M&t Bank Corporation · NYSE:MTB
M&t Bank — BancAnalysts Association of Boston Conference 2016
25 slides from M&t Bank's conference presentation, Nov 4, 2016
Slide 1: BancAnalysts Association of Boston Conference Presentation
BancAnalysts Association of Boston Conference Presentation November 4, 2016
Slide 2: Disclaimer
Disclaimer This presentation contains forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 giving M&T Bank Corporation’s (“M&T”) expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typ
Slide 3: Introduction
Introduction M&i Bank Corporation
Slide 4: Who is M&T Bank Corporation?
Who is M&T Bank Corporation? Top 20 US-based commercial bank holding company Have grown substantially from $2 billion in assets in 1983 to $127 billion at September 30, 2016 17,090 employees across 803 domestic branches in eight states and Washington DC 3.7 million customers representing 5.9 million
Slide 5: Key Ratios
Key Ratios 2010 2011 2012 2013 2014 2015 2Q'16 3Q'16 Superior Pre-Credit Earnings Net Interest Margin 3.84% 3.73% 3.73% 3.65% 3.31% 3.14% 3.13% 3.05% (1)(3) Efficiency Ratio – Tangible 53.71% 59.49% 55.28% 55.98% 59.29% 57.98% 55.06% 55.92% (1)(3) PPNR 1,461 1,531 1,796 1,951 1,766 1,845 562 597 (1)
Slide 6: Focus on Returns Drives M&T's Operating Model
Focus on Returns Drives M&T’s Operating Model Model M&T primarily measures performance using ROTCE throughout the cycle ROTCE focus provides consistent decision-making framework for evaluating: Lending decisions Allocation of capital to business units Acquisitions Return capital in excess of require
Slide 7: Low Volatility Model – Year History Versus Peer Banks
Low Volatility Model – 20 Year History Versus Peer Banks1 NCOs / Average Loans Pre-tax Pre-provision Net Revenue (PPNR) 1.0% 5% NCO / Avg Loans (20Y Median) 3 PPNR / RWA (20Y Median) 0.8% 4% 0.6% 3% MTB 0.4% 2% MTB 0.2% 1% 0.0% 0% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 0% 5% 10% 15% 2 4 Volatility (20Y
Slide 8: Consistently Profitable Throughout the Cycle
Consistently Profitable Throughout the Cycle Return on Tangible Common Equity: 2007 – Q3 2016 YTD 50% Max Min Median 40% 30% 20% 17.8% 10% 10.9% 12.4% 11.2% 9.5% 0% -2.6% -10% -12.2% -20% -15.2% -22.9% -22.8% -30% / / -91.2% -44.8% -40% -100% Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 P
Slide 9: Focus on Returns Supports Outperformance
Focus on Returns Supports Outperformance PPNR to RWA % Net Interest Margin % 6.0% 6.0% MTB 3Q 2016: MTB 3Q 2016: 2.43% 5.5% 3.05% 5.0% 5.0% 4.0% 4.5% 3.0% 2.78% 4.0% 2.35% 3.5% 3.41% 2.0% 1.84% 3.13% 3.0% 3.01% 1.0% 1.11% 2.5% 2.70% 0.0% 2.0% MTB Peer Maximum Peer Median Peer Minimum MTB Peer Maximu
Slide 10: Capacity for Increased Return of Capital
Capacity for Increased Return of Capital Tier 1 Common Ratio CET1 Ratio 2013 Q4 2014 Q4 2015 Q4 2016 Q31 Peer 1 11.22% Peer 7 11.92% Peer 7 12.22% Peer 7 12.00% Peer 2 11.21% Peer 2 11.65% MTB 11.08% Peer 2 11.10% Peer 3 10.90% Peer 1 11.17% Peer 4 11.07% Peer 4 10.93% Peer 4 10.82% Peer 4 11.04% Pe
Slide 11: Opportunities
11 Opportunities M&i Bank Corporation
Slide 12: Today's Agenda
Today’s Agenda Seize local market opportunities as they present themselves Build M&T presence in key geographies – e.g., New Jersey Grow capital-efficient, fee-based businesses to complement lending-focused businesses 12
Slide 13: New Customer Growth
New Customer Growth New Customer Growth: 3Q 2016 vs. 3Q 2015 50% Focused front line sales efforts across middle market, small business, and retail Media support from brand, TV, print, and direct mail 19% Customer incentives – focused on active accounts Upstate NY Rest of Footprint Note: Represents c
