60 million in the first quarter compared with $228 million in the fourth quarter.

What is M&T's capital position?

The estimated CET1 capital ratio was 11.07% at March 31, 2024, up from 10.98% at December 31, 2023, and estimated total risk-weighted assets were $155 billion. Common shareholders' equity per share was $150.90. M&T did not repurchase common shares in the first quarter of 2024, and it declared $219 million in common dividends and $25 million in preferred dividends.

M&T Bank 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 15, 2024. Cited figures are marked; the original filing is the authoritative source.

M&T Bank Corporation reported first quarter 2024 net income of $531 million^a, or $3.02 per diluted common share, compared with $702 million, or $4.01 per diluted share, in the first quarter of 2023.

Net operating income, a non-GAAP measure that excludes after-tax amortization of core deposit and other intangibles, was $543 million^b, or $3.09 per diluted share. The quarter's results were pressured by a net interest margin that narrowed to 3.52% from 3.61% in the fourth quarter of 2023 and from 4.04% a year earlier, as higher deposit and borrowing costs more than offset higher earning assets. Net interest income of $1.68 billion fell from $1.82 billion a year earlier.

Credit and expense items were mixed. The provision for credit losses was $200 million^c, up from $120 million in the first quarter of 2023, reflecting declines in commercial real estate values and elevated criticized commercial and industrial loans. Nonaccrual loans were $2.3 billion, and net charge-offs were $138 million.

Noninterest expense was $1.40 billion^d, including a $29 million incremental FDIC special assessment and $99 million of seasonally higher employee compensation and benefits costs. The effective tax rate was 20.0%, aided by a net discrete tax benefit. Capital strengthened modestly, with the CET1 capital ratio estimated at 11.07% at March 31, 2024, up from 10.98% at December 31, 2023.

M&T did not repurchase any common shares in the first quarter of 2024, and cash dividends declared totaled $219 million on common stock and $25 million on preferred stock. The filing also furnishes a news release and a presentation of supplemental financial data.

02—Key points

Key Highlights

Net income of $531 million, or $3.02 per diluted share, versus $702 million, or $4.01 per diluted share, in the first quarter of 2023 (down 24% and 25%, respectively).
Net interest margin of 3.52%, down from 3.61% in the fourth quarter of 2023 and 4.04% in the first quarter of 2023, as deposit and borrowing costs rose.
Provision for credit losses of $200 million, up from $120 million a year earlier, reflecting commercial real estate value declines and criticized commercial and industrial loans.
Noninterest expense of $1.40 billion, including a $29 million incremental FDIC special assessment and $99 million of seasonally higher employee compensation costs.
Estimated CET1 capital ratio of 11.07% at March 31, 2024, up 9 basis points from 10.98% at December 31, 2023.
Nonaccrual loans of $2.3 billion, up $136 million from December 31, 2023 but down $255 million from March 31, 2023.
No common share repurchases in the first quarter of 2024; common dividends declared totaled $219 million.

03—Questions

Frequently Asked Questions

How did M&T's core earnings perform in the first quarter of 2024?
Net income was $531 million, or $3.02 per diluted share, and net operating income, which excludes after-tax intangible amortization, was $543 million, or $3.09 per diluted share. Both figures were lower than the first quarter of 2023, when net income was $702 million and net operating income was $715 million.
What drove the decline in net interest margin?
The filing attributes the narrowing of the net interest margin to 3.52% from 3.61% in the fourth quarter of 2023 to higher liquidity, cash moving into investment securities, and higher deposit and borrowing costs. Average borrowings rose $2.9 billion from the fourth quarter, largely due to senior note issuance and higher Federal Home Loan Bank of New York borrowings.
Are credit quality trends deteriorating?
The provision for credit losses rose to $200 million from $120 million a year earlier, and net charge-offs were $138 million, or 0.42% of average loans on an annualized basis, compared with 0.22% in the first quarter of 2023. Nonaccrual loans were $2.3 billion, or 1.71% of total loans, compared with 1.92% a year earlier. The filing cites declines in commercial real estate values and higher rates affecting commercial borrowers as the main drivers.
How did the FDIC special assessment affect results?
The first quarter included $29 million of estimated incremental FDIC special assessment expense tied to the FDIC's updated loss estimates for certain failed banks. The fourth quarter of 2023 included a $197 million estimated special assessment, so FDIC assessments were $60 million in the first quarter compared with $228 million in the fourth quarter.
What is M&T's capital position?
The estimated CET1 capital ratio was 11.07% at March 31, 2024, up from 10.98% at December 31, 2023, and estimated total risk-weighted assets were $155 billion. Common shareholders' equity per share was $150.90. M&T did not repurchase common shares in the first quarter of 2024, and it declared $219 million in common dividends and $25 million in preferred dividends.

04—Continue

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