M&t Bank Corporation · NYSE:MTB
M&t Bank — Merrill Lynch Financial Services Investor Conference 2007
37 slides from M&t Bank's conference presentation, Nov 15, 2007
Slide 1: Merrill Lynch Financial Services Investor Conference November 15, 2007
Merrill Lynch Financial Services Investor Conference November 15, 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: Company Background & Recent Results
M&T Bank Corporation Company Background & Recent Results Loan and Investment Portfolios / Credit Recent Events / Outlook Shareholder Focus
Slide 4: M&T Bank Corporation - Overview
Top 20 US-based Bank Holding Company $10.4 billion market capitalization $60 billion total assets Over 660 branches in seven states / District of Columbia Over 1,500 ATMs across retail bank footprint Over 1.5 million retail customers Over 130,000 commercial customers M&T Bank Corporation - Overview
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 $8 million Dilutive to EPS by 9 cents per share for 3Q and YTD 3Q results reflect run rate of origination franchise without any securitization revenue Executed two securitizati
Slide 8: Quarterly Key Ratios
Quarterly Key Ratios (1) Excludes amortization related to intangible assets and merger-related expenses. Excludes Securities Gains/(Losses).
Slide 9: Net Interest Margin
Net Interest Margin Source: SNL Financial. Peer median is median of top 50 banks by asset size on September 30, 2007.
Slide 10: Loan and Investment Portfolios / Credit
M&T Bank Corporation Company Background & Recent Results Loan and Investment Portfolios / Credit Recent Events / Outlook Shareholder Focus
Slide 11: M&T Bank Corporation - Average Loans
M&T Bank Corporation - Average Loans ($ in billions) * annualized
Slide 12: "Headline" Commercial Portfolios
"Headline" Commercial Portfolios Auto dealer floor plan loans NPLs $34 million at September 30, down from 3Q06 and 2Q07 Deterioration appears to have reached an inflection point Residential builder / developer loans About $1.8 billion outstanding1 Vast majority within banking footprint Completed foc
Slide 13: Consumer Credit - Underwriting data
Consumer Credit -Underwriting data Weighted Average Weighted Average FICO Score Loan to Value (LTV) HELOC 750 66% HELOANS 739 68% Indirect Auto 732 111% Non-Agency Mortgages In portfolio 707 74%
Slide 14: 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 HELOCs 0.35% 0.47% 0.30% 0.44% 0.53% 0.53% 0.50% 0.56% Resid. Mortgages - 1st lien 6.13% 5.50% 4.12% 3.08% 2.92% 2.91% 3.20% 3.49% Resid. Mortgages 2nd lien 1.31% 1.90% 1.41% 2.67% 2.98% 2.58% 2.41% 3.36
Slide 15: Historical Credit Cycle - Annual Trend, 1991-Q3 2007
Source: SNL Interactive Historical Credit Cycle - Annual Trend, 1991-Q3 2007
Slide 16: 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 Approximately 75% mortgage related securities Unrealized losses about $100 million - pretax
Slide 17: Investment Securities - Credit Rating Distribution
AAA Rated 48.9% Agency MBS/CMO 22.0% CDO* 0.8% < BBB 0.1% AA Rated 2.2% A to BBB 1.5% All Other 18.7% US Treasury & Agency Securities 4.4% Municipal Bonds 1.4% Investment Securities - Credit Rating Distribution MBS/CMO Non-Agency 52.7% * Moody's dropped rating from Aa2 to Baa3 on CDO rated AA by S&P
Slide 18: CDO Exposure as of September 30, 2007
CDO Exposure as of September 30, 2007 $132mm CDO exposure in 3 separate securities Two initially rated triple-A and one double-A Mixed R/E and non-R/E collateral Includes about 42% sub-prime ABS Carried as available-for-sale Marked to market through equity Market value of $66mm at September 30, 2007
Slide 19: CDO Exposure - recent developments
CDO Exposure - recent developments Current unrealized loss estimated at $100mm Fair value of $31mm Two securities recently downgraded by Moody's Aaa tranche to Baa1 Aa2 tranche to Baa3 S&P ratings unchanged at AAA and AA Third security remains AAA/Aaa All three securities current with principal and
Slide 20: Recent Events / Outlook
M&T Bank Corporation Company Background & Recent Results Loan and Investment Portfolios / Credit Recent Events / Outlook 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: Merger-related charges recognized in quarter which deal closes Accretive to 2008 Net Operating Earnings Accretive to 2009 GAAP Earnings Partners Trust Transaction Hig
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 (before divestitures) M&T has 48 branches in these ma
Slide 24: First Horizon Branch Transaction Highlights
Transaction: Purchase of 13 FHN Mid-Atlantic branches Price: Not disclosed Financing: Earnings retention; no stock issued Financial impact: Merger-related charges recognized in quarter which deal closes <1% impact to 2008 GAAP and net operating earnings First Horizon Branch Transaction Highlights
Slide 25: Accelerates M&T's Mid-Atlantic Expansion
13 FHN branches in Mid-Atlantic 3 Baltimore metro area 1 Bethesda, MD 9 Northern Virginia area $250 million total loans About 1/3 consumer, primarily home equity About 2/3 commercial $230 million deposits Accelerates M&T's Mid-Atlantic Expansion
Slide 26: 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 More importantly, accelerates planned expansion in the Mid-Atlantic "
Slide 27: M&T - Outlook
M&T - Outlook NIM pressure Credit costs Continued pressure from residential builder portfolio Rising losses on non-Agency mortgages NCO ratio rising to 30-35 basis points Two acquisitions likely to close in 4Q07 Merger charges incurred in quarter of closing Some possibility of additional charges in
Slide 28: Shareholder Focus
M&T Bank Corporation Company Background & Recent Results Loan and Investment Portfolios / Credit Recent Events / Outlook Shareholder Focus
Slide 29: 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 30: 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 31: 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 32: 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 33: 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 34: Merrill Lynch Financial Services Investor Conference November 15, 2007
Merrill Lynch Financial Services Investor Conference November 15, 2007
Slide 35: Appendix
Appendix [\ Me Bank Corporation +
Slide 36: Reconciliation of GAAP and Non-GAAP Results of Operation
Reconciliation of GAAP and Non-GAAP Results of Operation
Slide 37: 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
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