M&t Bank Corporation · NYSE:MTB
M&t Bank — Investor Presentation (September 2021)
45 slides from M&t Bank's investor presentation, Sep 14, 2021
Slide 1: Investor Update | Third Quarter 2021
Investor Update | Third Quarter 2021 Exhibit 99.1
Slide 2: Forward-looking statements
This presentation may contain forward-looking statements regarding M&T Bank Corporation (“M&T”) within the meaning of the Private Securities Litigation Reform Act of 1995. Any statement that does not describe historical or current facts is a forward-looking statement, including statements based on c
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 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 over
Slide 4: The M&T Story: Our Operating Principles
The M&T Story: A High Performing Community-Focused Bank… ….Our Operating Principles Our People Operating Principles Mission Outcomes Talent & Capabilities Customers & Communities Ongoing insourcing of new capabilities Local Scale Credit Discipline Operating & Capital Efficiency Long-term and deep cu
Slide 5: Strong Financial Results Over the Long Term
ROTCE (average) GAAP EPS Growth – 20 Years (CAGR) ROTCE – 20 Years Dividend Growth – 20 Years (CAGR) 20 Years 10 Years 5 Years Average Min Strong Financial Results Over the Long Term Source: S&P Global Market Intelligence. Notes: ROTCE, dividend growth and EPS growth through FY2020. EPS and dividend
Slide 6: Delivering Superior Financial Results Over Decades
Delivering Superior Financial Results Over Decades Earnings & Dividend Growth: 1983 – 2021 YTD 14% EPS CAGR 13% Dividend CAGR Notes: CAGRs are from 1983 to full year 2020. 2Q21 YTD
Slide 7: Strong Financial Results in Recent Years
ROTCE Operating EPS CAGR Strong Financial Results in Recent Years Source: S&P Global Market Intelligence. With the exception of recent volatility, M&T has outperformed the peer median in EPS growth and returns in the prior 4 full years
Slide 8: Delivering Growth Over Decades
Loans: MTB Peer Median Quartile Commercial Real Estate 6% > 4% Top Commercial & Industrial 7% > 5% 2nd Residential Real Estate 5% > 3% Top Consumer 5% > 2% 2nd Total Loans 6% > 3% 2nd Deposits: Noninterest-Bearing 13% > 10% Top Interest-Bearing 6% > 3% Top Total Deposits 8% > 6% Top Delivering Growt
Slide 9: Local Scale in Key Markets
Hartford PF Rank Buffalo 1 Fairfield Co., CT(1) 1 Rochester 1 Baltimore 2 Hartford 2 New Haven 2 Philadelphia 7 Boston 8 Washington 11 New York 16 Buffalo Baltimore Wilmington Stamford Bridgeport Boston Contiguous Branch Footprint… People’s United transaction adds a leading market position in New En
Slide 10: Local Scale Leads to Superior Deposit Franchise
Total Cost of Deposits Noninterest-bearing deposits represented 42% of 2Q 2021 average total deposits for M&T compared to 35% peer median M&T Peer Median 2000-2021YTD Average M&T 0.99 Peer Median 1.13 Difference -0.15 Peer Range Noninterest Bearing Deposits / Total Deposits M&T Peer Median Peer Rang
Slide 11: Superior Growth and Pricing
Deposit Growth1 – 2Q21 YoY Cost of Funding Earning Assets2 – 2Q21 Loan Yield – 2Q21 Total Loan Growth1 – 2Q21 YoY Total Deposits Non-interest Bearing Deposits Excluding PPP Including PPP Superior Growth and Pricing Source: S&P Global Market Intelligence and company filings. Notes: (1) Loan and depos
Slide 12: Higher Returns Relative to Risk
Higher Returns Relative to Risk Risk Adjusted Net Interest Margin (NII less NCO % of AEA) MTB Peer Median Peer Range Source: S&P Global Market Intelligence and company filings See appendix for list of peers
Slide 13: Superior Credit Losses Through Multiple Economic Cycles
NCO % of Loans Consistent credit standards through economic cycles Emphasis on secured lending: cash flow + collateral + guarantors Customer selection, supported by local market knowledge Working with customers to achieve best long-term outcome M&T Credit Philosophy While M&T’s long-term average non
Slide 14: Best-In-Class Credit NCO Ratios Across All Portfolios
Best-In-Class Credit NCO Ratios Across All Portfolios Source: S&P Global Market Intelligence and company filings. Note: Range measures the difference between the annual maximum and minimum for M&T and peers. Residential Real Estate Other CRE Other Consumer HELOC Construction C&I MTB Peer Range Peer
Slide 15: Superior Credit Performance Relative to Peers and Industry
