M&t Bank Corporation · NYSE:MTB
M&t Bank — Q4 2023 Earnings Presentation
29 slides from M&t Bank's earnings presentation, Jan 18, 2024
Slide 1: Earnings Results 4th Quarter 2023
Earnings Results 4th Quarter 2023 JANUARY 18, 2024 1
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements regarding M&T Bank Corporation (“M&T”) within the meaning of the cost/financial risks in large, multi-year contracts; continued availability of financing; financial resources in the amounts, at the Private Securities Litigation Refo
Slide 3: Purpose, Mission and Operating Principles
Purpose Mission To make a difference We are a bank for communities – in people’s lives. committed to improving the lives of our customers and all the communities we touch. Operating Principles Operating & Credit Local Scale Capital Discipline Efficiency 3
Slide 4: Making a positive impact on our communities, customers, and colleagues
Making a positive impact on our communities, customers, and colleagues Sustainability Accomplishments and Highlights Fostering Prosperity in Our Communities Investing in Our Employees • Ranked #6 SBA Lender in the country (FY2023), the 15th consecutive year among the nation’s top 10 SBA • Consistent
Slide 5: Financial Results
M&PBank Corporation | s
Slide 6: Full Year 2023 Earnings Highlights
Full Year 2023 Earnings Highlights GAAP GAAP - Adjusted (Non-GAAP)(1) ($ in millions, except per share) 2023 2022 ($ in millions, except per share) 2023 2022 Revenues $9,643 $8,179 Revenues $9,418 $8,042 Noninterest Expense $5,379 $5,050 Noninterest Expense $5,182 $4,577 Provision for Credit Losses
Slide 7: Fourth Quarter 2023 Earnings Highlights
Fourth Quarter 2023 Earnings Highlights GAAP GAAP - Adjusted (Non-GAAP)(1) ($ in millions, except per share) 4Q23 3Q23 4Q22 ($ in millions, except per share) 4Q23 3Q23 4Q22 Revenues $2,300 $2,335 $2,509 Revenues $2,300 $2,335 $2,373 Noninterest Expense $1,450 $1,278 $1,408 Noninterest Expense $1,253
Slide 8: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin QoQ Drivers $1,841 • Taxable-equivalent net interest income(1) $1,832 $1,813 $1,790 decreased -$55 million QoQ $1,735 – Driven largely by higher interest rates on customer deposit funding – An unfavorable funding mix change $ IN MILLIONS – Partially offset b
Slide 9: Balance Sheet – Overview
Balance Sheet – Overview Change 4Q23 vs Average Balances, $ in billions, except per share 4Q23 3Q23 4Q22 3Q23 4Q22 Interest-bearing Deposits at Banks $30.2 $26.7 $25.1 13% 20% Investment Securities $27.5 $28.0 $25.3 -2% 9% Commercial and Industrial “C&I” $55.4 $54.5 $49.9 2% 11% Commercial Real Esta
Slide 10: Balance Sheet – Average Loans
Balance Sheet – Average Loans QoQ Drivers $132.0 $133.5 $132.6 $132.8 $129.4 Average loans +$0.2 billion or less than +1% $20.4 $20.5 $20.3 $20.2 $20.6 QoQ: • C&I loans increased +2% (+$854 million) QoQ, $23.3 $23.8 $23.8 $23.6 $23.3 driven by growth in our dealer, fund banking and corporate and ins
Slide 11: Balance Sheet – Securities and Cash
Balance Sheet – Securities and Cash Average Investment Securities and Yield Securities and Cash – at 12/31/23 Other $28.6 Securities $27.6 $28.0 $27.5 2% $25.3 Interest- bearing deposits at HTM banks $56.7B $55.7B Securities 27% TOTAL $ IN BILLIONS 50% TOTAL 3.09% 3.14% 3.13% 3.00% Cash 2.77% AFS 3%
Slide 12: Balance Sheet – Average Deposits
Balance Sheet – Average Deposits QoQ Drivers $163.5 $161.5 $162.7 $164.7 Average deposits +$2.0 billion or +1% QoQ: $159.4 $6.2 $11.6 $16.0 $19.5 $21.2 • Continued deposit mix shift to higher cost deposits given increased competition and customer behavior • Approximately 75% of the increase in avera
Slide 13: Income Statement – Noninterest Income
Income Statement – Noninterest Income Change 4Q23 vs Gain on CIT Sale(2) $803 $ in millions 4Q23 3Q23 4Q22 3Q23 4Q22 Gain on MTIA Sale(1) Mortgage Banking Revenues $112 $105 $82 8% 38% $682 $225 $587 Service Charges on Deposits $121 $121 $106 - 14% $560 $578 $136 Trust Income $159 $155 $195 2% -19%
Slide 14: Income Statement – Noninterest Expenses
Income Statement – Noninterest Expenses FDIC Special Charitable Assessment(1) Contribution(1) Change 4Q23 vs $1,450 $ in millions 4Q23 3Q23 4Q22 3Q23 4Q22 $1,408 $1,359 Salaries & Benefits(5) $724 $727 $693 - 4% $63 $1,293 $1,278 $1,435 Equip & Occupancy $134 $131 $135 2% - $1,345 $1,342 $1,278 $1,2
Slide 15: Credit
Credit Net charge-off ratio YTD of 0.33% equal to long-term average Net Charge-offs Provision for Credit Losses $148 $ IN MILLIONS $127 $225 $ IN MILLIONS $96 0.44% 0.38% $150 $150 $70 0.29% $120 $40 0.22% 0.12% $90 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 NCO ($) Net Charge-off Ratio Nonac
