M&t Bank Corporation · NYSE:MTB
M&t Bank — Lehman Brothers 2008 Financial Services Conference
40 slides from M&t Bank's conference presentation, May 19, 2008
Slide 1: Lehman Brothers 2008 Financial Services Conference May 20, 2008
Lehman Brothers 2008 Financial Services Conference May 20, 2008
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 - A Name known in Buffalo since 1856
M&T - A Name known in Buffalo since 1856 One of the 20 Largest U.S. Banks $10.3 Billion Market Cap $66 Billion in assets 687 branches in 7 States and the District of Columbia Serving customers in 1.8 million households and +150,000 businesses 13,300+ employees 1,500+ ATM's
Slide 4: 2008 Q1 Results & Operating Philosophy; Investments/Initiatives; Shareholder Focus
M&T Bank Corporation 2008 Q1 Results & Operating Philosophy Investments/Initiatives Shareholder Focus = Long Term Performance
Slide 5: Earnings Summary
Earnings Summary 1) Excludes merger-related expenses and amortization expense associated with intangible assets. Intangible Amortization net of tax: 1Q2007 = $11.2MM, 4Q2007 = $9.7MM, 1Q2008 = $11.2MM. Merger-related expenses net of tax: 4Q2007 = $9.1MM, 1Q2008 = $2.2MM ($ in millions, except EPS)
Slide 6: First Quarter 2008 Highlights
Benefit from Visa IPO $33mm or $0.18 per share securities gain $15mm or $0.08 per share partial reversal of 4Q07 accrual Net interest margin - 3.38%, down 7bp from 4Q07 3bp from the full quarter effect of PRTR/FHN acquisitions 4bp from issuance of $400mm sub-debt; $350mm Trust preferred Average loan
Slide 7: Key Ratios
Key Ratios Excludes amortization related to intangible assets and merger-related expenses. Net Operating Income less dividends paid over average tangible common equity. Excludes Securities Gains/(Losses). 2006 FY 2007 FY 1Q07 Actual 4Q07 Actual 1Q08 Actual Net Interest Margin 3.70% 3.60% 3.64% 3.45%
Slide 8: Net Interest Margin
Net Interest Margin Source: SNL Interactive. Note: Top 50 banks based on asset size as of March 31, 2008.
Slide 9: Operating Philosophy
Operating Philosophy Consistent and conservative philosophy Longstanding culture - developed through history of very high insider ownership Shareholder oriented decision making Diverse business mix and geography
Slide 10: Tangible Capital Generation - Q1 2008
Tangible Capital Generation - Q1 2008 Source: SNL Interactive.
Slide 11: Allowance to Loans - Q1 2008
Allowance to Loans - Q1 2008 Source: SNL Interactive
Slide 12: Allowance Coverage of Net Charge-Offs (in years) - Q1 2008
Allowance Coverage of Net Charge-Offs (in years) - Q1 2008 Source: SNL Interactive
Slide 13: Consistent Credit Culture
Consistent Credit Culture Operate Community Banking business model 14-region banking footprint Relationship lender, not a transaction lender Little appetite for syndicated loans Small, niche-focused investment banking capability Don't tighten and loosen credit standards through cycles Disciplined pr
Slide 14: Investment Securities - Portfolio Composition
Investment Securities - Portfolio Composition As of March 31, 2008
Slide 15: Loans as of 3/31/2008
M&T Bank Corporation - As at Loans* Investor CRE 24% Consumer 23% Prime 10% Alt-A 2% Residential Const. & Dev. 4% Owner Occupied CRE 9% Commercial & Industrial 28% Residential Real Estate 12% Commercial Real Estate 37% As of 3/312008
Slide 16: Granularity of Non-Performing Loans
As of March 31, 2008 NPL Size # of Credits % $ 000s % >$15.0 MM 2 0% $66,819 13% $5 to $15 MM 4 0% 39,178 8% $1 to $5 MM 25 0% 54,347 11% < $1 MM 11,707 100% 334,176 68% TOTAL 11,738 100% $494,520 100% Granularity of Non-Performing Loans
Slide 17: Consumer Loans - 30-89 day Delinquency EOP Trend
Consumer Loans - 30-89 day Delinquency EOP Trend1 Note: Computed from loan and delinquency balances as reported in FRY9C Total Loan $ MM 6,513 Alt A $ MM 1,077 % 17% Q108 Alt A exposure Total Loan $ MM 562 Alt A $ MM 54 % 10% Q108 Alt A exposure
Slide 18: Consumer Loans - Net Charge Off Ratios
Consumer Loans - Net Charge Off Ratios Note: Computed from loan and net charge-off balances as reported in FRY9C. EOP loan balances used to compute average loan balances. Q108 net charge-offs are as reported. NCO ratio for Q108 is annualized.
