M&T Bank Corporation (NYSE:MTB) announces third quarter 2023 results

BUFFALO, N.Y., Oct. 18, 2023 /PRNewswire/ — M&T Bank Corporation (“M&T” or “the Company”) reports net income of $690 million or $3.98 of diluted earnings per common share.

(Dollars in millions, except per share data)	3Q23			2Q23			3Q22
Earnings Highlights
Net interest income	$	1,775		$	1,799		$	1,679
Taxable-equivalent adjustment		15			14			12
Net interest income – taxable-equivalent		1,790			1,813			1,691
Provision for credit losses		150			150			115
Noninterest income		560			803			563
Noninterest expense		1,278			1,293			1,279
Net income		690			867			647
Net income available to common shareholders – diluted		664			841			621
Diluted earnings per common share		3.98			5.05			3.53
Return on average assets – annualized		1.33	%		1.70	%		1.28	%
Return on average common shareholders’ equity – annualized		10.99	%		14.27	%		10.43	%
Average Balance Sheet
Total assets	$	205,791		$	204,376		$	201,131
Interest-bearing deposits at banks		26,657			23,617			30,752
Investment securities		27,993			28,623			23,945
Loans and leases, net of unearned discount		132,617			133,545			127,525
Deposits		162,688			159,399			167,271
Borrowings		12,585			15,055			4,194
Selected Ratios (Amounts expressed as a percent, except per share data)
Net interest margin		3.79	%		3.91	%		3.68	%
Efficiency ratio		53.7			48.9			53.6
Net charge-offs to average total loans – annualized		.29			.38			.20
Allowance for credit losses to total loans		1.55			1.50			1.46
Nonaccrual loans to total loans		1.77			1.83			1.89
Common equity Tier 1 (“CET1”) capital ratio (1)		10.94			10.59			10.75
Common shareholders’ equity per share	$	145.72		$	143.41		$	134.45


(1)	September 30, 2023 CET1 capital ratio is estimated.

Financial Highlights

Capital position remains strong with the CET1 capital ratio increasing 35 basis points to an estimated 10.94% at September 30, 2023, compared with 10.59% at June 30, 2023.
Net interest margin of 3.79% in the recent quarter narrowed from 3.91% in the second quarter of 2023 as increases to the rates paid on interest-bearing deposits outpaced the rise in yields on interest-earning assets.
Average loans and leases in the third quarter of 2023 decreased 1% from the previous 2023 quarter reflecting a $714 million decline in average commercial real estate loan balances.
The level of nonaccrual loans improved to 1.77% of loans outstanding at September 30, 2023, compared with 1.83% at June 30, 2023.
Recent quarter net charge-offs of $96 million, or 29 basis points, were below the Company’s long-term average net charge-off rate.
Average deposits increased 2% from the second quarter of 2023 reflecting a higher demand for interest-bearing products.

Chief Financial Officer Commentary

“The third quarter results reflect the stability of M&T’s diverse banking franchise and the ability to consistently generate capital for our shareholders while continuing to invest in the systems and resources needed to best serve our customers. Our customer deposit balances increased in the recent quarter as we continue to build upon our strong liquidity position. Our credit metrics reflect a decline in nonaccrual loans and net charge-offs that remain below M&T’s long-term average. The comparative strength of our financial position in the industry will continue to enable us to improve the communities in which we serve and the lives of our customers. Thank you to our employees for their commitment to delivering for our customers each and every day.”

– 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 3Q23 vs.						Change 3Q23 vs.
($ in millions, except per share data)	3Q23			2Q23			2Q23			3Q22			3Q22

Net operating income	$	702		$	879			-20	%	$	700			—
Diluted net operating earnings per common share	$	4.05		$	5.12			-21	%	$	3.83			6	%
Annualized return on average tangible assets		1.41	%		1.80	%					1.44	%
Annualized return on average tangible common equity		17.41	%		22.73	%					17.89	%
Efficiency ratio		53.7	%		48.9	%					53.6	%
Tangible equity per common share	$	93.99		$	91.58			3	%	$	84.28			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.

Merger-related expenses associated with the People’s United Financial, Inc. (“People’s United”) acquisition in 2022 generally consisted of:

Professional services, temporary help fees and other costs associated with actual or planned conversions of systems and/or integration of operations and the introduction of M&T to its new customers.
Costs related to terminations of existing contractual arrangements to purchase various services, severance and travel costs.
An initial provision for credit losses of $242 million in the second quarter of 2022 on loans not deemed to be purchased credit deteriorated (“PCD”) on the April 1, 2022 acquisition date of People’s United.

The amounts of merger-related expenses in 2022 are presented in the tables that accompany this release. No merger-related expenses were incurred in the nine months ended September 30, 2023.

Taxable-equivalent Net Interest Income

							Change 3Q23 vs.						Change 3Q23 vs.
($ in millions)	3Q23			2Q23			2Q23			3Q22			3Q22

Average earning assets	$	187,403		$	185,936			1	%	$	182,382			3	%
Average interest-bearing liabilities	$	121,388		$	118,274			3	%	$	98,604			23	%
Net interest income – taxable-equivalent	$	1,790		$	1,813			-1	%	$	1,691			6	%
Yield on average earning assets		5.62	%		5.46	%					3.90	%
Cost of interest-bearing liabilities		2.83	%		2.43	%					0.41	%
Net interest spread		2.79	%		3.03	%					3.49	%
Net interest margin		3.79	%		3.91	%					3.68	%

Taxable-equivalent net interest income decreased $23 million, or 1%, from the second quarter of 2023.

