M&T Bank Corporation

18/07/2024 | Press release | Distributed by Public on 18/07/2024 09:36

M&T Bank Corporation (NYSE:MTB) announces second quarter 2024 results

BUFFALO, N.Y., July 18, 2024-- M&T Bank Corporation ("M&T" or "the Company") reports quarterly net income of $655 millionor $3.73of diluted earnings per common share.

(Dollars in millions, except per share data)

2Q24

1Q24

2Q23

Earnings Highlights

Net interest income

$ 1,718

$ 1,680

$ 1,799

Taxable-equivalent adjustment

13

12

14

Net interest income - taxable-equivalent

1,731

1,692

1,813

Provision for credit losses

150

200

150

Noninterest income

584

580

803

Noninterest expense

1,297

1,396

1,293

Net income

655

531

867

Net income available to common shareholders - diluted

626

505

841

Diluted earnings per common share

3.73

3.02

5.05

Return on average assets - annualized

1.24 %

1.01 %

1.70 %

Return on average common shareholders' equity - annualized

9.95

8.14

14.27

Average Balance Sheet

Total assets

$ 211,981

$ 211,478

$ 204,376

Interest-bearing deposits at banks

29,294

30,647

23,617

Investment securities

29,695

28,587

28,623

Loans and leases, net of unearned discount

134,588

133,796

133,545

Deposits

163,491

164,065

159,399

Borrowings

16,452

16,001

15,055

Selected Ratios

(Amounts expressed as a percent, except per share data)

Net interest margin

3.59 %

3.52 %

3.91 %

Efficiency ratio

55.3

60.8

48.9

Net charge-offs to average total loans - annualized

.41

.42

.38

Allowance for credit losses to total loans

1.63

1.62

1.50

Nonaccrual loans to total loans

1.50

1.71

1.83

Common equity Tier 1 ("CET1") capital ratio (1)

11.44

11.08

10.59

Common shareholders' equity per share

$ 153.57

$ 150.90

$ 143.41

(1) June 30, 2024 CET1 capital ratio is estimated.

Financial Highlights

  • Highlighting the Company's strengthening capital position, the CET1 capital ratio increased for the fifth consecutive quarter to an estimated 11.44% at June 30, 2024, representing a 36 basis point increase from 11.08% at March 31, 2024.
  • Net interest margin of 3.59% in the recent quarter widened from 3.52% in the first quarter of 2024 reflecting higher yields on investment securities as cash was deployed to those products, and stable deposit and borrowing costs.
  • Growth in average commercial and industrial loans and consumer loans in the recent quarter was partially offset by a decline in average commercial real estate loans.
  • Average customer deposits grew as funding shifted from wholesale sources to lower cost customer savings and interest-checking deposits during the recent quarter. Average borrowings rose in the second quarter of 2024 as compared with the first quarter of 2024 due to the issuance of senior notes and asset-backed notes at the end of the immediately preceding quarter, partially offset by lower average borrowings from the Federal Home Loan Bank ("FHLB") of New York.
  • Provision for credit losses in the recent quarter reflects lower levels of criticized commercial real estate loans, partially offset by commercial and industrial and consumer loan growth.
  • Lower noninterest expense in the second quarter of 2024 reflects seasonal salaries and employee benefit expenses recognized in 2024's initial quarter. The first and second quarters of 2024 include a $29 millionand a $5 millionestimated increase in the FDIC special assessment, respectively.

Chief Financial Officer Commentary

"Building on a strong start to the year, the second quarter results reflect a 24% increase in diluted earnings per common share from the first quarter. We continued to grow our commercial and industrial and consumer loan portfolios, while lessening our commercial real estate exposure. Credit metrics improved as both nonaccrual and total criticized loans declined sequentially. Liquidity and capital positions are exceptional, and we are pleased with the reduction in our stress capital buffer that becomes effective later this year. Our team continues to diligently deploy resources while controlling expense growth. We are grateful for our employees' commitment to our customers and communities which was again on full display in the first half of 2024 through various community events and volunteer engagements throughout our footprint."

- Daryl N. Bible, M&T's Chief Financial Officer

Contact:

Investor Relations:

Brian Klock

716.842.5138

Media Relations:

Frank Lentini

929.651.0447

Non-GAAP Measures (1)

Change
2Q24 vs.

Change
2Q24 vs.

(Dollars in millions, except per share data)

2Q24

1Q24

1Q24

2Q23

2Q23

Net operating income

$ 665

$ 543

22 %

$ 879

-24 %

Diluted net operating earnings per common share

3.79

3.09

23

5.12

-26

Annualized return on average tangible assets

1.31 %

1.08 %

1.80 %

Annualized return on average tangible common equity

15.27

12.67

22.73

Efficiency ratio

55.3

60.8

48.9

Tangible equity per common share

$ 102.42

$ 99.54

3

$ 91.58

12

(1) A reconciliation of non-GAAP measures is included in the tables that accompany this release.

M&T consistently provides supplemental reporting of its results on a "net operating" or "tangible" basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill and core deposit and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T (when incurred), since such items are considered by management to be "nonoperating" in nature.

Taxable-equivalent Net Interest Income

Change
2Q24 vs.

Change
2Q24 vs.

(Dollars in millions)

2Q24

1Q24

1Q24

2Q23

2Q23

Average earning assets

$ 193,676

$ 193,135

- %

$ 185,936

4 %

Average interest-bearing liabilities

132,209

131,451

1

118,274

12

Net interest income - taxable-equivalent

1,731

1,692

2

1,813

-5

Yield on average earning assets

5.82 %

5.74 %

5.46 %

Cost of interest-bearing liabilities

3.26

3.26

2.43

Net interest spread

2.56

2.48

3.03

Net interest margin

3.59

3.52

3.91

Taxable-equivalent net interest income increased $39 million, or 2%, from the first quarter of 2024.

