M&t Bank Corporation · NYSE:MTB
M&t Bank — Barclays Global Financial Services Conference 2013
22 slides from M&t Bank's conference presentation, Sep 9, 2013
Slide 1: Barclays Global Financial Services Conference
Exhibit 99 Barclays Global Financial Services Conference September 9, 2013
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’s expectations or predictions of future financial or business performance or conditions. Forward- looking statements are typically identified by word
Slide 3: M&T Bank Corporate Profile
M&T Bank Corporate Profile Top 20 US-based full-service commercial bank holding company by assets and Top 15 by market cap Founded in 1856 $83 billion total assets 726 domestic branches and more than 2,000 ATMs 15,411 employees located in New York, Maryland, Pennsylvania, Washington, D.C., Virginia,
Slide 4: A Changing Banking Environment
A Changing Banking Environment Higher Liquidity Higher Capital Strong Risk Management Modest Loan Demand Low but Rising Interest Rates Pressure on Returns A Viable Business Model is Essential 4
Slide 5: Strong Earnings Results
Strong Earnings Results 2Q13 versus GAAP Earnings 2010 2011 2012 1Q13 2Q13 YOY QOQ Net Income ($MM) 736 859 1,029 274 348 49% 27% EPS ($ per share) 5.69 6.35 7.54 1.98 2.55 49% 29% Net Operating Earnings Net Operating Income ($MM) 755 884 1,073 285 361 46% 27% Net Operating EPS ($ per share) 5.84 6.
Slide 6: Key Ratios
Key Ratios Prior Quarters 2006 2010 2011 2012 2Q12 1Q13 2Q13 Net Interest Margin 3.70% 3.84% 3.73% 3.73% 3.74% 3.71% 3.71% Superior pre-credit Efficiency Ratio - Tangible(1) 51.51% 53.71% 60.43% 56.19% 56.86% 55.88% 50.92% earnings (1) Pre-tax, Pre-provision Earnings ($MM) 1,312 1,461 1,495 1,757 41
Slide 7: M&T's 2Q13 Actions Enhancing Capital & Liquidity
M&T’s 2Q13 Actions Enhancing Capital & Liquidity Reduced risk sensitive assets • Sale of $1.0 billion of private-label MBS securities Divested non-core assets • Visa / Mastercard stock sale Securitized $296 million of FHA loans & held resulting GNMA securities Securitize and retain FHA loan producti
Slide 8: Further Actions Enhancing M&T's Capital & Liquidity
Further Actions Enhancing M&T’s Capital & Liquidity Continue to build liquid asset buffer • Complete securitization of FHA loans ($1.3 billion total) and retain as GNMA securities • Maintain program to securitize FHA mortgage production & retain as GNMA securities Continue to enhance the liquidity,
Slide 9: M&T Capital Build
M&T Capital Build Tier 1 Common Capital Ratio % Tangible Common Equity / Assets %* 9.0 8.55 9.0 8.0 8.0 7.82 7.57 7.17 6.86 7.0 6.51 7.0 6.42 6.34 6.12 6.08 6.16 6.0 5.74 5.81 5.62 5.66 6.0 5.79 5.51 5.33 5.49 4.95 5.09 5.0 5.0 4.55 4.0 4.0 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 Q2’ ’03 ’04 ’05 ’06
Slide 10: Mortgage Banking Environment
Mortgage Banking Environment M&T Gain on Sale Revenues - Last 5 Quarters Cautious revenue outlook for 2H-2013 $ in millions driven by lower gain on sale and volumes $80 $70 $60 -42% Re-fi volumes impacted by higher rates, $50 $40 purchase volume appears to have slowed $30 $20 $10 Industry competitio
Slide 11: Significant Investments for the Future
Significant Investments for the Future M&T has continued to manage core expenses well, but sizable investments in risk management, compliance and other areas will increase expenses Capital Planning IT Investments Risk Management Framework Higher Expenses Compliance Sub-servicing Hires We are focused
Slide 12: Net Interest Margin / Rate Sensitivity
Net Interest Margin / Rate Sensitivity M&T remains positioned for rising rates NII simulation in 2Q1310Q projects a +100bp gradual, parallel increase in rates benefits NII by about 4% 10Q reflects pro-forma impact of initiatives outlined M&T (and most banks) more sensitive to short end of curve Cont
Slide 13: Summary
Summary Mortgage banking – Residential GOS margins and volumes declining rapidly • Commercial originations also down Costs of risk management infrastructure build and staffing for sub-servicing contract driving expense growth Capital and liquidity build continues Modest loan growth Earning assets gr
Slide 14: Long-term Profitability Outperformance
Long-term Profitability Outperformance Net Interest Margin % Operating Efficiency Ratio % Pre-Tax Pre-Provision Net Revenues to Average Total Assets % Return on Tangible Common Equity % Note: Peer benchmarking group includes BBT, CMA, FITB, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC, and ZION. Source: S
Slide 15: Deploying Capital Where and When it Makes Sense
Deploying Capital Where and When it Makes Sense Cumulative Capital Retained, Dividends and Share Repurchases 5 Years 5 Years 2008 - 2012 2003 - 2007 Capital Dividends Retained 28% Capital 51% Retained Share Dividends 20% Repurchases 49% 52% 30 Years 1983 - 2012 Capital Dividends Retained 32% 37% Sha
Slide 16: Earnings & Dividend Growth: 1983 – 1H13
Earnings & Dividend Growth: 1983 – 1H13 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Dividends GAAP EPS Impact of Amortization and Merger-related expenses Note: Data prior to 1998 does not include provisions of SFAS No. 123 and No. 148 stock option expensing. Net Operating Income and Net Op
Slide 17: M&T Bank Corporation… a solid investment
M&T Bank Corporation… a solid investment Of the largest 100 banks operating in 1983, only 23 remain today. Among the remaining, M&T ranks 1st in stock price growth! Stock Closing Price at Return 6/30/2013 3/31/1983 CAGR 1 Rank Company Name Ticker ($) ($) (%) 1 M&T Bank Corporation MTB 111.75 1.34 15
Slide 18: M&T Bank Corporation… a solid investment
M&T Bank Corporation… a solid investment 1 19.8% Annual rate of return since 1980 nd 2 22 best return of entire universe of U.S. based stocks traded publicly since 1980 Rank Company Name Industry Annual Return 1 Eaton Vance Corp. Financials 25.2 2 Gap Inc. Consumer Discretionary 24.0 3 L Brands Inc.
Slide 19: Appendix
Appendix EX MaiT Bank Corporation
Slide 20: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Net Income 2006 2007 2008 2009 2010 2011 2Q12 2012 1Q13 2Q13 $'s in millions Net income $839.2 $654.3 $555.9 $379.9 $736.2 $859.5 $233.4 $1,029.5 $274.1 $348.5 Intangible amortization* 38.5 40.5 40.5 39.0 35.3 37.6 9.7 37.0 8.1 7.6 Merger-related items* 3
Slide 21: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Average Assets 2006 2007 2008 2009 2010 2011 2Q12 2012 1Q13 2Q13 $'s in millions Average assets $ 55,839 $ 58,545 $ 65,132 $ 67,472 $ 68,380 $ 73,977 $ 80,087 $ 79,983 $ 81,913 $ 83,352 Goodwill (2,908) (2,933) (3,193) (3,393) (3,525) (3,525) (3,525) (3,5
Slide 22: 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 22
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