M&T Bank (MTB) 2025 Conference June 11, 2025 07:30 AM ET Speaker0 Good morning, and welcome to day two of the sixteenth Annual Morgan Stanley US Financial Conference. I'm Manan Ghisalia, the mid cap banks analyst. We have M and T kicking off for us. I'll get our usual disclosure out of the way, which is for important disclosures. Please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. The taking of photographs and use of recording devices is not allowed. If you ha ...

M&T Bank, Galesi Group forge expanded partnership to fuel Mohawk Harbor's emergence as an entertainment destination SCHENECTADY, N.Y., June 5, 2025 /PRNewswire/ -- M&T Bank (NYSE:MTB) and the Galesi Group have launched a major partnership that will expand their collaborative efforts to accelerate and sustain the revitalization of Schenectady's Mohawk Harbor. Under their agreement, M&T Bank has secured the exclusive naming rights to the new state-of the-art events venue that Galesi Group is building in the h ...

Core Points - M&T Bank Corporation has declared a quarterly cash dividend of $1.35 per share on its common stock [1] - The dividend is scheduled to be payable on June 30, 2025, to shareholders of record as of June 2, 2025 [1] Company Overview - M&T Bank Corporation is a financial holding company based in Buffalo, New York [2] - The principal banking subsidiary, M&T Bank, offers banking products and services through a network of branches and ATMs across the eastern U.S., from Maine to Virginia and Washington, D.C. [2] - Trust-related services are provided in select markets in the U.S. and internationally by M&T's Wilmington Trust-affiliated companies and M&T Bank [2]

Company Overview - M&T Bank Corporation (MTB) is based in Buffalo and operates in the Finance sector, with a year-to-date share price change of -0.8% [3] - The company currently pays a dividend of $1.35 per share, resulting in a dividend yield of 2.9%, which is lower than the Banks - Major Regional industry's yield of 3.81% and the S&P 500's yield of 1.54% [3] Dividend Analysis - The annualized dividend of M&T Bank is $5.40, reflecting a 0.9% increase from the previous year [4] - Over the past five years, M&T Bank has increased its dividend three times, achieving an average annual increase of 5.45% [4] - The current payout ratio for M&T Bank is 36%, indicating that the company pays out 36% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year 2025, the Zacks Consensus Estimate projects earnings of $16.07 per share, representing an expected increase of 8% from the previous year [5] Investment Considerations - Dividends are favored by investors for various reasons, including improving stock investing profits and providing tax advantages [6] - High-yielding stocks may face challenges during periods of rising interest rates, but M&T Bank is considered a compelling investment opportunity due to its strong dividend profile [7] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [7]

M&T Bank (MTB) Conference Summary Company Overview - M&T Bank is characterized as a community-focused bank with a strong retail banking presence in the Northeastern, New England, and Mid-Atlantic regions of the US [3][4] - The bank has a solid capital position, high liquidity, and improving credit quality [4][5] Key Industry Insights - The current economic environment is marked by uncertainty due to tariffs and various economic paths [3] - Consumer spending patterns remain stable, with delinquencies on the consumer side still low [5][6] - Commercial customers are cautious about investments due to uncertainty regarding tariffs and regulations, although there is a desire to invest [7][8] Financial Performance - M&T Bank has seen record volumes in indirect lending, particularly in auto, RV, and marine sectors, attributed to preemptive spending before potential price increases [6] - The bank's commercial lending has been soft, particularly in floor planning, but there is growth in middle-market lending [15][16] - The bank's net interest margin increased by 8 basis points to 3.66%, with expectations for further improvement due to favorable pricing in their swap book and loan portfolio [18][19] Loan and Deposit Trends - The bank's commercial real estate (CRE) portfolio is shrinking, but this is seen as a positive due to the reduction of criticized loans [12][16] - The bank aims to stabilize and grow its loan originations in the second half of the year [17] - M&T Bank is cautious about deposit growth, focusing on attracting operating deposits while being price-conscious [13][24] Fee Income Growth - M&T Bank anticipates decent fee income growth driven by investments in corporate trust, wealth management, and mortgage services [27][29] - The treasury management business is performing well, with high single-digit to low double-digit growth year-over-year [31] Expense Management - The bank expects modest expense growth of around 2%, with ongoing strategic projects that require significant investment [34][37] - M&T Bank has several key strategic projects underway, including a new financial system and data centers [39][40] Credit Quality Outlook - Nonperforming assets and criticized loans have improved, with expectations for continued improvement despite potential economic downturns [45][46] - The bank is closely monitoring macroeconomic factors that could impact credit quality, including GDP and unemployment rates [55][56] Capital Management - M&T Bank aims to maintain a CET1 ratio of 11% and has been active in share buybacks, purchasing over $600 million in Q1 [60][61] - The bank has reduced its criticized loan book by 27% and nonaccrual loans by 33% over the past year [61] Regulatory Environment - The bank is preparing for potential regulatory changes and is focused on maintaining strong fundamentals [80][81] - M&T Bank is optimistic about the current regulatory environment, which is seen as more conducive to growth [79][80] Conclusion - M&T Bank emphasizes its commitment to community banking and maintaining a strong, consistent performance while managing risks effectively [100][103] - The bank's focus on inclusivity and community engagement is viewed as a competitive advantage [101][102]