  • Average loans and leases increased $792 millionand the yield on those loans and leases rose 6 basis points.
  • Average investment securities increased $1.1 billionand the rates earned on those securities increased 31 basis points.
  • Average interest-bearing deposits increased $307 millionand the rates paid on such deposits declined 3 basis points. Average brokered deposits declined $1.2 billionin the recent quarter.
  • Average borrowings rose $451 millionand the rate paid on such borrowings increased 11 basis points.

Taxable-equivalent net interest income decreased $82 million, or 5%, compared with the year-earlier second quarter.

  • Average interest-bearing deposits rose $12.5 billionand the rates paid on those deposits increased 88 basis points.
  • Average borrowings increased $1.4 billionand rates paid on such borrowings increased 50 basis points.
  • Average interest-bearing deposits at banks, average investment securities and average loans and leases increased $5.7 billion, $1.1 billionand $1.0 billion, respectively.
  • Yields earned on average interest-bearing deposits at banks and average loans and leases each increased 36 basis points. The yield on investment securities increased 52 basis points.

Average Earning Assets

Change
2Q24 vs.

Change
2Q24 vs.

(Dollars in millions)

2Q24

1Q24

1Q24

2Q23

2Q23

Interest-bearing deposits at banks

$ 29,294

$ 30,647

-4 %

$ 23,617

24 %

Trading account

99

105

-6

151

-34

Investment securities

29,695

28,587

4

28,623

4

Loans and leases, net of unearned discount

Commercial and industrial

58,152

56,821

2

54,572

7

Real estate - commercial

31,458

32,696

-4

34,903

-10

Real estate - consumer

23,006

23,136

-1

23,781

-3

Consumer

21,972

21,143

4

20,289

8

Total loans and leases, net

134,588

133,796

1

133,545

1

Total earning assets

$ 193,676

$ 193,135

-

$ 185,936

4

Average earning assets increased $541 millionfrom the first quarter of 2024.

  • Average interest-bearing deposits at banks decreased $1.4 billionreflecting purchases of investment securities and loan growth partially offset by higher long-term borrowings.
  • Average investment securities increased $1.1 billionprimarily due to purchases of fixed rate agency mortgage-backed and U.S. Treasury securities during the second quarter of 2024.
  • Average loans and leases increased $792 millionprimarily reflective of growth in average commercial and industrial loans and leases of $1.3 billionand consumer loans of $829 million, partially offset by declines in average commercial real estate and residential real estate loans. The growth in commercial and industrial loans spanned most industry types.

Average earning assets increased $7.7 billion, or 4%, from the year-earlier second quarter.

  • Average interest-bearing deposits at banks increased $5.7 billionreflecting a rise in average deposits and higher levels of average borrowings, partially offset by loan growth and purchases of investment securities.
  • Average investment securities increased $1.1 billionreflecting purchases of fixed rate agency mortgage-backed and U.S. Treasury securities over the past six months.
  • Average loans and leases increased $1.0 billionpredominantly due to higher average commercial and industrial loans and leases of $3.6 billion, reflecting lending activities to financial and insurance industry customers, motor vehicle and recreational finance dealers and to the services industry, and consumer loans of $1.7 billionreflecting higher average recreational finance loans, partially offset by a $3.4 billionand a $775 milliondecline in average commercial real estate loans and residential real estate loans, respectively.

Average Interest-bearing Liabilities

Change
2Q24 vs.

Change
2Q24 vs.

(Dollars in millions)

2Q24

1Q24

1Q24

2Q23

2Q23

Interest-bearing deposits

Savings and interest-checking deposits

$ 95,955

$ 94,867

1 %

$ 87,210

10 %

Time deposits

19,802

20,583

-4

16,009

24

Total interest-bearing deposits

115,757

115,450

-

103,219

12

Short-term borrowings

4,962

6,228

-20

7,539

-34

Long-term borrowings

11,490

9,773

18

7,516

53

Total interest-bearing liabilities

$ 132,209

$ 131,451

1

$ 118,274

12

Brokered savings and interest-checking
deposits

$ 8,193

$ 8,030

2 %

$ 3,754

118 %

Brokered time deposits

3,826

5,193

-26

6,873

-44

Total brokered deposits

$ 12,019

$ 13,223

-9

$ 10,627

13

Average interest-bearing liabilities increased $758 million, or 1%, from the first quarter of 2024.

  • Average borrowings increased $451 millionpredominantly due to the issuance of senior notes and asset-backed notes at the end of the first quarter of 2024, partially offset by lower average borrowings from the FHLB of New Yorkin the recent quarter.
  • Average interest-bearing deposits increased $307 million, reflective of a $1.5 billionincrease in average non-brokered deposits.

Average interest-bearing liabilities increased $13.9 billion, or 12%, from the second quarter of 2023.

  • Average interest-bearing deposits rose $12.5 billion, including a $11.1 billionincrease in average non-brokered deposits, reflecting customer demand for interest-bearing products amidst rising rates.
  • Average borrowings increased $1.4 billionreflecting the issuances of senior notes and other long-term debt since the second quarter of 2023, partially offset by lower average short-term borrowings.

Provision for Credit Losses/Asset Quality

Change

2Q24 vs.

Change

2Q24 vs.

