M&t Bank Corporation · NYSE:MTB
M&t Bank — Investor Presentation (June 2024)
41 slides from M&t Bank's investor presentation, Jun 11, 2024
Slide 1: Investor Update 2nd Quarter 2024
Investor Update 2nd Quarter 2024 JUNE 2024 Exhibit 99.1
Slide 2: Disclaimer
Disclaimer 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 and the rules and regulations of the Securities and Exchange Commission (“SEC”). Any statement that does not describe
Slide 3: Purpose, Mission and Operating Principles
3 Purpose Mission Operating Principles Local Scale Credit Discipline Operating & Capital Efficiency
Slide 4: Sustainability Accomplishments and Highlights
Making a positive impact on our communities, customers, and colleagues Fostering Prosperity in Our Communities Investing in Our Employees Strong Governance and Consistent Leadership Preserving our Environment Sustainability Accomplishments and Highlights Note: All data except for SBA data are as of
Slide 5: Key Awards and Accolades
5 J.D. Power 2024 U.S. Banking Mobile App Satisfaction Study; among banks with $70B to $200B in deposits. Visit jdpower.com/awards for more details. Key Awards and Accolades
Slide 6: Diversified Business Model
Diversified Business Model Experienced teams provide a wide-range of credit, liquidity and capital markets solutions to meet our customer needs, delivered through a local engagement model and industry expertise on a national scale. Strategically built for the communities in which we operate. High-to
Slide 7: Local Scale in Key Markets
Local Scale in Key Markets 7 Source: S&P Global Market Intelligence, FDIC Summary of Deposits (1) Top banks and thrifts by number of branches in Northeast / Mid-Atlantic regions (CT, DC, DE, MA, MD, ME, NH, NJ, NY, PA, RI, VA, VT, WV). M&T as of 4/25/2024, excludes two domestic branches outside of N
Slide 8: Through the Cycle Profitability Advantage
Through the Cycle Profitability Advantage… 8 Note: (1) See Appendix 1 and 2 for reconciliation of GAAP with these non-GAAP measures. 1.32% 1.33% 1.36% 1.04% 1.16% 1.17% 20-Years 2004-2023 10-Years 2014-2023 5-Years 2019-2023 Net Operating ROTA(1) Better than Peer PPNR Generation & Credit Losses • Ai
Slide 9: Combined with Consistent Growth
$21.97 $98.54 $- $20 $40 $60 $80 $100 $120 2003 2008 2013 2018 2023 $1.20 $5.20 $- $1 $2 $3 $4 $5 $6 2003 2008 2013 2018 2023 …Combined with Consistent Growth Dividend Per Share Tangible Book Value Per Share MTB: 7.6% CAGR Peer Median: 1.3%CAGR MTB: 7.8% CAGR Peer Median: 1.5% CAGR 10.5% 10.0% 11.9%
Slide 10: Key Ratios
Key Ratios 10 Note: (1) See Appendix 1 and 2 for reconciliation of GAAP with these non-GAAP measures. 2019 2020 2021 2022 2023 1Q23 4Q23 1Q24 Superior Pre-Credit Earnings Net Interest Margin 3.84% 3.16% 2.76% 3.39% 3.83% 4.04% 3.61% 3.52% Efficiency Ratio (1) 55.7% 56.3% 59.0% 56.6% 54.9% 55.5% 62.1
Slide 11: Solid Performance in Key Metrics against Peers
Solid Performance in Key Metrics against Peers 11 ROTA(1) 1Q24 Net Interest Margin 1Q24 Efficiency Ratio(1) 1Q24 PPNR / RWA(1) 1Q24 NCO / Loans 1Q24 Note: (1) See Appendix 1 and 2 for reconciliation of GAAP with these non-GAAP measures. Source: S&P Global Market Intelligence and company filings 1.1%
Slide 12: M&T Bank Corporation
M&q Bank Corporation | 12
Slide 13: 2Q 2024 Trends
2Q 2024 Trends Average Customer Deposits Growing; Average Loans Up Lower Expense with Seasonally Lower Compensation Revenues Trending Expectations Capital Builds and Asset Quality Trending Expectations • Through May QTD, average deposits down modestly from the linked quarter to $163.9 billion, lower
Slide 14: 2024 Outlook
2024 Outlook 2024 Outlook Comments In c o m e S ta te m e n t Net Interest Income Taxable-equivalent $6.85 billion +/- • NIM in the 3.50s • Reflects one rate cut Fee Income $2.3 billion to $2.4 billion • Growth in trust income from strong market activity GAAP Expense Includes intangible amortization
Slide 15: Approaching Neutral Asset Sensitivity
$175 $102 $69 $126 $84 $64 $20 $5 $(183) $(164) $(100) $(46) $(18) $(374) $(329) $(193) $(83) $(36) Mar. '23 June '23 Sept. '23 Dec. '23 Mar. '24 Approaching Neutral Asset Sensitivity (1) Represents estimated impact on NII resulting from a parallel shift in interest rates during first modeling year.
