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Loans and leases
12 Months Ended
Dec. 31, 2015
Receivables [Abstract]  
Loans and leases

4.    Loans and leases

Total loans and leases outstanding were comprised of the following:

 

     December 31  
     2015     2014  
     (In thousands)  

Loans

    

Commercial, financial, etc.

   $ 19,223,419      $ 18,280,049   

Real estate:

    

Residential

     26,249,059        8,636,794   

Commercial

     24,125,778        22,614,174   

Construction

     5,183,313        5,061,269   

Consumer

     11,584,347        10,969,879   
  

 

 

   

 

 

 

Total loans

     86,365,916        65,562,165   

Leases

    

Commercial

     1,353,318        1,337,204   
  

 

 

   

 

 

 

Total loans and leases

     87,719,234        66,899,369   

Less: unearned discount

     (229,735     (230,413
  

 

 

   

 

 

 

Total loans and leases, net of unearned discount

   $ 87,489,499      $ 66,668,956   
  

 

 

   

 

 

 

One-to-four family residential mortgage loans held for sale were $353 million at December 31, 2015 and $435 million at December 31, 2014. Commercial real estate loans held for sale were $39 million at December 31, 2015 and $308 million at December 31, 2014.

During 2013, the Company securitized approximately $1.3 billion of one-to-four family residential real estate loans previously held in the Company’s loan portfolio into guaranteed mortgage-backed securities with the Government National Mortgage Association (“Ginnie Mae”) and recognized gains of $42,382,000. In addition, the Company securitized and sold in 2013 approximately $1.4 billion of automobile loans held in its loan portfolio, resulting in a gain of $20,683,000.

As of December 31, 2015, approximately $2.5 billion of commercial real estate loan balances serviced for others had been sold with recourse in conjunction with the Company’s participation in the Federal National Mortgage Association (“Fannie Mae”) Delegated Underwriting and Servicing (“DUS”) program. At December 31, 2015, the Company estimated that the recourse obligations described above were not material to the Company’s consolidated financial position. There have been no material losses incurred as a result of those credit recourse arrangements.

In addition to recourse obligations, as described in note 21, the Company is contractually obligated to repurchase previously sold residential real estate loans that do not ultimately meet investor sale criteria related to underwriting procedures or loan documentation. When required to do so, the Company may reimburse loan purchasers for losses incurred or may repurchase certain loans. Charges incurred for such obligation, which are recorded as a reduction of mortgage banking revenues, were $5 million, $4 million and $17 million in 2015, 2014 and 2013, respectively.

The outstanding principal balance and the carrying amount of loans acquired at a discount that were recorded at fair value at the acquisition date that is included in the consolidated balance sheet were as follows:

 

     December 31  
     2015      2014  
     (In thousands)  

Outstanding principal balance

   $ 3,122,935       $ 3,070,268   

Carrying amount:

     

Commercial, financial, leasing, etc.

     78,847         247,820   

Commercial real estate

     644,284         961,828   

Residential real estate

     1,016,129         453,360   

Consumer

     725,807         933,537   
  

 

 

    

 

 

 
   $ 2,465,067       $ 2,596,545   
  

 

 

    

 

 

 

Purchased impaired loans included in the table above totaled $768 million at December 31, 2015 and $198 million at December 31, 2014, representing less than 1% of the Company’s assets as of each date. A summary of changes in the accretable yield for loans acquired at a discount for the years ended December 31, 2015, 2014 and 2013 follows:

 

For Year Ended December 31,

   2015     2014     2013  
     Purchased     Other     Purchased     Other     Purchased     Other  
     Impaired     Acquired     Impaired     Acquired     Impaired     Acquired  
     (In thousands)  

Balance at beginning of period

   $ 76,518      $ 397,379      $ 37,230      $ 538,633      $ 42,252      $ 638,272   

Additions

     117,251                                      

Interest income

     (28,551     (158,260     (21,263     (178,670     (36,727     (247,295

Reclassifications from nonaccretable balance, net

     19,400        49,930        60,551        24,907        31,705        149,595   

Other(a)

            7,385               12,509               (1,939
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

   $ 184,618      $ 296,434      $ 76,518      $ 397,379      $ 37,230      $ 538,633   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

(a) Other changes in expected cash flows including changes in interest rates and prepayment assumptions.