(Dollars in millions)

2Q24

1Q24

1Q24

2Q23

2Q23

At end of quarter

Nonaccrual loans

$ 2,024

$ 2,302

-12 %

$ 2,435

-17 %

Real estate and other foreclosed assets

33

38

-16

43

-23

Total nonperforming assets

2,057

2,340

-12

2,478

-17

Accruing loans past due 90 days or more (1)

233

297

-21

380

-39

Nonaccrual loans as % of loans outstanding

1.50 %

1.71 %

1.83 %

Allowance for credit losses

$ 2,204

$ 2,191

1

$ 1,998

10

Allowance for credit losses as % of loans outstanding

1.63 %

1.62 %

1.50 %

For the period

Provision for credit losses

$ 150

$ 200

-25

$ 150

-

Net charge-offs

137

138

-1

127

8

Net charge-offs as % of average loans (annualized)

.41 %

.42 %

.38 %

(1) Predominantly government-guaranteed residential real estate loans.

M&T recorded a provision for credit losses of $150 millionin each of the second quarters of 2024 and 2023, compared with $200 millionin 2024's initial quarter. The lower provision for credit losses in the most recent quarter as compared with the first quarter of 2024 reflects lower commercial real estate loans, including criticized loans, and modest improvement in forecasted real estate prices, partially offset by growth in certain sectors of M&T's commercial and industrial and consumer loan portfolios. Net charge-offs totaled $137 millionin 2024's second quarter as compared with $138 millionin 2024's first quarter and $127 millionin the year-earlier quarter.

Nonaccrual loans were $2.0 billionat June 30, 2024, $278 millionlower than March 31, 2024 and $411 millionlower than June 30, 2023, respectively. The lower level of nonaccrual loans at the recent quarter end as compared with the March 31, 2024and June 30, 2023was predominantly attributable to a decrease in commercial real estate nonaccrual loans. The decline in commercial real estate nonaccrual loans from the second quarter of 2023 was partially offset by an increase in commercial and industrial nonaccrual loans.

Noninterest Income

Change
2Q24 vs.

Change
2Q24 vs.

(Dollars in millions)

2Q24

1Q24

1Q24

2Q23

2Q23

Mortgage banking revenues

$ 106

$ 104

1 %

$ 107

-1 %

Service charges on deposit accounts

127

124

3

119

8

Trust income

170

160

6

172

-1

Brokerage services income

30

29

5

25

21

Trading account and other non-hedging derivative gains

7

9

-29

17

-61

Gain (loss) on bank investment securities

(8)

2

-

1

-

Other revenues from operations

152

152

-

362

-58

Total

$ 584

$ 580

1

$ 803

-27

Noninterest income in the second quarter of 2024 increased $4 million, or 1%, from 2024's first quarter.

  • Trust income increased $10 milliondue to seasonal tax service fees in the second quarter of 2024 of $4 millionand higher revenues from the Company's global capital markets business.
  • The loss on bank investment securities in the second quarter of 2024 reflected realized losses on sales of certain non-agency investment securities.
  • Other revenues from operations in 2024's second quarter reflect increases in merchant discount and credit card fees, letter of credit and other credit-related fees and distributions from renewable energy and certain other tax credit investments. In the first quarter of 2024, other revenues from operations included a $25 milliondistribution from Bayview Lending Group LLC.

Noninterest income declined $219 million, or 27%, as compared with the year-earlier second quarter.

  • Other revenues from operations declined $210 millionpredominantly due to the $225 milliongain on the sale of the Collective Investment Trust ("CIT") business recognized in April 2023, partially offset by higher letter of credit and other credit-related fees and an increase in tax-exempt income from bank owned life insurance in the recent quarter.
  • Trust income decreased $2 million. The Company recorded approximately $15 millionof revenues from its CIT business in 2023 prior to its sale. That revenue decline was largely offset by higher sales and fees from the Company's global capital markets business.

Noninterest Expense

Change
2Q24 vs.

Change
2Q24 vs.

(Dollars in millions)

2Q24

1Q24

1Q24

2Q23

2Q23

Salaries and employee benefits

$ 764

$ 833

-8 %

$ 738

4 %

Equipment and net occupancy

125

129

-3

129

-3

Outside data processing and software

124

120

4

106

17

Professional and other services

91

85

6

100

-10

FDIC assessments

37

60

-38

28

32

Advertising and marketing

27

20

34

28

-5

Amortization of core deposit and other intangible assets

13

15

-15

15

-15

Other costs of operations

116

134

-13

149

-21

Total

$ 1,297

$ 1,396

-7

$ 1,293

-

Noninterest expense aggregated $1.30 billionin the recent quarter, down from $1.40 billionin the first quarter of 2024.

  • Salaries and employee benefits expense decreased $69 millionreflecting seasonally higher stock-based compensation, payroll related-taxes and other employee benefits expense in the first quarter of 2024, partially offset by the full-quarter impact of annual merit increases awarded in the first quarter of 2024.
  • FDIC assessments reflect estimated special assessment expense of $29 millionand $5 millionin the first quarter and second quarter of 2024, respectively, related to the FDIC's updated loss estimates associated with certain failed banks.
  • Other costs of operations decreased $18 millionreflecting lower expense associated with the Company's supplemental executive retirement savings plan and losses on lease terminations related to certain vacated properties in the first quarter of 2024.

Noninterest expense increased $4 million from the second quarter of 2023.

  • Salaries and employee benefits expenses increased $26 millionreflecting higher salaries expense from annual merit and other increases and a rise in incentive compensation, partially offset by lower employee staffing levels.
  • Outside data processing and software rose $18 milliondue to higher software maintenance and licensing costs and data processing expenses.
  • Other costs of operations decreased $33 millionas a result of a decline in check fraudlosses, credit card merchant expenses and costs associated with serviced loans.