Slide 19: Historical Credit Cycle - Annual Trend, 1991-1Q08
Historical Credit Cycle - Annual Trend, 1991-1Q08 Source: SNL Interactive. Note: Top 50 banks based on asset size as of March 31, 2008.
Slide 20: Outlook
Loan growth slowing from pace of past two quarters Targeting growth in the mid-to-upper single digits for remainder of the year Strength in C&I / CRE Slow or no growth in consumer / residential mortgages Focus on deposit growth - multiple initiatives Outlook
Slide 21: Outlook
Continued modest NIM pressure Focus on expenses - esp. PRTR synergies NCOs continue to trend higher No share repurchase until capital ratios back to target range Outlook
Slide 22: 2008 Q1 Results & Operating Philosophy; Investments/Initiatives; Shareholder Focus
M&T Bank Corporation 2008 Q1 Results & Operating Philosophy Investments/Initiatives Shareholder Focus = Long Term Performance
Slide 23: Economically Diverse Footprint
Economically Diverse Footprint
Slide 24: Operating Efficiency Ratio
Operating Efficiency Ratio Note: Ratio excludes amortization expense associated with intangible assets, merger-related expenses, and G/L on investment securities. Source: SNL Interactive. Note: Top 50 banks based on asset size as of March 31, 2008.
Slide 25: 2008 Planned Growth in Operating Expenses
2008 Planned Growth in Operating Expenses Initiatives Partners & First Horizon Core Franchise 29% of growth 33% of growth 38% of growth
Slide 26: Investments/Initiatives: Segmented growth strategy
Investments/Initiatives Segmented growth strategy Region's Growth Profile and M&T's Share Investments & Initiatives Vary by Market
Slide 27: Segmented Growth Strategy
Low share - high growth Moderate share - high growth High share - reliable growth Key: Western New York Rochester Syracuse Southern Albany/ Hudson Valley North Tarrytown NYC New Jersey Northern PA Central & Western PA Southeast PA Philadelphia Chesapeake Baltimore Gtr. Washington Differences in mark
Slide 28: 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 29: Increased Focus on I-One Region
Increased Focus on I-One* Region 22% CAGR Net Income from I-One region as a percentage of Total Bank Net Income Includes Greater Baltimore, Greater Washington, D.C., Chesapeake and Southeastern PA regions.
Slide 30: Distribution Network - Total Activity
Distribution Network - Total Activity Since 2003, M&T has made a concerted effort to update and expand the branch network into higher growth corridors. Over the past 24 months, actions taken include: BWI Airport Branch de novo 7 additional de-novo branches 9 branch renovations 12 branch relocations
Slide 31: Metro Markets
Metro Markets Focused on Commercial Business lines (Middle Market, Healthcare, Real Estate, Business Banking). Opened Saddle Brook office in Bergen County, NJ in December 2007. Continued investments in these markets.
Slide 32: 2008 Q1 Results & Operating Philosophy; Investments/Initiatives; Shareholder Focus
M&T Bank Corporation 2008 Q1 Results & Operating Philosophy Investments/Initiatives Shareholder Focus = Long Term Performance
Slide 33: M&T Bank Corporation - Consistent Performance
M&T Bank Corporation - Consistent Performance Consistent Growth in Net Operating Earnings* 19% CAGR since 1983 9% CAGR over past 10 years Consistent Growth in Dividends* 18% CAGR since 1983 Ranked in top 10 of Top 50 banks for 10 year stock price performance** * Through December 31, 2007 ** From 3/3
Slide 34: Return of Capital to Shareholders
Return of Capital to Shareholders Cumulative Capital Retained, Dividends and Share Repurchases 1983 - Q1 2008 $2.6 Billion $2.0 Billion $1.1 Billion Share Repurchases Dividends Capital Retained 3244.2 1582.9 2157 $3.2 Billion $2.2 Billion $1.6 Billion
Slide 35: 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 36: M&T Bank Corporation... a solid investment
21.6% Annual rate of return since 1980* 19th best return of the entire universe of almost 800 U.S. based stocks that have traded publicly since 1980 $3,999 invested in M&T in 1980 would be worth $1 million today M&T Bank Corporation... a solid investment *CAGR calculated assuming reinvestment of div
Slide 37: Lehman Brothers 2008 Financial Services Conference May 20, 2008
Lehman Brothers 2008 Financial Services Conference May 20, 2008
Slide 38: Appendix
Appendix \ Ma Bank Corporation”
Slide 39: Reconciliation of GAAP and Non-GAAP Results of Operation
Reconciliation of GAAP and Non-GAAP Results of Operation * Excludes gain/loss on sale of securities. Net Income and Earnings Per Share 1Q08 4Q07 1Q07 2007 2006 $'s in millions Net income $202.2 $64.9 $176.0 $654.3 $839.2 Intangible amortization, net of tax 11.2 9.7 11.2 40.5 38.5 Merger-related expe
Slide 40: 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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