Part I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents M&T Bank Corporation's unaudited consolidated financial statements as of March 31, 2024 [Consolidated Balance Sheet](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEET) As of March 31, 2024, total assets increased to $215.1 billion, with corresponding growth in liabilities and equity Consolidated Balance Sheet Highlights (Unaudited) | (In millions) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Total loans and leases, net | $132,782 | $131,939 | | Total investment securities | $28,496 | $26,897 | | **Total assets** | **$215,137** | **$208,264** | | **Liabilities & Equity** | | | | Total deposits | $167,196 | $163,274 | | Total borrowings | $16,245 | $13,517 | | **Total liabilities** | **$187,968** | **$181,307** | | **Total shareholders' equity** | **$27,169** | **$26,957** | [Consolidated Statement of Income](index=5&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20INCOME) Q1 2024 net income was $531 million, down from $702 million in Q1 2023, due to lower net interest income Q1 2024 vs. Q1 2023 Income Statement (Unaudited) | (In millions, except per share) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net interest income | $1,680 | $1,818 | | Provision for credit losses | $200 | $120 | | Total other income | $580 | $587 | | Total other expense | $1,396 | $1,359 | | Income before taxes | $664 | $926 | | **Net income** | **$531** | **$702** | | **Diluted EPS** | **$3.02** | **$4.01** | [Notes to Financial Statements](index=9&type=section&id=NOTES%20TO%20FINANCIAL%20STATEMENTS) Detailed disclosures supporting financial statements, covering investment securities, loan portfolio, and borrowing activities - In Q2 2023, the Company sold its Collective Investment Trust (CIT) business, resulting in a pre-tax gain of **$225 million**. Prior to the sale, the CIT business contributed **$45 million** to trust income in Q1 2023[24](index=24&type=chunk) - The Company recorded an additional FDIC special assessment expense of **$29 million** in Q1 2024, related to bank failures in 2023. This is in addition to the **$197 million** recorded in Q4 2023, bringing the total accrued liability to **$226 million** at March 31, 2024[118](index=118&type=chunk) - The Company holds a 20% minority interest in Bayview Lending Group, LLC (BLG) and recognized income of **$25 million** from cash distributions in Q1 2024, compared to **$20 million** in Q1 2023[122](index=122&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=46&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A discusses Q1 2024 financial condition and results, highlighting interest rate impact and credit losses [Overview](index=46&type=section&id=Overview) Q1 2024 net income was $531 million, up sequentially but down YoY, impacted by interest rates and FDIC assessment Q1 2024 Financial Highlights | (In millions, except per share) | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Interest Income | $1,680 | $1,722 | $1,818 | | Provision for credit losses | $200 | $225 | $120 | | Net Income | $531 | $482 | $702 | | Diluted EPS | $3.02 | $2.74 | $4.01 | | Net Interest Margin | 3.52% | 3.61% | 4.04% | - The effective tax rate was **20.0%** in Q1 2024, compared to **24.2%** in Q1 2023, reflecting a net discrete benefit from the resolution of a tax matter inherited from the People's United acquisition[131](index=131&type=chunk) [Net Interest Income](index=48&type=section&id=Net%20Interest%20Income) Net interest income decreased to $1.69 billion in Q1 2024, with NIM compressing to 3.52% due to elevated interest rates - The net interest margin was **3.52%** in Q1 2024, a decrease of **9 basis points** from Q4 2023 (**3.61%**) and **52 basis points** from Q1 2023 (**4.04%**)[142](index=142&type=chunk) - The yield on earning assets in Q1 2024 was **5.74%**, while the rate paid on interest-bearing liabilities was **3.26%**, resulting in a net interest spread of **2.48%**. This compares to a spread of **3.30%** in Q1 2023[162](index=162&type=chunk) - Interest rate swaps had a negative impact of **$100 million** on net interest income in Q1 2024, compared to a negative impact of **$69 million** in Q1 2023[167](index=167&type=chunk) [Asset Quality and Allowance for Credit Losses](index=60&type=section&id=Asset%20Quality%20and%20Allowance%20for%20Credit%20Losses) Asset quality showed stress with a $200 million provision for credit losses in Q1 2024, and increased net charge-offs - The provision for credit losses was **$200 million** in Q1 2024, compared to **$120 million** in Q1 2023, reflecting declines in commercial real estate values and deterioration in performance of certain commercial and consumer loans[169](index=169&type=chunk) Net Charge-offs (NCOs) | (In millions) | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Total NCOs | $138 | $148 | $70 | | NCOs as % of avg. loans | 0.42% | 0.44% | 0.22% | - Nonaccrual loans increased to **$2.30 billion** at March 31, 2024, from **$2.17 billion** at December 31, 2023, largely due to an increase in commercial and industrial nonaccruals[175](index=175&type=chunk) - Criticized investor-owned commercial real estate loans were **$8.5 billion (26% of such loans)** at March 31, 2024, compared to **$8.8 billion (27%)** at December 31, 2023[182](index=182&type=chunk) - The allowance for credit losses was **$2.2 billion, or 1.62% of total loans**, at March 31, 2024, up from **1.59%** at December 31, 2023[201](index=201&type=chunk) [Other Income](index=72&type=section&id=Other%20Income) Total other income was $580 million in Q1 2024, slightly down due to CIT business sale, offset by mortgage banking revenues Other Income Components | (In millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Mortgage banking revenues | $104 | $85 | | Service charges on deposit accounts | $124 | $113 | | Trust income | $160 | $194 | | Other revenues from operations | $152 | $159 | | **Total other income** | **$580** | **$587** | - The decrease in trust income was driven by the divestiture