Income Taxes

The Company's effective income tax rate was 23.4% in the second quarter of 2024, compared with 20.0% and 25.2% in the first quarter of 2024 and second quarter of 2023, respectively. The first quarter of 2024 income tax expense reflects a net discrete tax benefit related to the resolution of a tax matter inherited from the acquisition of People's United Financial, Inc.

Capital

2Q24

1Q24

2Q23

CET1

11.44 %

(1)

11.08 %

10.59 %

Tier 1 capital

13.22

(1)

12.38

11.91

Total capital

14.87

(1)

14.04

13.71

Tangible capital - common

8.55

8.03

7.63

(1) June 30, 2024 capital ratios are estimated.

M&T's capital ratios remained well above the minimum set forth by regulatory requirements. The Company issued $750 millionpar value of Perpetual 7.5% Non-Cumulative Preferred Stock (Series J) in May 2024. Cash dividends declared on M&T's common and preferred stock totaled $228 million and $27 million, respectively, for the quarter ended June 30, 2024. M&T's current stress capital buffer is 4.0%. In June 2024, the Federal Reserve released the results of its most recent supervisory stress tests. Based on those results, M&T's stress capital buffer is estimated to be 3.8% effective October 1, 2024.

The CET1 capital ratio for M&T was estimated at 11.44% as of June 30, 2024. M&T's total risk-weighted assets at June 30, 2024 are estimated to be $155 billion.

Conference Call

Investors will have an opportunity to listen to M&T's conference call to discuss second quarter financial results today at 8:00 a.m. Eastern Time. Those wishing to participate in the call may dial (800) 347-7315. International participants, using any applicable international calling codes, may dial (785) 424-1755. Callers should reference M&T Bank Corporation or the conference ID #MTBQ224. The conference call will be webcast live through M&T's website at https://ir.mtb.com/events-presentations. A replay of the call will be available through Thursday July 25, 2024 by calling (800) 727-5306, or (402) 220-2670 for international participants. No conference ID or passcode is required. The event will also be archived and available by 3:00 p.m.today on M&T's website at https://ir.mtb.com/events-presentations.

About M&T

M&T is a financial holding company headquartered in Buffalo, New York. M&T's principal banking subsidiary, M&T Bank, provides banking products and services in 12 states across the eastern U.S. from Maineto Virginiaand Washington, D.C.Trust-related services are provided in select markets in the U.S. and abroad by M&T's Wilmington Trust-affiliated companies and by M&T Bank. For more information on M&T Bank, visit www.mtb.com.

Forward-Looking Statements

This news release and related conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the rules and regulations of the SEC. Any statement that does not describe historical or current facts is a forward-looking statement, including statements based on current expectations, estimates and projections about M&T's business, and management's beliefs and assumptions.

Statements regarding the potential effects of events or factors specific to M&T and/or the financial industry as a whole, as well as national and global events generally, on M&T's business, financial condition, liquidity and results of operations may constitute forward-looking statements. Such statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond M&T's control.

Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," or "potential," by future conditional verbs such as "will," "would," "should," "could," or "may," or by variations of such words or by similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and may cause actual outcomes to differ materially from what is expressed or forecasted.

While there can be no assurance that any list of risks and uncertainties is complete, important factors that could cause actual outcomes and results to differ materially from those contemplated by forward-looking statements include the following, without limitation: economic conditions and growth rates, including inflation and market volatility; events and developments in the financial services industry, including industry conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, loan concentrations by type and industry, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; levels of client deposits; ability to contain costs and expenses; changes in M&T's credit ratings; the impact of the People's United Financial, Inc. acquisition; domestic or international political developments and other geopolitical events, including international conflicts and hostilities; changes and trends in the securities markets; common shares outstanding and common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; federal, state or local legislation and/or regulations affecting the financial services industry, or M&T and its subsidiaries individually or collectively, including tax policy; regulatory supervision and oversight, including monetary policy and capital requirements; governmental and public policy changes; political conditions, either nationally or in the states in which M&T and its subsidiaries do business; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board, regulatory agencies or legislation; increasing price, product and service competition by competitors, including new entrants; technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products and services; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition, divestment and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

These are representative of the factors that could affect the outcome of the forward-looking statements. In addition, as noted, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, and other factors.

M&T provides further detail regarding these risks and uncertainties in its Form 10-K for the year ended December 31, 2023, including in the Risk Factors section of such report, as well as in other SEC filings. Forward-looking statements speak only as of the date they are made, and M&T assumes no duty and does not undertake to update forward-looking statements.

Financial Highlights

Three months ended

Six months ended

June 30,

June 30,

(Dollars in millions, except per share, shares in thousands)

2024

2023

Change

2024

2023

Change

Performance

Net income

$ 655

$ 867

-25 %

$ 1,186

$ 1,569

-24 %

Net income available to common shareholders

626

841

-26

1,131

1,516

-25

Per common share:

Basic earnings

3.75

5.07

-26

6.79

9.09

-25

Diluted earnings

3.73

5.05

-26

6.76

9.06

-25

Cash dividends

1.35

1.30

4

2.65

2.60

2

Common shares outstanding:

Average - diluted (1)

167,659

166,320

1

167,372

167,359

-

Period end (2)

167,225

165,894

1

167,225

165,894

1

Return on (annualized):

Average total assets

1.24 %

1.70 %

1.13 %

1.55 %

Average common shareholders' equity

9.95

14.27

9.05

13.02

Taxable-equivalent net interest income

$ 1,731

$ 1,813

-5

$ 3,423

$ 3,645

-6

Yield on average earning assets

5.82 %

5.46 %

5.78 %

5.31 %

Cost of interest-bearing liabilities

3.26

2.43

3.26

2.15

Net interest spread

2.56

3.03

2.52

3.16

Contribution of interest-free funds

1.03

.88

1.04

.81

Net interest margin

3.59

3.91

3.56

3.97

Net charge-offs to average total net loans (annualized)

