M&t Bank Corporation · NYSE:MTB
M&t Bank — Western New York Investor Conference 2007
39 slides from M&t Bank's conference presentation, Nov 7, 2007
Slide 1: Western New York Investor Conference November 7, 2007
Western New York Investor Conference November 7, 2007
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 agenda
M&T Bank Corporation Company Background & Recent Results Loan and Investment Portfolios / Credit Recent Events Shareholder Focus
Slide 4: M&T - A Name known in Buffalo since 1856
M&T - A Name known in Buffalo since 1856 One of the 20 Largest U.S. Banks $10.5 Billion Market Cap $60.0 Billion in assets +660 branches in 7 States and the District of Columbia Serving customers in 2 million households and +150,000 businesses +13,300 employees +1,500 ATM's
Slide 5: Earnings Summary
Earnings Summary (1) Excludes merger-related expenses and amortization expense associated with intangible assets. Intangible Amortization net of tax: 3Q2006 = $12.2MM, 2Q2007 = $10.0MM, 3Q2007 = $9.6MM. Merger-related expenses: 3Q2006 = $0.7MM. ($ in millions, except EPS)
Slide 6: Third Quarter 2007 highlights
Third Quarter 2007 highlights Linked quarter NIM decrease from 3.67% to 3.65% 2 bps drop due to 1 additional day in Q3 vs. Q2 Fee income decreased $30MM from the linked quarter Income from BLG fell $19MM due to timing of securitizations $1MM linked quarter decrease in operating expenses $76MM Linked
Slide 7: Impact from Bayview Lending Group
Impact from Bayview Lending Group Pro-rata equity income from Bayview Lending Group 3Q loss of $11 million vs. 2Q profit of $8 million Dilutive to EPS by 9 cents per share for 3Q and YTD 3Q results reflect run rate of origination franchise without any securitization revenue Executed two securitizati
Slide 8: Impact from Bayview Lending Group
Impact from Bayview Lending Group Won't forecast 4Q results beyond already completed securitizations Would expect a pool of loans large enough to securitize Expect results will fluctuate from quarter to quarter - depending on size and timing of securitizations
Slide 9: Quarterly Key Ratios
Quarterly Key Ratios (1) Excludes amortization related to intangible assets and merger-related expenses. Excludes Securities Gains/(Losses).
Slide 10: Net Interest Margin
Net Interest Margin Source: SNL Financial. Peer median is median of top 50 banks by asset size on September 30, 2007.
Slide 11: M&T Bank Corporation agenda
M&T Bank Corporation Company Background & Recent Results Loan and Investment Portfolios / Credit Recent Events Shareholder Focus
Slide 12: M&T Bank Corporation - Average Loans
M&T Bank Corporation - Average Loans ($ in billions) * annualized
Slide 13: Credit Quality
Credit Quality NPLs to Total Loans ratio of 83 bps at Sept. 30, 2007 43 bps at September 30, 2006 68 bps at June 30, 2007 Linked quarter increase in NPLs driven by: Residential development / construction ($42mm) Residential mortgages ($26mm) Net charge-off ratio 20 bps in 3Q07 unchanged from 2Q07 up
Slide 14: Historical Credit Cycle - Annual Trend, 1991-Q3 2007
Source: SNL Interactive Historical Credit Cycle - Annual Trend, 1991-Q3 2007
Slide 15: Residential builder / developer loans
Residential builder / developer loans About $1.8 billion outstanding1 Vast majority within banking footprint Completed reviews of in September 2006 and May 2007 Next review currently in process 1 Excludes approximately $400 million of construction loans to individuals
Slide 16: Consumer Loans - 30-89 day Delinquency Trend
Consumer Loans - 30-89 day Delinquency Trend1 2002Y 2003Y 2004Y 2005Y 2006Y Sep-06 Jun-07 Sep-07 1-4 Family Revolving LOC 0.35% 0.47% 0.30% 0.44% 0.53% 0.53% 0.50% 0.56% 1-4 Family - 1st lien 6.13% 5.50% 4.12% 3.08% 2.92% 2.91% 3.20% 3.49% 1-4 Family - junior lien 1.31% 1.90% 1.41% 2.67% 2.98% 2.58%
Slide 17: Consumer Credit - Underwriting data
Consumer Credit -Underwriting data Weighted Average Weighted Average FICO Score Loan to Value (LTV) HELOC 750 66% Second Mortgages 739 68% Indirect Auto 723 111% Alt-A Mortgages - In portfolio 705 74% Other HFI Mortgages 721 71%
Slide 18: Securities Portfolio as of September 30, 2007
Securities Portfolio as of September 30, 2007 Securities portfolio totaled $8 billion at September 30 Equals 13% of total assets vs top-50 bank median of 17% Effective duration just under 2.0 years Unrealized losses about $100 million - pretax Approximately 75% mortgage related securities Very high
Slide 19: Investment Securities - Credit Rating Distribution
