M&t Bank Corporation · NYSE:MTB
M&t Bank — Investor Presentation (September 2024)
40 slides from M&t Bank's investor presentation, Sep 10, 2024
Slide 1: Investor Update 3rd Quarter 2024
Investor Update 3rd Quarter 2024 SEPTEMBER 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 (1) Following the criteria for independence r
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 7/1/2024, excludes two domestic branches outside of No
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 $6 2003 2008 2013 2018 2023 …Combined with Consistent Growth Dividend Per Share Tangible Book Value Per Share MTB: 7.6% CAGR Peer Median: 1.3%CAGR MTB: 7.8% CAGR Peer Median: 1.5% CAGR 10.5% 10.0% 11.9%
Slide 10: Superior Pre-Credit Earnings
2019 2020 2021 2022 2023 1H24 Superior Pre-Credit Earnings Net Interest Margin 3.84% 3.16% 2.76% 3.39% 3.83% 3.56% Efficiency Ratio (1) 55.7% 56.3% 59.0% 56.6% 54.9% 58.0% PPNR ($, Millions) (1) $2,753 $2,579 $2,445 $3,471 $4,232 $1,909 PPNR to RWA (1) 2.7% 2.4% 2.3% 2.7% 2.8% 2.5% Strong Credit Met
Slide 11: Solid Performance in Key Metrics against Peers
Solid Performance in Key Metrics against Peers 11 ROTA(1) 2Q24 Net Interest Margin 2Q24 Efficiency Ratio(1) 2Q24 PPNR / RWA(1) 2Q24 NCO / Loans 2Q24 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 1.3%
Slide 12: M&T Bank Corporation
M&@ Bank Corporation | 12
Slide 13: 3Q 2024 Trends
3Q 2024 Trends Average Loans Flat and Deposits Declined QTD Expense Reflects Continued Discipline while Investing in Key Priorities Revenues Trending Expectations Capital and Asset Quality Trending Expectations • Through August QTD, average deposits down from the linked quarter to $160.7 billion • T
Slide 14: 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 to $6.90 billion • NIM in the 3.50s • Reflects four rate cuts in remainder of the year • Range dependent on deposit trends and loan growth Fee Income $2.3 billion to $2.4 billion • Growth in trust,
Slide 15: Diversified Model Performs Across Cycles
Diversified Model Performs Across Cycles 15 Manageable NII impact from lower rates Diversified fee income with potential benefits in lower rate environment Reductions in short- and long-term interest rates could benefit asset quality • Overall, relatively neutral asset sensitivity • Earning assets a
Slide 16: Effectively Neutral Asset Sensitivity
$(6) $102 $69 $84 $64 $20 $5 $(164) $(100) $(46) $(18) $(329) $(193) $(83) $(36) $(19) June '23 Sept. '23 Dec. '23 Mar. '24 June '24 Effectively Neutral Asset Sensitivity (1) Represents estimated impact on NII resulting from a parallel shift in interest rates during first modeling year. (2) Mar. 202
Slide 17: Swap Portfolio Details
Swap Portfolio Details 17 ▪ 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 ▪ CF Hedges - executed $5B of forward-starting swaps in 1H24: 2025 start,~4.02%; FV Debt Hedges –
Slide 18: Fee Income Diversification
Fee Income Diversification 18 25% 29% 33% MTB Peer Median • Potential rate-related upside in commercial mortgage banking, loan fees, and capital markets given the potentially higher volume • Additional potential rate-related benefit in other areas including derivatives, advisory fees, and commercial
Slide 19: 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 6/30/2024 • Average consumer deposit account balance is $15,000 • A
Slide 20: Local Scale Leads to Superior Deposit Franchise
0.09% 0.08% 0.07% 0.06% 0.04% 0.03% 0.03% 0.02% 0.01% -0.03% -0.03% -0.05% Peer 11 Peer 10 Peer 9 Peer 8 Peer 7 Peer 6 Peer 5 Peer 4 Peer 3 Peer 2 MTB Peer 1 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 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
Slide 21: Diversified and Granular Deposit Base
Retail Bank $92.3B Commercial Bank $43.0B Inst. Svcs. & Wealth Mgmt. $17.3B All Other $11.0B Diversified and Granular Deposit Base • Diversified across industries and geographies • Average relationship tenure of 16 years • Average account size $4MM; median $378k • ~62% operating balances Average Dep
Slide 22: Strong Core Funding and Liquidity