.41

.38

.41

.30

Net operating results (3)

Net operating income

$ 665

$ 879

-24

$ 1,208

$ 1,594

-24

Diluted net operating earnings per common share

3.79

5.12

-26

6.89

9.21

-25

Return on (annualized):

Average tangible assets

1.31 %

1.80 %

1.20 %

1.65 %

Average tangible common equity

15.27

22.73

13.99

20.90

Efficiency ratio

55.3

48.9

58.0

52.0

At June 30,

Loan quality

2024

2023

Change

Nonaccrual loans

$ 2,024

$ 2,435

-17 %

Real estate and other foreclosed assets

33

43

-23

Total nonperforming assets

$ 2,057

$ 2,478

-17

Accruing loans past due 90 days or more (4)

$ 233

$ 380

-39

Government guaranteed loans included in totals above:

Nonaccrual loans

$ 64

$ 40

61

Accruing loans past due 90 days or more

215

294

-27

Nonaccrual loans to total loans

1.50 %

1.83 %

Allowance for credit losses to total loans

1.63

1.50

Additional information

Period end common stock price

$ 151.36

$ 123.76

22

Domestic banking offices

957

996

-4

Full time equivalent employees

22,110

22,946

-4

(1)

Includes common stock equivalents.

(2)

Includes common stock issuable under deferred compensation plans.

(3)

Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. Reconciliations of net income with net operating income appears herein.

(4)

Predominantly residential real estate loans.

Financial Highlights, Five Quarter Trend

Three months ended

June 30,

March 31,

December 31,

September 30,

June 30,

(Dollars in millions, except per share, shares in thousands)

2024

2024

2023

2023

2023

Performance

Net income

$ 655

$ 531

$ 482

$ 690

$ 867

Net income available to common shareholders

626

505

457

664

841

Per common share:

Basic earnings

3.75

3.04

2.75

4.00

5.07

Diluted earnings

3.73

3.02

2.74

3.98

5.05

Cash dividends

1.35

1.30

1.30

1.30

1.30

Common shares outstanding:

Average - diluted (1)

167,659

167,084

166,731

166,570

166,320

Period end (2)

167,225

166,724

166,149

165,970

165,894

Return on (annualized):

Average total assets

1.24 %

1.01 %

.92 %

1.33 %

1.70 %

Average common shareholders' equity

9.95

8.14

7.41

10.99

14.27

Taxable-equivalent net interest income

$ 1,731

$ 1,692

$ 1,735

$ 1,790

$ 1,813

Yield on average earning assets

5.82 %

5.74 %

5.73 %

5.62 %

5.46 %

Cost of interest-bearing liabilities

3.26

3.26

3.17

2.83

2.43

Net interest spread

2.56

2.48

2.56

2.79

3.03

Contribution of interest-free funds

1.03

1.04

1.05

1.00

.88

Net interest margin

3.59

3.52

3.61

3.79

3.91

Net charge-offs to average total net loans (annualized)

.41

.42

.44

.29

.38

Net operating results (3)

Net operating income

$ 665

$ 543

$ 494

$ 702

$ 879

Diluted net operating earnings per common share

3.79

3.09

2.81

4.05

5.12

Return on (annualized):

Average tangible assets

1.31 %

1.08 %

.98 %

1.41 %

1.80 %

Average tangible common equity

15.27

12.67

11.70

17.41

22.73

Efficiency ratio

55.3

60.8

62.1

53.7

48.9

June 30,

March 31,

December 31,

September 30,

June 30,

Loan quality

2024

2024

2023

2023

2023

Nonaccrual loans

$ 2,024

$ 2,302

$ 2,166

$ 2,342

$ 2,435

Real estate and other foreclosed assets

33

38

39

37

43

Total nonperforming assets

$ 2,057

$ 2,340

$ 2,205

$ 2,379

$ 2,478

Accruing loans past due 90 days or more (4)

$ 233

$ 297

$ 339

$ 354

$ 380

Government guaranteed loans included in totals above:

Nonaccrual loans

$ 64

$ 62

$ 53

$ 40

$ 40

Accruing loans past due 90 days or more

215

244

298

269

294

Nonaccrual loans to total loans

1.50 %

1.71 %

1.62 %

1.77 %

1.83 %

Allowance for credit losses to total loans

1.63

1.62

1.59

1.55

1.50

Additional information

Period end common stock price

$ 151.36

$ 145.44

$ 137.08

$ 126.45

$ 123.76

Domestic banking offices

957

958

961

967

996

Full time equivalent employees

22,110

21,927

21,980

22,424

22,946

(1)

Includes common stock equivalents.

(2)

Includes common stock issuable under deferred compensation plans.

(3)

Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. Reconciliations of net income with net operating income appears herein.

(4)

Predominantly residential real estate loans.

