M&t Bank Corporation · NYSE:MTB
M&t Bank — Q4 2020 Earnings Presentation
34 slides from M&t Bank's earnings presentation, Jan 21, 2021
Slide 1: Investor Update Fourth Quarter 2020
Investor Update Fourth Quarter 2020
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements regarding M&T Bank business initiatives; increasing price and product/service competition by Corporation (“M&T”) within the meaning of the Private Securities Litigation competitors, including new entrants, and other competitive pres
Slide 3: A Leading Community Bank and Bank for Communities: Our Performance Principles
A Leading Community Bank and Bank for Communities: Our Performance Principles • Top 20 U.S.-based, commercial bank holding company • Proven track record of results through multiple economic cycles • Consistent above average returns relative to peers over decades • Local scale leading to superior cre
Slide 4: Practicing Stakeholder Capitalism for Decades
Practicing Stakeholder Capitalism for Decades Our purpose (why we do what we do) To make a difference in people’s lives Our mission (what we do) We are a bank for communities ─committed to improving the lives of our customers and all the communities we touch. 4
Slide 5: The M&T Story: A Community Bank Model and a Bank for Communities
The M&T Story: A Community Bank Model and a Bank for Communities Local Scale Credit Discipline Operating & Capital Efficiency • Long-term and deep customer • Long-term credit costs well below • Prudent expense management relationships industry averages • Lower PPNR and credit volatility • Stable low
Slide 6: Delivering Growth Over Decades
Delivering Growth Over Decades Loan and Deposit Growth per Share (1999-2Q20, CAGR) Loans: MTB Peer Median Quartile Commercial Real Estate 7% > 4% Top Commercial & Industrial 7% > 6% Top Residential Real Estate 5% > 3% Top Consumer 6% > 2% 2nd Total Loans 6% > 4% 2nd Deposits: Noninterest-Bearing 13%
Slide 7: Strong Financial Results Over the Long Term
Strong Financial Results Over the Long Term ROTCE (average) GAAP EPS Growth – 20 Years (CAGR) 20.7% 7.7% 16.4% 15.3% 6.6% 14.4% 13.1% 5.2% 11.3% 4.0% 3.9% 3.3% 3.1% MTB Peer MTB Peer MTB Peer -0.5% Median Median Median -1.2% -1.3% -2.0% MTB Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer 20 Years
Slide 8: Delivering Growth in Recent Years
Delivering Growth in Recent Years M&T took consumer and small business deposit share in 13 out of 18 regions in 2020 Consumer Bank Business Bank 1.3% Increase in primary checking customers 1 3.7% Increase in customers 2.9 Products per customer (flat Y.O.Y.) 4.5 Products per customer (up 0.3 products
Slide 9: Strong Financial Results in Recent Years
Strong Financial Results in Recent Years 2018 2019 3Q20 YTD Peer 9 24.0% MTB 19.1% Peer 3 15.8% Peer 1 20.3% Peer 3 18.7% Peer 1 12.4% Peer 3 20.2% Peer 1 18.5% MTB 11.2% MTB 19.1% Peer 6 18.4% Peer 9 9.9% Peer 8 18.1% Peer 10 17.9% Peer 11 7.6% ROTCE Peer 7 18.0% Peer 8 17.0% Peer 8 7.4% Peer 6 17.
