M&t Bank Corporation · NYSE:MTB
M&t Bank — Q3 2022 Earnings Presentation
34 slides from M&t Bank's earnings presentation, Oct 19, 2022
Slide 1: Investor Update | Third Quarter 2022
Investor Update | Third Quarter 2022
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements regarding M&T Bank and its subsidiaries' future businesses; and material differences in the actual financial Corporation (“M&T”) within the meaning of the Private Securities Litigation Reform Act of results of merger, acquisition an
Slide 3: M&T – A High Performing Community-Focused Bank
M&T – A High Performing Community-Focused Bank • Top 15 U.S.-based, commercial bank holding company, with Financial Highlights 2Q22 national capabilities from our suite of specialty businesses and Symbol MTB Wilmington Trust Stock Price * $187.61 • Seasoned management team and deeply embedded cultur
Slide 4: Strong Financial Results Over the Long-Term
Strong Financial Results Over the Long-Term ROTCE (average) GAAP EPS Growth – 20 Years (CAGR) 11.1% 19.3% 15.0% 15.6% 15.6% 15.9% 14.0% 6.7% 4.6% 3.0% 3.0% 2.8% Peer Median, 2.6% 2.3% 1.9% 0.4% 0.1% MTB Peer MTB Peer MTB Peer Median Median Median (2.2%) 20 Years 10 Years 5 Years Peer Peer MTB Peer P
Slide 5: Delivering Superior Financial Results Over Decades
Delivering Superior Financial Results Over Decades Earnings & Dividend Growth: 1983 – 2021 5 Notes: CAGRs are from 1983 to 2021. FY 2021 operating EPS of $14.11 equals GAAP EPS of $13.80 plus the after-tax impact of amortization and merger-related expenses. See appendix for GAAP to non-GAAP reconcil
Slide 6: The M&T Story: Our Operating Principles
The M&T Story: A High Performing Community-Focused Bank… ….Our Operating Principles Our purpose - To make a difference in people’s lives Our mission - We are a bank for communities ─ committed to improving the lives of our customers and all the communities we touch. Local Scale Credit Discipline Ope
Slide 7: Prudent Stewards of Shareholders' Capital
Prudent Stewards of Shareholders’ Capital How we think about capital allocation Results Disciplined return criteria – lending Higher return earning asset mix and investments One of two S&P 500 banks to maintain dividend Moderate dividend payout through the Great Financial Crisis Acquisitions that cl
Slide 8: Efficient Operator Through the Cycles
Efficient Operator Through the Cycles Operating Efficiency Ratio 100% TTM 2Q22 55% 60% 65% 90% Peer 1 Peer 2 80% Peer Peer 3 Range Peer 4 70% Median Peer 5 MTB 60% MTB Peer 6 Peer 7 50% Peer 8 Peer 9 40% Peer 10 TTM 2Q22 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Peer 11 8
Slide 9: Delivering Growth Over Decades
Delivering Growth Over Decades EOP Loan and Deposit Growth per Share (2001-2Q22, CAGR) Loans: MTB Peer Median Quartile Commercial Real Estate 5% > 2% Top Commercial & Industrial 6% > 4% Top Residential Real Estate 5% > 3% Top Consumer 3% > 2% 2nd Total Loans 5% > 3% Top Deposits: Noninterest-Bearing
Slide 10: Superior Credit Losses Through Multiple Economic Cycles
Superior Credit Losses Through Multiple Economic Cycles M&T Credit Philosophy • Consistent credit standards through economic cycles • Emphasis on secured lending: cash flow + collateral + guarantees • Customer selection, supported by local market knowledge • Working with customers to achieve best lo
Slide 11: Best-In-Class Credit NCO Ratios Across All Portfolios
Best-In-Class Credit NCO Ratios Across All Portfolios C&I Construction Avg Max Range Avg Max Range MTB 0.38% 1.27% 1.10% MTB 0.39% 2.47% 2.82% Peer Median 0.48% 1.79% 1.68% Peer Median 1.08% 7.11% 7.27% Peer Range MTB Peer Median Other CRE Residential Real Estate Avg Max Range Avg Max Range MTB 0.06
Slide 12: Local Scale in Key Markets in M&T Footprint
