Profile: M&T Bank Corp (MTB.N)
28 Aug 2014
M&T Bank Corporation (M&T), incorporated on November 6, 1969, is a bank holding company. As of December 31, 2012, M&T had two wholly owned bank subsidiaries: M&T Bank and Wilmington Trust, National Association (Wilmington Trust, N.A.). The banks collectively offer a range of retail and commercial banking, trust, wealth management and investment services to their customers. The Company conducts lending activities in various states through other subsidiaries. M&T Bank and certain of its subsidiaries also offer commercial mortgage loans secured by income producing properties or properties used by borrowers in a trade or business. Additional financial services are provided through other operating subsidiaries of the Company. Its segments include Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking.
The Business Banking segment provides a range of services to small businesses and professionals through the Company’s branch network, business banking centers and other delivery channels, such as telephone banking, Internet banking and automated teller machines within markets served by the Company. Services and products offered by this segment include various business loans and leases, including loans guaranteed by the Small Business Administration, business credit cards, deposit products, and financial services, such as cash management, payroll and direct deposit, merchant credit card and letters of credit. The Commercial Banking segment provides a range of credit products and banking services for middle-market and commercial customers, mainly within the markets served by the Company. Services provided by this segment include commercial lending and leasing, letters of credit, deposit products, and cash management services.
The Commercial Real Estate segment provides credit and deposit services to its customers. Real estate securing loans in this segment is generally located in the New York City metropolitan area, upstate New York, Pennsylvania, Maryland, the District of Columbia, Delaware, Virginia, West Virginia, and the northwestern portion of the United States. Commercial real estate loans may be secured by apartment/multifamily buildings; office, retail and industrial space; or other types of collateral. Activities of this segment also include the origination, sales and servicing of commercial real estate loans through the Fannie Mae DUS program and other programs. The Discretionary Portfolio segment includes investment and trading securities, residential mortgage loans and other assets; short-term and long-term borrowed funds; brokered certificates of deposit and interest rate swap agreements related thereto; and Cayman Islands branch deposits. This segment also provides foreign exchange services to customers.
The Residential Mortgage Banking segment originates and services residential mortgage loans and sells all of those loans in the secondary market to investors or to the Discretionary Portfolio segment. In addition to the geographic regions served by or contiguous with the Company’s branch network, the Company maintains mortgage loan origination offices in several states throughout the western United States. Residential mortgage loans held for sale are included in this segment. The Retail Banking segment offers a variety of services to consumers through several delivery channels, which include branch offices, automated teller machines, telephone banking and Internet banking. The Company has branch offices in New York State, Pennsylvania, Maryland, Virginia, the District of Columbia, West Virginia and Delaware. The Retail Banking segment also offers certain deposit products on a nationwide basis through the delivery channels of Wilmington Trust, N.A. Credit services offered by this segment include consumer installment loans, automobile loans (originated both directly and indirectly through dealers), home equity loans and lines of credit and credit cards. The segment also offers to its customers deposit products, including demand, savings and time accounts; investment products, including mutual funds and annuities, and other services.
As of December 31, 2012 the Company had deposits of $65.6 billion and shareholders’ equity of $9.3 billion. As of December 31, 2012, M&T Bank had 725 domestic banking offices located throughout New York State, Pennsylvania, Maryland, Delaware, Virginia, West Virginia, and the District of Columbia, a full-service commercial banking office in Ontario, Canada, and an office in George Town, Cayman Islands. As a commercial bank, M&T Bank offers a range of financial services to a diverse base of consumers, businesses, professional clients, governmental entities and financial institutions located in its markets. Lending is focused on consumers residing in New York State, Pennsylvania, Maryland, Delaware, northern Virginia and Washington, D.C., and on small and medium-size businesses based in those areas, although loans are originated through lending offices in other states.
Wilmington Trust, N.A., formerly M&T Bank, National Association, is a national banking association. Wilmington Trust, N.A. offers various trust and wealth management services. Wilmington Trust Company, a wholly owned subsidiary of M&T Bank, provides a range of Delaware-based trust, fiduciary and custodial services to its clients. M&T Life Insurance Company (M&T Life Insurance), a wholly owned subsidiary of M&T, is a credit reinsurer, which reinsures credit life and accident and health insurance purchased by the Company’s consumer loan customers. M&T Insurance Agency, Inc. (M&T Insurance Agency), a wholly owned insurance agency subsidiary of M&T Bank, provides insurance agency services principally to the commercial market.