Average interest-bearing deposits increased $5.6 billion and the rates paid on such deposits rose 52 basis points.
Average short-term borrowings declined $2.2 billion.
The yield on average outstanding loans and leases increased 17 basis points.
Average interest-bearing deposits at banks increased $3.0 billion.

Taxable-equivalent net interest income increased $99 million, or 6%, compared with the year-earlier quarter.

Yields earned on average loans and leases and interest-bearing deposits at banks increased 164 basis points and 317 basis points, respectively.
Average loans and leases increased $5.1 billion.
Rates paid on interest-bearing deposits increased 225 basis points.
Average borrowings increased $8.4 billion.

Provision for Credit Losses/Asset Quality

							Change 3Q23 vs.						Change 3Q23 vs.
($ in millions)	3Q23			2Q23			2Q23			3Q22			3Q22

At end of quarter
Nonaccrual loans	$	2,342		$	2,435			-4	%	$	2,429			-4	%
Real estate and other foreclosed assets		37			43			-13	%		37			—
Total nonperforming assets	$	2,379		$	2,478			-4	%	$	2,466			-4	%
Accruing loans past due 90 days or more (1)	$	354		$	380			-7	%	$	477			-26	%
Nonaccrual loans as % of loans outstanding		1.77	%		1.83	%					1.89	%

Allowance for credit losses	$	2,052		$	1,998			3	%	$	1,876			9	%
Allowance for credit losses as % of loans outstanding		1.55	%		1.50	%					1.46	%

For the period
Provision for credit losses	$	150		$	150			—		$	115			30	%
Net charge-offs	$	96		$	127			-24	%	$	63			52	%
Net charge-offs as % of average loans (annualized)		.29	%		.38	%					.20	%


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

M&T recorded a provision for credit losses of $150 million in each of the third and second quarters of 2023 compared with $115 million in the third quarter of 2022. The comparatively higher provisions for credit losses in the most recent two quarters compared with the third quarter of 2022 reflect a softening of commercial real estate values. Net charge-offs totaled $96 million in 2023’s third quarter, compared with $127 million in 2023’s second quarter and $63 million in the year-earlier quarter reflective of variability in the timing and amount of commercial real estate charge-offs.

Nonaccrual loans were $2.34 billion at September 30, 2023, $94 million lower than June 30, 2023 and $87 million lower than September 30, 2022. Those declines are reflective of lower levels of hospitality-related commercial real estate nonaccrual loans.

Noninterest Income

					Change 3Q23 vs.					Change 3Q23 vs.
($ in millions)	3Q23		2Q23		2Q23			3Q22		3Q22
Mortgage banking revenues	$	105	$	107		-2	%	$	83		26	%
Service charges on deposit accounts		121		119		2	%		115		5	%
Trust income		155		172		-10	%		187		-17	%
Brokerage services income		27		25		7	%		21		28	%
Trading account and non-hedging derivative gains		9		17		-44	%		5		85	%
Gain (loss) on bank investment securities		—		1		—			(1)		—
Other revenues from operations		143		362		-61	%		153		-7	%
Total	$	560	$	803		-30	%	$	563		-1	%

Noninterest income in the third quarter of 2023 decreased $244 million, or 30%, as compared with 2023’s second quarter.

Other revenues from operations decreased $219 million reflecting a $225 million gain on sale of the Company’s Collective Investment Trust (“CIT”) business in the second quarter of 2023.
Trust income declined $17 million, predominantly reflective of one month of revenues associated with the CIT business recognized prior to its sale in the second quarter of 2023.
Trading account and non-hedging derivative gains decreased $7 million from the second quarter due to a decline in customer interest rate swap revenues and market conditions.

Noninterest income decreased $3 million, or less than 1%, as compared with the year-earlier third quarter.

Trust income decreased $31 million reflecting lower revenues associated with the CIT business as a result of its sale in April 2023.
Other revenues from operations declined $11 million due to lower insurance income reflecting the sale of M&T Insurance Agency in December 2022.
Mortgage banking revenues increased $21 million due to higher servicing income related to the bulk purchase of residential mortgage loan servicing rights in the first quarter of 2023 and higher gains on sales of residential mortgage loans. The Company returned to originating for sale the majority of its newly originated residential mortgage loans in the first quarter of 2023.

Noninterest Expense

					Change 3Q23 vs.					Change 3Q23 vs.
($ in millions)	3Q23		2Q23		2Q23			3Q22		3Q22
Salaries and employee benefits	$	727	$	738		-1	%	$	736		-1	%
Equipment and net occupancy		131		129		2	%		127		3	%
Outside data processing and software		111		106		4	%		95		16	%
FDIC assessments		29		28		5	%		28		4	%
Advertising and marketing		23		28		-19	%		21		7	%
Printing, postage and supplies		14		14		-2	%		15		-5	%
Amortization of core deposit and other intangible assets		15		15		—			18		-19	%
Other costs of operations		228		235		-3	%		239		-4	%
Total	$	1,278	$	1,293		-1	%	$	1,279		—

Noninterest expense aggregated $1.28 billion in the recent quarter, down from $1.29 billion in the second quarter of 2023. Excluding the amortization of core deposit and other intangible assets considered to be nonoperating in nature, noninterest operating expenses decreased $15 million, or 1%, to $1.26 billion in the recent quarter from $1.28 billion in the immediately preceding quarter.