A summary of current, past due and nonaccrual loans as of December 31, 2015 and 2014 follows:

 

    Current     30-89 Days
Past Due
    Accruing
Loans Past
Due 90
Days or
More(a)
    Accruing
Loans
Acquired at
a Discount
Past Due
90 Days or
More(b)
    Purchased
Impaired(c)
    Nonaccrual     Total  
    (In thousands)  

December 31, 2015

             

Commercial, financial, leasing, etc.

  $ 20,122,648      $ 52,868      $ 2,310      $ 693      $ 1,902      $ 241,917      $ 20,422,338   

Real estate:

             

Commercial

    23,645,354        172,439        12,963        8,790        46,790        179,606        24,065,942   

Residential builder and developer

    1,507,856        7,969        5,760        6,925        28,734        28,429        1,585,673   

Other commercial construction

    3,428,939        65,932        7,936        2,001        24,525        16,363        3,545,696   

Residential

    20,507,551        560,312        284,451        16,079        488,599        153,281        22,010,273   

Residential-limited documentation

    3,885,073        137,289                      175,518        61,950        4,259,830   

Consumer:

             

Home equity lines and loans

    5,805,222        45,604               15,222        2,261        84,467        5,952,776   

Automobile

    2,446,473        56,181               6               16,597        2,519,257   

Other

    3,051,435        36,702        4,021        18,757               16,799        3,127,714   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 84,400,551      $ 1,135,296      $ 317,441      $ 68,473      $ 768,329      $ 799,409      $ 87,489,499   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

December 31, 2014

             

Commercial, financial, leasing, etc.

  $ 19,228,265      $ 37,246      $ 1,805      $ 6,231      $ 10,300      $ 177,445      $ 19,461,292   

Real estate:

             

Commercial

    22,208,491        118,704        22,170        14,662        51,312        141,600        22,556,939   

Residential builder and developer

    1,273,607        11,827        492        9,350        98,347        71,517        1,465,140   

Other commercial construction

    3,484,932        17,678                      17,181        25,699        3,545,490   

Residential

    7,640,368        226,932        216,489        35,726        18,223        180,275        8,318,013   

Residential-limited documentation

    249,810        11,774                             77,704        339,288   

Consumer:

             

Home equity lines and loans

    5,859,378        42,945               27,896        2,374        89,291        6,021,884   

Automobile

    1,931,138        30,500               133               17,578        1,979,349   

Other

    2,909,791        33,295        4,064        16,369               18,042        2,981,561   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 64,785,780      $ 530,901      $ 245,020      $ 110,367      $ 197,737      $ 799,151      $ 66,668,956   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

(a) Excludes loans acquired at a discount.

 

(b) Loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

 

(c) Accruing loans that were impaired at acquisition date and were recorded at fair value.

If nonaccrual and renegotiated loans had been accruing interest at their originally contracted terms, interest income on such loans would have amounted to $56,784,000 in 2015, $58,314,000 in 2014 and $62,010,000 in 2013. The actual amounts included in interest income during 2015, 2014 and 2013 on such loans were $30,735,000, $28,492,000 and $31,987,000, respectively.

During the normal course of business, the Company modifies loans to maximize recovery efforts. If the borrower is experiencing financial difficulty and a concession is granted, the Company considers such modifications as troubled debt restructurings and classifies those loans as either nonaccrual loans or renegotiated loans. The types of concessions that the Company grants typically include principal deferrals and interest rate concessions, but may also include other types of concessions.

The table below summarizes the Company’s loan modification activities that were considered troubled debt restructurings for the year ended December 31, 2015:

 

            Recorded Investment      Financial Effects of
Modification
 
     Number      Pre-
modifica-
tion
     Post-
modifica-
tion
     Recorded
Investment
(a)
     Interest
(b)
 
     (Dollars in thousands)  

Commercial, financial, leasing, etc.