Local Scale in Key Markets in M&T Footprint Contiguous Branch Footprint… …With Market Leading Franchises… Top 10 MSAs by Deposits Top Northeast Banks by Branches(1) Rank Branches Buffalo 1 1 Bank of America Corp. 1,102 Bridgeport 1 2 M&T Bank Corp. 1,030 Rochester 1 3 JPMorgan Chase & Co. 1,027 Balt
Slide 13: Local Scale Leads to Superior Deposit Franchise
Local Scale Leads to Superior Deposit Franchise Noninterest Bearing Deposits / Total Deposits Total Cost of Deposits 3.5% 60% 2002-2Q22 Average M&T 0.73% 3.0% Peer Median 0.90% 50% Peer Difference -0.17% Range 2.5% M&T 40% Peer 2.0% Median 30% 1.5% 20% 1.0% Peer 10% Range 0.5% Peer Median M&T 0% 0.0
Slide 14: Higher Returns Relative to Risk
Higher Returns Relative to Risk Risk Adjusted Net Interest Margin (NII less NCO % of AEA) 4.0% 3.5% 3.0% MTB Peer Median 2.5% Peer Range 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 YTD 2022 14 Source: S&P Global Market Intelligence and company
Slide 15: Meeting Evolving Needs: Talent Is the Greatest Differentiator
Meeting Evolving Needs: Talent Is the Greatest Differentiator Seasoned, Skilled, and Stable Increasingly Diverse New Capabilities • 19-year average tenure for executive • More than 40% of our Board of • Digitally forward, locally focused management Directors team is diverse • Enhanced team with new
Slide 16: Delivering Innovative Capabilities as Technology Transformation Continues
Delivering Innovative Capabilities… …as Technology Transformation Continues Our Technology transformation is centered around Three Key Dimensions {Talent} •Pivoted to mostly insourced technologists •Increasing Technology Development Program (TDP) hires •Perpetually upskilling and reskilling our tech
Slide 17: Our Focus on Customers, Communities and Innovation Pays Dividends
Our Focus on Customers, Communities and Innovation Pays Dividends When our customers and communities succeed, we all succeed Customer Focused Community Engagement • Long lasting relationships • $1.5 billion in community development • Offered pandemic-related mortgage loan loans, lines of credit, & i
Slide 18: A Bank for Communities & Making a Difference – Our ESG Commitment
A Bank for Communities & Making a Difference – Our ESG Commitment ESG Accomplishments and Highlights since Last Year Established Renewable Energy and Defined Board and Management Carbon Reduction Targets 2021 ESG report included ESG Governance • Inaugural TCFD(1) disclosure • Second SASB(2) report C
Slide 19: M&T – A High Performing Community-Focused Bank
M&T – A High Performing Community-Focused Bank • Top 15 U.S.-based, commercial bank holding company, with national capabilities from our suite of specialty businesses and Wilmington Trust • Seasoned management team and deeply embedded culture • Superior profitability and earnings and dividend growth
Slide 20: Current Themes & Key Messages
Current Themes & Key Messages 20
Slide 21: Performance Through Unprecedented Environment Over Last 2 Years
Performance Through Unprecedented Environment Over Last 2 Years Environmental Challenges M&T’s Response (2020/2021) Outperformance (1) ROTCE People’s United 14.8% 14.0% Supply Chain Acquisition Low Rates Disruptions MTB Peer Median Built Capital PPNR/RWA Tepid 2.4% 2.0% Loan Demand Increased Liquidi
Slide 22: Managed Through Pandemic; Work Deploying Dry Powder Continues
Managed Through Pandemic; Work Deploying “Dry Powder” Continues 2020 and 2021 2022+ Status • Closed merger on April 1 People’s • Announced acquisition of like-minded • Completed system conversion over Labor Day banking franchise with contiguous weekend United footprint • Cultural integration Acquisi
Slide 23: Work Toward Building Optimal Balance Sheet Structure Continues