Salaries and employee benefits expense decreased $11 million reflecting lower average headcount and lower expenses for contracted resources and overtime.
Other costs of operations decreased $6 million reflecting lower sub-advisory fees as a result of the sale of the CIT business in April 2023 and a decline in legal-related expenses, partially offset by losses associated with certain retail banking activities.

Noninterest expense decreased $2 million from the third quarter of 2022. Noninterest operating expenses aggregated $1.21 billion in the third quarter of 2022 after excluding $53 million of merger-related expenses associated with the People’s United acquisition and $18 million of amortization of core deposit and other intangible assets. Noninterest operating expenses increased $55 million, or 5%, from the prior year third quarter inclusive of the following:

Other costs of operations increased $23 million resulting from the amortization of the bulk purchase of residential mortgage loan servicing rights purchased in March 2023 and losses associated with certain retail banking activities, partially offset by lower professional and other outside services expenses reflecting lower sub-advisory fees as a result of the sale of the CIT business.
Outside data processing and software costs increased $18 million, or 19%, primarily due to higher software maintenance costs, offshore processing and data processing fees.

Average Earning Assets

					Change 3Q23 vs.					Change 3Q23 vs.
($ in millions)	3Q23		2Q23		2Q23			3Q22		3Q22
Interest-bearing deposits at banks	$	26,657	$	23,617		13	%	$	30,752		-13	%
Federal funds sold and agreements to resell securities		—		—		—			29		-100	%
Trading account		136		151		-9	%		131		4	%
Investment securities		27,993		28,623		-2	%		23,945		17	%
Loans and leases, net of unearned discount
Commercial, financial, etc.		44,625		44,531		—			38,321		16	%
Real estate – commercial		44,230		44,944		-2	%		46,282		-4	%
Real estate – consumer		23,573		23,781		-1	%		22,962		3	%
Consumer		20,189		20,289		—			19,960		1	%
Total loans and leases, net		132,617		133,545		-1	%		127,525		4	%
Total earning assets	$	187,403	$	185,936		1	%	$	182,382		3	%

Average earning assets increased $1.5 billion, or 1%, from the second quarter of 2023.

Average interest-bearing deposits at banks increased $3.0 billion due to increased liquidity from a rise in average deposits and a decline in average loan and investment securities balances.
Average loans and leases decreased $928 million primarily reflective of a $714 million decline in average balances of commercial real estate loans.
Average investment securities declined $630 million primarily due to pay downs of fixed rate mortgage-backed securities.

Average earning assets increased $5.0 billion, or 3%, from the year-earlier third quarter.

Average loans and leases increased $5.1 billion predominantly due to higher average outstanding balances of commercial and industrial loans and leases reflecting lending activities to financial and insurance industry customers and motor vehicle and recreational finance dealers, partially offset by a $2.1 billion decline in average commercial real estate loans.
Average investment securities increased $4.0 billion due to the purchases of additional investment securities in the fourth quarter of 2022 and the first quarter of 2023.
Average interest-bearing deposits at banks decreased $4.1 billion reflecting lower deposits, incremental loan balances and purchases of investment securities, partially offset by higher borrowings.

Average Interest-bearing Liabilities

					Change 3Q23 vs.					Change 3Q23 vs.
($ in millions)	3Q23		2Q23		2Q23			3Q22		3Q22
Interest-bearing deposits
Savings and interest-checking deposits	$	89,274	$	87,210		2	%	$	89,360		—
Time deposits		19,528		16,009		22	%		5,050		287	%
Total interest-bearing deposits		108,802		103,219		5	%		94,410		15	%
Short-term borrowings		5,346		7,539		-29	%		913		485	%
Long-term borrowings		7,240		7,516		-4	%		3,281		121	%
Total interest-bearing liabilities	$	121,388	$	118,274		3	%	$	98,604		23	%

Average interest-bearing liabilities increased $3.1 billion, or 3%, from the second quarter of 2023.

Average interest-bearing deposits increased $5.6 billion, including a $3.3 billion increase in average non-brokered deposits.
Average borrowings decreased $2.5 billion predominantly due to lower levels of short-term borrowings from the Federal Home Loan Bank (“FHLB”) of New York.

Average interest-bearing liabilities increased $22.8 billion, or 23%, from the third quarter of 2022.

Average interest-bearing deposits increased $14.4 billion, including a $5.3 billion increase in average non-brokered deposits.
Average borrowings increased $8.4 billion predominantly due to issuances of long-term senior notes totaling $3.5 billion in the first quarter of 2023 and increases in short-term borrowings from the FHLB of New York.

Capital

	3Q23				2Q23			3Q22
CET1		10.94	%	(1)		10.59	%		10.75	%
Tier 1 capital		12.27	%	(1)		11.91	%		12.13	%
Total capital		13.99	%	(1)		13.71	%		13.96	%
Tangible capital – common		7.78	%			7.63	%		7.70	%


(1)	September 30, 2023 capital ratios are estimated.