of the CIT business, which had contributed **$45 million** in Q1 2023[216](index=216&type=chunk) - Residential mortgage banking revenues increased to **$78 million** from **$55 million** year-over-year, mainly due to higher loan servicing fees from a bulk purchase of servicing rights in March 2023[206](index=206&type=chunk)[207](index=207&type=chunk) [Other Expense](index=74&type=section&id=Other%20Expense) Total other expense increased to $1.40 billion in Q1 2024, driven by higher FDIC assessments and salaries Other Expense Components | (In millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Salaries and employee benefits | $833 | $808 | | FDIC assessments | $60 | $30 | | Professional and other services | $85 | $125 | | Outside data processing and software | $120 | $106 | | **Total other expense** | **$1,396** | **$1,359** | - Salaries and employee benefits included **$99 million** of seasonally higher costs in both Q1 2024 and Q1 2023[218](index=218&type=chunk) - FDIC assessments in Q1 2024 included a **$29 million** estimated incremental special assessment related to 2023 bank failures[219](index=219&type=chunk) [Liquidity and Capital](index=76&type=section&id=Liquidity%20and%20Capital) The company maintained strong liquidity with $81.5 billion in available sources and all regulatory capital ratios well above minimums Available Liquidity Sources (March 31, 2024) | (In millions) | Amount | | :--- | :--- | | Deposits at the FRB of New York | $32,033 | | Unused secured borrowing facilities (FRB & FHLB) | $32,993 | | Unencumbered investment securities (after haircuts) | $16,506 | | **Total** | **$81,532** | Regulatory Capital Ratios (March 31, 2024) | Ratio | M&T (Consolidated) | | :--- | :--- | | CET1 | 11.08% | | Tier 1 capital | 12.38% | | Total capital | 14.04% | | Tier 1 leverage | 9.47% | - There were no common stock repurchases in Q1 2024. In Q1 2023, the company repurchased **3.8 million shares** for **$600 million**[250](index=250&type=chunk) [Segment Information](index=86&type=section&id=Segment%20Information) Retail Bank was the largest contributor to Q1 2024 net income at $446 million, followed by Commercial Bank and Institutional Services Net Income by Segment (Q1 2024 vs Q1 2023) | (In millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Commercial Bank | $201 | $333 | | Retail Bank | $446 | $452 | | Institutional Services & Wealth Management | $128 | $110 | | All Other | ($244) | ($193) | | **Total Net Income** | **$531** | **$702** | - Commercial Bank net income fell **40%** YoY, driven by lower net interest income and a higher provision for credit losses[261](index=261&type=chunk) - Retail Bank net income was stable YoY, as higher noninterest income (from mortgage servicing) offset a higher provision for credit losses[268](index=268&type=chunk) - Institutional Services & Wealth Management net income grew **16%** YoY, despite lower trust income from the CIT sale, due to lower expenses and higher net interest income[272](index=272&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=97&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates by reference discussions on Liquidity Risk, Market Risk, Interest Rate Sensitivity, and Capital from MD&A - Information regarding market risk, including liquidity risk and interest rate sensitivity, is incorporated by reference from the MD&A section of the report[293](index=293&type=chunk) [Controls and Procedures](index=97&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls were effective as of March 31, 2024, with no material changes to internal control - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report (March 31, 2024)[294](index=294&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2024 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[295](index=295&type=chunk) Part II. OTHER INFORMATION [Legal Proceedings](index=98&type=section&id=Item%201.%20Legal%20Proceedings) The company estimates reasonably possible losses for legal matters to be between $0 and $25 million beyond existing liabilities - The company estimates the range of reasonably possible losses for legal matters, beyond existing recorded liabilities, to be between **$0** and **$25 million** as of March 31, 2024[298](index=298&type=chunk) [Risk Factors](index=98&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors disclosed in the company's 2023 Annual Report on Form 10-K have occurred - No material changes in risk factors have occurred since those disclosed in the 2023 Annual Report[299](index=299&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=98&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company purchased 18,415 shares of equity securities in Q1 2024, primarily for tax obligations on employee awards Issuer Purchases of Equity Securities (Q1 2024) | Period | Total Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | Jan 2024 | 210 | $136.94 | | Feb 2024 | 0 | N/A | | Mar 2024 | 18,205 | $140.05 | | **Total** | **18,415** | **$140.01** | - As of March 31, 2024, approximately **$1.2 billion** remained available for repurchase under the publicly announced program authorized in July 2022[300](index=300&type=chunk)[301](index=301&type=chunk) [Exhibits](index=99&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including a retirement agreement and Sarbanes-Oxley certifications - Exhibits filed include a retirement agreement for Doris Meister, Sarbanes-Oxley certifications (Sections 302 and 906) from the CEO and CFO, and XBRL data files[305](index=305&type=chunk)

BUFFALO, N.Y., April 30, 2024 /PRNewswire/ -- M&T Bank Corporation (NYSE: MTB) today released its 2023 Sustainability Report, Committed to our Communities. This fourth annual report highlights the progress the company has made toward its sustainability goals including environmental and social finance solutions for customers as well as initiatives that support the bank's business and community relationships. Key highlights from the 2023 Sustainable Report include over $3.1 billion in financing aligned to pos ...