Financial Performance - Net income for the three months ended March 31, 2025, was $584 million, compared to $531 million for the same period in 2024, reflecting an increase of 10%[20]. - Total comprehensive income for Q1 2025 was $838 million, significantly higher than $401 million in Q1 2024, reflecting a strong performance[22]. - Net income available to common shareholders for Q1 2025 was $547 million, an increase of 8.3% from $505 million in Q1 2024[73]. - Basic earnings per common share for Q1 2025 was $3.33, up 9.5% from $3.04 in Q1 2024[73]. - Diluted earnings per common share for Q1 2025 was $3.32, an increase of 9.9% compared to $3.02 in Q1 2024[74]. - Total revenue for the first quarter of 2025 was $2,306 million, an increase from $2,260 million in the first quarter of 2024, marking a growth of 2.0%[126]. Asset and Deposit Growth - Total assets increased to $210,321 million as of March 31, 2025, up from $208,105 million at December 31, 2024, representing a growth of 1.1%[16]. - Total deposits increased to $165,409 million as of March 31, 2025, compared to $161,095 million at December 31, 2024, a growth of 2%[16]. - The net increase in deposits for the three months ended March 31, 2025, was $4,314 million, compared to $3,921 million for the same period in 2024[24]. Credit Quality and Losses - The provision for credit losses decreased to $130 million in Q1 2025 from $200 million in Q1 2024, indicating improved credit quality[20]. - The allowance for credit losses increased to $2,200 million as of March 31, 2025, from $2,191 million as of March 31, 2024, reflecting a net charge-off of $114 million for the period[48]. - Net charge-offs totaled $114 million in Q1 2025, with an annualized percentage of 0.34%, compared to $160 million and 0.47% in Q4 2024[182]. - Nonaccrual loans declined by $150 million from December 31, 2024, to March 31, 2025, reflecting a $113 million reduction in commercial real estate nonaccrual loans[185]. Investment Securities - The amortized cost of total debt securities was $34,159 million as of March 31, 2025, with an estimated fair value of $33,107 million, reflecting a decrease in value[30]. - Investment securities available for sale had an amortized cost of $20,807 million and an estimated fair value of $20,799 million as of March 31, 2025, indicating minimal unrealized losses[30]. - The fair value of investment securities held to maturity was estimated at $12,308 million as of March 31, 2025[112]. Borrowings and Liquidity - The total short-term borrowings increased to $1,573 million as of March 31, 2025, compared to $1,060 million as of December 31, 2024, reflecting a growth of about 48%[63]. - Long-term borrowings decreased to $10,496 million as of March 31, 2025, down from $12,605 million as of December 31, 2024, indicating a decline of approximately 17%[63]. - The company had secured borrowing facilities available totaling approximately $18.6 billion with the FHLB of New York and $24.7 billion with the FRB of New York as of March 31, 2025[64]. Noninterest Income - Total noninterest income for the three months ended March 31, 2025, was $397 million, compared to $367 million for the same period in 2024, representing an increase of approximately 8%[71]. - Revenue from service charges on deposit accounts increased to $133 million for the three months ended March 31, 2025, up from $124 million for the same period in 2024, marking a growth of about 7%[71]. Economic Outlook - The national unemployment rate is projected to be 4.7% in Year 1 and 5.2% in Year 2, indicating potential economic challenges[210]. - The real GDP growth rate is forecasted at 0.7% for Year 1 and 2.2% for Year 2, showing a decline compared to previous estimates[210]. - The commercial real estate price index is expected to decline by 3.0% in Year 1, with a recovery of 2.9% in Year 2, reflecting volatility in the market[210].