M&T’s capital ratios remained well above the minimum set forth by regulatory requirements. Cash dividends declared on M&T’s common and preferred stock totaled $217 million and $25 million, respectively, for the quarter ended September 30, 2023. M&T did not repurchase any shares of its common stock in the third quarter of 2023.

The CET1 capital ratio for M&T was estimated at 10.94% as of September 30, 2023. M&T’s total risk-weighted assets at September 30, 2023 are estimated to be $152 billion.

Capital regulations require buffers in addition to the minimum risk-based capital ratios noted above. M&T is subject to a stress capital buffer requirement that is determined through the Federal Reserve’s supervisory stress tests and M&T’s bank subsidiaries are subject to a 2.5% capital conservation buffer requirement. The buffer requirement must be composed entirely of CET1. In June 2023, the Federal Reserve released the results of its most recent supervisory stress tests. Based on those results, on October 1, 2023, M&T’s stress capital buffer of 4.0% became effective.

M&T repurchased 3,282,449 shares of its common stock at an average cost per share of $182.79 resulting in a total cost of $600 million in 2022’s third quarter. There were no share repurchases in the second or third quarters of 2023.

Conference Call

Investors will have an opportunity to listen to M&T’s conference call to discuss third quarter financial results today at 10:00 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 #MTBQ323. 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 Wednesday October 25, 2023 by calling (800) 839-5631, or (402) 220-2558 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 Maine to Virginia and 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, including economic conditions, 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 (“Future Factors”) which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

Examples of Future Factors include: the impact of M&T’s acquisition of People’s United (as described in the next paragraph); events and developments in the financial services industry, including legislation, regulations and other governmental actions as well as business conditions affecting the industry and/or M&T and its subsidiaries, individually or collectively; economic conditions, including inflation and market volatility; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; 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; regulatory supervision and oversight, including monetary policy and capital requirements; domestic or international political developments and other geopolitical events, including international conflicts; governmental and public policy changes, including tax policy; 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; rapid 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; containing costs and expenses; 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.

In addition, Future Factors related to the acquisition of People’s United include, among others: the possibility that the anticipated benefits of the transaction will not be realized when expected or at all; potential adverse reactions or changes to business, customer or employee relationships; M&T’s success in executing its business plans and strategies and managing the risks involved in the foregoing; the results and costs of integration efforts; the business, economic and political conditions in the markets in which M&T and its subsidiaries operate; the outcome of any legal proceedings that may be instituted against M&T or its subsidiaries; and other factors related to the acquisition that may affect future results of M&T.

These are representative of the Future 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, including interest rate and currency exchange rate fluctuations, changes and trends in the securities markets, and other Future Factors.

M&T provides further detail regarding these risks and uncertainties in its Form 10-K for the year ended December 31, 2022, 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 made, and M&T does not assume any duty and does not undertake to update forward-looking statements.

Financial Highlights

	Three months ended									Nine months ended
	September 30									September 30
Dollars in millions, except per share, shares in thousands	2023			2022			Change			2023			2022			Change
Performance
Net income	$	690			647			7	%	$	2,259			1,226			84	%
Net income available to common shareholders		664			621			7	%		2,180			1,152			89	%
Per common share:
Basic earnings	$	4.00			3.55			13	%	$	13.09			7.18			82	%
Diluted earnings		3.98			3.53			13	%		13.05			7.14			83	%
Cash dividends		1.30			1.20			8	%		3.90			3.60			8	%
Common shares outstanding:
Average – diluted (1)		166,570			175,682			-5	%		167,093			161,295			4	%
Period end (2)		165,970			172,900			-4	%		165,970			172,900			-4	%
Return on (annualized):
Average total assets		1.33	%		1.28	%					1.48	%		.87	%
Average common shareholders’ equity		10.99	%		10.43	%					12.33	%		7.24	%
Taxable-equivalent net interest income	$	1,790			1,691			6	%	$	5,434			4,020			35	%
Yield on average earning assets		5.62	%		3.90	%					5.41	%		3.30	%
Cost of interest-bearing liabilities		2.83	%		.41	%					2.39	%		.27	%
Net interest spread		2.79	%		3.49	%					3.02	%		3.03	%
Contribution of interest-free funds		1.00	%		.19	%					.89	%		.12	%
Net interest margin		3.79	%		3.68	%					3.91	%		3.15	%
Net charge-offs to average total net loans (annualized)		.29	%		.20	%					.30	%		.14	%
Net operating results (3)
Net operating income	$	702			700			—		$	2,295			1,654			39	%
Diluted net operating earnings per common share		4.05			3.83			6	%		13.26			9.78			36	%
Return on (annualized):
Average tangible assets		1.41	%		1.44	%					1.57	%		1.23	%
Average tangible common equity		17.41	%		17.89	%					19.70	%		15.13	%
Efficiency ratio		53.7	%		53.6	%					52.6	%		58.1	%

	At September 30
Loan quality	2023			2022			Change
Nonaccrual loans	$	2,342			2,429			-4	%
Real estate and other foreclosed assets		37			37			—
Total nonperforming assets	$	2,379			2,466			-4	%
Accruing loans past due 90 days or more (4)	$	354			477			-26	%
Government guaranteed loans included in totals above:
Nonaccrual loans	$	40			45			-11	%
Accruing loans past due 90 days or more		269			423			-37	%
Nonaccrual loans to total net loans		1.77	%		1.89	%
Allowance for credit losses to total loans		1.55	%		1.46	%


(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 appear herein.
(4)	Predominantly residential real estate loans.

