M&t Bank Corporation · NYSE:MTB
M&t Bank — Q1 2023 Earnings Presentation
26 slides from M&t Bank's earnings presentation, Apr 17, 2023
Slide 1: Investor Update | First Quarter 2023
Investor Update | First Quarter 2023
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements regarding M&T Bank times and on the terms required to support M&T and its subsidiaries' future businesses; Corporation (“M&T”) within the meaning of the Private Securities Litigation Reform Act of and material differences in the act
Slide 3: M&T – A High Performing Community-Focused Bank
M&T – A High Performing Community-Focused Bank • Top 15 U.S.-based, commercial bank holding company, with Financial Highlights 4Q22 national capabilities from our suite of specialty businesses and Symbol MTB Wilmington Trust Stock Price * $152.54 • Seasoned management team and deeply embedded cultur
Slide 4: The M&T Story: Our Operating Principles
The M&T Story: A High Performing Community-Focused Bank… ….Our Operating Principles Our purpose - To make a difference in people’s lives Our mission - We are a bank for communities ─ committed to improving the lives of our customers and all the communities we touch. Local Scale Credit Discipline Ope
Slide 5: Strong Financial Results Over the Long-Term
Strong Financial Results Over the Long-Term ROTCE (average) Operating EPS Growth (CAGR) 19.1% 16.9% 16.7% 14.8% 15.4% 14.4% 10.3% 8.4% 8.2% 5.3% 6.2% 2.3% MTB Peer MTB Peer MTB Peer MTB Peer MTB Peer MTB Peer Median Median Median Median Median Median 20 Years 10 Years 5 Years 20 Years 10 Years 5 Yea
Slide 6: M&T's Business Model – Focus on Four Key Performance Indicators
M&T’s Business Model – Focus on Four Key Performance Indicators Net Interest Margin Operating Efficiency Ratio 5.0% 90% 4Q 2022 4Q 2022 MTB 4.06% Peer Min 49.9% 4.5% Peer Max 3.99% 80% Peer Median 53.2% Peer Median 3.34% MTB 53.3% Peer Min 2.83% Peer Max 60.7% 4.0% 70% 3.5% 60% 3.0% 2.5% 50% 2.0% 40
Slide 7: Key Ratios
Key Ratios 2017 2018 2019 2020 2021 2022 4Q '21 3Q '22 4Q '22 Superior Pre-Credit Earnings Net Interest Margin 3.47% 3.83% 3.84% 3.16% 2.76% 3.39% 2.58% 3.68% 4.06% Efficiency Ratio – Operating (1) 55.07% 54.79% 55.66% 56.35% 59.02% 56.62% 59.71% 53.57% 53.27% (1) PPNR 2,492 2,640 2,723 2,570 2,380
Slide 8: 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 500 banks to maintain dividend Moderate dividend payout through the Great Financial Crisis Acquisitions that cl
Slide 9: Superior Credit Losses Through Multiple Economic Cycles
Superior Credit Losses Through Multiple Economic Cycles M&T Credit Philosophy • Consistent credit standards through economic cycles • Emphasis on secured lending: cash flow + collateral + guarantees • Customer selection, supported by local market knowledge • Working with customers to achieve best lo
Slide 10: Best-In-Class Credit NCO Ratios Across All Portfolios
Best-In-Class Credit NCO Ratios Across All Portfolios C&I Construction 6.0% Avg Max Range 12.0% Avg Max Range 5.0% MTB 0.38% 1.27% 1.09% 10.0% MTB 0.43% 2.47% 2.70% Peer Median 0.50% 1.79% 1.65% Peer Median 1.14% 7.11% 7.27% 4.0% 8.0% 3.0% Peer Range 6.0% 2.0% Peer Median 4.0% 1.0% M&T 2.0% 0.0% 0.0
Slide 11: Work Toward Building Optimal Balance Sheet Structure Continues
Work Toward Building Optimal Balance Sheet Structure Continues Optimizing Balance Sheet to Align with Operating Principles % of Interest Earning Assets Const. & (2%) 4% 6% Dev. Shifting Loan Mix CRE Permanent 13% 15% ▪ Reducing Capital Intensive CRE 5% ▪ Diversifying with increased Mix of C&I Owner-
Slide 12: Local Scale in Key Markets in M&T Footprint
Local Scale in Key Markets in M&T Footprint Contiguous Branch Footprint… …With Market Leading Franchises… Top 10 MSAs by Deposits Top Northeast Banks by Branches(1) Rank Branches Buffalo 1 1 Bank of America Corp. 1,091 Rochester 1 2 JPMorgan Chase & Co. 1,047 Rochester Bridgeport 2 3 M&T Bank Corp.
