M&t Bank Corporation · NYSE:MTB
M&t Bank — Barclays Global Financial Services Conference 2016
27 slides from M&t Bank's conference presentation, Sep 14, 2016
Slide 1: Barclays Global Financial Services Conference
Barclays Global Financial Services Conference September 14, 2016 Exhibit 99.1
Slide 2: Disclaimer
Disclaimer This presentation contains forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 giving M&T Bank Corporation’s (“M&T”) expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typ
Slide 3: Introduction
Introduction M&q'Bank Corporation
Slide 4: Who is M&T Bank Corporation?
Who is M&T Bank Corporation? Top 20 US-based commercial bank holding company Have grown substantially from $2 billion in assets in 1983 to $124 billion at June 30, 2016 17,215 employees across 803 domestic branches in eight states and Washington DC 3.7 million customers representing 5.9 million acco
Slide 5: Key Metrics
Key Metrics 1 – The Efficiency Ratio and Pre-tax, Pre-provision Net Revenue are non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is available in the appendix. 2 – Excludes merger-related gains and expenses and amortization expense associated with intangible assets
Slide 6: Focus on Returns Drives M&T's Operating Model
Focus on Returns Drives M&T’s Operating Model M&T primarily measures performance using return on equity throughout the cycle ROTCE focus provides consistent decision-making framework for evaluating: Lending decisions Allocation of capital to business units Acquisitions Return capital in excess of re
Slide 7: Low Volatility Model – History Versus Peer Banks
NCOs / Average Loans Low Volatility Model – 20 Year History Versus Peer Banks1 Pre-tax Pre-provision Net Revenue (PPNR) MTB Peers Difference Median 0.27% 0.44% (0.17%) Maximum5 1.18% 2.84% (1.66%) NCO / Average Loans Ratio (2Q96 to 2Q16): MTB Peers Difference Median 2.77% 2.57% +0.20% Minimum5 2.09%
Slide 8: Consistently Profitable Throughout the Cycle
Consistently Profitable Throughout the Cycle Notes: ROTCE range is from 2007-2015 annuals and H1 2016. Volatility is calculated as standard deviation of ROTCE. Net operating income and average tangible common equity calculations are found in the appendix. Source: SNL Financial. Return on Tangible Co
Slide 9: Return on Equity vs. Cost of Equity
Cost of Equity (Est.) ROTCE H1 2016 Return vs. Cost of Equity Peer 1 8.8% 17.4% 8.6% Peer 2 9.2% 15.2% 6.0% Peer 3 8.7% 14.5% 5.8% MTB 9.0% 12.2% 3.2% Peer 4 10.1% 12.1% 2.0% Peer 5 9.0% 11.2% 2.2% Peer 6 10.5% 10.9% 0.4% Peer 7 11.1% 9.7% -1.4% Peer 8 10.6% 8.9% -1.7% Peer 9 11.7% 9.6% -2.1% Peer 1
Slide 10: Focus on Returns Supports Outperformance
Focus on Returns Supports Outperformance Notes: Years prior to 2011 not restated for LIHTC. Refer to appendix for peer group list and GAAP reconciliation. Source: SNL Financial.
Slide 11: Profitability and Acquisitions Support Capital Generation
Profitability and Acquisitions Support Capital Generation Tier 1 Common Ratio CET1 Ratio Source: SNL Financial. CCAR Non-Objection: 2015 capital growth for M&T supported by Hudson City acquisition Accretive to CET1 Ratio and tangible book value per share N/A 2013 Q4 2014 Q4 2015 Q4 2016 Q2 Peer 1 11
Slide 12: Capacity for Increased Return of Capital
Capacity for Increased Return of Capital Cumulative Payout Ratios: 2014 – H1 2016 Source: SNL Financial and company reports.