Financial Highlights, Five Quarter Trend

	Three months ended
	September 30,			June 30,			March 31,			December 31,			September 30,
Dollars in millions, except per share, shares in thousands	2023			2023			2023			2022			2022
Performance
Net income	$	690			867			702			765			647
Net income available to common shareholders		664			841			676			739			621
Per common share:
Basic earnings	$	4.00			5.07			4.03			4.32			3.55
Diluted earnings		3.98			5.05			4.01			4.29			3.53
Cash dividends		1.30			1.30			1.30			1.20			1.20
Common shares outstanding:
Average – diluted (1)		166,570			166,320			168,410			172,149			175,682
Period end (2)		165,970			165,894			165,865			169,285			172,900
Return on (annualized):
Average total assets		1.33	%		1.70	%		1.40	%		1.53	%		1.28	%
Average common shareholders’ equity		10.99	%		14.27	%		11.74	%		12.59	%		10.43	%
Taxable-equivalent net interest income	$	1,790			1,813			1,832			1,841			1,691
Yield on average earning assets		5.62	%		5.46	%		5.16	%		4.60	%		3.90	%
Cost of interest-bearing liabilities		2.83	%		2.43	%		1.86	%		.98	%		.41	%
Net interest spread		2.79	%		3.03	%		3.30	%		3.62	%		3.49	%
Contribution of interest-free funds		1.00	%		.88	%		.74	%		.44	%		.19	%
Net interest margin		3.79	%		3.91	%		4.04	%		4.06	%		3.68	%
Net charge-offs to average total net loans (annualized)		.29	%		.38	%		.22	%		.12	%		.20	%
Net operating results (3)
Net operating income	$	702			879			715			812			700
Diluted net operating earnings per common share		4.05			5.12			4.09			4.57			3.83
Return on (annualized):
Average tangible assets		1.41	%		1.80	%		1.49	%		1.70	%		1.44	%
Average tangible common equity		17.41	%		22.73	%		19.00	%		21.29	%		17.89	%
Efficiency ratio		53.7	%		48.9	%		55.5	%		53.3	%		53.6	%

	September 30,			June 30,			March 31,			December 31,			September 30,
Loan quality	2023			2023			2023			2022			2022
Nonaccrual loans	$	2,342			2,435			2,557			2,439			2,429
Real estate and other foreclosed assets		37			43			44			41			37
Total nonperforming assets	$	2,379			2,478			2,601			2,480			2,466
Accruing loans past due 90 days or more (4)	$	354			380			407			491			477
Government guaranteed loans included in totals above:
Nonaccrual loans	$	40			40			42			44			45
Accruing loans past due 90 days or more		269			294			306			363			423
Nonaccrual loans to total net loans		1.77	%		1.83	%		1.92	%		1.85	%		1.89	%
Allowance for credit losses to total loans		1.55	%		1.50	%		1.49	%		1.46	%		1.46	%


(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 appear herein.
(4)	Predominantly residential real estate loans.

Condensed Consolidated Statement of Income

	Three months ended							Nine months ended
	September 30							September 30
Dollars in millions	2023		2022		Change			2023		2022		Change
Interest income	$	2,641		1,782		48	%	$	7,484		4,175		79	%
Interest expense		866		103		742			2,091		180		—
Net interest income		1,775		1,679		6			5,393		3,995		35
Provision for credit losses		150		115		30			420		427		-2
Net interest income after provision for credit losses		1,625		1,564		4			4,973		3,568		39
Other income
Mortgage banking revenues		105		83		26			297		275		8
Service charges on deposit accounts		121		115		5			354		341		4
Trust income		155		187		-17			521		546		-4
Brokerage services income		27		21		28			76		65		16
Trading account and non-hedging derivative gains		9		5		85			38		13		197
Gain (loss) on bank investment securities		—		(1)		—			—		(2)		—
Other revenues from operations		143		153		-7			664		437		52
Total other income		560		563		-1			1,950		1,675		16
Other expense
Salaries and employee benefits		727		736		-1			2,273		2,090		9
Equipment and net occupancy		131		127		3			387		338		14
Outside data processing and software		111		95		16			323		269		20
FDIC assessments		29		28		4			87		66		31
Advertising and marketing		23		21		7			82		58		42
Printing, postage and supplies		14		15		-5			42		40		5
Amortization of core deposit and other intangible assets		15		18		-19			47		38		24
Other costs of operations		228		239		-4			689		743		-7
Total other expense		1,278		1,279		—			3,930		3,642		8
Income before income taxes		907		848		7			2,993		1,601		87
Applicable income taxes		217		201		8			734		375		96
Net income	$	690		647		7	%	$	2,259		1,226		84	%