BUFFALO, N.Y., April 29, 2024 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE:MTB) will participate in the Barclays Americas Select Franchise Conference being held in London. Representatives of M&T are scheduled to deliver a presentation to investors and analysts on May 8, 2024, at 4:00 a.m. ET (9:00 a.m. BST). A link to the webcast will be available at https://ir.mtb.com/events-presentations. The webcast may contain material information as well as forward-looking information, and cautionary statements r ...

NEW YORK, April 25, 2024 (GLOBE NEWSWIRE) -- Sunstone Credit, Inc., a commercial solar loan platform that helps businesses switch to clean energy, today announced a program with M&T Bank (NYSE:MTB) to give more businesses access to easy, affordable solar financing. Despite the advantages and incentives for businesses to go solar, most companies lack access to loan financing for solar installations, forcing them to pay cash or forgo switching to clean energy altogether. By collaborating with M&T Bank, a top ...

BUFFALO, N.Y., April 24, 2024 /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE:MTB) will participate in the RBC Capital Markets US Banks Fixed Income Investor Symposium. Representatives of M&T will meet with investors in New York City on April 30, Chicago on May 1 and virtually on May 2. About M&TM&T Bank Corporation is a financial holding company headquartered in Buffalo, New York. M&T's principal banking subsidiary, M&T Bank, provides banking products and services in 12 states across the eastern U.S. fr ...

Financial Data and Key Metrics Changes - The first quarter saw a solid PPNR of $891 million, with diluted GAAP earnings per share at $3.02, and adjusted diluted earnings per share at $3.15 excluding the FDIC special assessment [2][12] - The CET1 ratio increased to 11.07% at the end of the first quarter, and tangible book value per share grew 1% to $99.54 [2][19] - Noninterest income was $580 million, slightly up from the linked quarter, but excluding a distribution from Bayview Lending Group, it declined [11] Business Line Data and Key Metrics Changes - Average loans and leases increased 1% to $133.8 billion, driven by growth in C&I and consumer loans, while declines were noted in CRE and residential mortgages [5][12] - Loan yields decreased 1% to 6.32%, but increased 2 basis points sequentially when excluding cash flow hedges [6] - Noninterest expenses were $1.4 billion, with adjusted noninterest expense increasing by 0.6% compared to the previous year [12] Market Data and Key Metrics Changes - Average investment securities increased by $1.1 billion to $28.6 billion, reflecting a shift of cash balances into investment securities [4][7] - Average total deposits declined by $648 million to $164.1 billion, with average customer deposits increasing sequentially [8][10] - The cost of interest-bearing deposits increased by 3 basis points to 2.93%, the smallest quarterly increase since early 2022 [10] Company Strategy and Development Direction - The company is focused on controlling expenses and maintaining strong liquidity, with a strategy to grow customer deposits [12][22] - The management emphasized the importance of organic growth and building new customer relationships, with share repurchases on hold until reassessment after the second quarter [22][23] - The outlook for net interest income (NII) is positive, with expectations of $6.8 billion, reflecting a neutral stance on interest rates [20][30] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the economic outlook, noting a strong labor market despite challenges [20] - There is an expectation for minimal impact on the CRE portfolio even with potential rate increases, as most loans are fixed-rate [64] - The management highlighted a conservative approach to capital management and liquidity, aiming to navigate economic uncertainties effectively [22][70] Other Important Information - The company is actively managing criticized loans, with a focus on working with clients to mitigate risks [52][96] - The management noted a reduction in criticized CRE balances, indicating improved performance in most property types [98][100] - The company is undergoing a review of its construction portfolio, with limited incremental downgrades expected [18] Q&A Session Summary Question: Can you unpack the NII guidance in a higher for longer rate environment? - Management indicated comfort with achieving $6.8 billion in NII regardless of rate cuts, citing strong deposit performance and loan growth [30] Question: What is the rationale for increasing liquidity levels? - Management stated that increased liquidity is a conservative measure in response to industry uncertainties, aiming to maintain strong capital [34] Question: How do criticized loan levels compare to past peaks? - Management acknowledged higher criticized levels but emphasized a conservative approach to credit management, aiming to support clients through stress [39][52] Question: What is the outlook for commercial real estate? - Management noted stabilization in the CRE portfolio, with ongoing monitoring and support for clients in troubled sectors [46][96] Question: How does the company plan to address S&P's negative outlook? - Management expressed confidence in managing CRE exposure and criticized loans, believing that strategies in place will mitigate risks [95][96]

