M&t Bank Corporation · NYSE:MTB
M&t Bank — Citigroup Financial Services Conference 2008
40 slides from M&t Bank's conference presentation, Jan 30, 2008
Slide 1: Citigroup Financial Services Conference January 30, 2008
Citigroup Financial Services Conference January 30, 2008
Slide 2: Disclaimer
Disclaimer This presentation contains forward looking statements within the meaning of the Private Securities Litigation Reform Act giving the Company's expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words
Slide 3: M&T Bank Corporation - Overview
Top 20 US-based Bank Holding Company $9.3 billion market capitalization $65 billion total assets Over 700 branches in seven states / District of Columbia Over 1,600 ATMs across retail bank footprint Over 1.8 million retail customers Over 150,000 commercial customers M&T Bank Corporation - Overview
Slide 4: 2007 Results & Operating Philosophy; Investments/Initiatives; Shareholder Focus
M&T Bank Corporation 2007 Results & Operating Philosophy Investments/Initiatives Shareholder Focus = Long Term Performance
Slide 5: Earnings Per Share Summary
M&T Bank Corporation - Earnings Per Share Summary (1) Excludes merger-related costs and amortization expense associated with intangible assets. *Intangible Amortization net of tax: Dec. 2006 YTD =$38MM, Dec. 2007 YTD = $40MM Merger-related costs net of tax: Dec. 2006 YTD = $3MM, Dec. 2007 YTD = $9MM
Slide 6: Mortgage Market Turmoil
After-tax CDO "OTT" Impairment of $78 million (wrote off 96%) Retained $883 million of Alt-A loans in the first quarter of 2007 Change of accounting policy - more conservative approach to recognition of NPLs and NCOs on residential mortgages Loans move to non-performing at 90 days past due versus 18
Slide 7: 2007 Summary
Strong loan growth in second half Attractively Priced Acquisitions Partners Trust First Horizon Mid-Atlantic Franchise 17% dividend increase; 18% CAGR since 1983 Top tier efficiency ratio High regulatory capital generation rate Continued progress in Mid-Atlantic markets 2007 Summary
Slide 8: Operating Philosophy
Operating Philosophy Consistent and conservative philosophy Longstanding culture - developed through history of very high insider ownership Shareholder oriented decision making Diverse business mix and geography
Slide 9: M&T Bank Corporation - Key Ratios
M&T Bank Corporation - Key Ratios (1) Excludes amortization related to intangible assets and merger-related expenses. (2) Excludes gain/loss on sale of securities.
Slide 10: Net Interest Margin
Net Interest Margin Source: SNL Interactive. Note: Top 50 banks based on asset size as of September 30, 2007. * Top 50 median for those banks that have reported by Jan. 28, 2008. estimated*
Slide 11: Capital Generation
M&T Bank Corporation - Capital Generation Source: SNL Interactive
Slide 12: Consistent Credit Culture - What we do?
Consistent Credit Culture - What we do? Operate Community Banking business model Have the resources and product set of a super-regional 14-region banking footprint Regional presidents / credit officers
Slide 13: Consistent Credit Culture - How we do it?
Consistent Credit Culture - How we do it? Relationship lender, not a transaction lender "We make loans that we understand" Prudent underwriting standards Senior Loan Committee in Buffalo 6 regional Managers Loan Committees NYC CRE Mortgage Committee Underwrite our own consumer loans
Slide 14: Consistent Credit Culture - How we do it? - Cont.
Consistent Credit Culture - How we do it? - Cont. Little appetite for syndicated loans Small, niche-focused investment banking capability Don't tighten and loosen credit standards through cycles Disciplined pricing approach
Slide 15: Investment Securities - Portfolio Composition
Investment Securities - Portfolio Composition
Slide 16: Loans Portfolio by Category
% of FY 2007 Portfolio incl. acq. excl. acq. Commercial and Industrial 13.1 $ 27% 12% 10% Commercial Real Estate Owner Occupied CRE 5.0 10% Investor CRE 10.5 22% 13% 11% Res. Cons.& Development 1.9 4% Residential Real Estate 6.2 13% 4% 1% Consumer 11.3 24% 14% 7% Total Loans 48.0 $ 100% 12% 8% % Gro
Slide 17: Industry Focus Loan Portfolios
Industry Focus Loan Portfolios Auto Floor Plan $2.4 billion portfolio (5% of total loans) NPLs down $20 million linked quarter Residential builder / developer loans About $1.85 billion outstanding1 (3.9% of total loans) Completed focused reviews in May, and November 2007 Quarterly reviews going forw
Slide 18: Granularity of Non-Performing Loans
As of December 31, 2007 NPL Size # of Credits % $ Total % >$15.0 MM 2 0.0% $68,275 15.3% $5 to $15 MM 2 0.0% 14,675 3.3% $1 to $5 MM 26 0.2% 59,511 13.3% < $1 MM 13,626 99.8% 304,705 68.1% TOTAL 13,656 100% $ 100% Granularity of Non-Performing Loans 447,166
Slide 19: Consumer Credit
