M&t Bank Corporation · NYSE:MTB
M&t Bank — Lehman Brothers Financial Services Conference 2007
35 slides from M&t Bank's conference presentation, Sep 11, 2007
Slide 1: Lehman Brothers Financial Services Conference September 11, 2007
Lehman Brothers Financial Services Conference September 11, 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 $11.3 Billion Market Cap $57.9 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: 2Q2006 = $6.9MM, 1Q2007 = $11.2MM, 2Q2007 = $10.0MM. Merger-related expenses: 2Q2006 = $2.3MM. ($ in millions, except EPS)
Slide 6: Net Interest Margin
Net Interest Margin Source: SNL Financial Note: Top 50 banks based on asset size as of June 30, 2007. Have widened NIM advantage over peers 3.70 3.64
Slide 7: M&T Bank Corporation agenda
M&T Bank Corporation Company Background & Recent Results Loan and Investment Portfolios / Credit Recent Events Shareholder Focus
Slide 8: M&T Bank Corporation - Average Loans
M&T Bank Corporation - Average Loans ($ in billions) * annualized
Slide 9: "Headline" Commercial Portfolios
"Headline" Commercial Portfolios Auto floor plan Significant source of new NPLs since 1Q06 Credit losses have been very manageable Out-of-trust positions appear to be abating Residential builder / developer loans About $1.8 billion outstanding Vast majority within banking footprint Completed reviews
Slide 10: Consumer Credit - Underwriting data
Consumer Credit -Underwriting data Weighted Average Weighted Average FICO Score Loan to Value (LTV) HELOC 743 68% Second Mortgages 739 66% Indirect Auto 723 111% Alt-A Mortgages - In portfolio 705 74% Other HFI Mortgages 720 71%
Slide 11: Historical Credit Cycle - Annual Trend, 1991-Q2 2007
Source: SNL Interactive Historical Credit Cycle - Annual Trend, 1991-Q2 2007
Slide 12: Securities Portfolio as of June 30, 2007
Securities Portfolio as of June 30, 2007 Securities portfolio totaled $7 billion at June 30 Equals 12% of total assets vs top-50 bank median of 17% Effective duration just under 2.0 years Unrealized losses about $75 million - pretax Approximately 88% mortgage related securities Very high credit qual
Slide 13: Investment Securities - Credit Rating Distribution
AAA Rated 48.3% A to BBB 1.9% CDO: AA Rated 0.5% All Other 6.3% US Treasury & Agency Securities 12.1% Municipal Bonds 1.6% Agency MBS/CMO 25.4% CDO: AAA Rated 1.2% AA Rated 2.6% Investment Securities - Credit Rating Distribution MBS/CMO Non-Agency 52.8%
Slide 14: M&T Bank Corporation agenda
M&T Bank Corporation Company Background & Recent Results Loan and Investment Portfolios / Credit Recent Events Shareholder Focus
Slide 15: Recent Events
Recent Events 3Q07 dividend increase increased 17% from prior amount $0.70 per qtr / $2.80 annualized Partners Trust acquisition Bayview Lending Group
Slide 16: Partners Trust - Transaction Highlights
Partners Trust - Transaction Highlights Transaction: Merger of Partners Trust into M&T Price: $12.50 per PRTR share Exchange Ratio: Floating, based on 5 day average of M&T closing price immediately prior to consummation Aggregate Value: $555 million Stock / Cash Mix: 50% / 50% Tax treatment: Tax-fre
Slide 17: Partners Trust Highlights
$872 million in investment securities $2.3 billion loans $636 million consumer, including home equity loans $320 million commercial real estate $171 million commercial & industrial $1,174 million residential mortgages $2.3 billion deposits $214 million DDA $1,004 million Savings, NOW & MMDA $1,043 m
Slide 18: 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 19: 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 20: Financial Highlights
Accretive to 2008 Net Operating Earnings Accretive to 2009 GAAP Earnings Low risk transaction; achievable cost savings IRR comfortably exceeds acquisition hurdle rate Financial Highlights
Slide 21: Bayview Lending Group Update
Bayview Lending Group Update
Slide 22: BLG Update
Acquired minority interest in Bayview Lending Group (BLG) in 1Q07 BLG originates and securitizes small balance commercial mortgages in US, UK and Canada Bayview Financial contributed operating entities into JV, but minimal amount of loans BLG Update
Slide 23: Bayview Management
Bayview Financial founded by management in 1993 Own 80% of BLG partnership Privately held financial services firm based in Miami $11 billion in managed assets; over 1,700 employees Bayview Management
Slide 24: Bayview Management
M&T - Bayview relationship goes back over 10 years Owner-operators Like M&T, focused on economics and cash returns Bayview Management
Slide 25: BLG Update
BLG has elements of both startup and going concern Day 1 - minimal loan portfolio, ie revenue base SG&A expense from pre-existing operating entities While still in startup mode, revenue will be volatile BLG Update
Slide 26: M&T Bank Corporation agenda
M&T Bank Corporation Company Background & Recent Results Loan and Investment Portfolios / Credit Recent Events Shareholder Focus
Slide 27: 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 28: Return of Capital to Shareholders
Return of Capital to Shareholders Cumulative Capital Retained, Dividends and Share Repurchases 1983 - Q2 2007 $2.6 Billion $2.0 Billion $1.1 Billion Share Repurchases Dividends Capital Retained 3160.8 1354.2 1961 =sum( $3.2 Billion $2.0 Billion $1.4 Billion
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: 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 31: 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 32: Lehman Brothers Financial Services Conference September 11, 2007
Lehman Brothers Financial Services Conference September 11, 2007
Slide 33: Appendix
Appendix (2) Mat Bank Corporation *
Slide 34: Reconciliation of GAAP and Non-GAAP Results of Operation
Reconciliation of GAAP and Non-GAAP Results of Operation
Slide 35: Reconciliation of GAAP and Non-GAAP Results of Operation
Reconciliation of GAAP and Non-GAAP Results of Operation
M&T Bank — Lehman Brothers Financial Services Conference 2007 on 6ix