M&t Bank Corporation · NYSE:MTB
M&t Bank — Q2 2022 Earnings Presentation
34 slides from M&t Bank's earnings presentation, Jul 20, 2022
Slide 1: Investor Update | Second Quarter 2022
Investor Update | Second Quarter 2022
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements regarding M&T Bank and its subsidiaries' future businesses; and material differences in the actual financial Corporation (“M&T”) within the meaning of the Private Securities Litigation Reform Act of results of merger, acquisition an
Slide 3: M&T – A High Performing Community-Focused Bank
M&T – A High Performing Community-Focused Bank • Top 20 U.S.-based, commercial bank holding company, with Financial Highlights 1Q22 national capabilities from our suite of specialty businesses and Symbol MTB Wilmington Trust Stock Price * $170.74 • Seasoned management team and deeply embedded cultur
Slide 4: Strong Financial Results Over the Long-Term
Strong Financial Results Over the Long-Term ROTCE (average) GAAP EPS Growth – 20 Years (CAGR) 12.2% 11.3% 19.6% 16.2% 10.0% 15.5% 15.3% 14.9% 13.3% 7.0% 4.0% 4.0% 3.9% 3.8% Peer Median, 4.0% 2.6% 1.6% MTB Peer MTB Peer MTB Peer Median Median Median -0.3% Peer Peer Peer MTB Peer Peer Peer Peer Peer P
Slide 5: Delivering Superior Financial Results Over Decades
Delivering Superior Financial Results Over Decades Earnings & Dividend Growth: 1983 – 2021 Notes: CAGRs are from 1983 to full year 2021. The $14.11 operating EPS equals GAAP EPS of $13.80 plus the after-tax impact of amortization and merger-related expenses. 5 See appendix for GAAP to non-GAAP recon
Slide 6: The M&T Story: Our Operating Principles
The M&T Story: A High Performing Community-Focused Bank… ….Our Operating Principles Our purpose - To make a difference in people’s lives Our mission- We are a bank for communities ─ committed to improving the lives of our customers and all the communities we touch. Local Scale Credit Discipline Oper
Slide 7: Prudent Stewards of Shareholders’ Capital
Prudent Stewards of Shareholders’ Capital How we think about capital allocation Results Disciplined return criteria – lending Higher return earning asset mix and investments One of two S&P banks to maintain dividend Moderate dividend payout through the Great Financial Crisis Acquisitions that clearl
Slide 8: Efficient Operator Through the Cycles
Efficient Operator Through the Cycles Operating Efficiency Ratio 100% 2021 54% 56% 58% 60% 62% 64% 90% Peer 7 Peer 8 80% MTB Peer 9 70% Peer 2 Peer Range Peer 3 60% Median MTB Peer 5 Peer 4 50% Peer 10 40% Peer 11 Peer 1 30% Peer 6 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 202
Slide 9: Delivering Growth Over Decades
Delivering Growth Over Decades EOP Loan and Deposit Growth per Share (2001-2021, CAGR) Loans: MTB Peer Median Quartile Commercial Real Estate 5% > 2% Top Commercial & Industrial 5% > 4% 2nd Residential Real Estate 5% > 3% Top Consumer 4% > 2% 2nd Total Loans 5% > 2% Top Deposits: Noninterest-Bearing
Slide 10: Superior Credit Losses Through Multiple Economic Cycles
Superior Credit Losses Through Multiple Economic Cycles M&T Credit Philosophy • Consistent credit standards through economic cycles • Emphasis on secured lending: cash flow + collateral + guarantees • Customer selection, supported by local market knowledge • Working with customers to achieve best lo
Slide 11: Best-In-Class Credit NCO Ratios Across All Portfolios
Best-In-Class Credit NCO Ratios Across All Portfolios C&I Construction Avg Max Range Avg Max Range MTB 0.39% 1.27% 1.09% MTB 0.46% 2.47% 2.70% Peer Median 0.53% 1.79% 1.64% Peer Median 1.20% 7.11% 7.27% Peer Range MTB Peer Median Other CRE Residential Real Estate Avg Max Range Avg Max Range MTB 0.07