Consumer Credit Weighted Average Weighted Average FICO Score Loan to Value (LTV) HELOC 751 66% HELOANS 739 68% Indirect Auto 732 110% Non-Agency Mortgages In portfolio 703 74%
Slide 20: Consumer Loans - 30-89 day Delinquency Trend
Consumer Loans - 30-89 day Delinquency EOP Trend1 Note: Computed from loan and delinquency balances as reported in FRY9C
Slide 21: Consumer Loans - Net Charge Off Ratios
1-4 Family Second Lien 0.04% 0.90% 0.35% - - 10 20 30 40 50 2002 2003 2004 2005 2006 2007 NCO ($ millions) 0.00% 0.25% 0.50% 0.75% 1.00% NCO to Avg Loans % Net Charge-Offs excl. policy change As reported HELOCs 0.08% 0.11% 0.09% - - 10 20 30 40 50 2002 2003 2004 2005 2006 2007 NCO ($ millions) 0.00%
Slide 22: Most Recent HELOC FICO Rescore
Most Recent HELOC FICO Rescore M&T has no true wholesale home equity business Any loans referred through brokers are underwritten by M&T according to our established loan policies & product guidelines No correspondent home equity business
Slide 23: Historical Credit Cycle - Annual Trend, 1991-2007
Historical Credit Cycle - Annual Trend, 1991-2007 Source: SNL Financial Note: Top 50 banks based on asset size as of September 30, 2007. * Top 50 median for those banks that have reported by Jan. 28, 2008. Estimated* Estimated*
Slide 24: Reserve Levels
Reserve Levels Note: Top 50 banks based on asset size on September 30, 2007. * Top 50 median for those banks that have reported by Jan. 28, 2008. Source: SNL Interactive estimated*
Slide 25: Economically Diverse Footprint
Economically Diverse Footprint
Slide 26: 2007 Results & Operating Philosophy; Investments/Initiatives; Shareholder Focus
M&T Bank Corporation 2007 Results & Operating Philosophy Investments/Initiatives Shareholder Focus = Long Term Performance
Slide 27: Operating Efficiency Ratio
Operating Efficiency Ratio Note 1: Ratio excludes amortization expense associated with intangible assets, merger-related expenses, and G/L on investment securities. Note 2: Top 50 banks based on asset size as of September 30, 2007. * Top 50 median for those banks that have reported by Jan. 28, 2008.
Slide 28: 2008 Planned Growth in Operating Expenses
Initiatives Partners & First Horizon Core Franchise 2008 Planned Growth in Operating Expenses 29% of growth 33% of growth 38% of growth
Slide 29: Investments/Initiatives
Investments/Initiatives Segmented growth strategy Region's Growth Profile and M&T's Share Investments & Initiatives Vary by Market
Slide 30: Strengthens M&T's Market Position in Upstate NY
Strengthens M&T's Market Position in Upstate NY Partners Trust branches M&T Bank Corporation branches Syracuse Utica-Rome Binghamton
Slide 31: Distribution Network - Baltimore
Distribution Network - Baltimore Washington International Airport International Airport International Airport
Slide 32: Metro Markets
Metro Markets Focused on Commercial Business lines (Middle Market, Healthcare, Real Estate, Business Banking). Opened Saddle Brook office in Bergen County, NJ in December 2007. Continued investments in these markets.
Slide 33: 2007 Results & Operating Philosophy; Investments/Initiatives; Shareholder Focus
M&T Bank Corporation 2007 Results & Operating Philosophy Investments/Initiatives Shareholder Focus = Long Term Performance
Slide 34: M&T Bank Corporation - Consistent Performance
M&T Bank Corporation - Consistent Performance Consistent Growth in Net Operating Earnings 19% CAGR since 1983 9% CAGR over past 10 years Consistent Growth in Dividends 18% CAGR since 1983 Ranked in top 10 of Top 50 banks for 10 year stock price performance
Slide 35: Return of Capital to Shareholders
Return of Capital to Shareholders Cumulative Capital Retained, Dividends and Share Repurchases 1983 - 2007 $2.6 Billion $2.0 Billion $1.1 Billion Share Repurchases Dividends Capital Retained 3244.2 1505.9 2018.4 $3.2 Billion $2.0 Billion $1.5 Billion
Slide 36: What Makes M&T Unique?
What Makes M&T Unique?* Management's Interest aligned with Shareholders' Interests Over 50% Ownership between AIB, M&T Insiders and Warren Buffett AIB Berkshire Hathaway- Warren Buffett Other Shareholders M&T Management, Directors and Employees * As of 2/28/07. Includes options & deferred bonus shar
Slide 37: M&T Bank Corporation... a solid investment
21.8% Annual rate of return since 1980* 18th best return of the entire universe of over 800 U.S. based stocks that have traded publicly since 1980 $3,979 invested in M&T in 1980 would be worth $1 million today M&T Bank Corporation... a solid investment *CAGR calculated assuming reinvestment of divid
Slide 38: Appendix
Appendix FE\ MaT Bank Corporation **
Slide 39: Reconciliation of GAAP and Non-GAAP Results of Operation
Reconciliation of GAAP and Non-GAAP Results of Operation * Excludes gain/loss on sale of securities.
Slide 40: Reconciliation of GAAP and Non-GAAP Results of Operation
Reconciliation of GAAP and Non-GAAP Results of Operation
M&T Bank — Citigroup Financial Services Conference 2008 on 6ix