Slide 10: Local Scale Leads to Deposit Advantage
Local Scale Leads to Deposit Advantage #1 or #2 Market Total Cost of Deposits Share in 7 of 10 l argest markets 5.0% 2000-2020YTD Average #1 #1 #1 M&T 1.03 4.5% Peer Median 1.19 Difference -0.16 4.0% 3.5% 3.0% 2.5% #2 2.0% #1 1.5% #1 1.0% Peer #2 Range 0.5% Peer Median 0.0% M&T 2000 2002 2007 2009 2
Slide 11: Superior Credit Results Through Multiple Economic Cycles
Superior Credit Results Through Multiple Economic Cycles M&T Credit Philosophy • Consistent credit standards through economic cycles • Emphasis on secured lending: cash flow + collateral + guarantors • Customer selection, supported by local market knowledge • Working with customers to achieve best l
Slide 12: Best-In-Class Credit Results Across All Portfolios
Best-In-Class Credit Results Across All Portfolios C&I Construction Avg Max Range Avg Max Range MTB 0.4% 1.3% 1.1% MTB 0.5% 2.5% 2.7% Peer Median 0.5% 1.8% 1.6% Peer Median 1.3% 7.1% 7.3% Peer Range Peer Median MTB Other CRE Residential Real Estate Avg Max Range Avg Max Range MTB 0.1% 0.2% 0.3% MTB
Slide 13: Superior Credit Performance Relative to Peers and Industry
Superior Credit Performance Relative to Peers and Industry Top 4 Banks Peer Group JPM BAC C WFC USB TFC PNC FITB CFG KEY RF MTB HBAN CMA ZION FHN Current Assets ($B) $3,213 $2,742 $2,233 $1,969 $547 $504 $459 $203 $180 $172 $144 $140 $118 $85 $76 $49 1991 230% 159% na 60% 74% 40% 95% 60% 85% 57% 22%
Slide 14: Higher Returns Relative to Risk
Higher Returns Relative to Risk Risk Adjusted Net Interest Margin (NII less NCO % of AEA) Q3 2020 YTD 4.0% 0.0% 1.0% 2.0% 3.0% 4.0% 3.5% MTB 3.0% MTB Peer 4 Peer Range Peer 3 2.5% Median Peer 7 2.0% Peer 9 1.5% Peer 8 Peer 6 1.0% Peer 5 0.5% Peer 11 0.0% Peer 2 Peer 1 -0.5% 2008 2009 2010 2011 2012
Slide 15: Superior Growth and Pricing
Superior Growth and Pricing Commercial & Consumer Loan Growth – 3Q20 YoY Deposit Growth – 3Q20 YoY Total Deposits Non-interest Bearing Deposits 11% 24% 47% 7% 20% 41% 2% 0% MTB Peer Median MTB Peer Median MTB Peer Median MTB Peer Median Excluding PPP Loan Yield – 3Q20 Cost of Funding Earning Assets
Slide 16: Efficient Operator Through the Cycles
Efficient Operator Through the Cycles Operating Efficiency Ratio 100% Q3 2020 LTM 52% 54% 56% 58% 60% 62% 64% 90% MTB Peer 8 80% Peer 1 70% Peer 7 Peer Peer 3 60% Range Median Peer 5 MTB Peer 6 50% Peer 10 Peer 9 40% Peer 2 30% Peer 11 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 3Q20
Slide 17: Prudent Stewards of Shareholders' Capital
Prudent Stewards of Shareholders’ Capital How we think about capital allocation Results Disciplined return criteria – lending Higher return earning asset mix and investments One of two S&P banks to maintain dividend Moderate dividend payout through the Great Financial Crisis Acquisitions that clearl
Slide 18: Meeting Evolving Needs: Talent Is the Greatest Differentiator
Meeting Evolving Needs: Talent Is the Greatest Differentiator Seasoned, Skilled, and Stable Increasingly Diverse New Capabilities • 22-year average tenure for executive • More than 41% of our senior • Digitally forward, locally focused management management team is diverse • Enhanced team with new s
Slide 19: Continuous Focus on Customers & Communities Through the Decades
Continuous Focus on Customers & Communities Through the Decades When our customers and communities succeed, we all succeed Customer Focused Community Investment • Long lasting relationships • $1.7 billion in community development • Offered mortgage loan relief to >107,000 loans & investments custome
Slide 20: Powering Community Banking with Digital Capabilities
Powering Community Banking with Digital Capabilities Consideration Onboarding Servicing Growth How Custom ers How Custom ers How Custom ers How Custom ers HUMAN Shop Join Bank Strive Virtual Communication Tools: Digital Appointment Setting, Virtual Conferencing, Live Chat New Wealth Dash Client/Advi
Slide 21: Our Community Focus Results in Increased Market Share: Mission Maryland