Slide 13: Delivering for our customers
Meeting Evolving Needs: Talent Is the Greatest Differentiator Seasoned, Skilled, and Stable Increasingly Diverse New Capabilities • 19-year average tenure for executive • More than 40% of our Board of • Digitally forward, locally focused management Directors team is diverse • Enhanced team with new
Slide 14: Delivering Innovative Capabilities as Technology Transformation Continues
Delivering Innovative Capabilities… …as Technology Transformation Continues Our Technology transformation is centered around Three Key Dimensions {Talent} •Pivoted to mostly insourced technologists •Increasing Technology Development Program (TDP) hires •Perpetually upskilling and reskilling our tech
Slide 15: Our Focus on Customers, Communities and Innovation Pays Dividends
Our Focus on Customers, Communities and Innovation Pays Dividends When our customers and communities succeed, we all succeed Customer Focused Community Engagement • Long lasting relationships • $1.5 billion in community development • Designated 118 multicultural banking loans, lines of credit, & inv
Slide 16: A Bank for Communities & Making a Difference – Our ESG Commitment
A Bank for Communities & Making a Difference – Our ESG Commitment ESG Accomplishments and Highlights since Last Year Established Renewable Energy and Defined Board and Management Carbon Reduction Targets ESG Governance 2021 ESG report included • Inaugural TCFD(1) disclosure • Second SASB(2) report J
Slide 17: M&T – A High Performing Community-Focused Bank
M&T – A High Performing Community-Focused Bank • Top 15 U.S.-based, commercial bank holding company, with national capabilities from our suite of specialty businesses and Wilmington Trust • Seasoned management team and deeply embedded culture • Superior profitability and earnings and dividend growth
Slide 18: Current Themes & Key Messages
Current Themes & Key Messages 18
Slide 19: Solid Performance in Key Metrics against Peers
Solid Performance in Key Metrics against Peers ROTCE % (ex-AOCI) Net Interest Margin Efficiency Ratio PPNR / RWA NCO / Loans 4Q22 4Q22 4Q22 4Q22 4Q22 Peer 1 MTB 4.1% Peer 1 Peer 1 Peer 6 MTB 20.1% Peer 1 Peer 5 MTB 3.0% Peer 7 Peer 2 Peer 6 Peer 4 Peer 4 MTB 0.12% Peer 3 Peer 5 Peer 6 Peer 2 Peer 11
Slide 20: 1Q 2023 Trends
1Q 2023 Trends Seasonal Customer Deposit Flows & Rate Sensitivity Acceleration Continues ▪ First quarter seasonal outflows from distributions to business owners for tax purposes ▪ Customer rate sensitivity behavior continues to rapidly react to higher rates, driving betas higher ▪ Commercial custome
Slide 21: Balance Sheet Trends and 2023 Outlook
Balance Sheet Trends and 2023 Outlook 2022 2023 Actual Outlook Comments - Two 25 bps rate increases in 1Q23 and one 25 bps cut in 4Q23 Net Interest Income $5,861 Million +23% to 26% Y/Y - Cumulative through the cycle Interest-Bearing deposit beta of high Taxable Equivalent 30% to low 40% Income Stat
Slide 22: Prudent Liquidity Management Protected Tangible Common Equity
Prudent Liquidity Management Protected Tangible Common Equity Lower AOCI Hit Drives Measured and Thoughtful Deployment of Excess Liquidity TBV Per Share Outperformance Securities and Short-Term Investments % of Earning Assets Decline in TBV Per Share since 2021 2Q 2020 4Q 2022 (10%) (30%) (50%) MTB
Slide 23: Q4 2022 Appendix
Q4 2022 Appendix M&i Bank Corporation
Slide 24: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Net Income 2017 2018 2019 2020 2021 2022 4Q21 3Q22 4Q22 $ in millions Net income $ 1,408.3 $ 1,918.1 $ 1,929.1 $ 1,353.2 $ 1,858.7 $ 1,991.7 $ 458.0 $ 646.6 $ 765.4 Intangible amortization* 19.0 18.1 14.4 11.0 7.5 42.8 1.4 14.1 13.6 Merger-related items*
Slide 25: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Average Assets 2017 2018 2019 2020 2021 2022 4Q21 3Q22 4Q22 $ in millions Average assets $ 120,860 $ 116,959 $ 119,584 $ 135,480 $ 152,669 $ 190,252 $ 157,722 $ 201,131 $ 198,592 Goodwill (4,593) (4,593) (4,593) (4,593) (4,593) (7,537) (4,593) (8,501) (8,
Slide 26: 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