Work Toward Building Optimal Balance Sheet Structure Continues Optimizing Balance Sheet to Align with Operating Principles % of Interest Earning Assets Const. & Reducing Capital Intensive CRE 7% (2%) 5% Dev. Reduced legacy Construction and Investment Real Estate CRE Permanent 15% 15% People’s co
Slide 24: Historical Industry Net Interest Margin Below 4%
Historical Industry Net Interest Margin Below 4% Historical Net Interest Margin Trends 5.5% Industry Net Interest Margin above 4% for only two 5.0% quarters since 2000 4.5% 4.0% 3.5% 3.0% Avg. Fed Funds Avg. Fed Funds 5.1% 1.6% 2.5% All FDIC Insured Institutions FDIC Insured with Assets $10B - $250B
Slide 25: Prudent Liquidity Management Protected Tangible Common Equity
Prudent Liquidity Management Protected Tangible Common Equity Lower AOCI Hit Drives Measured and Thoughtful Deployment of Excess Liquidity TBV Per Share Outperformance Securities and Short-Term Investments % of Earning Assets Decline in TBV Per Share since 2021 2Q 2020 2Q 2022 0% (10%) (20%) (30%) (
Slide 26: 2022 Outlook
2022 Outlook FY2021 FY2022 Comments Legacy M&T Includes People's 2Q-4Q Net Interest Income $3.8 Billion Up 54%-58% Income/Expense Non Interest Income $2.2 Billion Up 5%-7% Operating Expenses* $3.6 Billion Up 24%-26% Likely at high end of range Total Loans $97 Billion Up 24%-26% Likely at low end of
Slide 27: Q2 2022 | Appendix
Q2 2022 |Appendix M&P Bank Corporation
Slide 28: Key Ratios
Key Ratios 2016 2017 2018 2019 2020 2021 1H'21 1H'22 Superior Pre-Credit Earnings Net Interest Margin 3.11% 3.47% 3.83% 3.84% 3.16% 2.76% 2.87% 2.86% (1) Efficiency Ratio – Operating 56.10% 55.07% 54.79% 55.66% 56.35% 59.02% 59.38% 61.09% (1) PPNR 2,248 2,492 2,640 2,723 2,570 2,380 1,158 1,065 (1)
Slide 29: Adjusted Net Interest Margin Beginning to Benefit from Higher Rates
Adjusted Net Interest Margin Beginning to Benefit from Higher Rates Net Interest Margin • M&T managed a stable adjusted(1) NIM during 3.33% low-rate environment and pandemic 3.08% 3.08% 3.10% 3.02% • 2Q22 higher rates helped drive 23 bps adjusted NIM expansion 3.01% • Excess cash(2) had a negative 3
Slide 30: Mortgage Banking Servicing Adds Stability to Revenues
Mortgage Banking Servicing Adds Stability to Revenues Total Mortgage Fee Mix – 2Q22 (TTM) Highlights • Mortgage banking revenues serve as a natural hedge in different environments and can offset reductions in spread Commercial: 33% revenues Servicing 17% • Residential and commercial mortgage servici
Slide 31: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Net Income 2016 2017 2018 2019 2020 2021 1H21 1H22 $ in millions Net income $ 1,315.1 $ 1,408.3 $ 1,918.1 $ 1,929.1 $ 1,353.2 $ 1,858.7 $ 905.3 $ 579.7 Intangible amortization* 25.9 19.0 18.1 14.4 11.0 7.5 4.1 15.1 Merger-related items* 21.7 - - - - 33.6
Slide 32: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Average Assets 2016 2017 2018 2019 2020 2021 1H21 1H22 $ in millions Average assets $ 124,340 $ 120,860 $ 116,959 $ 119,584 $ 135,480 $ 152,669 $ 149,406 $ 180,414 Goodwill (4,593) (4,593) (4,593) (4,593) (4,593) (4,593) (4,593) (6,560) Core deposit and o
Slide 33: Reconciliation of GAAP and Non-GAAP Measures
Reconciliation of GAAP and Non-GAAP Measures Net Interest Margin 2Q21 3Q21 4Q21 1Q22 2Q22 Net Interest Margin 2.77% 2.74% 2.58% 2.65% 3.01% Less: Excess Cash (0.51%) (0.67%) (0.74%) (0.64%) (0.39%) Less: PPP 0.04% 0.14% 0.09% 0.05% 0.02% Less: Swap Income 0.22% 0.19% 0.15% 0.14% 0.05% Adjusted Net I
Slide 34: M&T Peer Group
M&T Peer Group Citizens Financial Group, Inc. M&T Bank Corporation Comerica Incorporated PNC Financial Services Group, Inc. Fifth Third Bancorp Regions Financial Corporation First Horizon National Corporation Truist Financial Corporation Huntington Bancshares Incorporated U.S. Bancorp KeyCorp Zions