[First Quarter 2024 Performance Overview](index=1&type=section&id=First%20Quarter%202024%20Performance%20Overview) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) M&T Bank reported Q1 2024 net income of **$531 million**, a year-over-year decrease but sequential increase, impacted by margin compression Q1 2024 Key Financial Metrics | (Dollars in millions, except per share data) | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net income | $531 | $482 | $702 | | Diluted earnings per common share | $3.02 | $2.74 | $4.01 | | Net interest income | $1,680 | $1,722 | $1,818 | | Provision for credit losses | $200 | $225 | $120 | | Net interest margin | 3.52% | 3.61% | 4.04% | | CET1 capital ratio (estimated) | 11.07% | 10.98% | 10.16% | - The Common Equity Tier 1 (CET1) capital ratio improved to an estimated **11.07%** at March 31, 2024, up **9 basis points** from **10.98%** at the end of 2023[5](index=5&type=chunk) - Net interest margin narrowed to **3.52%** from **3.61%** in Q4 2023, attributed to higher liquidity, a shift from cash to investment securities, and increased deposit and borrowing costs[5](index=5&type=chunk) - First quarter expenses included **$99 million** in seasonal employee compensation and a **$29 million** incremental FDIC special assessment[5](index=5&type=chunk) [Chief Financial Officer Commentary](index=1&type=section&id=Chief%20Financial%20Officer%20Commentary) CFO Daryl N. Bible noted a solid start to 2024, with growth in specific loan portfolios, reduced CRE exposure, and strengthened capital and liquidity - The bank successfully grew certain sectors of its commercial and consumer loan portfolios[4](index=4&type=chunk) - Management continued to shrink the bank's commercial real estate (CRE) exposure[4](index=4&type=chunk) - M&T's liquidity and capital position strengthened, reflecting a stable deposit base and increased borrowings[4](index=4&type=chunk) [Detailed Financial Analysis](index=3&type=section&id=Detailed%20Financial%20Analysis) [Net Interest Income](index=3&type=section&id=Net%20Interest%20Income) Taxable-equivalent net interest income was **$1.69 billion**, declining due to a narrowing net interest margin of **3.52%**, primarily from increased interest-bearing liability costs Net Interest Income and Margin Analysis | (Dollars in millions) | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Taxable-equivalent Net Interest Income | $1,692 | $1,735 | $1,832 | | Net interest margin | 3.52% | 3.61% | 4.04% | | Yield on average earning assets | 5.74% | 5.73% | 5.16% | | Cost of interest-bearing liabilities | 3.26% | 3.17% | 1.86% | - Compared to Q4 2023, the decrease in NII was influenced by a **$2.9 billion** increase in average borrowings and higher rates on both borrowings and deposits[11](index=11&type=chunk) - Year-over-year, the cost of interest-bearing deposits rose by **144 basis points**, and average borrowings increased by **$4.5 billion**, significantly pressuring the net interest margin[11](index=11&type=chunk) [Average Earning Assets](index=5&type=section&id=Average%20Earning%20Assets) Average earning assets grew to **$193.1 billion**, driven by higher interest-bearing deposits and commercial & industrial and consumer loans, partially offset by commercial real estate loan declines Average Earning Assets Breakdown (in millions) | Category | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Interest-bearing deposits at banks | $30,647 | $30,153 | $24,312 | | Investment securities | $28,587 | $27,490 | $27,622 | | Commercial and industrial loans | $56,821 | $55,420 | $52,510 | | Real estate - commercial loans | $32,696 | $33,455 | $35,245 | | Total earning assets | $193,135 | $190,536 | $184,069 | - Sequentially, average loans and leases increased by **$1.0 billion**, led by growth in commercial & industrial and consumer loans, while commercial real estate loans declined[16](index=16&type=chunk) [Average Interest-bearing Liabilities](index=6&type=section&id=Average%20Interest-bearing%20Liabilities) Average interest-bearing liabilities increased to **$131.5 billion**, primarily due to significant rises in short-term and long-term borrowings and a shift to interest-bearing deposit products Average Interest-bearing Liabilities Breakdown (in millions) | Category | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Total interest-bearing deposits | $115,450 | $114,589 | $99,683 | | Short-term borrowings | $6,228 | $5,156 | $4,994 | | Long-term borrowings | $9,773 | $7,901 | $6,511 | | Total interest-bearing liabilities | $131,451 | $127,646 | $111,188 | - Compared to Q4 2023, average borrowings increased by **$2.9 billion**, mainly due to a senior notes issuance and higher FHLB borrowings[19](index=19&type=chunk) [Provision for Credit Losses and Asset Quality](index=7&type=section&id=Provision%20for%20Credit%20Losses%20and%20Asset%20Quality) Provision for credit losses was **$200 million**, down sequentially but up significantly year-over-year, reflecting commercial real estate pressures and higher interest rates, with nonaccrual loans at **$2.3 billion** Asset Quality Metrics (in millions) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Provision for credit losses | $200 | $225 | $120 | | Net charge-offs | $138 | $148 | $70 | | Net charge-offs as % of avg. loans | 0.42% | 0.44% | 0.22% | | Nonaccrual loans | $2,302 | $2,166 | $2,557 | | Allowance for credit losses as % of loans | 1.62% | 1.59% | 1.49% | - Higher provisions in recent quarters reflect declines in commercial real estate values and deteriorating performance of loans to commercial borrowers, including nonautomotive dealers and healthcare facilities[21](index=21&type=chunk) - Nonaccrual loans increased by **$136 million** from Q4 2023, largely due to an increase in commercial and industrial nonaccruals, partially offset by a decrease in commercial real estate nonaccruals[22](index=22&type=chunk) [Noninterest Income](index=8&type=section&id=Noninterest%20Income) Noninterest income was **$580 million**, stable sequentially but down 1% year-over-year, boosted by a **$25 million** distribution but offset by lower mortgage banking and trust income from a business sale Noninterest Income Breakdown (in millions) | Category | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Mortgage banking revenues | $104 | $112 | $85 | | Service charges on deposit accounts | $124 | $121 | $113 | | Trust income | $160 | $159 | $194 | | Other revenues from operations | $152 | $145 | $159 | | Total | $580 | $578 | $587 | - Other revenues from operations increased sequentially due to a **$25 million** distribution from Bayview Lending Group LLC[25](index=25&type=chunk) - Trust income decreased by **$34 