Slide 16: Swap Portfolio Details
Swap Portfolio Details 16 ▪ Hedge position increasing through 2024 as forward-starting hedges become “active” ▪ Forward-starting rates higher than current active resulting in higher active rates in 2025 ▪ QTD through May, added $3.6B in forward-starting – 2025 start, ~4.1%, 2-year maturity Highlight
Slide 17: Granular, Diversified Core Deposit Funding & Strong Liquidity Position
Granular, Diversified Core Deposit Funding & Strong Liquidity Position Granular Deposit Base Diversified Deposit Base Stable & Long-Tenured Relationships Strong Liquidity Profile • 64% of deposits are insured or collateralized as of 3/31/2024 • Average consumer deposit account balance is $15,000 • A
Slide 18: Local Scale Leads to Superior Deposit Franchise
0% 10% 20% 30% 40% 50% 60% 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 1 Q 2 3 2 Q 2 3 3 Q 2 3 4 Q 2 3 1 Q 2 4 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2
Slide 19: Diversified and Granular Deposit Base
Retail Bank $91.6B Commercial Bank $43.5B Inst. Svcs. & Wealth Mgmt. $16.2B All Other $12.6B Diversified and Granular Deposit Base • Diversified across industries and geographies • Average relationship tenure of 15 years • Average account size $4MM; median $360k • ~63% operating balances Average Dep
Slide 20: Strong Core Funding and Liquidity
Int-Bearing Cash, $32.0B Unused FHLB, $14.6B Unused FRB NY, $18.4B Unencumbered Securities, $16.5B Adjusted Uninsured, $60.5B Collateralized, $11.4B $81.5B $71.9B Liquidity Uninsured Deposits • Liquidity Sources represent ~135% of Adjusted Uninsured Deposits as of 3/31/2024 • Uninsured Deposits repr
Slide 21: Strong CRE Underwriting Track Record
Strong CRE Underwriting Track Record All information presented as of 3/31/2024 Long History & Expertise in CRE Lending • Long-term relationships and consistently conservative Credit Standards through economic cycles • Two Chief Credit Officers over the past 40 years Diversified Loan Portfolio • 43%
Slide 22: Well Diversified Loan Portfolio
Multifamily $6.4B, 5% Retail $5.8B, 4% Office $4.6B, 3% Healthcare $3.6B, 3% Hotel $2.5B, 2% Industrial & Other $2.2B, 2% Construction $7.2B, 5% C&I - Owner Occ. $9.9B, 7% C&I $48.0B, 36% Cons. Real Estate $23.1B, 17% Consumer $21.6B, 16% Permanent CRE $25.2B, 19% Well Diversified Loan Portfolio (1)
Slide 23: Allowance for Credit Losses
• March 31, 2024 assumptions, during the 8 quarter forecast period – Average unemployment rate of 4.5% – Gross domestic product growth at a 1.0% rate during the first year of the forecast period and at a 1.8% rate in the second year – Commercial real estate and residential real estate prices were as
Slide 24: Superior Credit Losses Through Multiple Economic Cycles
Source: S&P Global Market Intelligence and FRY9C. Note: Industry data represents all FDIC-insured institutions from the FDIC’s Quarterly Banking Profile (“QBP”). Average, max, and range are weighted FY1990-FY2023. Superior Credit Losses Through Multiple Economic Cycles M&T Credit Philosophy NCO % of
Slide 25: Spotlight on Permanent IRE
Spotlight on Permanent IRE • Hallmark of structures requires material upfront ‘skin in the game’ to ensure alignment and provide a buffer against potential future losses • Weighted average LTV is 56%; over 80% of the total Permanent IRE portfolio has an LTV of 70% or less • Approximately 70% of the
Slide 26: Diversified and Low LTV Permanent Office CRE
Diversified and Low LTV Permanent Office CRE (1) Lease maturity data for loans with >$10MM in exposure. Balance ($, B) % of Total Loans WAVG LTV New York City $0.7 0.5% 48% Connecticut $0.5 0.4% 58% Greater Boston $0.4 0.3% 59% New Jersey $0.3 0.2% 62% Western New York $0.3 0.2% 61% VT/NH/ME $0.3 0.
Slide 27: Permanent Office CRE Maturities Spread Out and Manageable
Permanent Office CRE Maturities Spread Out and Manageable 2Q24 3Q24 4Q24 1Q25 2Q24-1Q25 2Q25-1Q26 >90% 10% 8% - 13% 8% 3% >80%-90% 3% - - 7% 3% 3% >70%-80% 11% 23% 12% - 9% 6% >60%-70% 36% 25% 2% 9% 15% 22% >50%-60% 21% 13% 53% 26% 30% 30% ≤50% 19% 31% 32% 44% 34% 37% Maturities ($, B) $0.2 $0.2 $0.
