M&t Bank Corporation · NYSE:MTB
M&t Bank — Investor Presentation (March 2024)
38 slides from M&t Bank's investor presentation, Mar 5, 2024
Slide 1: Investor Update 1st Quarter 2024
Investor Update 1st Quarter 2024 March 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
Purpose To make a difference in people’s lives. Mission We are a bank for communities – committed to improving the lives of our customers and all the communities we touch. Operating Principles Local Scale Credit Discipline Operating & Capital Efficiency
Slide 4: Making a positive impact on our communities, customers, and colleagues
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 and volunt
Slide 5: 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 6: Local Scale in Key Markets
Local Scale in Key Markets 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 02/05/2024, excludes two domestic branches outside of No
Slide 7: Through the Cycle Profitability Advantage
Through the Cycle Profitability Advantage Note: (1) See Appendix 1 and 2 for reconciliation of GAAP with these non-GAAP measures. Net Operating ROTA(1) Better than Peer PPNR Generation & Credit Losses Aided by NIM, efficiency and credit loss outperformance Consistent Profitability Advantage Over the
Slide 8: Key Ratios
Key Ratios Note: (1) See Appendix 1 and 2 for reconciliation of GAAP with these non-GAAP measures. 2019 2020 2021 2022 2023 4Q22 3Q23 4Q23 Superior Pre-Credit Earnings Net Interest Margin 3.84% 3.16% 2.76% 3.39% 3.83% 4.06% 3.79% 3.61% Efficiency Ratio (1) 55.7% 56.3% 59.0% 56.6% 54.9% 53.3% 53.7% 6
Slide 9: Solid Performance in Key Metrics against Peers
Solid Performance in Key Metrics against Peers ROTA(1) 4Q23 Net Interest Margin 4Q23 Efficiency Ratio(1) 4Q23 PPNR / RWA(1) 4Q23 NCO / Loans 4Q23 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
Slide 10: Areas of Focus
Areas of M&& Bank Corporation | 10
Slide 11: 1Q 2024 Trends
1Q 2024 Trends Average Deposit Balance Down; Average Loans Up Expenses Reflect 1Q Seasonal Compensation Revenues Trending Expectations Capital Builds and Asset Quality Trending Expectations Through February QTD, average total deposits down $1.3 billion from the linked quarter to $163.4 billion, driv
Slide 12: 2024 Outlook
2024 Outlook 2024 Outlook Comments Income Statement Net Interest Income Taxable-equivalent $6.7 billion to $6.8 billion NIM in the 3.50s Reflects the impact of higher deposit funding costs and impact of Fed cuts Expect to shift portion of cash to securities Potential additional hedging actions to pr
Slide 13: Decreasing Asset Sensitivity
Decreasing Asset Sensitivity Represents estimated impact on NII resulting from a parallel shift in interest rates during first modeling year. Dec. 2023 +200bps scenario results in a negative $18 million net change in NII. Sensitivity of NII to Changes in Interest Rates1 $, Millions Increased mix of
Slide 14: Swap Portfolio Details
Swap Portfolio Details Hedge position increasing through 2024 as forward-starting hedges become “active” Stable fixed yields in 2024 protect NII in a flat or down rate environment Along with securities purchases, M&T is adding hedging activities for 2025+ Highlights Active and Forward Starting Swaps
Slide 15: 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 66% of deposits are insured or collateralized as of 12/31/2023 Average consumer deposit account balance is $15,000 Averag
Slide 16: Local Scale Leads to Superior Deposit Franchise
Sources: S&P Global Market Intelligence and FDIC Local Scale Leads to Superior Deposit Franchise Noninterest-bearing deposits represented 30% of 4Q 2023 average total deposits for M&T or 33% of total deposits excluding brokered, compared to 26% peer median 2003-2023 Average M&T 0.72% Peer Median 0.8
Slide 17: Diversified and Granular Deposit Base
Diversified and Granular Deposit Base Diversified across industries and geographies Average relationship tenure of 15 years Average account size $4MM; median $330k ~62% operating balances Average Deposits 4Q23 Institutional Services & Wealth Management Retail Bank Commercial Bank Consists primarily
Slide 18: Strong Core Funding and Liquidity
Liquidity Sources represent ~139% of Adjusted Uninsured Deposits as of 12/31/2023 Uninsured Deposits represent 41% of Total Deposits, 34% excluding Collateralized Deposits as of 12/31/2023 4Q23 Average Cash Balances represent nearly 16% of Earning Assets Strong Core Funding and Liquidity Liquidity S
Slide 19: Strong CRE Underwriting Track Record
Strong CRE Underwriting Track Record All information presented as of 12/31/23. 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 33% Consum
Slide 20: Well Diversified Loan Portfolio
Permanent CRE $25.3B, 19% Well Diversified Loan Portfolio (1) Regulatory CRE includes Construction (HC-C 1.a.(1) and HC-C 1.a.(2)), Multifamily (HC-C 1.d), non-owner occupied (HC-C 1.e.(2)) and non-real estate secured CRE (HC-C, Memo 2). Loan Portfolio Composition 12/31/2023 Regulatory CRE % of Tier
Slide 21: Allowance for Credit Losses
December 31, 2023 assumptions Average unemployment rate of 4.5% Gross domestic product growth at a 0.9% rate during the first year of the forecast period and at a 1.9% rate in the second year Commercial real estate and residential real estate prices were assumed to cumulatively contract 4.5% and 3.3
Slide 22: 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 23: 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 55%; over 80% of the total Permanent IRE portfolio has an LTV of 70% or less Approximately 70% of the Perman
Slide 24: 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% 50% Connecticut $0.5 0.4% 59% Greater Boston $0.4 0.3% 58% New Jersey $0.3 0.2% 61% Western New York $0.3 0.2% 64% VT/NH/ME $0.3 0.