million** year-over-year, reflecting the sale of the company's Collective Investment Trust (CIT) business in April 2023[25](index=25&type=chunk) [Noninterest Expense](index=9&type=section&id=Noninterest%20Expense) Noninterest expense was **$1.40 billion**, decreasing sequentially due to a lower FDIC special assessment but increasing year-over-year due to higher salaries and an incremental FDIC assessment Noninterest Expense Breakdown (in millions) | Category | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Salaries and employee benefits | $833 | $724 | $808 | | FDIC assessments | $60 | $228 | $30 | | Professional and other services | $85 | $99 | $125 | | Other costs of operations | $134 | $110 | $115 | | Total | $1,396 | $1,450 | $1,359 | - Salaries and benefits expense increased by **$109 million** sequentially, reflecting annual merit increases and **$99 million** of seasonally higher compensation and taxes[28](index=28&type=chunk) - FDIC assessments in Q1 2024 included a **$29 million** incremental special assessment, compared to a **$197 million** special assessment in Q4 2023[28](index=28&type=chunk) [Income Taxes](index=10&type=section&id=Income%20Taxes) The effective tax rate for Q1 2024 was **20.0%**, lower than prior quarters due to a net discrete tax benefit from resolving a tax matter related to the People's United Financial acquisition - The effective tax rate was **20.0%** in Q1 2024, compared to **22.9%** in Q4 2023 and **24.2%** in Q1 2023[29](index=29&type=chunk) - The lower tax rate reflects a net discrete tax benefit from resolving a tax matter related to the People's United Financial, Inc. acquisition[29](index=29&type=chunk) [Capital](index=10&type=section&id=Capital) M&T's capital position strengthened, with the estimated Common Equity Tier 1 (CET1) ratio increasing to **11.07%**, remaining well above regulatory minimums, with dividends declared but no common stock repurchases Capital Ratios | Ratio | Q1 2024 (est.) | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | CET1 | 11.07% | 10.98% | 10.16% | | Tier 1 capital | 12.37% | 12.29% | 11.48% | | Total capital | 14.03% | 13.99% | 13.28% | - M&T did not repurchase any shares of its common stock in Q1 2024, compared to repurchasing **3.8 million** shares for **$600 million** in Q1 2023[31](index=31&type=chunk) [Financial Statements and Reconciliations](index=12&type=section&id=Financial%20Statements%20and%20Reconciliations) [Financial Highlights and Trends](index=12&type=section&id=Financial%20Highlights%20and%20Trends) This section provides a comparative view of M&T's financial performance, highlighting key metrics for Q1 2024 versus Q1 2023, five-quarter trends, and recent credit quality metrics Performance Comparison: Q1 2024 vs Q1 2023 | (Dollars in millions, except per share) | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Net income | $531 | $702 | -24% | | Diluted earnings per common share | $3.02 | $4.01 | -25% | | Taxable-equivalent net interest income | $1,692 | $1,832 | -8% | | Net interest margin | 3.52% | 4.04% | | Five Quarter Net Interest Margin Trend | Quarter | Net Interest Margin (%) | | :--- | :--- | | Q1 2024 | 3.52% | | Q4 2023 | 3.61% | | Q3 2023 | 3.79% | | Q2 2023 | 3.91% | | Q1 2023 | 4.04% | [Condensed Consolidated Financial Statements](index=14&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements provide detailed line-item data for the Statement of Income, Balance Sheet, and Average Balance Sheet, offering a comprehensive view of the company's financial position and performance - The Condensed Consolidated Statement of Income shows a year-over-year decrease in net interest income and an increase in provision for credit losses, leading to a **24%** decline in net income[45](index=45&type=chunk) - The Condensed Consolidated Balance Sheet as of March 31, 2024, shows total assets of **$215.1 billion**, up **6%** from a year ago, driven by increases in interest-bearing deposits at banks and net loans[48](index=48&type=chunk) - Total deposits grew **5%** year-over-year to **$167.2 billion**, with a significant shift from noninterest-bearing (**-16%**) to interest-bearing deposits (**+18%**)[48](index=48&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=19&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section reconciles GAAP results to non-GAAP measures, with Q1 2024 diluted net operating earnings at **$3.09** per share, primarily adjusted for after-tax amortization of core deposit and other intangible assets Q1 2024 GAAP to Non-GAAP Reconciliation | (per share) | GAAP ($) | Adjustments ($) | Non-GAAP ($) | | :--- | :--- | :--- | :--- | | Diluted earnings per common share | $3.02 | $0.07 | $3.09 | - Non-GAAP measures exclude the after-tax effect of amortization of core deposit and other intangible assets, which management considers to be 'nonoperating' in nature[8](index=8&type=chunk)

Financial Position - As of December 31, 2023, M&T had consolidated total assets of $208.3 billion, deposits of $163.3 billion, and shareholders' equity of $27.0 billion[13]. - M&T Bank, representing over 99% of consolidated assets, had total assets of $207.8 billion, deposits of $167.3 billion, and shareholders' equity of $25.7 billion as of December 31, 2023[17]. - The combined total assets and shareholders' equity of the equipment leasing and financing services subsidiaries acquired from People's United was $6.6 billion and $440 million, respectively, at December 31, 2023[28]. - Wilmington Trust Company had total assets of $1.1 billion and revenues of $142 million in 2023[24]. - M&T Securities recorded $13 million of revenue in 2023, with total assets of $56 million and shareholders' equity of $55 million as of December 31, 2023[20]. - Wilmington Trust, N.A. had total assets of $683 million and deposits of $6 million as of December 31, 2023[19]. Acquisition and Expansion - Following the acquisition of People's United on April 1, 2022, M&T expanded its geographical footprint and expects benefits from greater geographical diversity and scale[15]. - The