Investment Securities - Credit Rating Distribution MBS/CMO Non-Agency 52.7%
Slide 20: M&T Bank Corporation agenda
M&T Bank Corporation Company Background & Recent Results Loan and Investment Portfolios / Credit Recent Events Shareholder Focus
Slide 21: Recent Events / Pending Acquisitions
Recent Events / Pending Acquisitions Partners Trust acquisition First Horizon Branch acquisition
Slide 22: Partners Trust Transaction Highlights
Transaction: Merger of Partners Trust into M&T Price: $12.50 per PRTR share Financing: 50% cash / 50% M&T stock Financial highlights: Accretive to 2008 Net Operating Earnings* Accretive to 2009 GAAP Earnings Partners Trust Transaction Highlights
Slide 23: Strengthens M&T's Market Position in Upstate NY
Strengthens M&T's Market Position in Upstate NY 155,000 households 15 branches in Utica-Rome MSA (proforma #1 position) 10 branches in Binghamton MSA (proforma #1 position) 8 branches in Syracuse MSA (proforma #1 position) 33 branches and 46 ATMs M&T has 48 branches in these markets with $2.4 billio
Slide 24: 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 25: First Horizon Branch Transaction Highlights
Transaction: Purchase of 13 FHN Mid-Atlantic branches Price: Not disclosed Financing: Earnings retention; no stock issued Financial impact: <1% impact to 2008 GAAP and Net Operating earnings First Horizon Branch Transaction Highlights
Slide 26: FHN branches in Mid-Atlantic
13 FHN branches in Mid-Atlantic 3 Baltimore metro area 10 Northern Virginia area $226 million total loans $85 million consumer, primarily home equity $141 million commercial $201 million deposits Accelerates M&T's Mid-Atlantic Expansion
Slide 27: Accelerates M&T's Mid-Atlantic Expansion
M&T Branches First Horizon Branches Accelerates M&T's Mid-Atlantic Expansion
Slide 28: Low risk transactions; achievable cost savings
Low risk transactions; achievable cost savings IRR for each comfortably exceeds acquisition hurdle rate PRTR branch/back office overlap offers significant consolidation opportunity FHN branches offer some consolidation opportunity Up to 5 branch combinations Accelerates planned expansion south and w
Slide 29: M&T Bank Corporation agenda
M&T Bank Corporation Company Background & Recent Results Loan and Investment Portfolios / Credit Recent Events Shareholder Focus
Slide 30: Consistent and Conservative Operating Philosophy
Consistent and Conservative Operating Philosophy Conservative credit culture Centralized underwriting Constant presence in markets Long history of returning excess capital to shareholders Owner-operators Focus on operating fundamentals Operating efficiency Cash return to shareholders Disciplined acq
Slide 31: Return of Capital to Shareholders
Return of Capital to Shareholders Cumulative Capital Retained, Dividends and Share Repurchases 1983 - Q3 2007 $2.6 Billion $2.0 Billion $1.1 Billion Share Repurchases Dividends Capital Retained 3231.8 1429 2023.9 =sum( $3.2 Billion $2.0 Billion $1.4 Billion Note: Percentages do not add to 100% due t
Slide 32: 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 33: M&T Diluted EPS 1996 - 2006, GAAP & Net Operating
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2.11 2.53 2.5 3.13 3.24 3.58 4.78 4.95 6 6.73 7.37 0.078 0.088 0.56 0.56 0.87 1.05 0.34 0.75 0.38 0.3 0.36 * Net operating EPS excludes amortization of intangible assets and merger-related costs. Note: GAAP and net operating EPS in 1998-2002 hav
Slide 34: M&T Per Share Data 1983-2006
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Diluted Net Operating Earnings 0.09 0.29 0.39 0.46 0.48 0.6 0.57 0.79 0.92 1.3 1.34 1.57 1.8 2.19 2.61 3.06 3.69 4.11 4.63 5.12 5.7 6.38 7.03 7.73 Dividends 0.05 0.053 0.063 0.07 0
Slide 35: M&T Bank Corporation... a solid investment
23.0% Annual rate of return since 1980 17th best return of the entire universe of over 800 U.S. based stocks that have traded publicly since 1980 M&T Bank Corporation... a solid investment *CAGR calculated assuming reinvestment of dividends through September 30, 2007. Source: IDC & Factset $3,165 in
Slide 36: Western New York Investor Conference November 7, 2007
Western New York Investor Conference November 7, 2007
Slide 37: Appendix
Appendix [EV Mei Bank Corporation :”
Slide 38: Reconciliation of GAAP and Non-GAAP Results of Operation
Reconciliation of GAAP and Non-GAAP Results of Operation
Slide 39: Reconciliation of GAAP and Non-GAAP Results of Operation
Reconciliation of GAAP and Non-GAAP Results of Operation Reconciliation of GAAP and Non-GAAP Results of Operation