Our Community Focus Results in Increased Market Share: Mission Maryland Mission Maryland unleashes the power of the entire bank, using a test and learn approach to apply a modern toolkit and deliver our community-focused solutions for customers and the community • Scalable approach to large or small
Slide 22: Unwavering Focus on Performance Principles
Unwavering Focus on Performance Principles • Top 20 U.S.-based, commercial bank holding company • Proven track record of results through multiple economic cycles • Consistent above average returns relative to peers over decades • Local scale leading to superior credit performance and top deposit sha
Slide 23: Delivering Superior Financial Results Over Decades
Delivering Superior Financial Results Over Decades Earnings & Dividend Growth: 1999 – 2020 YTD 23
Slide 24: Appendix
Q4 2020 Appendix
Slide 25: Loan Portfolio Composition
Loan Portfolio Composition M&T’s loan portfolio is broadly diversified by asset class and geography; hotel and retail CRE ~9% of total loans Loan Composition – 9/30/2020 Investor-Owned CRE Detail Owner Occupied NYC CRE, $7.1B $6.2B 7% Other, $1.2B C&I, $27.9B Other IRE, $8.7B Office, $1.3B 9% Multif
Slide 26: Commercial Real Estate – Hotel and Retail
Commercial Real Estate – Hotel and Retail Portfolios are geographically diversified; New York City exposures have lower loan-to-value ratios than rest of portfolio Hotel Retail NYC $0.6B NYC $1.3B Geographic Concentration (Permanent and Construction) Non NYC Non NYC $3.9B $3.0B Total NYC Total NYC P
Slide 27: Commercial Loan Modifications Update
Commercial Loan Modifications Update Remaining commercial loan modifications concentrated in Hotel and Retail CRE, with significant declines in modifications for all other portfolios Commercial Loan Modifications ($, B) $14.0B • >97% of dealer-related modifications expired as sales activity resumed
Slide 28: CRE Hotel Detail
CRE Hotel Detail Substantial equity and guarantor relationships, with limited exposure to luxury(1) categories and non-affiliated properties; NYC metrics stronger than overall portfolio Hotel – Permanent Investor-Owned (9/30/2020) Balance by LTV ($, millions) # of Loans % Deferral % Criticized % Gua
Slide 29: CRE Retail Detail
CRE Retail Detail NYC metrics stronger than overall portfolio, supported by strong sponsorship and mixed-use properties with both retail and non-retail tenants Retail – Permanent Investor-Owned (9/30/2020) Balance by LTV ($, millions) # of Loans % Deferral % Criticized % Guaranteed Total NYC Total N
Slide 30: CRE Office Detail
CRE Office Detail Office – Permanent Investor-Owned (9/30/2020) Balance by LTV ($, millions) # of Loans % Deferral % Criticized % Guaranteed Total NYC Total NYC Total NYC Total NYC LTV NYC ≥70% - 154 0 8% NA 6% NA 56% NA 698 Total 121 204 8 8% NA 4% NA 48% 34% 60%-69% 1,247 475 180 23 1% 0% 3% 6% 57
Slide 31: CRE Multifamily Detail
CRE Multifamily Detail Multifamily – Permanent Investor-Owned (9/30/2020) Balance by LTV ($, millions) # of Loans % Deferral % Criticized % Guaranteed Total NYC Total NYC Total NYC Total NYC LTV NYC 91 Total ≥70% 212 11 3% 0% 1% 0% 74% 52% 1,130 550 188 34 5% 4% 6% 15% 66% 56% 60%-69% 1,421 397 123
Slide 32: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures 3Q19 3Q20 Net Income 2014 2015 2016 2017 2018 2019 YTD YTD $ in millions Net income $ 1,066.2 $ 1,079.7 $ 1,315.1 $ 1,408.3 $ 1,918.1 $ 1,929.1 $ 1,436.1 $ 882.0 Intangible amortization* 20.7 16.2 25.9 19.0 18.1 14.4 11.2 8.7 Merger-related items* - 60.8
Slide 33: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Average Assets 2014 2015 2016 2017 2018 2019 3Q19 YTD 3Q20 YTD $ in millions Average assets $ 92,143 $ 101,780 $ 124,340 $ 120,860 $ 116,959 $ 119,584 $ 118,584 $ 132,430 Goodwill (3,525) (3,694) (4,593) (4,593) (4,593) (4,593) (4,593) (4,593) Core deposi
Slide 34: M&T Peer Group
M&T Peer Group Citizens Financial Group, Inc. M&T Bank Corporation Comerica Incorporated PNC Financial Services Group, Inc. Fifth Third Bancorp Regions Financial Corporation First Horizon National Corporation Truist Financial Corporation Huntington Bancshares Incorporated U.S. Bancorp KeyCorp Zions