Slide 28: Credit Metrics
Credit Metrics Nonaccrual Loans Net Charge-offs Provision for Credit Losses Allowance for Credit Losses 28 $70 $127 $96 $148 $138 0.22% 0.38% 0.29% 0.44% 0.42% 1Q23 2Q23 3Q23 4Q23 1Q24 $ I N M IL L IO N S NCO ($) Net Charge-off Ratio $120 $150 $150 $225 $200 1Q23 2Q23 3Q23 4Q23 1Q24 $ I N M IL L IO
Slide 29: Criticized C&I and CRE Loans
Criticized C&I and CRE Loans +$364 million QoQ Criticized Increase: • C&I increased +$641 million – Nonautomotive dealers and manufacturing • CRE decreased -$277 million – Permanent CRE -$139 million – Construction -$138 million • 97% of criticized accrual loans are current • 59% of criticized nonac
Slide 30: Strong Capital and Low AOCI Impact
Strong Capital and Low AOCI Impact • Top quartile CET1 ratio among peers (11.1%) • Top quartile TCE ratio among peers (8.0%); nearly 200 bps above peer median • Agency MBS/CMBS account for 55% of total and U.S. Treasurys 31% • AFS duration ~2.0 years and HTM duration ~5.4 years, total debt securitie
Slide 31: Diversified Securities Portfolio
Agency MBS $12.4B US Treasury $8.7B Agency CMBS $3.4B Municipal Bonds $2.5B Other Debt Sec. $0.2B Equity & Other $1.3B Diversified Securities Portfolio (1) Mortgage securities include estimated prepayment under market forward interest rates. $28.5B Securities Portfolio Composition 3/31/2024 • Securi
Slide 32: Strong Capital Levels Compared to Peers
Strong Capital Levels Compared to Peers • Capital levels favorable to peers both as reported and when considering AOCI • Strong capital position benefits M&T under current and proposed rules – CET1 ratio would exceed SCB minimum levels under proposal • Modest impact from including AOCI in regulatory
Slide 33: Why invest in M&T?
Why invest in M&T? • Long term focused with deeply embedded culture • Business operated to represent the best interests of all key stakeholders • Energized colleagues consistently serving our customers and communities • A safe haven for our clients as proven during turbulent times and crisis • Exper
Slide 34: Appendices
Appendices M&q Bank Corporation | 34
Slide 35: GAAP to GAAP - Adjusted (Non-GAAP) Reconciliation
Appendix 1 Note: M&T is providing supplemental reporting of its results on a “GAAP – Adjusted” basis, from which M&T excludes the after-tax effect of certain notable items of significance. Although “GAAP – Adjusted” income as presented by M&T is not a GAAP measure, M&T management believes that this
Slide 36: GAAP to Net Operating and Net Operating-Adjusted Reconciliation
Appendix 2 Note: M&T consistently provides supplemental reporting of its results on a “net operating” or “tangible” basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit and other intangible asset balan
Slide 37: GAAP to Net Operating (Non-GAAP) Reconciliation
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation 37 In millions 2019 2020 2021 2022 2023 1Q23 4Q23 1Q24 Efficiency ratio Noninterest expense $3,469 $3,385 $3,612 $5,050 $5,379 $1,359 $1,450 $1,396 Less: Amortization of core deposit and other intangible assets 19 15 10 56 62 17 15 15 Less:
Slide 38: GAAP to Net Operating - Adjusted (Non-GAAP) Reconciliation
Appendix 2 GAAP to Net Operating - Adjusted (Non-GAAP) Reconciliation 38 In millions 2019 2020 2021 2022 2023 1Q23 4Q23 1Q24 Efficiency ratio - Adjusted Noninterest expense $3,469 $3,385 $3,612 $5,050 $5,379 $1,359 $1,450 $1,396 Less: Amortization of core deposit and other intangible assets 19 15 10
Slide 39: GAAP to Tangible (Non-GAAP) Reconciliation
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation 39 In millions 2019 2020 2021 2022 2023 1Q23 4Q23 1Q24 Average assets Average assets $119,584 $135,480 $152,669 $190,252 $205,397 $202,599 $208,752 $211,478 Goodwill (4,593) (4,593) (4,593) (7,537) (8,473) (8,490) (8,465) (8,465) Core deposit and
Slide 40: GAAP to Tangible (Non-GAAP) Reconciliation
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation 40 In millions 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 3/31/2023 12/31/2023 3/31/2024 Total assets Total assets $119,873 $142,601 $155,107 $200,730 $208,264 $202,956 $208,264 $215,137 Goodwill (4,593) (4,593) (4,593) (8,490) (8,465
Slide 41: M&T Peer Group
M&T Peer Group PNC Financial Services Group, Inc.Comerica Incorporated Regions Financial CorporationFifth Third Bancorp Huntington Bancshares Incorporated Zions Bancorporation, NAKeyCorp Truist Financial Corporation U.S. Bancorp M&T Bank CorporationCitizens Financial Group, Inc. First Horizon Nation