M&t Bank Corporation · NYSE:MTB
M&t Bank — Q3 2023 Earnings Presentation
29 slides from M&t Bank's earnings presentation, Oct 18, 2023
Slide 1: M&T Bank Corporation Earnings Results 3rd Quarter 2023
M&IBank Corporation Earnings Results 3™4 Quarter 2023 OCTOBER 18, 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 Private Securities Litigation Reform Act of 1
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, Increasingly New Skilled Diverse Capabilities & Stable • 18-year average tenure for • More than 40% of our Board of • Digitally forward, locally focused executive management Directors team is diverse • Enhanced team with new skill • Talent
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 • $2.26 billion in financing to projects that contain • Long lasting relationships affordable housing • Designated 119 multicultural banking branches •
Slide 6: Our ESG commitment
Our ESG commitment A bank for communities and making a difference ESG accomplishments and highlights ENVIRONMENT SOCIAL GOVERNANCE • $231.6 million invested in the • 1,440 Small Business Administration • 94% of Board members were renewable energy sector loans originated in 2022, totaling independent
Slide 7: Financial
Financial M&& Bank Corporation | 7
Slide 8: Earnings Highlights
Earnings Highlights GAAP GAAP - Adjusted (Non-GAAP)(1) ($ in millions, except per share) 3Q23 2Q23 3Q22 ($ in millions, except per share) 3Q23 2Q23 3Q22 Revenues $2,335 $2,602 $2,242 Revenues $2,335 $2,378 $2,242 Noninterest Expense $1,278 $1,293 $1,279 Noninterest Expense $1,278 $1,293 $1,226 Provi
Slide 9: Earnings Highlights
Earnings Highlights Net Operating Results (Non-GAAP)(1) ($ in millions, except per share) 3Q23 2Q23 3Q22 Net Operating Income $702 $879 $700 Diluted Net Operating EPS $4.05 $5.12 $3.83 (2) Efficiency Ratio 53.7% 48.9% 53.6% Net Operating ROTA 1.41% 1.80% 1.44% Net Operating ROTCE 17.41% 22.73% 17.89
Slide 10: Income Statement – Overview
Income Statement – Overview Change 3Q23 vs $ in millions, except per share 3Q23 2Q23 3Q22 2Q23 3Q22 Revenue $2,335 $2,602 $2,242 (10%) 4% Noninterest Expense $1,278 $1,293 $1,279 (1%) - PPNR(1) $1,057 $1,084 $1,017 (2%) 4% Provision for Credit Losses $150 $150 $115 - 30% Income Tax $217 $292 $201 (2
Slide 11: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin QoQ Drivers $1,841 $1,832 $1,813 $1,790 • Taxable-equivalent net interest income decreased $1,691 -$23 million QoQ – Driven largely by higher interest rates on customer deposit funding – An unfavorable funding mix change $ IN MILLIONS – Partially offset by h
Slide 12: Balance Sheet – Overview
Balance Sheet – Overview Change 3Q23 vs Average Balances, $ in billions, except per share 3Q23 2Q23 3Q22 2Q23 3Q22 Interest-bearing Deposits at Banks $26.7 $23.6 $30.8 13% (13%) Investment Securities $28.0 $28.6 $23.9 (2%) 17% C&I $44.6 $44.5 $38.3 - 16% CRE $44.2 $44.9 $46.3 (2%) (4%) Residential M
Slide 13: Balance Sheet – Average Loans
Balance Sheet – Average Loans QoQ Drivers $132.0 $133.5 $132.6 $127.5 $129.4 Average loans -$0.9 billion or -1% QoQ: $20.5 $20.3 $20.2 $20.4 $20.0 • C&I loans increased slightly (+$94 million) QoQ, driven by growth in our dealer and specialty $23.8 $23.8 $23.6 $22.9 $23.3 businesses • CRE loans decl
Slide 14: Balance Sheet – Securities and Cash
Balance Sheet – Securities and Cash Average Investment Securities and Yield Securities and Cash – at 9/30/23 Other Securities 2% $28.6 $27.6 $28.0 Interest- bearing $25.3 HTM $23.9 $59.2B Securities $55.7B deposits at banks $ IN BILLIONS TOTAL 26% 51% TOTAL 3.00% 3.09% 3.14% Cash AFS 2.77% 3% Securi
Slide 15: Balance Sheet – Average Deposits
Balance Sheet – Average Deposits QoQ Drivers $167.3 $163.5 $161.5 $162.7 End of period deposits +$2.1 billion or +1% QoQ $159.4 $5.0 $6.2 $11.6 $16.0 $19.5 Average deposits +$3.3 billion or +2% QoQ: • Deposit mix is shifting to higher cost deposits given increased competition and customer behavior $
Slide 16: Income Statement – Noninterest Income