company intends to continue pursuing acquisition opportunities to complement its business and geographic reach[16]. - M&T's subsidiaries include various entities providing investment advisory services, with combined revenues of $449 million for the equipment leasing and financing services subsidiaries in 2023[28]. Capital and Regulatory Requirements - M&T's SCB (Stress Capital Buffer) of 4.0% became effective on October 1, 2023, resulting in a CET1 capital requirement of 8.5%[55]. - M&T is classified as a Category IV BHC, which subjects it to less stringent liquidity risk management and reporting requirements compared to higher categories[60]. - The proposed capital framework revisions would require Category IV firms, including M&T, to include all accumulated other comprehensive income components in regulatory capital starting July 1, 2028[45]. - M&T's minimum capital ratios include 4.5% CET1 to RWA, 6.0% Tier 1 capital to RWA, and 8.0% Total capital to RWA[50]. - The Federal Reserve conducts supervisory stress tests for Category IV firms biennially, with M&T participating in the 2023 test due to its acquisition of People's United[53]. - M&T's ability to make capital distributions is contingent on maintaining its SCB above minimum CET1 risk-based, Tier-1 risk-based, and total risk-based capital requirements[58]. - The capital conservation buffer for M&T's bank subsidiaries is set at 2.5% of RWA[48]. - M&T's capital plans must be submitted annually, incorporating various economic scenarios and ensuring capital adequacy[56]. - The Tailoring Rules exempt Category IV firms from LCR and NSFR requirements, focusing instead on enhanced liquidity standards[60]. - M&T's regulatory capital ratios are subject to adjustments based on risk weights assigned to its assets and off-balance sheet items[46]. Special Assessments and Insurance - The FDIC finalized a rule imposing a special assessment to recover approximately $16.3 billion in costs related to certain failed banks, with M&T's estimated total assessments at $197 million[74]. - The special assessments will be collected at an annual rate of approximately 13.4 basis points per year over eight quarters in 2024 and 2025, starting January 1, 2024[74]. - The FDIC increased initial base deposit insurance assessment rates by 2 basis points starting in 2023 to restore the DIF reserve ratio to meet or exceed the statutory minimum of 1.35% by September 30, 2028[73]. Compliance and Regulatory Environment - The Dodd-Frank Act requires federal bank regulatory agencies to establish regulations prohibiting excessive incentive-based payment arrangements for entities with at least $1 billion in total assets, including M&T[78]. - M&T Bank submitted its most recent resolution plan to the FDIC in November 2022, following the FDIC's requirement for IDIs with $50 billion or more in total assets to submit periodic plans for resolution[82]. - The FDIC proposed amendments to resolution planning requirements for IDIs with $100 billion or more in total assets, requiring submission on a two-year cycle[83]. - The FDIC's risk-based premium assessment system determines assessment rates based on average total assets minus average tangible equity, with larger institutions like M&T using performance and loss-severity scores[71]. - Institutions categorized as undercapitalized must submit a capital restoration plan to their federal banking regulator, with restrictions on increasing total assets and accepting brokered deposits[68]. - The Federal Reserve may not approve transactions that would result in a monopoly or substantially lessen competition in the banking sector[76]. - The Federal Reserve proposed a rule requiring Category II through IV BHCs and IDIs with $100 billion or more in consolidated assets to maintain eligible long-term debt equal to the greatest of 6% of RWAs, 3.5% of total consolidated assets, or 2.5% of total leverage exposure[84]. - The FDIC has the authority to transfer assets and liabilities of an insolvent IDI to a new depository institution without creditor approval, which could impact the treatment of debt holders[85]. - Under the Dodd-Frank Act, the FDIC may be appointed as receiver for systemically important financial companies, allowing for liquidation if the institution is in default or poses a risk to financial stability[87]. Consumer and Market Regulations - The proposed rule by the CFPB on October 19, 2023, would require banks to make consumer data available upon request, enhancing consumer control over financial data[100]. - The Federal Reserve proposed amendments to interchange fees, reducing the maximum permissible fee for debit transactions from 21 cents to 14.4 cents, with an increase in fraud prevention adjustments[101]. - The CFPB proposed a rule on January 17, 2024, that would reform overdraft practices, potentially increasing compliance costs for banks with over $10 billion in assets[102]. Community Engagement and Workforce - M&T Bank currently holds an "Outstanding" CRA rating from both the Federal Reserve and NYSDFS, indicating strong performance in meeting community credit needs[105]. - The final rule to modernize CRA regulations will take effect on April 1, 2024, with certain compliance provisions starting as late as January 1, 2027[106]. - As of December 31, 2023, the company employed 22,223 full-time and part-time employees, with approximately 46% located in New York[117]. - The average tenure of the company's employees is 9.6 years, while the average tenure of executive officers is 17.0 years[118]. - In 2023, 44% of total corporate hires were people of color, and 55% were women, reflecting the company's commitment to diversity[120]. - The company conducted 18 "Annual Engagement Surveys" since 2001, with average participation rates around 90%[122]. - In 2023, M&T employees volunteered approximately 249,000 hours and served on the boards of 946 not-for-profit organizations[123]. - The company has a talent acquisition strategy that includes an Employee Referral Program, which accounted for 