Slide 14: Building New Jersey Presence
Building New Jersey Presence New Jersey Growth: 3Q 2016 vs. 2Q 2016 60% Strong growth rates – from a low base Balance sheet repositioning 36% continues and will persist through 2017 into 2018 Loan portfolio transitioning 19% from residential mortgage to commercial Deposit mix shift Consumer Growth B
Slide 15: Average Earning Asset Trends
Average Earning Asset Trends 2Q 2016 3Q 2016 Q/Q Change ($ in billions) Balance Balance % (Anlzd) Residential Mortgages $24.9 $24.1 (13%) Other Loans $63.3 $64.7 +9% Total Loans $88.2 $88.7 +3% Investment Securities $14.9 $14.4 (15%) Other Earning Assets $8.8 $9.8 +44% Total Earning Assets $111.9 $1
Slide 16: Fee Businesses and Liquidity Requirements Drive Cash Balances
Fee Businesses and Liquidity Requirements Drive Cash Balances ($ in billions) Supports trust fee income Trust demand deposits-received in a fiduciary or administrative capacity in Trust-Related connection with capital markets transactions - short duration and high turnover prohibit long term investm
Slide 17: Illustrative Example – Change in Other Earning Assets
Illustrative Example – Change in Other Earning Assets Variability in trust and escrow deposits affects net interest margin, with limited impact to net interest income Illustrative Example Increase of $1 billion in non-interest bearing trust-related deposits Funds held at the Federal Reserve earning
Slide 18: Long-term Shareholder Outperformance
Long-term Shareholder Outperformance 18
Slide 19: Earnings & Dividend Growth: 1983-2015
Earnings & Dividend Growth: 1983-2015 $9.00 $8.00 7.74 $7.00 6.07 $6.00 $5.00 $4.00 $3.00 2.80 $2.00 $1.00 2.10 $0.00 Dividends GAAP EPS Impact of Amortization and Merger-related expenses 19
Slide 20: M&T Bank Corporation…a solid investment
M&T Bank Corporation…a solid investment Of the largest 100 banks operating in 1983, only 23 remain today. Among the remaining, M&T ranks 1st in stock price growth Stock Closing Price at Return 9/30/2016 3/31/1983 CAGR Rank Company Name Ticker ($) ($) 1 (%) 1 M&T Bank Corporation MTB 116.10 1.34 14.3
Slide 21: M&T Bank Corporation…a solid investment
M&T Bank Corporation…a solid investment 18.2% Annual rate of return since 19801 In the top 30 of the entire universe2 of U.S. based stocks traded publicly since 1980 Rank Company Name Industry Annual Return 1 Ea ton Va nce Corp. Fina nci a l s 23.1 2 L Bra nds , Inc. Cons umer Di s cretiona ry 22.4
Slide 22: Appendix and GAAP Reconciliations
Appendix and GAAP Reconciliations 22
Slide 23: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Net Income 2010 2011 2012 2013 2014 2015 2Q16 3Q16 $ in millions Net income $736.2 $859.5 $1,029.5 $1,138.5 $1,066.2 $1,079.7 $336.0 $350.0 Intangible amortization* 35.3 37.6 37.0 28.6 20.7 16.2 6.9 5.9 Merger-related items* (16.3) (12.8) 6.0 7.5 - 60.8 7
Slide 24: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Average Assets 2010 2011 2012 2013 2014 2015 2Q16 3Q16 $ in millions Average assets $ 68,380 $ 73,977 $ 79,983 $ 83,662 $ 92,143 $ 101,780 $ 123,706 $ 124,725 Goodwill (3,525) (3,525) (3,525) (3,525) (3,525) (3,694) (4,593) (4,593) Core deposit and other
Slide 25: M&T Peer Group
M&T Peer Group BB&T Corporation PNC Financial Services Group, Inc. Comerica Incorporated Regions Financial Corporation Fifth Third Bancorp SunTrust Banks, Inc. Huntington Bancshares Incorporated U.S. Bancorp KeyCorp Wells Fargo & Company M&T Bank Corporation Zions Bancorporation 25
M&T Bank — BancAnalysts Association of Boston Conference 2016 on 6ix