              

Principal deferral

     114       $ 55,621       $ 50,807       $ (4,814    $   

Interest rate reduction

     1         99         99                 (19

Other

     3         12,965         12,827         (138        

Combination of concession types

     9         32,444         31,439         (1,005      (245

Real estate:

              

Commercial

              

Principal deferral

     49         49,486         48,388         (1,098        

Other

     3         4,169         4,087         (82        

Combination of concession types

     6         3,238         3,242         4         (159

Residential builder and developer

              

Principal deferral

     2         10,650         10,598         (52        

Other commercial construction

              

Principal deferral

     4         368         460         92           

Combination of concession types

     2         10,375         10,375                 (49

Residential

              

Principal deferral

     58         6,194         6,528         334           

Other

     1         267         267                   

Combination of concession types

     26         4,024         4,277         253         (483

Residential-limited documentation

              

Principal deferral

     2         426         437         11           

Combination of concession types

     9         1,536         1,635         99         (121

Consumer:

              

Home equity lines and loans

              

Principal deferral

     8         2,175         2,175                   

Combination of concession types

     63         5,203         5,204         1         (677

Automobile

              

Principal deferral

     192         1,818         1,818                   

Interest rate reduction

     7         137         137                 (10

Other

     46         150         150                   

Combination of concession types

     57         948         948                 (43

Other

              

Principal deferral

     102         1,995         1,995                   

Other

     13         116         116                   

Combination of concession types

     40         396         396                 (45
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     817       $ 204,800       $ 198,405       $ (6,395    $ (1,851
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

(a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages.

 

(b) Represents the present value of interest rate concessions discounted at the effective rate of the original loan.

The table below summarizes the Company’s loan modification activities that were considered troubled debt restructurings for the year ended December 31, 2014:

 

            Recorded Investment      Financial Effects of
Modification
 
     Number      Pre-
modifica-
tion
     Post-
modifica-
tion
     Recorded
Investment
(a)
     Interest
(b)
 
     (Dollars in thousands)  

Commercial, financial, leasing, etc.

              

Principal deferral

     95       $ 29,035       $ 23,628       $ (5,407    $   

Other

     3         29,912         31,604         1,692           

Combination of concession types

     7         19,167         19,030         (137      (20

Real estate:

              

Commercial

              

Principal deferral

     39         19,077         18,997         (80        

Interest rate reduction

     1         255         252         (3      (48

Other

     1         650                 (650        

Combination of concession types

     7         1,152         1,198         46         (264

Residential builder and developer

              

Principal deferral

     2         1,639         1,639                   

Other commercial construction

              

Principal deferral

     4         6,703         6,611         (92        

Residential

              

Principal deferral

     28         2,710         2,905         195           

Interest rate reduction

     11         1,146         1,222         76         (152

Other

     1         188         188                   

Combination of concession types

     30         4,211         4,287         76         (483

Residential-limited documentation

              

Principal deferral

     6         880         963         83           

Combination of concession types

     21         3,806         3,846         40         (386

Consumer:

              

Home equity lines and loans

              

Principal deferral

     3         280         280                   

Interest rate reduction

     6         535         535                 (120

Combination of concession types

     47         5,031         5,031                 (560

Automobile

              

Principal deferral

     208         3,293         3,293                   

Interest rate reduction

     9         152         152                 (12

Other

     42         255         255                   

Combination of concession types

     81         1,189         1,189                 (100

Other

              

Principal deferral

     33         245         245                   

Interest rate reduction

     4         293         293                 (63

Other

     1         45         45                   

Combination of concession types

     70         2,502         2,502                 (761
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     760       $ 134,351       $ 130,190       $ (4,161    $ (2,969
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

(a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages.

 

(b) Represents the present value of interest rate concessions discounted at the effective rate of the original loan.

The table below summarizes the Company’s loan modification activities that were considered troubled debt restructurings for the year ended December 31, 2013:

 

            Recorded Investment      Financial Effects of
Modification
 
     Number      Pre-
modifica-
tion
     Post-
modifica-
tion
     Recorded
Investment
(a)
     Interest
(b)
 
     (Dollars in thousands)  

Commercial, financial, leasing, etc.

              

Principal deferral

     79       $ 16,389       $ 16,002       $ (387    $   

Interest rate reduction

     1         104         335         231         (54

Other

     4         50,433         50,924         491           

Combination of concession types

     11         6,229         5,578         (651      (458

Real estate:

              

Commercial

              

Principal deferral

     27         40,639         40,464         (175        

Other

     2         449         475         26           

Combination of concession types

     9         2,649         3,040         391         (250

Residential builder and developer

              

Principal deferral

     18         21,423         20,577         (846        

Other

     1         4,039         3,888         (151        

Combination of concession types

     3         15,580         15,514         (66      (535

Other commercial construction

              

