01—Abstract
Summary
Summary of the 8-K filed October 17, 2024. Cited figures are marked; the original filing is the authoritative source.
M&T Bank Corporation reported third quarter 2024 net income of $721 milliona, or $4.02 diluted earnings per common share, up from $655 million ($3.73 per share) in the second quarter of 2024 and $690 million ($3.98 per share) in the third quarter of 2023.
Net operating income, a non-GAAP measure that excludes after-tax amortization of core deposit and other intangible assets, was $731 millionb, or $4.08 per diluted share. Net interest margin widened to 3.62% from 3.59% in the prior quarter, and the provision for credit losses fell to $120 million from $150 million, while nonaccrual loans declined to 1.42% of loans from 1.50%. Capital strengthened further, with the estimated CET1 capital ratio rising to 11.54% at September 30, 2024, from 11.45% at June 30, 2024.
The company repurchased 1,190,054 shares for a total cost of $200 millionc in the quarter. Noninterest expense rose modestly to $1.303 billion, and the effective tax rate was 20.7%, which the filing notes includes a discrete tax benefit tied to certain tax credits claimed on a prior year return.
The filing also includes an investor presentation with 4Q24 outlook guidance: taxable-equivalent net interest income of $1,730 milliond, a net interest margin in the low 3.60s, fee income of $595 million to $605 million, GAAP expense of $1,310 million to $1,330 million, net charge-offs of about 40 basis points of average loans, and a tax rate of 24.0% to 24.5%. Both exhibits are furnished under Items 2.02 and 7.01 and are not deemed filed for purposes of Section 18 of the Exchange Act.
02—Key points
Key Highlights
- Net income of $721 million, or $4.02 diluted EPS, versus $655 million ($3.73) in 2Q24 and $690 million ($3.98) in 3Q23
- Net operating income of $731 million, or $4.08 diluted net operating EPS, a non-GAAP measure
- Net interest margin of 3.62%, up from 3.59% in 2Q24; taxable-equivalent net interest income rose $8 million, or 1%, from 2Q24
- Provision for credit losses fell to $120 million from $150 million in 2Q24; net charge-offs were $120 million, versus $137 million in 2Q24
- Nonaccrual loans declined to 1.42% of loans outstanding from 1.50% at June 30, 2024; nonaccrual loans totaled $1.9 billion
- Estimated CET1 capital ratio rose to 11.54% from 11.45%; the company repurchased $200 million of common stock in the quarter
- Guidance for 4Q24 includes taxable-equivalent net interest income of $1,730 million, fee income of $595 million to $605 million, and GAAP expense of $1,310 million to $1,330 million
03—Questions
Frequently Asked Questions
How did M&T's third quarter 2024 earnings compare with the prior quarter and the year-earlier quarter?
Net income was $721 million, or $4.02 per diluted share, compared with $655 million ($3.73) in the second quarter of 2024 and $690 million ($3.98) in the third quarter of 2023. Net operating income was $731 million, or $4.08 per diluted share, versus $665 million ($3.79) in the prior quarter and $702 million ($4.05) a year earlier.
What drove the change in net interest margin and net interest income?
The filing attributes the net interest margin increase to 3.62% from 3.59% to higher yields on investment securities and lower funding costs, led by a decline in brokered time deposits. Taxable-equivalent net interest income increased $8 million, or 1%, from the second quarter. Compared with the third quarter of 2023, net interest income fell $51 million, or 3%.
How did credit quality trend in the quarter?
The provision for credit losses decreased to $120 million from $150 million in the second quarter, reflecting lower criticized commercial real estate and commercial and industrial loans. Nonaccrual loans fell to 1.42% of loans outstanding from 1.50%, and total nonaccrual loans were $1.9 billion, $98 million lower than at June 30, 2024.
What did M&T say about capital and shareholder returns?
The estimated CET1 capital ratio rose to 11.54% at September 30, 2024, from 11.45% at June 30, 2024. M&T repurchased 1,190,054 shares at an average cost of $166.40, for a total cost of $200 million including excise tax. Common dividends declared totaled $226 million and preferred dividends totaled $47 million for the quarter. The stress capital buffer of 3.8% became effective October 1, 2024.
What outlook did M&T provide for the fourth quarter of 2024?
The investor presentation projects taxable-equivalent net interest income of $1,730 million, a net interest margin in the low 3.60s, fee income of $595 million to $605 million, and GAAP expense of $1,310 million to $1,330 million. It also expects net charge-offs of about 40 basis points of average loans, a tax rate of 24.0% to 24.5%, and $200 million of share repurchases.
04—Continue