19% of new hires in 2023[119]. Risk Factors - The company faces extensive competition from various financial services entities, including fintech companies that offer traditional banking products[127]. - The financial services industry is highly competitive, which could adversely affect the Company's revenue and profitability[135]. - Economic conditions, including inflationary pressures and geopolitical uncertainties, may negatively impact the Company's business and financial performance[138]. - The Federal Reserve raised benchmark interest rates in 2022 and 2023, which could materially affect the Company's profitability and the value of its assets and liabilities[141]. - A decrease in demand for loans and other products could result from poor economic conditions, impacting net interest income and overall financial performance[139]. - The Company's core banking business is concentrated in the Northeast and Mid-Atlantic regions, making it vulnerable to adverse economic changes in those areas[147]. - The Company faces operational risks, including potential cybersecurity breaches, which could lead to reputational damage and financial exposure[135]. - Changes in accounting standards and management's accounting methods could impact the Company's reported financial condition and results of operations[135]. - The Company is subject to extensive government regulation, and failure to comply could result in significant penalties and reputational damage[152]. - Volatility in debt and equity markets can significantly affect the Company's performance, particularly due to its financial asset and liability structure[145]. - The discontinuation of benchmark rates could adversely impact the Company's business and operational results[148]. - M&T's capital and liquidity requirements may become more stringent due to regulatory changes, potentially limiting its business activities and ability to return capital to shareholders[157]. - M&T's reliance on core customer deposits as a stable funding source may be challenged by increased competition and rising interest rates, potentially raising funding costs[177]. - The company maintains an allowance for credit losses, reflecting expected losses in its loan portfolio, but there is no assurance that this allowance will cover all potential credit losses[169]. - Regulatory changes following the failures of large banks in 2023 may lead to revised liquidity requirements for M&T, impacting its competitive position[175]. - M&T's ability to return capital to shareholders is contingent upon meeting capital ratios exceeding specified minimum levels and regulatory approvals[160]. - The company faces credit risk from deteriorating credit quality, influenced by economic conditions and real estate valuations, particularly in commercial and residential sectors[165]. - M&T's liquidity could be adversely affected by negative market conditions or reputational damage, leading to potential loss of customer deposits[174]. - The company relies on dividends from its subsidiaries for liquidity, which are subject to regulatory limitations and could impact its ability to pay dividends on its stock[180]. Operational and Cybersecurity Risks - The Company faces challenges in obtaining regulatory approval for acquisitions, which may delay or prevent the realization of expected benefits from such transactions[184]. - Integration risks from acquisitions, such as the People's United acquisition in April 2022, could adversely impact the Company's business and financial condition[185]. - The Company is competing for skilled personnel against less regulated financial technology providers, which may increase recruitment and compensation costs[186]. - The Company's compensation practices are subject to regulatory oversight, and changes in these regulations could affect its ability to attract and retain qualified employees[187]. - Operational risks, including human error, fraud, and data security breaches, could create significant legal and financial exposure for the Company[188][189]. - Cybersecurity threats have increased significantly, with potential impacts on customer confidence and operational costs due to breaches or attacks[191][194]. - The Company has experienced incidents involving third-party vendors that compromised customer information, highlighting vulnerabilities in its security measures[193]. - The reliance on cloud service providers introduces additional risks, including system failures and cybersecurity attacks, which could adversely affect the Company's operations[195]. - The Company is subject to privacy laws, and non-compliance could lead to liability and reputational damage[200]. - The Company is subject to various privacy and data protection laws, which may impose operational burdens and increase risks associated with customer data usage[201]. - Compliance with privacy-related laws may significantly increase the time and resources needed for the Company, impacting its management of personal data[202]. - The Company relies on third-party service providers for key business infrastructure, and any disruption in their services could adversely affect operations[203]. - The Company may not be fully insured against losses from third-party failures, which could lead to increased operational costs[204]. Legal and Accounting Risks - Legal proceedings and regulatory inquiries could result in significant civil or criminal penalties, adversely impacting the Company's financial condition[207]. - The Company establishes accruals for legal proceedings but may face higher ultimate losses than accrued amounts due to the unpredictability of legal outcomes[208]. - Changes in accounting standards could materially impact the Company's reported financial condition and results of operations[209]. - Management's selection of accounting methods and estimates may lead to material losses if underlying assumptions are incorrect[210]. - The Company's quantitative models for business planning may perform poorly, leading to inadequate information for decision-making[212].