Superior Credit Performance Relative to Peers and Industry Top 4 Banks Peer Group Source: S&P Global Market Intelligence and FDIC. Sorted by EOP total assets at 6/30/21. Cumulative, 10-, and 5-year averages as of 2020. Calculated as actual NCO ratio divided by expected NCO ratio which is based on FD
Slide 16: Efficient Operator Through the Cycles
Efficient Operator Through the Cycles Operating Efficiency Ratio 2Q 2021 TTM Sources: S&P Global Market Intelligence and company filings See appendix for calculation of operating efficiency ratio and list of peers MTB Peer Range Median
Slide 17: Prudent Stewards of Shareholders' Capital
Disciplined return criteria – lending and investments Higher return earning asset mix Moderate dividend payout One of two S&P banks to maintain dividend through the Great Financial Crisis Acquisitions that clearly present value creation History of accretive acquisitions Consistently return excess ca
Slide 18: Meeting Evolving Needs: Talent Is the Greatest Differentiator
Meeting Evolving Needs: Talent Is the Greatest Differentiator Seasoned, Skilled, and Stable Digitally forward, locally focused Enhanced team with new skill sets including design engineers and anthropologists to solve problems & deliver solutions Partnerships with Fintechs to innovate and create cust
Slide 19: 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 technol
Slide 20: Leveraging The Tech Hub at Seneca One
Leveraging The Tech Hub at Seneca One … …And Buffalo’s Burgeoning “Innovation Corridor” Job Creation & Talent Attraction About 1,500 employees will be located in the Tech Hub, with another 500 technologists in close proximity to Innovation Corridor M&T Tech Hub at Seneca One 330,000 square feet of w
Slide 21: Powering Community Banking with Innovation & Digital Capabilities
HUMAN DIGITAL DIGITAL-ASSISTED Virtual Communication Tools: Digital Appointment Setting, Virtual Conferencing, Live Chat Electronic Signature Personalized MTB.com Advanced Prospect Targeting Money Smart New Wealth Client/Advisor Digital Portal Digitized P2P Payments Money Mentor Dash End-to-end digi
Slide 22: Our Focus on Customers, Communities and Innovation Pays Dividends
Our Focus on Customers, Communities and Innovation Pays Dividends Customer Focused Business Support $1.8 billion in community development loans & investments 40 hours of volunteer time to employees yearly $263 million charitable donations to not-for-profits over the past decade Opened tech hub; Laun
Slide 23: A Bank for Communities & Making a Difference – Our ESG Commitment
A Bank for Communities & Making a Difference – Our ESG Commitment $493.3 million funded in renewable energy projects over the past three years $175.4 million investment in renewable energy in 2020 Silver LEED rating on our Baltimore regional headquarters 7% reduction in our total electricity usage E
Slide 24: A Bank for Communities & Making a Difference – Our ESG Commitment
A Bank for Communities & Making a Difference – Our ESG Commitment
Slide 25: 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 over
Slide 26: Current Themes & Key Message
Current Themes & Key Message
Slide 27: Highly Profitable Business Model with Upside Potential from Dry Powder
Highly Profitable Business Model with Upside Potential from “Dry Powder” Excess Liquidity Excess Capital People’s United Acquisition “Dry Powder” Environmental Challenges Low Rates Supply Chain Disruptions Excess Cash Elevated Capital COVID Uncertainty Excess Credit Reserves Low Utilization Rates Ac
Slide 28: Strong Core Profitability
Strong Core Profitability Source: S&P Global Market Intelligence and company filings Notes: Excludes 2020 purchases accounting gains for FHN See appendix for operating PPNR calculation. Operating Pre-tax Pre-provision Net Revenue as a % of Risk Weighted Assets – 2021 Q2 TTM
Slide 29: Powerful Combination with People's United Creates Shareholder Value
Shared conservative credit culture with credit outperformance over decades Powerful Combination with Peoples United Creates Shareholder Value Equipment finance business expands and diversifies M&T’s portfolio of national businesses Shared community banking purpose and commitment, with deep local pre
Slide 30: Compelling Pro Forma Financial Impact