Income Statement – Noninterest Income Change 3Q23 vs Gain on Gain on CIT Sale(2) $ in millions 3Q23 2Q23 3Q22 2Q23 3Q22 $803 MTIA Sale(1) Mortgage Banking Revenues $105 $107 $83 (2%) 26% $682 $225 Service Charges on Deposits $121 $119 $115 2% 5% $563 $587 $560 $136 Trust Income $155 $172 $187 (10%)
Slide 17: Income Statement – Noninterest Expenses
Income Statement – Noninterest Expenses Charitable Change 3Q23 vs Contribution(1) $ in Millions 3Q23 2Q23 3Q22 2Q23 3Q22 $1,408 $1,359 Salaries & Benefits (4) $727 $738 $723 (1%) 1% $1,279 $63 $1,293 $1,278 Equip & Occupancy $131 $129 $125 2% 5% $71 $1,345 $1,342 $1,278 $1,263 $1,208 Outside Data Pr
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 $150 $150 $127 $115 $120 $ IN MILLIONS $ IN MILLIONS $90 $96 $70 0.38% $63 0.29% 0.20% $40 0.22% 0.12% 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 NCO ($) Net Charge-off ratio No
Slide 19: Capital
Capital CET1 TBVPS(2) 10.75% 10.59% 10.94% 10.44% 10.16% $91.58 $93.99 $86.59 $88.81 $84.28 (1) 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 QoQ Drivers • CET1 capital ratio increased +35 bps to 10.94%(1) at 3Q23 • Tangible common equity to tangible assets was 7.78% at the end of 3Q23 • Tangibl
Slide 20: 4Q23 Outlook
4Q23 Outlook 4Q23 Outlook Comments Net Interest Income $1,710 million to • Continued cost pressure from funding mix-shift Taxable-equivalent $1,740 million • Cumulative interest-bearing deposit betas, excluding Brokered deposits, in the mid 40% range Income Statement Fee Income $560 million +/- • Co
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: Appendices
Appendices M&& Bank Corporation | 22
Slide 23: GAAP to GAAP – Adjusted (Non-GAAP) Reconciliation
Appendix 1 GAAP to GAAP – Adjusted (Non-GAAP) Reconciliation In millions 3Q22 4Q22 1Q23 2Q23 3Q23 Revenues Net interest income - GAAP $1,679 $1,827 $1,818 $1,799 $1,775 Total other income - GAAP 563 682 587 803 560 Subtotal 2,242 2,509 2,405 2,602 2,335 Gain on CIT - - - (225) - Gain on MTIA - (136)
Slide 24: GAAP to GAAP – Adjusted (Non-GAAP) Reconciliation
Appendix 1 GAAP to GAAP – Adjusted (Non-GAAP) Reconciliation In millions, except per share 3Q22 4Q22 1Q23 2Q23 3Q23 Net income Net income - GAAP $647 $765 $702 $867 $690 Gain on CIT(1) - - - (157) - Gain on MTIA(1) - (98) - - - Charitable contribution(1) - 100 - - - Merger-related expense(1) 39 33 -
Slide 25: GAAP to Net Operating (Non-GAAP) Reconciliation
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation In millions, except per share 3Q22 4Q22 1Q23 2Q23 3Q23 Net income Net income $647 $765 $702 $867 $690 Amortization of core deposit and other intangible assets(1) 14 14 13 12 12 Merger-related expenses(1) 39 33 - - - Net operating income $700
Slide 26: GAAP to Net Operating (Non-GAAP) Reconciliation
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation In millions 3Q22 4Q22 1Q23 2Q23 3Q23 Other expense Other expense $1,279 $1,408 $1,359 $1,293 $1,278 Amortization of core deposit and other intangible assets (18) (18) (17) (15) (15) Merger-related expenses (53) (45) - - - Noninterest operati
Slide 27: GAAP to Net Operating (Non-GAAP) Reconciliation
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation In millions 3Q22 4Q22 1Q23 2Q23 3Q23 Efficiency ratio Noninterest operating expense (numerator) $1,208 $1,345 $1,342 $1,278 $1,263 Taxable-equivalent net interest income 1,691 1,841 1,832 1,813 $1,790 Other income 563 682 587 803 $560 Less:
Slide 28: GAAP to Tangible (Non-GAAP) Reconciliation
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation In millions 3Q22 4Q22 1Q23 2Q23 3Q23 Average assets Average assets $201,131 $198,592 $202,599 $204,376 $205,791 Goodwill (8,501) (8,494) (8,490) (8,473) (8,465) Core deposit and other intangible assets (236) (218) (201) (185) (170) Deferred taxes
Slide 29: GAAP to Tangible (Non-GAAP) Reconciliation
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation In millions 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Total assets Total assets $197,955 $200,730 $202,956 $207,672 $209,124 Goodwill (8,501) (8,490) (8,490) (8,465) (8,465) Core deposit and other intangible assets (227) (209) (192) (177