M&T Mortgage Reinsurance Company, Inc. (M&T Reinsurance), a wholly owned subsidiary of M&T Bank, enters into reinsurance contracts with insurance companies who insure against the risk of a mortgage borrower’s payment default in connection with M&T Bank-related mortgage loans. M&T Real Estate Trust (M&T Real Estate) is a real estate investment trust (REIT). M&T Realty Capital Corporation (M&T Realty Capital), a wholly owned subsidiary of M&T Bank, engages in multifamily commercial real estate lending and provides loan servicing to purchasers of the loans it originates. M&T Securities, Inc. (M&T Securities) is a wholly owned subsidiary of M&T Bank. M&T Securities provides securities brokerage, investment advisory and insurance services.
Wilmington Trust Investment Advisors, Inc. (WT Investment Advisors), formerly MTB Investment Advisors, is a wholly owned subsidiary of M&T Bank. WT Investment Advisors serves as investment advisor to the MTB Group of Funds, a family of mutual funds, and institutional clients. Rodney Square Management Corporation (Rodney Square Management), a wholly owned subsidiary of M&T. Rodney Square Management serves as the investment advisor to the Wilmington Funds, a family of proprietary mutual funds. Wilmington Trust Investment Management, LLC (WTIM) is a wholly owned subsidiary of M&T. WTIM serves as the primary sub-advisor to the Wilmington Funds and provides investment management services to other clients, including certain private funds.
The Company provides financing for leases to commercial customers, primarily for equipment. The Company participates in the insurance and guarantee programs of the Export-Import Bank of the United States. Loans secured by real estate include outstanding balances of home equity loans and lines of credit which the Company classifies as consumer loans. As of December 31, 2012, the Company held approximately $26 billion of commercial real estate loans, $11.2 billion of consumer real estate loans secured by one-to-four family residential properties, including $1.2 billion of loans held for sale, and $6.3 billion of outstanding balances of home equity loans and lines of credit.
Commercial real estate loans originated by the Company include fixed-rate instruments with monthly payments and a balloon payment of the remaining unpaid principal at maturity, in many cases five years after origination. The Company also originates fixed-rate commercial real estate loans with maturities of greater than five years. Commercial real estate loans secured by properties located outside of Pennsylvania, the Mid-Atlantic area, New York State and areas of states neighboring New York considered to be part of the New York City metropolitan area, consisted of 10% of total commercial real estate loans, as of December 31, 2012. M&T Realty Capital Corporation, a commercial real estate lending subsidiary of M&T Bank, participates in the Fannie Mae Delegated Underwriting and Servicing (DUS) program, pursuant to which commercial real estate loans are originated.
Real estate loans secured by one-to-four family residential properties were $11.2 billion, as of December 31, 2012, including approximately 38% secured by properties located in New York State, 13% secured by properties located in Pennsylvania and 23% secured by properties located in the Mid-Atlantic area. Consumer loans consisted of approximately 21% of the average loan portfolio, during the year ended December 31, 2012. The two components of the consumer loan portfolio are outstanding balances of home equity lines of credit and automobile loans.
The investment securities portfolio consists of residential mortgage-backed securities and collateralized mortgage obligations (CMOs), debt securities issued by municipalities, trust preferred securities issued by certain financial institutions, and shorter-term United States Treasury and federal agency notes. Investment securities also include available for sale, investment securities held to maturity, collateralized debt obligations and other debt securities. As of December 31, 2012, the Company owned 249 individual investment securities.
Sources of Funds
Other earning assets include interest-earning deposits at the Federal Reserve Bank of New York and other banks, trading account assets, federal funds sold and agreements to resell securities. The source of funding for the Company is core deposits. The Company’s branch network is its principal source of core deposits. Certificates of deposit of $250,000 or less generated on a nationwide basis by Wilmington Trust, N.A. were also included in core deposits. Additional funding sources for the Company included domestic time deposits over $250,000, deposits associated with the Company’s Cayman Islands branch office, and brokered deposits. Cayman Islands branch deposits and brokered deposits have been used by the Company as alternatives to short-term borrowings.
The Company also uses borrowings from banks, securities dealers, various Federal Home Loan Banks, the Federal Reserve Bank and others as sources of funding. Net interest-free funds consist of noninterest-bearing demand deposits and shareholders’ equity, partially offset by bank owned life insurance and non-earning assets, including goodwill and core deposit and other intangible assets.
M&T Bank Corp
ONE M&T PLAZA, 5TH FLOOR
BUFFALO NY 14203-2399