Immediately Accretive to Tangible Book Value Strong, Growing EPS Accretion(2) Attractive Returns Robust Capital Levels and Generation Meaningful Cost Synergies Compelling Pro Forma Financial Impact Pro Forma TCE / TA at Close >8% Internal Rate of Return 18%+ Pro Forma CET1 Ratio at Close >10% Additi
Slide 31: People's United Financial Acquisition Update
Peoples United Financial Acquisition Update 2021 2022 February 21 Announcement March 23 Merger Application Filed May 25 MTB & PBCT Shareholders Approve Merger 4Q21 Anticipated Close 1Q22 Anticipated Systems Conversion Filed all key regulatory applications Joint proxies filed and S-4 declared effecti
Slide 32: Dry Powder from Above Peer Excess Liquidity
“Dry Powder” from Above Peer Excess Liquidity Cash and cash equivalents driving excess balance sheet growth Predominately interest-earning deposits with the Federal Reserve, these assets generate negligible interest, negatively impact our NIM, but are relatively neutral from an NII perspective Utili
Slide 33: Meaningful Dry Powder and Upside from Higher Rates
Meaningful “Dry Powder” and Upside from Higher Rates Benefit from Gradual +100 Basis Points Increase as of June 30, 20211 Strong deposit base, high commercial loan concentration, and elevated liquidity to support above average benefit from higher rates Asset sensitivity near top of peer group with a
Slide 34: Dry Powder from Reserves Above CECL Day 1
“Dry Powder” from Reserves Above CECL Day 1 Allowance for Loan and Lease Losses as a % of Loans Above CECL Day 1(1) M&T has an above average ALLL build compared to CECL Day 1 levels. As of 6/30/21, the ALLL/loans ratio is 32 bps above the CECL Day 1 level while the peer median is only 15 bps above C
Slide 35: Dry Powder from Above Peer Capital Levels
“Dry Powder” from Above Peer Capital Levels CET1 Ratio elevated versus peer group and historical levels Top-quartile CET1 generation (+99 bps) since December 31, 2019 Comfortably covered our dividend through earnings in all quarters of the pandemic Tangible book value per share growth of +12.0% sinc
Slide 36: Appendix
Q3 2021 | Appendix Z
Slide 37: Strong Financial Results in Recent Years
Strong Financial Results in Recent Years Notes: (1) The Efficiency Ratio and Pre-provision Net Revenue are non-GAAP financial measures. The Efficiency Ratio reflects non-interest expense (excluding amortization expense associated with intangible assets and merger-related expenses) as a percentage of
Slide 38: Stable Adjusted Net Interest Margin Trends
Stable Adjusted Net Interest Margin Trends Net Interest Income 0 Net Interest Margin Notes: (1) The impact to NIM from excess cash balances is calculated by comparing the sum of Federal funds sold and agreements to resell securities, interest earnings deposits at banks and trading assets at the end
Slide 39: Residential Mortgage Trends
Residential Mortgage Trends Mortgage Banking Revenues – A Steady Contributor to Fee Income 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 commercial loans for others The diversi
Slide 40: Total Loan Portfolio and Criticized Loan Mix
Pass Total Loan Portfolio and Criticized Loan Mix – June 30, 2021 Total criticized loans of $9.7 billion represent 10% of total loans Criticized loans are well secured (CRE constitute 82% of total) and about 1/3 in NYC COVID impacted industries-Hotel, health facilities and retail CRE account for 64%
Slide 41: Commercial Real Estate Performance
Commercial Real Estate Performance Exposure diversified geographically; NYC (15%), Massachusetts (12%), N.J. (9%) all other <=6% Revpar still below pre-pandemic levels, but up y/y (3x in Boston, 2x in NYC & NJ) 80% of exposures have been reappraised in 2020/2021; 99% of nonaccrual have been reapprai
Slide 42: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Notes: *Net of tax Numbers may not foot due to rounding
Slide 43: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Notes: Numbers may not foot due to rounding
Slide 44: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Notes: Numbers may not foot due to rounding
Slide 45: M&T Peer Group
M&T Peer Group PNC Financial Services Group, Inc. Comerica Incorporated Regions Financial Corporation Fifth Third Bancorp Huntington Bancshares Incorporated Zions Bancorporation, NA KeyCorp Truist Financial Corporation U.S. Bancorp M&T Bank Corporation Citizens Financial Group, Inc. First Horizon Na