• Liquidity Sources represent ~141% of Adjusted Uninsured Deposits as of 6/30/2024 • Uninsured Deposits represent 43% of Total Deposits, 36% excluding Collateralized Deposits as of 6/30/2024 • 2Q24 Average Cash Balances represent 15% of Earning Assets Strong Core Funding and Liquidity Liquidity Sour
Slide 23: Strong CRE Underwriting Track Record
Strong CRE Underwriting Track Record All information presented as of 6/30/2024 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 • 44%
Slide 24: Well Diversified Loan Portfolio
Multifamily $5.8B, 4% Retail $5.3B, 4% Office $4.5B, 3% Healthcare $2.8B, 2% Hotel $2.3B, 2% Industrial & Other $2.2B, 2% Construction $6.8B, 5% C&I - Owner Occ. $10.7B, 8% C&I $49.3B, 37% Cons. Real Estate $23.0B, 17% Consumer $22.4B, 17% Permanent CRE $22.8B, 17% Well Diversified Loan Portfolio (1
Slide 25: 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 26: 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 27: Diversified and Low LTV Permanent Office CRE
34% 26% 23% 6% 4% 7% ≤50% >50%-60% >60%-70% >70%-80% >80%-90% >90% 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 $0.6 0.5% 49% Connecticut $0.4 0.3% 55% Greater Boston $0.4 0.3% 69% New J
Slide 28: Credit Metrics
Credit Metrics Nonaccrual Loans Net Charge-offs Provision for Credit Losses Allowance for Credit Losses 28 $150 $150 $225 $200 $150 2Q23 3Q23 4Q23 1Q24 2Q24 $ I N M IL L IO N S $1,998 $2,052 $2,129 $2,191 $2,204 1.50% 1.55% 1.59% 1.62% 1.63% 2Q23 3Q23 4Q23 1Q24 2Q24 $ I N M IL L IO N S Allowance for
Slide 29: Criticized C&I and CRE Loans
Criticized C&I and CRE Loans -$889 million QoQ criticized loans decreased: • C&I increased +$98 million – Driven by health services and motor vehicle and recreational finance dealers • CRE decreased -$987 million – Permanent CRE -$773 million – Construction -$214 million • 97% of criticized accrual
Slide 30: Strong Capital and Low AOCI Impact
Strong Capital and Low AOCI Impact • Top quartile CET1 ratio among peers (11.5%) • Top quartile TCE ratio among peers (8.6%); more than 200 bps above peer median • Agency MBS/CMBS account for 58% of total and U.S. Treasurys 29% • AFS duration ~2.1 years and HTM duration ~5.3 years, total debt securi
Slide 31: Diversified Securities Portfolio
Agency MBS $13.2B US Treasury $8.7B Agency CMBS $4.1B Municipal Bonds $2.4B Other Debt Sec. $0.1B Equity & Other $1.2B Diversified Securities Portfolio (1) Mortgage securities include estimated prepayment under market forward interest rates. $29.9B Securities Portfolio Composition 6/30/2024 • Securi
Slide 32: Strong Capital Levels Compared to Peers
5.2% 5.2% 5.3% 5.8% 6.0% 6.3% 6.5% 6.5% 6.5% 7.6% 8.1% 8.6% Peer 11 Peer 10 Peer 9 Peer 8 Peer 7 Peer 6 Peer 5 Peer 4 Peer 3 Peer 2 Peer 1 MTB Strong Capital Levels Compared to Peers • Capital levels favorable to peers both as reported and when considering AOCI • Strong capital position benefits M&T
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&i Bank Corporation | 34
Slide 35: GAAP to GAAP-Adjusted 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: Net Operating 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 Reconciliation
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation 37 In millions 2019 2020 2021 2022 2023 1H24 2Q23 1Q24 2Q24 Efficiency ratio Noninterest expense $3,469 $3,385 $3,612 $5,050 $5,379 $2,693 $1,293 $1,396 $1,297 Less: Amortization of core deposit and other intangible assets 19 15 10 56 62 28
Slide 38: GAAP to Tangible Reconciliation
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation 38 In millions 2019 2020 2021 2022 2023 1H24 2Q23 1Q24 2Q24 Average assets Average assets $119,584 $135,480 $152,669 $190,252 $205,397 $211,729 $204,376 $211,478 $211,981 Goodwill (4,593) (4,593) (4,593) (7,537) (8,473) (8,465) (8,473) (8,465) (8
Slide 39: GAAP to Tangible Reconciliation
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation 39 In millions 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 6/30/2023 3/31/2024 6/30/2024 Total assets Total assets $119,873 $142,601 $155,107 $200,730 $208,264 $207,672 $215,137 $208,855 Goodwill (4,593) (4,593) (4,593) (8,490) (8,465)
Slide 40: 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