Slide 12: Local Scale in Key Markets in M&T Footprint
Local Scale in Key Markets in M&T Footprint People’s United transaction adds a leading market position in New England while increasing density in attractive New York markets Contiguous Branch Footprint… …Combining Market Leading Franchises… Top 10 MSAs by Deposits Top Northeast Banks by Branches(2)
Slide 13: Local Scale Leads to Superior Deposit Franchise
Local Scale Leads to Superior Deposit Franchise Noninterest Bearing Deposits / Total Deposits Total Cost of Deposits 3.5% 2002-2021 Average 60.0% M&T 0.75% Peer Median 0.92% 3.0% Peer Difference -0.17% 50.0% Range M&T 2.5% 40.0% Peer Median 2.0% 30.0% 1.5% 20.0% 1.0% Peer Range 10.0% 0.5% Peer Media
Slide 14: Higher Returns Relative to Risk
Higher Returns Relative to Risk Risk Adjusted Net Interest Margin (NII less NCO % of AEA) 4.0% 3.5% 3.0% MTB 2.5% Peer Median Peer Range 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 14 Source: S&P Global Market Intelligence and company filings
Slide 15: Delivering for our customers
Meeting Evolving Needs: Talent Is the Greatest Differentiator Seasoned, Skilled, and Stable Increasingly Diverse New Capabilities • 18-year average tenure for executive • More than 40% of our Board of • Digitally forward, locally focused management Directors team is diverse • Enhanced team with new
Slide 16: Delivering Innovative Capabilities as Technology Transformation Continues
Delivering Innovative Capabilities… …as Technology Transformation Continues Our Technology transformation is centered around Three Key Dimensions {Talent} •Pivoted to mostly insourced technologists •Increasing Technology Development Program (TDP) hires •Perpetually upskilling and reskilling our tech
Slide 17: Our Focus on Customers, Communities and Innovation Pays Dividends
Our Focus on Customers, Communities and Innovation Pays Dividends When our customers and communities succeed, we all succeed Customer Focused Community Engagement • Long lasting relationships • $1.5 billion in community development • Offered pandemic-related mortgage loan loans, lines of credit, & i
Slide 18: A Bank for Communities & Making a Difference – Our ESG Commitment
A Bank for Communities & Making a Difference – Our ESG Commitment ESG Accomplishments and Highlights since Last Year Launched Operational Defined Board and Management Sustainability Initiatives to Reduce ESG Governance Carbon Footprint 2021 ESG report included • Inaugural TCFD(1) disclosure • Second
Slide 19: M&T – A High Performing Community-Focused Bank
M&T – A High Performing Community-Focused Bank • Top 20 U.S.-based, commercial bank holding company, with national capabilities from our suite of specialty businesses and Wilmington Trust • Seasoned management team and deeply embedded culture • Superior profitability and earnings and dividend growth
Slide 20: Current Themes & Key Messages
Current Themes & Key Messages 20
Slide 21: Performance Through Unprecedented Environment Over Last 2 Years
Performance Through Unprecedented Environment Over Last 2 Years Environmental Challenges M&T’s Response Outperformance(1) (2020/2021) ROTCE Announced 14.8% People’s United 14.0% Low Supply Chain Acquisition Rates Disruptions MTB Peer Median Built Capital PPNR/RWA Tepid 2.4% 2.0% Loan Demand Increase
Slide 22: Environment Opening Up for “Dry Powder” Deployment
Environment Opening Up for “Dry Powder” Deployment 2020 and 2021 2022+ People’s • Announced acquisition of like-minded banking franchise Complete integration process and United with contiguous footprint begin realizing synergies Acquisition • Preserved liquidity in low-rate environment Excess Higher
Slide 23: People’s United Financial Merger Creates Long-Term Shareholder Value