Condensed Consolidated Statement of Income, Five Quarter Trend

	Three months ended
	September 30,		June 30,		March 31,		December 31,		September 30,
Dollars in millions	2023		2023		2023		2022		2022
Interest income	$	2,641		2,516		2,327		2,072		1,782
Interest expense		866		717		509		245		103
Net interest income		1,775		1,799		1,818		1,827		1,679
Provision for credit losses		150		150		120		90		115
Net interest income after provision for credit losses		1,625		1,649		1,698		1,737		1,564
Other income
Mortgage banking revenues		105		107		85		82		83
Service charges on deposit accounts		121		119		113		106		115
Trust income		155		172		194		195		187
Brokerage services income		27		25		24		22		21
Trading account and non-hedging derivative gains		9		17		12		14		5
Gain (loss) on bank investment securities		—		1		—		(3)		(1)
Other revenues from operations		143		362		159		266		153
Total other income		560		803		587		682		563
Other expense
Salaries and employee benefits		727		738		808		697		736
Equipment and net occupancy		131		129		127		137		127
Outside data processing and software		111		106		106		108		95
FDIC assessments		29		28		30		24		28
Advertising and marketing		23		28		31		32		21
Printing, postage and supplies		14		14		14		15		15
Amortization of core deposit and other intangible assets		15		15		17		18		18
Other costs of operations		228		235		226		377		239
Total other expense		1,278		1,293		1,359		1,408		1,279
Income before income taxes		907		1,159		926		1,011		848
Applicable income taxes		217		292		224		246		201
Net income	$	690		867		702		765		647

Condensed Consolidated Balance Sheet

	September 30
Dollars in millions	2023		2022		Change
ASSETS
Cash and due from banks	$	1,769		2,256		-22	%
Interest-bearing deposits at banks		30,114		25,392		19
Trading account		137		130		6
Investment securities		27,336		24,604		11
Loans and leases:
Commercial, financial, etc.		45,058		38,808		16
Real estate – commercial		43,574		46,139		-6
Real estate – consumer		23,448		23,074		2
Consumer		20,275		20,205		—
Total loans and leases, net of unearned discount		132,355		128,226		3
Less: allowance for credit losses		2,052		1,876		9
Net loans and leases		130,303		126,350		3
Goodwill		8,465		8,501		—
Core deposit and other intangible assets		162		227		-29
Other assets		10,838		10,495		3
Total assets	$	209,124		197,955		6	%

LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits	$	53,787		73,023		-26	%
Interest-bearing deposits		110,341		90,822		21
Total deposits		164,128		163,845		—
Short-term borrowings		6,731		918		633
Accrued interest and other liabilities		4,946		4,477		10
Long-term borrowings		7,123		3,459		106
Total liabilities		182,928		172,699		6
Shareholders’ equity:
Preferred		2,011		2,011		—
Common		24,185		23,245		4
Total shareholders’ equity		26,196		25,256		4
Total liabilities and shareholders’ equity	$	209,124		197,955		6	%

Condensed Consolidated Balance Sheet, Five Quarter Trend

	September 30,		June 30,		March 31,		December 31,		September 30,
Dollars in millions	2023		2023		2023		2022		2022
ASSETS
Cash and due from banks	$	1,769		1,848		1,818		1,517		2,256
Interest-bearing deposits at banks		30,114		27,107		22,306		24,959		25,392
Federal funds sold and agreements to resell securities		—		—		—		3		—
Trading account		137		137		165		118		130
Investment securities		27,336		27,917		28,443		25,211		24,604
Loans and leases:
Commercial, financial, etc.		45,058		44,684		43,758		41,850		38,808
Real estate – commercial		43,574		44,649		45,073		45,365		46,139
Real estate – consumer		23,448		23,762		23,790		23,756		23,074
Consumer		20,275		20,249		20,317		20,593		20,205
Total loans and leases, net of unearned discount		132,355		133,344		132,938		131,564		128,226
Less: allowance for credit losses		2,052		1,998		1,975		1,925		1,876
Net loans and leases		130,303		131,346		130,963		129,639		126,350
Goodwill		8,465		8,465		8,490		8,490		8,501
Core deposit and other intangible assets		162		177		192		209		227
Other assets		10,838		10,675		10,579		10,584		10,495
Total assets	$	209,124		207,672		202,956		200,730		197,955

LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits	$	53,787		54,938		59,955		65,502		73,023
Interest-bearing deposits		110,341		107,120		99,120		98,013		90,822
Total deposits		164,128		162,058		159,075		163,515		163,845
Short-term borrowings		6,731		7,908		6,995		3,555		918
Accrued interest and other liabilities		4,946		4,488		4,046		4,377		4,477
Long-term borrowings		7,123		7,417		7,463		3,965		3,459
Total liabilities		182,928		181,871		177,579		175,412		172,699
Shareholders’ equity:
Preferred		2,011		2,011		2,011		2,011		2,011
Common		24,185		23,790		23,366		23,307		23,245
Total shareholders’ equity		26,196		25,801		25,377		25,318		25,256
Total liabilities and shareholders’ equity	$	209,124		207,672		202,956		200,730		197,955

Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates

	Three months ended															Change in balance						Nine months ended
	September 30,					June 30,					September 30,					September 30, 2023 from						September 30										Change
Dollars in millions	2023					2023					2022					June 30,			September 30,			2023					2022					in
	Balance		Rate			Balance		Rate			Balance		Rate			2023			2022			Balance		Rate			Balance		Rate			balance
ASSETS
Interest-bearing deposits at banks	$	26,657		5.40	%		23,617		5.14	%		30,752		2.23	%		13	%		-13	%	$	24,871		5.07	%		36,248		1.00	%		-31	%
Federal funds sold and agreements to resell securities		—		5.79			—		5.53			29		.55			-99			-100			—		5.34			93		.42			-100
Trading account		136		4.05			151		2.66			131		1.78			-9			4			136		3.02			105		1.24			29
Investment securities		27,993		3.14			28,623		3.09			23,945		2.62			-2			17			28,081		3.08			18,077		2.51			55
Loans and leases, net of unearned discount
Commercial, financial, etc.		44,625		7.01			44,531		6.79			38,321		4.87			—			16			43,870		6.76			33,203		4.24			32
Real estate – commercial		44,230		6.41			44,944		6.25			46,282		4.49			-2			-4			44,830		6.16			42,864		4.09			5
Real estate – consumer		23,573		4.14			23,781		4.10			22,962		3.84			-1			3			23,707		4.06			20,557		3.69			15
Consumer		20,189		6.16			20,289		5.88			19,960		4.76			—			1			20,320		5.90			19,267		4.43			5
Total loans and leases, net		132,617		6.19			133,545		6.02			127,525		4.55			-1			4			132,727		5.98			115,891		4.14			15
Total earning assets		187,403		5.62			185,936		5.46			182,382		3.90			1			3			185,815		5.41			170,414		3.30			9
Goodwill		8,465					8,473					8,501					—			—			8,476					7,214					17
Core deposit and other intangible assets		170					185					236					-8			-28			185					165					12
Other assets		9,753					9,782					10,012					—			-3			9,790					9,602					2
Total assets	$	205,791					204,376					201,131					1	%		2	%	$	204,266					187,395					9	%

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits
Savings and interest-checking deposits	$	89,274		2.20			87,210		1.69			89,360		.31			2	%		—	%	$	88,184		1.73			84,006		.16			5	%
Time deposits		19,528		4.09			16,009		3.77			5,050		.09			22			287			15,751		3.74			4,401		.11			258
Total interest-bearing deposits		108,802		2.54			103,219		2.02			94,410		.29			5			15			103,935		2.03			88,407		.16			18
Short-term borrowings		5,346		5.16			7,539		5.11			913		1.16			-29			485			5,961		5.01			701		1.16			750
Long-term borrowings		7,240		5.52			7,516		5.43			3,281		3.67			-4			121			7,092		5.42			3,335		2.69			113
Total interest-bearing liabilities		121,388		2.83			118,274		2.43			98,604		.41			3			23			116,988		2.39			92,443		.27			27
Noninterest-bearing deposits		53,886					56,180					72,861					-4			-26			57,277					68,406					-16
Other liabilities		4,497					4,237					4,001					6			12			4,305					3,301					30
Total liabilities		179,771					178,691					175,466					1			2			178,570					164,150					9
Shareholders’ equity		26,020					25,685					25,665					1			1			25,696					23,245					11
Total liabilities and shareholders’ equity	$	205,791					204,376					201,131					1	%		2	%	$	204,266					187,395					9	%

Net interest spread				2.79					3.03					3.49											3.02					3.03
Contribution of interest-free funds				1.00					.88					.19											.89					.12
Net interest margin				3.79	%				3.91	%				3.68	%										3.91	%				3.15	%

Reconciliation of Quarterly GAAP to Non-GAAP Measures

	Three months ended						Nine months ended
	September 30						September 30
	2023			2022			2023			2022
Income statement data
In millions, except per share
*Net income*
Net income	$	690			647		$	2,259			1,226
Amortization of core deposit and other intangible assets (1)		12			14			36			29
Merger-related expenses (1)		—			39			—			399
Net operating income	$	702			700			2,295			1,654
*Earnings per common share*
Diluted earnings per common share	$	3.98			3.53		$	13.05			7.14
Amortization of core deposit and other intangible assets (1)		.07			.08			.21			.18
Merger-related expenses (1)		—			.22			—			2.46
Diluted net operating earnings per common share	$	4.05			3.83			13.26			9.78
*Other expense*
Other expense	$	1,278			1,279		$	3,929			3,642
Amortization of core deposit and other intangible assets		(15)			(18)			(47)			(38)
Merger-related expenses		—			(53)			—			(293)
Noninterest operating expense	$	1,263			1,208		$	3,882			3,311
*Merger-related expenses*
Salaries and employee benefits	$	—			13		$	—			99
Equipment and net occupancy		—			2			—			4
Outside data processing and software		—			2			—			3
Advertising and marketing		—			2			—			4
Printing, postage and supplies		—			1			—			4
Other costs of operations		—			33			—			179
Other expense		—			53			—			293
Provision for credit losses		—			—			—			242
Total	$	—			53		$	—			535
*Efficiency ratio*
Noninterest operating expense (numerator)	$	1,263			1,208		$	3,882			3,311
Taxable-equivalent net interest income	$	1,790			1,691		$	5,434			4,020
Other income		560			563			1,950			1,675
Less: Gain (loss) on bank investment securities		—			(1)			—			(2)
Denominator	$	2,350			2,255		$	7,384			5,697
Efficiency ratio		53.7	%		53.6	%		52.6	%		58.1	%
Balance sheet data
In millions
*Average assets*
Average assets	$	205,791			201,131		$	204,266			187,395
Goodwill		(8,465)			(8,501)			(8,476)			(7,214)
Core deposit and other intangible assets		(170)			(236)			(185)			(165)
Deferred taxes		43			56			46			38
Average tangible assets	$	197,199			192,450		$	195,651			180,054
*Average common equity*
Average total equity	$	26,020			25,665		$	25,696			23,245
Preferred stock		(2,011)			(2,011)			(2,011)			(1,925)
Average common equity		24,009			23,654			23,685			21,320
Goodwill		(8,465)			(8,501)			(8,476)			(7,214)
Core deposit and other intangible assets		(170)			(236)			(185)			(165)
Deferred taxes		43			56			46			38
Average tangible common equity	$	15,417			14,973		$	15,070			13,979
At end of quarter
*Total assets*
Total assets	$	209,124			197,955
Goodwill		(8,465)			(8,501)
Core deposit and other intangible assets		(162)			(227)
Deferred taxes		41			54
Total tangible assets	$	200,538			189,281
*Total common equity*
Total equity	$	26,197			25,256
Preferred stock		(2,011)			(2,011)
Common equity		24,186			23,245
Goodwill		(8,465)			(8,501)
Core deposit and other intangible assets		(162)			(227)
Deferred taxes		41			54
Total tangible common equity	$	15,600			14,571