Condensed Consolidated Statement of Income

Three months ended

Six months ended

June 30,

June 30,

(Dollars in millions)

2024

2023

Change

2024

2023

Change

Interest income

$ 2,789

$ 2,516

11 %

$ 5,534

$ 4,843

14 %

Interest expense

1,071

717

50

2,136

1,226

74

Net interest income

1,718

1,799

-5

3,398

3,617

-6

Provision for credit losses

150

150

-

350

270

30

Net interest income after provision for credit losses

1,568

1,649

-5

3,048

3,347

-9

Other income

Mortgage banking revenues

106

107

-1

210

192

9

Service charges on deposit accounts

127

119

8

251

232

8

Trust income

170

172

-1

330

366

-10

Brokerage services income

30

25

21

59

49

21

Trading account and other non-hedging
derivative gains

7

17

-61

16

28

-44

Gain (loss) on bank investment securities

(8)

1

-

(6)

1

-

Other revenues from operations

152

362

-58

304

522

-42

Total other income

584

803

-27

1,164

1,390

-16

Other expense

Salaries and employee benefits

764

738

4

1,597

1,546

3

Equipment and net occupancy

125

129

-3

254

256

-1

Outside data processing and software

124

106

17

244

212

15

Professional and other services

91

100

-10

176

225

-22

FDIC assessments

37

28

32

97

58

67

Advertising and marketing

27

28

-5

47

59

-20

Amortization of core deposit and other
intangible assets

13

15

-15

28

32

-14

Other costs of operations

116

149

-21

250

264

-5

Total other expense

1,297

1,293

-

2,693

2,652

2

Income before income taxes

855

1,159

-26

1,519

2,085

-27

Applicable income taxes

200

292

-32

333

516

-36

Net income

$ 655

$ 867

-25 %

$ 1,186

$ 1,569

-24 %

Condensed Consolidated Statement of Income, Five Quarter Trend

Three months ended

June 30,

March 31,

December 31,

September 30,

June 30,

(Dollars in millions)

2024

2024

2023

2023

2023

Interest income

$ 2,789

$ 2,745

$ 2,740

$ 2,641

$ 2,516

Interest expense

1,071

1,065

1,018

866

717

Net interest income

1,718

1,680

1,722

1,775

1,799

Provision for credit losses

150

200

225

150

150

Net interest income after provision for credit losses

1,568

1,480

1,497

1,625

1,649

Other income

Mortgage banking revenues

106

104

112

105

107

Service charges on deposit accounts

127

124

121

121

119

Trust income

170

160

159

155

172

Brokerage services income

30

29

26

27

25

Trading account and other non-hedging
derivative gains

7

9

11

9

17

Gain (loss) on bank investment securities

(8)

2

4

-

1

Other revenues from operations

152

152

145

143

362

Total other income

584

580

578

560

803

Other expense

Salaries and employee benefits

764

833

724

727

738

Equipment and net occupancy

125

129

134

131

129

Outside data processing and software

124

120

114

111

106

Professional and other services

91

85

99

89

100

FDIC assessments

37

60

228

29

28

Advertising and marketing

27

20

26

23

28

Amortization of core deposit and other
intangible assets

13

15

15

15

15

Other costs of operations

116

134

110

153

149

Total other expense

1,297

1,396

1,450

1,278

1,293

Income before income taxes

855

664

625

907

1,159

Applicable income taxes

200

133

143

217

292

Net income

$ 655

$ 531

$ 482

$ 690

$ 867

Condensed Consolidated Balance Sheet

June 30,

(Dollars in millions)

2024

2023

Change

ASSETS

Cash and due from banks

$ 1,778

$ 1,848

-4 %

Interest-bearing deposits at banks

24,792

27,107

-9

Trading account

99

137

-28

Investment securities

29,894

27,917

7

Loans and leases, net of unearned discount:

Commercial and industrial

60,027

54,699

10

Real estate - commercial

29,532

34,634

-15

Real estate - consumer

23,003

23,762

-3

Consumer

22,440

20,249

11

Total loans and leases, net

135,002

133,344

1

Less: allowance for credit losses

2,204

1,998

10

Net loans and leases

132,798

131,346

1

Goodwill

8,465

8,465

-

Core deposit and other intangible assets

119

177

-32

Other assets

10,910

10,675

2

Total assets

$ 208,855

$ 207,672

1 %

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits

$ 47,729

$ 54,938

-13 %

Interest-bearing deposits

112,181

107,120

5

Total deposits

159,910

162,058

-1

Short-term borrowings

4,764

7,908

-40

Accrued interest and other liabilities

4,438

4,488

-1

Long-term borrowings

11,319

7,417

53

Total liabilities

180,431

181,871

-1

Shareholders' equity:

Preferred

2,744

2,011

36

Common

25,680

23,790

8

Total shareholders' equity

28,424

25,801

10

Total liabilities and shareholders' equity

$ 208,855

$ 207,672

1 %

Condensed Consolidated Balance Sheet, Five Quarter Trend

June 30,

March 31,

December 31,

September 30,

June 30,

(Dollars in millions)

2024

2024

2023

2023

2023

ASSETS

Cash and due from banks

$ 1,778

$ 1,695

$ 1,731

$ 1,769

$ 1,848

Interest-bearing deposits at banks

24,792

32,144

28,069

30,114

27,107

Trading account

99

99

106

137

137

Investment securities

29,894

28,496

26,897

27,336

27,917

Loans and leases, net of unearned discount:

Commercial and industrial

60,027

57,897

57,010

54,891

54,699

Real estate - commercial

29,532

32,416

33,003

33,741

34,634

Real estate - consumer

23,003

23,076

23,264

23,448

23,762

Consumer

22,440

21,584

20,791

20,275

20,249

Total loans and leases, net

135,002

134,973

134,068

132,355

133,344

Less: allowance for credit losses

2,204

2,191

2,129

2,052

1,998

Net loans and leases

132,798

132,782

131,939

130,303

131,346

Goodwill

8,465

8,465

8,465

8,465

8,465

Core deposit and other intangible assets

119

132

147

162

177

Other assets

10,910

11,324

10,910

10,838

10,675

Total assets

$ 208,855

$ 215,137

$ 208,264

$ 209,124

$ 207,672

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits

$ 47,729

$ 50,578

$ 49,294

$ 53,787

$ 54,938

Interest-bearing deposits

112,181

116,618

113,980

110,341

107,120

Total deposits

159,910

167,196

163,274

164,128

162,058

Short-term borrowings

4,764

4,795

5,316

6,731

7,908

Accrued interest and other liabilities

4,438

4,527

4,516

4,946

4,488

Long-term borrowings

11,319

11,450

8,201

7,123

7,417

Total liabilities

180,431

187,968

181,307

182,928

181,871

Shareholders' equity:

Preferred

2,744

2,011

2,011

2,011

2,011

Common

25,680

25,158

24,946

24,185

23,790

Total shareholders' equity

28,424

27,169

26,957

26,196

25,801

Total liabilities and shareholders' equity

$ 208,855

$ 215,137

$ 208,264

$ 209,124

$ 207,672

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates

Three months ended

Change in balance

Six months ended

June 30,

March 31,

June 30,

June 30, 2024 from

June 30,

Change

(Dollars in millions)

2024

2024

2023

March 31,

June 30,

2024

2023

in

Balance

Rate

Balance

Rate

Balance

Rate

2024

2023

Balance

Rate

Balance

Rate

balance

ASSETS

Interest-bearing deposits at banks

$ 29,294

5.50 %

$ 30,647

5.49 %

$ 23,617

5.14 %

-4 %

24 %

$ 29,971

5.50 %

$ 23,963

4.89 %

25 %

Trading account

99

3.47

105

3.42

151

2.66

-6

-34

102

3.45

136

2.50

-25

Investment securities

29,695

3.61

28,587

3.30

28,623

3.09

4

4

29,141

3.46

28,126

3.04

4

Loans and leases, net of unearned discount:

Commercial and industrial

58,152

7.04

56,821

6.99

54,572

6.63

2

7

57,486

7.01

53,531

6.47

7

Real estate - commercial

31,458

6.38

32,696

6.36

34,903

6.38

-4

-10

32,077

6.37

35,089

6.14

-9

Real estate - consumer

23,006

4.32

23,136

4.28

23,781

4.10

-1

-3

23,071

4.30

23,775

4.03

-3

Consumer

21,972

6.61

21,143

6.54

20,289

5.88

4

8

21,558

6.58

20,388

5.77

6

Total loans and leases, net

134,588

6.38

133,796

6.32

133,545

6.02

1

1

134,192

6.35

132,783

5.87

1

Total earning assets

193,676

5.82

193,135

5.74

185,936

5.46

-

4

193,406

5.78

185,008

5.31

5

Goodwill

8,465

8,465

8,473

-

-

8,465

8,482

-

Core deposit and other intangible assets

126

140

185

-10

-32

133

192

-31

Other assets

9,714

9,738

9,782

-

-1

9,725

9,810

-1

Total assets

$ 211,981

$ 211,478

$ 204,376

- %

4 %

$ 211,729

$ 203,492

4 %

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing deposits

Savings and interest-checking deposits

$ 95,955

2.59 %

$ 94,867

2.61 %

$ 87,210

1.69 %

1 %

10 %

$ 95,411

2.60 %

$ 87,629

1.49 %

9 %

Time deposits

19,802

4.41

20,583

4.41

16,009

3.77

-4

24

20,192

4.41

13,832

3.49

46

Total interest-bearing deposits

115,757

2.90

115,450

2.93

103,219

2.02

-

12

115,603

2.91

101,461

1.76

14

Short-term borrowings

4,962

5.62

6,228

5.42

7,539

5.11

-20

-34

5,595

5.51

6,273

4.94

-11

Long-term borrowings

11,490

5.83

9,773

5.81

7,516

5.43

18

53

10,631

5.82

7,017

5.36

52

Total interest-bearing liabilities

132,209

3.26

131,451

3.26

118,274

2.43

1

12

131,829

3.26

114,751

2.15

15

Noninterest-bearing deposits

47,734

48,615

56,180

-2

-15

48,175

59,001

-18

Other liabilities

4,293

4,393

4,237

-2

1

4,343

4,208

3

Total liabilities

184,236

184,459

178,691

-

3

184,347

177,960

4

Shareholders' equity

27,745

27,019

25,685

3

8

27,382

25,532

7

Total liabilities and

shareholders' equity

$ 211,981

$ 211,478

$ 204,376

- %

4 %

$ 211,729

$ 203,492

4 %

Net interest spread

2.56

2.48

3.03

2.52

3.16

Contribution of interest-free funds

1.03

1.04

.88

1.04

.81

Net interest margin

3.59 %

3.52 %

3.91 %

3.56 %

3.97 %

Reconciliation of Quarterly GAAP to Non-GAAP Measures

Three months ended

Six months ended

June 30,

June 30,

2024

2023

2024

2023

(Dollars in millions, except per share)

Income statement data

Net income

Net income

$ 655

$ 867

$ 1,186

$ 1,569

Amortization of core deposit and other intangible assets (1)

10

12

22

25

Net operating income

$ 665

$ 879

$ 1,208

$ 1,594

Earnings per common share

Diluted earnings per common share

$ 3.73

$ 5.05

$ 6.76

$ 9.06

Amortization of core deposit and other intangible assets (1)

.06

.07

.13

.15

Diluted net operating earnings per common share

$ 3.79

$ 5.12

$ 6.89

$ 9.21

Other expense

Other expense

$ 1,297

$ 1,293

$ 2,693

$ 2,652

Amortization of core deposit and other intangible assets

(13)

(15)

(28)

(32)

Noninterest operating expense

$ 1,284

$ 1,278

$ 2,665

$ 2,620

Efficiency ratio

Noninterest operating expense (numerator)

$ 1,284

$ 1,278

$ 2,665

$ 2,620

Taxable-equivalent net interest income

$ 1,731

$ 1,813

$ 3,423

$ 3,645

Other income

584

803

1,164

1,390

Less: Gain (loss) on bank investment securities

(8)