People’s United Financial Merger Creates Long-Term Shareholder Value • On April 1, 2022, M&T successfully completed the acquisition of People’s United Financial valued at approximately $8.4 billion • Complementary community banking purpose and commitment; since announcement, core People’s United cus
Slide 24: 2022 Outlook Including Impact from People’s United
2022 Outlook Including Impact from People’s United April 1 Combined(1) YE 2022 Guide 2021(2) Avg 2022 Avg Total Loans Up 3-5% $128 Billion (up 4-6% ex PPP/GNMA $97 Billion Up 24-26% Buyouts) Growth of ~$2 billion Securities $21 Billion per quarter Interest- Slightly under $30 $45 Billion Earning Cas
Slide 25: “Dry Powder” from Above Peer Excess Liquidity
“Dry Powder” from Above Peer Excess Liquidity Interest-Earning Deposits at Banks and Fed Funds Sold as a Securities as a % of Total Earning Assets – As of 3/31/21 % of Total Earning Assets – As of 3/31/21 32% 32% 32% 31% 29% 26% 27% 26% Peer Median 27% 24% 21% 18% 17% 17% 15% 15% 11% 10% Peer Median
Slide 26: “Dry Powder” from Credit and Capital
“Dry Powder” from Credit and Capital M&T’s credit and capital position support earnings growth in a recovering market and serve as a prudent starting point for the 2022 CCAR cycle Δ in ACL Ratio vs. CECL Day 1(1) • Above average ACL build compared to CECL Day 1 levels. M&T’s 0.30% ACL/loans ratio is
Slide 27: Q1 2022 Appendix
Q1 2022 Appendix M&P Bank Corporation
Slide 28: Key Ratios
Key Ratios 2016 2017 2018 2019 2020 2021 1Q '21 4Q '21 1Q '22 Superior Pre-Credit Earnings Net Interest Margin 3.11% 3.47% 3.83% 3.84% 3.16% 2.76% 2.97% 2.58% 2.65% (1) Efficiency Ratio – Operating 56.10% 55.07% 54.79% 55.66% 56.35% 59.02% 60.33% 59.71% 64.95% (1) PPNR 2,248 2,492 2,640 2,723 2,570
Slide 29: Stable Adjusted Net Interest Margin Trends
Stable Adjusted Net Interest Margin Trends Net Interest Margin • In addition to low rates, excess cash 3.10% 3.06% 3.02% 3.08% 3.08% balances(1), PPP, and swaps were the main drivers of NIM volatility during the crisis 2.97% • Adjusted(2) NIM has been stable to slightly higher over the last five qua
Slide 30: Diversity in Mortgage Banking Revenues
Diversity in Mortgage Banking Revenues Total Mortgage Fee Mix – 1Q22 (TTM) Highlights • While M&T has benefitted from a favorable residential origination environment, more than half of our mortgage revenue is comprised of fees from servicing residential and Origination 16% Commercial: 31% commercial
Slide 31: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Net Income 2016 2017 2018 2019 2020 2021 1Q21 4Q21 1Q22 $ in millions Net income $ 1,315.1 $ 1,408.3 $ 1,918.1 $ 1,929.1 $ 1,353.2 $ 1,858.7 $ 447.2 $ 458.0 $ 362.2 Intangible amortization* 25.9 19.0 18.1 14.4 11.0 7.5 2.0 1.4 0.9 Merger-related items* 21
Slide 32: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Average Assets 2016 2017 2018 2019 2020 2021 1Q21 4Q21 1Q22 $ in millions Average assets $ 124,340 $ 120,860 $ 116,959 $ 119,584 $ 135,480 $ 152,669 $ 148,157 $ 157,722 $ 151,648 Goodwill (4,593) (4,593) (4,593) (4,593) (4,593) (4,593) (4,593) (4,593) (4,
Slide 33: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Net Interest Margin 1Q21 2Q21 3Q21 4Q21 1Q22 Net Interest Margin 2.97% 2.77% 2.74% 2.58% 2.65% Less: Excess Cash (0.45%) (0.51%) (0.67%) (0.74%) (0.64%) Less: PPP 0.09% 0.04% 0.14% 0.09% 0.05% Less: Swap Income 0.27% 0.22% 0.19% 0.15% 0.14% Adjusted Net I
Slide 34: M&T Peer Group
M&T Peer Group Citizens Financial Group, Inc. M&T Bank Corporation Comerica Incorporated PNC Financial Services Group, Inc. Fifth Third Bancorp Regions Financial Corporation First Horizon National Corporation Truist Financial Corporation Huntington Bancshares Incorporated U.S. Bancorp KeyCorp Zions