Group 1 - M&T Bank Corporation is one of the larger regional banks covered during the Q1 earnings season [1] - The current market selloff is seen as an opportunity for investment, with strategies in place to help members hedge and identify buying opportunities [1] - The company promotes a blended trading and income approach to enhance savings and retirement timelines [1] Group 2 - A money-back guarantee is offered to ensure customer satisfaction with the investment ideas provided [3] - The team behind the investment strategies has a proven track record, indicating reliability in their recommendations [3]

Core Insights - The article discusses the expertise of Labutes IR as a Fund Manager/Analyst in the financial sector, highlighting over 18 years of experience in financial markets [1] Group 1 - Labutes IR specializes in the financial sector and has extensive experience in portfolio management [1] - The author has worked at various institutions on the buy side, indicating a strong background in investment strategies [1] Group 2 - There is no indication of any stock or derivative positions held by the author in the companies mentioned, ensuring an unbiased perspective [2] - The article reflects the author's personal opinions and is not influenced by compensation from any company [2]

While there can be no assurance that any list of risks and uncertainties is complete, important factors that could cause actual outcomes and results to differ materially from those contemplated by forward-looking statements include the following, without limitation: economic conditions and growth rates, including inflation and market volatility; events and developments in the financial services industry, including industry conditions; changes in interest rates, spreads on earning assets and interest-bearing ...

Financial Data and Key Metrics Changes - The first quarter results showed diluted GAAP earnings per share at $3.32, down from $3.86 in the prior quarter [13] - Net income decreased to $584 million compared to $681 million in the linked quarter [13] - The net interest margin increased by eight basis points to 3.66% [15] - Fee income grew by 5% year-over-year, or 10% excluding last year's BLG distribution [12] - Non-interest income was $611 million, down from $657 million in the linked quarter [24] Business Line Data and Key Metrics Changes - Average loans and leases decreased by $0.9 billion to $134.8 billion, with lower CRE balances partially offset by growth in CNI, consumer, and residential mortgage [17] - CNI loans grew by 1% to $61 billion, driven by strength in corporate institutional and fund banking [17] - CRE loans declined by 6% to $26.3 billion, reflecting payoffs and muted origination activity [18] - Consumer loans grew by 1% to $24.3 billion, reflecting increases in recreational finance and indirect auto loans [18] Market Data and Key Metrics Changes - Average total deposits declined by $3.4 billion or 2% to $161.2 billion, with a decline in broker deposits and commercial banking [22] - Average non-interest bearing deposits decreased by $1.1 billion to $45.4 billion [22] - Investment securities and cash totaled $57.9 billion, representing 28% of total assets [19] Company Strategy and Development Direction - The company aims to reach an 11% CET1 ratio in 2025 while focusing on growing customer deposits at a reasonable cost [34][38] - M&T Bank is committed to growing its New England and Long Island markets and optimizing resources through simplification [41] - The company emphasizes a disciplined approach to lending, particularly in the competitive CRE market [78] Management's Comments on Operating Environment and Future Outlook - The economic backdrop remains dynamic, with mixed recent economic data and weakening business and consumer sentiment [35] - Management expects net interest income to be between $7.05 billion and $7.15 billion, with a net interest margin averaging in the mid to high 360s [37] - The company anticipates credit charge-offs for the full year to be near 40 basis points [40] Other Important Information - Non-interest expenses increased to $1.42 billion, reflecting higher salary and benefits costs [27] - The efficiency ratio was reported at 60.5%, compared to 56.8% in the linked quarter [27] Q&A Session Summary Question: Insights on NII and deposit flow activity - Management noted a reduction in deposit guidance but expressed confidence in achieving growth across various business lines [48][49] Question: Fee income growth and Bayview distribution - Management confirmed no Bayview distribution in Q1 but expects significant growth in fee businesses throughout the year [51][52] Question: Customer feedback on tariffs and CapEx decisions - Management observed weak sentiment among consumers and businesses, with some customers pausing investments due to uncertainty [61] Question: Regulatory environment insights - Management indicated a more pro-business regulatory environment, with potential easing of certain requirements benefiting regional banks [74] Question: Challenges in the commercial real estate portfolio - Management highlighted increased competition in the CRE space, leading to higher payoffs than expected [80] Question: Loan loss reserves and macro outlook - Management adjusted macro outlook to reflect potential economic pressures, leading to a slight increase in loan loss reserves [92] Question: Long-term debt and funding strategy - Management plans to issue long-term debt as needed, focusing on reducing broker deposits and maintaining strong liquidity [135][137]