M&t Bank Corporation · NYSE:MTB
M&t Bank — Q2 2023 Earnings Presentation
29 slides from M&t Bank's earnings presentation, Jul 19, 2023
Slide 1: Earnings Results 2nd Quarter 2023
Earnings Results 2nd Quarter 2023 JULY 19, 2023
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements regarding M&T Bank Corporation (“M&T”) within the meaning of the In addition, future factors related to the acquisition of People's United include, among others: the possibility that the anticipated Private Securities Litigation Ref
Slide 3: Purpose, Mission and Operating Principles
Purpose Mission Operating Principles Operating & Credit Local Scale Capital Discipline Efficiency 3
Slide 4: Driven by our talent
Driven by our talent Delivering for our customers Seasoned, Increasingl New Skilled y Diverse Capabilitie & Stable s • • • • • • • • 4
Slide 5: Delivering impact to our communities and customers
Delivering impact to our communities and customers When our customers and communities succeed, we all succeed Customer Focused Community Engagement • • • • • • Business Support Top Rankings • • • • • • • Note: All data points and SBA rankings are for 2022. 5
Slide 6: Our ESG commitment
Our ESG commitment ESG accomplishments and highlights ENVIRONMENT SOCIAL GOVERNANCE • • • • • • • • • • • • • Note: Data are as of December 31, 2022. (1)Numbers above reflect legacy M&T and do not include People’s United Bank (PUB). 6
Slide 7: Financial Results
M&& Bank Corporation | 7
Slide 8: Earnings Highlights
Earnings Highlights GAAP GAAP - Adjusted (Non-GAAP)(1) ($ in millions, except per share) 2Q23 2Q22 1Q23 ($ in millions, except per share) 2Q23 2Q22 1Q23 Revenues $2,602 $1,983 $2,405 Revenues $2,378 $1,983 $2,405 Noninterest Expense $1,293 $1,403 $1,359 Noninterest Expense $1,293 $1,180 $1,359 Provi
Slide 9: Earnings Highlights
Earnings Highlights Net Operating Results (Non-GAAP)(1) ($ in millions, except per share) 2Q23 2Q22 1Q23 Net Operating Income $879 $578 $715 Diluted Net Operating EPS $5.12 $3.10 $4.09 (2) Efficiency Ratio 48.9% 58.3% 55.5% Net Operating ROTA 1.80% 1.16% 1.49% Net Operating ROTCE 22.73% 14.41% 19.00
Slide 10: Income Statement – Overview
Income Statement – Overview Change 2Q23 vs $ in Millions, except per share 2Q23 2Q22 1Q23 2Q22 1Q23 Revenue $2,602 $1,983 $2,405 31% 8% Noninterest Expense $1,293 $1,403 $1,359 (8%) (5%) PPNR(1) $1,084 $803 $1,047 35% 4% Provision for Credit Losses $150 $302 $120 (50%) 25% Income Tax $293 $60 $225 3
Slide 11: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin QoQ Drivers $1,841 $1,832 $1,813 • Taxable-equivalent net interest income decreased $1,691 -$19 million QoQ – Driven by higher volumes of non-core funding and an $1,422 unfavorable mix change, caused by disintermediation – These negative variances were parti
Slide 12: Balance Sheet – Overview
Balance Sheet – Overview Change 2Q23 vs Average Balances, $ in Billions, except per share 2Q23 2Q22 1Q23 2Q22 1Q23 Interest-bearing Deposits at Banks $23.6 $39.4 $24.3 (40%) (3%) Investment Securities $28.6 $22.4 $27.6 28% 4% C&I $44.5 $37.8 $42.4 18% 5% CRE $44.9 $47.2 $45.3 (5%) (1%) Residential M
Slide 13: Balance Sheet – Average Loans
Balance Sheet – Average Loans $133.5 $127.6 $127.5 $129.4 $132.0 QoQ Drivers $20.5 $20.3 $19.8 $20.0 $20.4 Average loans +$1.5 billion or +1% QoQ: $22.8 $23.3 $23.8 $23.8 • C&I loans increased +5% (+$2.1 billion) QoQ, $22.9 driven by growth in our dealer and specialty businesses IN BILLIONS $47.2 $4
Slide 14: Balance Sheet – Securities and Cash
Balance Sheet – Securities and Cash Average Investment Securities and Yield Securities and Cash – at 6/30/23 Other Securities 2% $28.6 $27.6 Interest- $25.3 bearing $55.7B HTM $56.9B Securities $23.9 deposits at $22.4 $ IN BILLIONS banks 28% TOTAL TOTAL 48% Cash AFS 3% Securities 19% 3.00% 3.09% 2.5
Slide 15: Balance Sheet – Average Deposits
Balance Sheet – Average Deposits QoQ Drivers $174.7 $5.5 $167.3 $163.5 $161.5 End of period deposits grew $3.0 billion or 2% $5.0 $159.4 $6.2 $11.6 QoQ $16.0 Average deposits declined -1% QoQ: $95.1 $89.4 • Deposit mix is shifting to higher cost deposits as $87.1 IN BILLIONS $88.1 competition for de
Slide 16: Income Statement – Noninterest Income
Income Statement – Noninterest Income Change 2Q23 vs Gain on Gain on CIT Sale(2) $ in Millions 2Q23 2Q22 1Q23 2Q22 1Q23 $803 MTIA Sale(1) Mortgage Banking $107 $83 $85 29% 26% $682 $225 Service Charges $119 $124 $113 (4%) 5% $571 $563 $587 $136 Trust Income $172 $190 $194 (9%) (11%) $587 IN MILLIONS