1

(6)

1

Denominator

$ 2,323

$ 2,615

$ 4,593

$ 5,034

Efficiency ratio

55.3 %

48.9 %

58.0 %

52.0 %

Balance sheet data

Average assets

Average assets

$ 211,981

$ 204,376

$ 211,729

$ 203,492

Goodwill

(8,465)

(8,473)

(8,465)

(8,482)

Core deposit and other intangible assets

(126)

(185)

(133)

(192)

Deferred taxes

30

46

32

47

Average tangible assets

$ 203,420

$ 195,764

$ 203,163

$ 194,865

Average common equity

Average total equity

$ 27,745

$ 25,685

$ 27,382

$ 25,532

Preferred stock

(2,405)

(2,011)

(2,208)

(2,011)

Average common equity

25,340

23,674

25,174

23,521

Goodwill

(8,465)

(8,473)

(8,465)

(8,482)

Core deposit and other intangible assets

(126)

(185)

(133)

(192)

Deferred taxes

30

46

32

47

Average tangible common equity

$ 16,779

$ 15,062

$ 16,608

$ 14,894

At end of quarter

Total assets

Total assets

$ 208,855

$ 207,672

Goodwill

(8,465)

(8,465)

Core deposit and other intangible assets

(119)

(177)

Deferred taxes

31

44

Total tangible assets

$ 200,302

$ 199,074

Total common equity

Total equity

$ 28,424

$ 25,801

Preferred stock

(2,744)

(2,011)

Common equity

25,680

23,790

Goodwill

(8,465)

(8,465)

Core deposit and other intangible assets

(119)

(177)

Deferred taxes

31

44

Total tangible common equity

$ 17,127

$ 15,192

(1) After any related tax effect.

Reconciliation of Quarterly GAAP to Non-GAAP Measures, Five Quarter Trend

Three months ended

June 30,

March 31,

December 31,

September 30,

June 30,

2024

2024

2023

2023

2023

(Dollars in millions, except per share)

Income statement data

Net income

Net income

$ 655

$ 531

$ 482

$ 690

$ 867

Amortization of core deposit and other intangible assets (1)

10

12

12

12

12

Net operating income

$ 665

$ 543

$ 494

$ 702

$ 879

Earnings per common share

Diluted earnings per common share

$ 3.73

$ 3.02

$ 2.74

$ 3.98

$ 5.05

Amortization of core deposit and other intangible assets (1)

.06

.07

.07

.07

.07

Diluted net operating earnings per common share

$ 3.79

$ 3.09

$ 2.81

$ 4.05

$ 5.12

Other expense

Other expense

$ 1,297

$ 1,396

$ 1,450

$ 1,278

$ 1,293

Amortization of core deposit and other intangible assets

(13)

(15)

(15)

(15)

(15)

Noninterest operating expense

$ 1,284

$ 1,381

$ 1,435

$ 1,263

$ 1,278

Efficiency ratio

Noninterest operating expense (numerator)

$ 1,284

$ 1,381

$ 1,435

$ 1,263

$ 1,278

Taxable-equivalent net interest income

$ 1,731

$ 1,692

$ 1,735

$ 1,790

$ 1,813

Other income

584

580

578

560

803

Less: Gain (loss) on bank investment securities

(8)

2

4

-

1

Denominator

$ 2,323

$ 2,270

$ 2,309

$ 2,350

$ 2,615

Efficiency ratio

55.3 %

60.8 %

62.1 %

53.7 %

48.9 %

Balance sheet data

Average assets

Average assets

$ 211,981

$ 211,478

$ 208,752

$ 205,791

$ 204,376

Goodwill

(8,465)

(8,465)

(8,465)

(8,465)

(8,473)

Core deposit and other intangible assets

(126)

(140)

(154)

(170)

(185)

Deferred taxes

30

33

39

43

46

Average tangible assets

$ 203,420

$ 202,906

$ 200,172

$ 197,199

$ 195,764

Average common equity

Average total equity

$ 27,745

$ 27,019

$ 26,500

$ 26,020

$ 25,685

Preferred stock

(2,405)

(2,011)

(2,011)

(2,011)

(2,011)

Average common equity

25,340

25,008

24,489

24,009

23,674

Goodwill

(8,465)

(8,465)

(8,465)

(8,465)

(8,473)

Core deposit and other intangible assets

(126)

(140)

(154)

(170)

(185)

Deferred taxes

30

33

39

43

46

Average tangible common equity

$ 16,779

$ 16,436

$ 15,909

$ 15,417

$ 15,062

At end of quarter

Total assets

Total assets

$ 208,855

$ 215,137

$ 208,264

$ 209,124

$ 207,672

Goodwill

(8,465)

(8,465)

(8,465)

(8,465)

(8,465)

Core deposit and other intangible assets

(119)

(132)

(147)

(162)

(177)

Deferred taxes

31

34

37

41

44

Total tangible assets

$ 200,302

$ 206,574

$ 199,689

$ 200,538

$ 199,074

Total common equity

Total equity

$ 28,424

$ 27,169

$ 26,957

$ 26,197

$ 25,801

Preferred stock

(2,744)

(2,011)

(2,011)

(2,011)

(2,011)

Common equity

25,680

25,158

24,946

24,186

23,790

Goodwill

(8,465)

(8,465)

(8,465)

(8,465)

(8,465)

Core deposit and other intangible assets

(119)

(132)

(147)

(162)

(177)

Deferred taxes

31

34

37

41

44

Total tangible common equity

$ 17,127

$ 16,595

$ 16,371

$ 15,600

$ 15,192

(1) After any related tax effect.