(1)	After any related tax effect.

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

	Three months ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2023			2023			2023			2022			2022
Income statement data
In millions, except per share
*Net income*
Net income	$	690			867			702			765			647
Amortization of core deposit and other intangible assets (1)		12			12			13			14			14
Merger-related expenses (1)		—			—			—			33			39
Net operating income	$	702			879			715			812			700
*Earnings per common share*
Diluted earnings per common share	$	3.98			5.05			4.01			4.29			3.53
Amortization of core deposit and other intangible assets (1)		.07			.07			.08			.08			.08
Merger-related expenses (1)		—			—			—			.20			.22
Diluted net operating earnings per common share	$	4.05			5.12			4.09			4.57			3.83
*Other expense*
Other expense	$	1,278			1,293			1,359			1,408			1,279
Amortization of core deposit and other intangible assets		(15)			(15)			(17)			(18)			(18)
Merger-related expenses		—			—			—			(45)			(53)
Noninterest operating expense	$	1,263			1,278			1,342			1,345			1,208
*Merger-related expenses*
Salaries and employee benefits	$	—			—			—			4			13
Equipment and net occupancy		—			—			—			2			2
Outside data processing and software		—			—			—			2			2
Advertising and marketing		—			—			—			5			2
Printing, postage and supplies		—			—			—			3			1
Other costs of operations		—			—			—			29			33
Other expense		—			—			—			45			53
Provision for credit losses		—			—			—			—			—
Total	$	—			—			—			45			53
*Efficiency ratio*
Noninterest operating expense (numerator)	$	1,263			1,278			1,342			1,345			1,208
Taxable-equivalent net interest income	$	1,790			1,813			1,832			1,841			1,691
Other income		560			803			587			682			563
Less: Gain (loss) on bank investment securities		—			1			—			(3)			(1)
Denominator	$	2,350			2,615			2,419			2,526			2,255
Efficiency ratio		53.7	%		48.9	%		55.5	%		53.3	%		53.6	%
Balance sheet data
In millions
*Average assets*
Average assets	$	205,791			204,376			202,599			198,592			201,131
Goodwill		(8,465)			(8,473)			(8,490)			(8,494)			(8,501)
Core deposit and other intangible assets		(170)			(185)			(201)			(218)			(236)
Deferred taxes		43			46			49			54			56
Average tangible assets	$	197,199			195,764			193,957			189,934			192,450
*Average common equity*
Average total equity	$	26,020			25,685			25,377			25,346			25,665
Preferred stock		(2,011)			(2,011)			(2,011)			(2,011)			(2,011)
Average common equity		24,009			23,674			23,366			23,335			23,654
Goodwill		(8,465)			(8,473)			(8,490)			(8,494)			(8,501)
Core deposit and other intangible assets		(170)			(185)			(201)			(218)			(236)
Deferred taxes		43			46			49			54			56
Average tangible common equity	$	15,417			15,062			14,724			14,677			14,973
At end of quarter
*Total assets*
Total assets	$	209,124			207,672			202,956			200,730			197,955
Goodwill		(8,465)			(8,465)			(8,490)			(8,490)			(8,501)
Core deposit and other intangible assets		(162)			(177)			(192)			(209)			(227)
Deferred taxes		41			44			47			51			54
Total tangible assets	$	200,538			199,074			194,321			192,082			189,281
*Total common equity*
Total equity	$	26,197			25,801			25,377			25,318			25,256
Preferred stock		(2,011)			(2,011)			(2,011)			(2,011)			(2,011)
Common equity		24,186			23,790			23,366			23,307			23,245
Goodwill		(8,465)			(8,465)			(8,490)			(8,490)			(8,501)
Core deposit and other intangible assets		(162)			(177)			(192)			(209)			(227)
Deferred taxes		41			44			47			51			54
Total tangible common equity	$	15,600			15,192			14,731			14,659			14,571