Financial Performance - Full Year 2023 - Revenues grew +18% YoY to $9.6 billion[126] - PPNR grew +22% YoY to $4.2 billion[33] Financial Performance - Fourth Quarter 2023 - Revenues declined -8% YoY to $2.3 billion[129] - PPNR declined -9% YoY to $1.0 billion[35] - Diluted EPS declined -36% YoY[15] - Net interest margin declined -18 bps QoQ to 3.61%[130] Balance Sheet - Average deposits increased +$2.0 billion or +1% QoQ[24] - CRE loans declined -2% (-$834 million) QoQ[39] - CET1 capital ratio increased +3 bps to 10.98%[74]

Financial Data and Key Metrics Changes - For the full year 2023, the company generated pre-tax pre-provision revenue (PPNR) of $4.2 billion, up 22% from 2022, with a positive operating leverage of 3.9% [5] - Diluted GAAP earnings per common share for Q4 2023 were $2.74, and adjusted diluted earnings per common share were $3.62, excluding the FDIC special assessment [16] - The net interest margin decreased to 3.61%, down 18 basis points from the linked quarter, primarily due to an unfavorable deposit mix shift and higher rates on customer deposit funding [44] Business Line Data and Key Metrics Changes - Average loans and leases increased slightly, with growth in commercial and industrial (C&I) and consumer loans, while declines were noted in commercial real estate (CRE) and residential mortgage loans [7] - Non-interest income for Q4 was $578 million, up 3% sequentially, driven by strong commercial mortgage banking revenues and higher trust income [8] - Non-accrual loans decreased by $176 million from the linked quarter to $2.2 billion, with a non-accrual ratio of 1.62% [9] Market Data and Key Metrics Changes - Average deposits grew by $2 billion to $164.7 billion, with a decline in average demand deposits reflecting a shift towards higher-yielding products [18] - The company expects average deposits in 2024 to be in the range of $163 billion to $165 billion, focusing on growing customer deposits at a reasonable cost [52] Company Strategy and Development Direction - The company aims to leverage strong capital and liquidity levels to grow new customer accounts while reducing asset sensitivity [15] - There is a focus on optimizing resources for expense savings and revenue generation, particularly in the New England and Long Island markets [26] - The integration of People’s United is complete, and the company is confident in realizing potential post-merger benefits [30] Management's Comments on Operating Environment and Future Outlook - Management anticipates a soft landing scenario for the economy, with potential for mild recession due to the lagged impact of rate hikes [50] - The outlook for net interest income is projected to be in the range of $6.7 billion to $6.8 billion, reflecting the impact of higher deposit funding costs [51] - The company expects net charge-offs for the full year to be near 40 basis points, indicating ongoing credit cost normalization [54] Other Important Information - The company’s CET1 ratio at the end of 2023 was estimated at 10.98%, reflecting strong capital generation [22] - Non-interest expenses for Q4 were $1.45 billion, down 2% from the linked quarter, with an adjusted efficiency ratio of 53.6% [46] - The company has made enhancements to financial reporting, including reclassifying owner-occupied loans to better align with management practices [29] Q&A Session Summary Question: What is the comfortable level of CET1 on a long-term basis? - Management indicated a preference to operate with a buffer of 50 to 100 basis points over regulatory requirements [32] Question: Can the company maintain a long-term track record of lower credit losses despite increases in criticized loans? - Management expressed confidence, noting that increases in criticized loans are primarily interest rate driven and that overall performance remains strong [34] Question: What is the outlook for net interest income given potential rate cuts? - Management expects net interest income to stabilize and potentially grow in the second half of the year, depending on rate cuts [38] Question: What is the appetite for bank acquisitions in the next 12 to 18 months? - Management stated that while there is a focus on organic growth, they remain open to acquisition opportunities if they align with strategic goals [75] Question: How does the company view the current state of criticized loans? - Management noted that the increase in criticized loans is largely a reflection of market conditions rather than changes in underwriting standards [82]