Principal deferral

     3         590         521         (69        

Residential

              

Principal deferral

     32         3,556         3,821         265           

Other

     1         195         195                   

Combination of concession types

     61         73,940         70,854         (3,086      (924

Residential-limited documentation

              

Principal deferral

     10         1,900         1,880         (20        

Combination of concession types

     19         2,826         3,148         322         (790

Consumer:

              

Home equity lines and loans

              

Principal deferral

     10         859         861         2           

Interest rate reduction

     1         99         99                 (8

Other

     1         106         106                   

Combination of concession types

     28         2,190         2,190                 (270

Automobile

              

Principal deferral

     460         6,148         6,148                   

Interest rate reduction

     15         235         235                 (22

Other

     78         339         339                   

Combination of concession types

     225         2,552         2,552                 (191

Other

              

Principal deferral

     36         332         332                   

Interest rate reduction

     1         12         12                 (2

Other

     2         14         14                   

Combination of concession types

     120         4,248         4,248                 (1,187
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     1,258       $ 258,075       $ 254,352       $ (3,723    $ (4,691
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

(a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages.

 

(b) Represents the present value of interest rate concessions discounted at the effective rate of the original loan.

Troubled debt restructurings are considered to be impaired loans and for purposes of establishing the allowance for credit losses are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows. Impairment of troubled debt restructurings that have subsequently defaulted may also be measured based on the loan’s observable market price or the fair value of collateral if the loan is collateral-dependent. Charge-offs may also be recognized on troubled debt restructurings that have subsequently defaulted. Loans that were modified as troubled debt restructurings during the twelve months ended December 31, 2015, 2014 and 2013 and for which there was a subsequent payment default during the respective period were not material.

Borrowings by directors and certain officers of M&T and its banking subsidiaries, and by associates of such persons, exclusive of loans aggregating less than $120,000, amounted to $52,152,000 and $49,799,000 at December 31, 2015 and 2014, respectively. During 2015, new borrowings by such persons amounted to $4,425,000 (including any borrowings of new directors or officers that were outstanding at the time of their election) and repayments and other reductions (including reductions resulting from retirements) were $2,072,000.

At December 31, 2015, approximately $11.1 billion of commercial loans and leases, $10.4 billion of commercial real estate loans, $20.9 billion of one-to-four family residential real estate loans, $3.9 billion of home equity loans and lines of credit and $3.6 billion of other consumer loans were pledged to secure outstanding borrowings from the FHLB of New York and available lines of credit as described in note 9.

The Company’s loan and lease portfolio includes commercial lease financing receivables consisting of direct financing and leveraged leases for machinery and equipment, railroad equipment, commercial trucks and trailers, and aircraft. A summary of lease financing receivables follows:

 

     December 31  
     2015      2014  
     (In thousands)  

Commercial leases:

     

Direct financings:

     

Lease payments receivable

   $ 1,058,605       $ 1,022,133   

Estimated residual value of leased assets

     81,269         79,525   

Unearned income

     (102,723      (103,777
  

 

 

    

 

 

 

Investment in direct financings

     1,037,151         997,881   

Leveraged leases:

     

Lease payments receivable

     95,316         102,457   

Estimated residual value of leased assets

     118,128         133,089   

Unearned income

     (41,556      (44,288
  

 

 

    

 

 

 

Investment in leveraged leases

     171,888         191,258   
  

 

 

    

 

 

 

Total investment in leases.

   $ 1,209,039       $ 1,189,139   
  

 

 

    

 

 

 

Deferred taxes payable arising from leveraged leases

   $ 160,603       $ 169,101   

Included within the estimated residual value of leased assets at December 31, 2015 and 2014 were $50 million and $48 million, respectively, in residual value associated with direct financing leases that are guaranteed by the lessees or others.

At December 31, 2015, the minimum future lease payments to be received from lease financings were as follows:

 

     (In thousands)  

Year ending December 31:

  

2016

   $ 277,993   

2017

     245,892   

2018

     193,580   

2019

     143,406   

2020

     95,217   

Later years

     197,833   
  

 

 

 
   $ 1,153,921   
  

 

 

 

The amount of foreclosed residential real estate property held by the Company was $172 million and $44 million at December 31, 2015 and 2014, respectively. At December 31, 2015, there were $315 million in loans secured by residential real estate that were in the process of foreclosure.