Slide 13: Outlook and Opportunities
Outlook and Opportunities M&q'Bank Corporation
Slide 14: M&T Operating Model Creates Opportunities In Current Environment
M&T Operating Model Creates Opportunities In Current Environment Commercial loan growth more than offsets decline in acquired Hudson City mortgages Commercial loans generate higher ROE throughout the cycle Mortgage runoff releases capital for reinvestment or distribution Consistent underwriting supp
Slide 15: Earning Asset Trends
Earning Asset Trends 6/30/16 YTD Change ($ in billions) Balance $(1) % (Anlzd) Residential Mortgages $24.5 -$1.7 (13%) Other Loans $64.0 +$2.8 9% Total Loans $88.5 +$1.0 2% Investment Securities $15.0 -$0.7 (9%) Other Earning Assets $9.0 +$1.1 28% Total Earning Assets $112.5 +$1.5 3% Impact of Hudso
Slide 16: Commercial loans yield higher overall returns throughout the cycle
Commercial loans yield higher overall returns throughout the cycle Illustrative Economics: New Commercial Loans vs. Mortgage Loans Commercial Loan Jumbo Mortgage2 Assumptions Base Rate Variable – 1M LIBOR Fixed – 10Y Swap Current Level 0.5% 1.4% Average Life 3 years 10 years Yield Spread 2.5% 2.0% Y
Slide 17: Less Volatile Loan Growth Through Credit Cycles
Less Volatile Loan Growth Through Credit Cycles Commercial Real Estate Commercial and Industrial Notes: Reflects end of period loan growth for each year and annualized for 2Q16. Industry Commercial loans includes both “Commercial and Industrial Loans” and “Other Loans and Leases” as outlined in the
Slide 18: Credit Trends
Credit Trends Net Charge Offs (Annualized) Nonaccrual Loans 024% 022% 3a 4aM4 10152153015 AOIS—1aN6 2016. 30M 414 1015215 aaNS AQIS 1G 2S S==ENCOsiTotal Loans ~@~ALUNCOs S=EENAL (S$) =0=NAUTotal Loans it by Le Category: (Sin millions) Outstanding _30-89Days Past Due _90+ Days Past Due 2Q16 NCOs s %
Slide 19: Illustrative Economics: Return on Investment in Market Disruption
Illustrative Economics: Return on Investment in Market Disruption M&T is benefitting from elevated acquisition activity in our footprint Disruption creates potential growth opportunity M&T would generate a return on a $1 million marketing investment exceeding its current ROTCE (approximately 12%) by
Slide 20: Update and Outlook
Net Interest Income / Margin Near term NII growth impacted by balance sheet repositioning and interest rate environment – modest core NIM compression Recent 30 & 90 day LIBOR moves have negligible impact Strong performance of trust business combined with growth in mortgage servicing business creates
Slide 21: Long-term Shareholder Outperformance
Long-term Shareholder Outperformance
Slide 22: 18.4% Annual rate of return since 1980
18.4% Annual rate of return since 19801 In the top 30 of the entire universe2 of U.S. based stocks traded publicly since 1980 M&T Bank Corporation…a solid long-term investment CAGR calculated assuming reinvestment of dividends through June 30, 2016 Includes 587 U.S. based publicly traded stocks $2,1
Slide 23: M&T ranks 1st in stock price growth among remaining largest banks
Of the largest 100 banks operating in 1983, only 23 remain today. Among the remaining, M&T ranks 1st in stock price growth M&T Bank Corporation…a solid investment 1 – 1983 Stock Prices Source: Compustat and Bigcharts.com.
Slide 24: Appendix and GAAP Reconciliations
Appendix and GAAP Reconciliations
Slide 25: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures 1 – Years prior to 2011 not restated for change of accounting policy for LIHTC. 2 – Subtotals may not foot due to rounding.
Slide 26: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures
Slide 27: M&T Peer Group
BB&T Corporation M&T Bank Corporation PNC Financial Services Group, Inc. Comerica Incorporated Regions Financial Corporation Fifth Third Bancorp Wells Fargo & Company SunTrust Banks, Inc. Huntington Bancshares Incorporated Zions Bancorporation KeyCorp M&T Peer Group U.S. Bancorp
M&T Bank — Barclays Global Financial Services Conference 2016 on 6ix