Slide 25: Permanent Office CRE Maturities Spread Out and Manageable
Permanent Office CRE Maturities Spread Out and Manageable 1Q24 2Q24 3Q24 4Q24 1Q24-4Q24 1Q25-4Q25 >90% 9% 2% 14% 0% 6% 7% >80%-90% 13% 6% 14% 0% 8% 2% >70%-80% 0% 11% 8% 0% 3% 4% >60%-70% 40% 44% 24% 15% 28% 18% >50%-60% 21% 7% 12% 44% 25% 32% ≤50% 17% 29% 29% 41% 29% 35% Maturities ($, B) $0.2 $0.1
Slide 26: Nonaccrual and Criticized Loans
Nonaccrual and Criticized Nonaccrual Loans Criticized Loans Borrower selection is key to low loss content; approximately 96% of criticized accrual and 53% of nonaccrual loans are paid current History of working with borrowers to reduce loss; minimal loan/note sales over past 20 years In most cases,
Slide 27: Strong Capital and Low AOCI Impact
Strong Capital and Low AOCI Impact Top quartile CET1 ratio among peers (10.98%) Top quartile TCE ratio among peers (8.2%); more than 200 bps above peer median Agency MBS/CMBS account for 53% of total and U.S. Treasurys 32% AFS duration ~1.3 years and HTM duration ~5.4 years, total debt securities du
Slide 28: Diversified Securities Portfolio
Diversified Securities Portfolio (1) Mortgage securities include estimated prepayment under market forward interest rates. $26.9B Securities Portfolio Composition 12/31/2023 Securities of $26.9B; 13% of total assets ~$6.8B securities maturing1 in 2024 with an average yield of 2.2%. ~$4.9B securities
Slide 29: 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 capital
Slide 30: 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 Experienced and
Slide 31: Appendices
Appendices M&& Bank Corporation | 31
Slide 32: Appendix: 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 33: Appendix: GAAP to 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 34: Appendix: GAAP to Net Operating (Efficiency Ratio)
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation In millions 2019 2020 2021 2022 2023 4Q22 3Q23 4Q23 Efficiency ratio Noninterest expense $3,469 $3,385 $3,612 $5,050 $5,379 $1,408 $1,278 $1,450 Less: Amortization of core deposit and other intangible assets 19 15 10 56 62 18 15 15 Less: Mer
Slide 35: Appendix: GAAP to Net Operating - Adjusted
Appendix 2 GAAP to Net Operating - Adjusted (Non-GAAP) Reconciliation In millions 2019 2020 2021 2022 2023 4Q22 3Q23 4Q23 Efficiency ratio - Adjusted Noninterest expense $3,469 $3,385 $3,612 $5,050 $5,379 $1,408 $1,278 $1,450 Less: Amortization of core deposit and other intangible assets 19 15 10 56
Slide 36: Appendix: GAAP to Tangible Reconciliation
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation In millions 2019 2020 2021 2022 2023 4Q22 3Q23 4Q23 Average assets Average assets $119,584 $135,480 $152,669 $190,252 $205,397 $198,592 $205,791 $208,752 Goodwill (4,593) (4,593) (4,593) (7,537) (8,473) (8,494) (8,465) (8,465) Core deposit and ot
Slide 37: Appendix: GAAP to Tangible Reconciliation (Period-end)
Appendix 2 GAAP to Tangible (Non-GAAP) Reconciliation In millions 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2022 9/30/2023 12/31/2023 Total assets Total assets $119,873 $142,601 $155,107 $200,730 $208,264 $200,730 $209,124 $208,264 Goodwill (4,593) (4,593) (4,593) (8,490) (8,465)
Slide 38: 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