Slide 17: Income Statement – Noninterest Expenses
Income Statement – Noninterest Expenses Charitable Contribution(1) Change 2Q23 vs $1,403 $1,408 $ in Millions 2Q23 2Q22 1Q23 2Q22 1Q23 $1,359 $1,279 $63 $1,293 Salaries & Benefits (4) $738 $691 $808 7% (9%) $241 $71 $1,346 $1,342 Equip & Occupancy $129 $124 $127 4% 1% $1,278 $1,208 $1,162 Outside Da
Slide 18: Credit
Credit Net charge-off ratio YTD of 0.30% vs. long-term average of 0.33% Net Charge-offs Provision for Credit Losses $302 Merger Non-PCD $127 Provision(1) $ IN MILLIONS $ IN MILLIONS $242 $150 $115 $120 $70 0.38% $90 $63 $50 0.20% $40 0.22% 0.16% 0.12% $60 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23
Slide 19: Capital
Capital CET1 TBVPS(2) 10.94% 10.75% $91.58 (1) 10.58% 10.44% $88.81 $86.59 10.16% $85.78 $84.28 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 QoQ Drivers • CET1 capital ratio increased +42 bps to 10.58%(1) at 2Q23 • Accumulated other comprehensive income ($5.21) per share and would have impacted
Slide 20: Balance Sheet Trends and 2023 Outlook
Balance Sheet Trends and 2023 Outlook 2023 Outlook Comments Net Interest Income $7.0 Billion to • NII trending toward low end of the range Taxable-equivalent $7.2 Billion • Cumulative interest-bearing deposit betas in the mid 40% range Income Statement • Reflects reduction in trust revenue from the
Slide 21: Why invest in M&T?
Why invest in M&T? Purpose-Driven Successful and Sustainable Business Model that Produces Strong Shareholder Returns Purpose Driven Successful and Strong Organization Sustainable Shareholder Business Model Returns • Long term focused with deeply • Experienced and seasoned • 15-20% ROATCE embedded cu
Slide 22: Appendix
Appendix M&P Bank Corporation | 22
Slide 23: Appendix 1: GAAP to GAAP – Adjusted Reconciliation
Appendix 1 GAAP to GAAP – Adjusted (Non-GAAP) Reconciliation In thousands, except per share 2Q22 3Q22 4Q22 1Q23 2Q23 Revenues Net interest income - GAAP $1,411,717 $1,678,691 $1,827,374 $1,818,264 $1,799,129 Total other income - GAAP 571,100 563,079 681,537 587,133 803,171 Subtotal 1,982,817 2,241,7
Slide 24: Appendix 1: GAAP to GAAP – Adjusted Reconciliation
Appendix 1 GAAP to GAAP – Adjusted (Non-GAAP) Reconciliation In thousands, except per share 2Q22 3Q22 4Q22 1Q23 2Q23 Net income Net income - GAAP $217,522 $646,596 $765,371 $701,624 $867,034 Gain on CIT(1) - - - - (157,264) Gain on MTIA(1) - - (97,533) - - Charitable contribution(1) - - 100,035 - -
Slide 25: Appendix 2: GAAP to Net Operating Reconciliation
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation In thousands, except per share 2Q22 3Q22 4Q22 1Q23 2Q23 Net income Net income $217,522 $646,596 $765,371 $701,624 $867,034 Amortization of core deposit and other intangible assets(1) 14,138 14,141 13,559 13,311 11,627 Merger-related expenses
Slide 26: Appendix 2: GAAP to Net Operating Reconciliation
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation In thousands 2Q22 3Q22 4Q22 1Q23 2Q23 Other expense Other expense $1,403,154 $1,279,253 $1,408,288 $1,359,230 $1,292,559 Amortization of core deposit and other intangible assets (18,384) (18,384) (17,600) (17,208) (14,945) Merger-related exp
Slide 27: Appendix 2: GAAP to Net Operating Reconciliation
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation In thousands 2Q22 3Q22 4Q22 1Q23 2Q23 Efficiency ratio Noninterest operating expense (numerator) $1,161,961 $1,207,842 $1,345,575 $1,342,022 $1,277,614 Taxable-equivalent net interest income 1,422,443 1,690,518 1,840,759 1,831,726 1,813,015
Slide 28: Appendix 2: GAAP to Tangible Reconciliation
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation In millions 2Q22 3Q22 4Q22 1Q23 2Q23 Average assets Average assets $208,865 $201,131 $198,592 $202,599 $204,376 Goodwill (8,501) (8,501) (8,494) (8,490) (8,473) Core deposit and other intangible assets (254) (236) (218) (201) (185) Deferred taxes
Slide 29: Appendix 2: GAAP to Tangible Reconciliation
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation In millions 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 Total assets Total assets $204,033 $197,955 $200,730 $202,956 $207,672 Goodwill (8,501) (8,501) (8,490) (8,490) (8,465) Core deposit and other intangible assets (245) (227) (209) (192