Slide 16: Criticized C&I and CRE Loans
Criticized C&I and CRE Loans $1.5B QoQ Criticized Increase: • Non-owner-occupied C&I Loans +$663 million $12.6 • CRE +$816 million – Permanent CRE +$441 million $11.1 – Construction +$375 million $10.7 $10.6 $10.5 • 96% of criticized accrual loans are current • 53% of criticized nonaccrual loans are
Slide 17: Criticized CRE Loans
Criticized CRE Loans December 31, 2023 September 30, 2023 Criticized Criticized Criticized Outstanding Criticized Accrual Nonaccrual Total Criticized Outstanding Accrual Nonaccrual Total Criticized (In millions) Permanent finance by property type Apartments/Multifamily $ 6,165 $ 1,184 $ 115 $ 1,299
Slide 18: Criticized C&I Loans
Criticized C&I Loans December 31, 2023 September 30, 2023 Criticized Criticized Criticized Outstanding Criticized Accrual Nonaccrual Total Criticized Outstanding Accrual Nonaccrual Total Criticized (In millions) Commercial and industrial excluding owner-occupied real estate by industry Financial and
Slide 19: Capital
Capital CET1(1) TBVPS(2) 10.98% $98.54 10.95% $93.99 $91.58 10.59% (1) $88.81 10.44% $86.59 10.16% 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 QoQ Drivers • CET1 capital ratio increased +3 bps to 10.98%(1) at 4Q23 • Tangible common equity to tangible assets was 8.20% at the end of 4Q23 • Tangi
Slide 20: 2024 Outlook
2024 Outlook 2024 Outlook Comments • NIM in the 3.50s Net Interest Income $6.7 billion to • Reflects the impact of higher deposit funding costs and impact of Fed cuts Taxable-equivalent $6.8 billion • Expect to shift portion of cash to securities • Potential additional hedging actions to protect NII
Slide 21: Financial Reporting Changes
Financial Reporting Changes At December 31, 2023, the Company reclassified the substantial majority of its loans secured by commercial real estate that Owner-occupied were considered owner-occupied to commercial and industrial loans to reflect the variation in the management and underlying reclassif
Slide 22: Why invest in M&T?
Why invest in M&T? Purpose-Driven Successful and Sustainable Business Model that Produces Strong Shareholder Returns Purpose Driven Successful and Strong Organization Sustainable Shareholder Business Model Returns • Long term focused with deeply • Experienced and seasoned • 15-20% ROATCE embedded cu
Slide 23: Appendices
Appendices M&PBank Corporation | 23
Slide 24: Appendix 1: GAAP to GAAP-Adjusted Reconciliation
Appendix 1 GAAP to GAAP – Adjusted (Non-GAAP) Reconciliation In millions 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Revenues Net interest income - GAAP $1,827 $1,818 $1,799 $1,775 $1,722 $5,822 $7,115 Total other income - GAAP 682 587 803 560 578 2,357 2,528 Subtotal 2,509 2,405 2,602 2,335 2,300 8,179 9,64
Slide 25: Appendix 1: GAAP to GAAP-Adjusted Reconciliation
Appendix 1 GAAP to GAAP – Adjusted (Non-GAAP) Reconciliation In millions, except per share 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Net income Net income - GAAP $765 $702 $867 $690 $482 $1,992 $2,741 FDIC special assessment(1) - - - - 146 - 146 Gain on CIT(1) - - (157) - - - (157) Gain on MTIA(1) (98) - -
Slide 26: Appendix 2: GAAP to Net Operating Reconciliation
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation In millions 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Other expense Other expense $1,408 $1,359 $1,293 $1,278 $1,450 $5,050 $5,379 Amortization of core deposit and other intangible assets (18) (17) (15) (15) (15) (56) (62) Merger-related expenses (
Slide 27: Appendix 2: GAAP to Net Operating Reconciliation
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation In millions 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Efficiency ratio Noninterest operating expense (numerator) $1,345 $1,342 $1,278 $1,263 $1,435 $4,656 $5,317 Taxable-equivalent net interest income 1,841 1,832 1,813 1,790 1,735 5,861 7,169 Other
Slide 28: Appendix 2: GAAP to Tangible Reconciliation
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation In millions 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Average assets Average assets $198,592 $202,599 $204,376 $205,791 $208,752 $190,252 $205,397 Goodwill (8,494) (8,490) (8,473) (8,465) (8,465) (7,537) (8,473) Core deposit and other intangible assets
Slide 29: Appendix 2: GAAP to Tangible Reconciliation
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation In millions 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Total assets Total assets $200,730 $202,956 $207,672 $209,124 $208,264 Goodwill (8,490) (8,490) (8,465) (8,465) (8,465) Core deposit and other intangible assets (209) (192) (177) (16