M&T Bank (NYSE:MTB) Conference Transcript

M&T Bank Conference Summary Company Overview - Company: M&T Bank (NYSE: MTB) - Date: December 10, 2025 - Speaker: CFO Daryl Bible Key Points 1. Financial Performance in 2025 - M&T Bank reported strong performance in 2025, highlighted by significant fee income growth of 16% year-over-year, driven by mortgage, trust, and treasury management services [5][20] - The bank experienced improvements in credit quality, with criticized and non-accrual levels decreasing [5][10][27] - The bank's net interest income (NII) was impacted by softer commercial real estate (CRE) conditions, but overall margins increased [3][4] 2. Strategic Priorities - The bank's strategic focus includes expanding into certain markets, simplifying operations, upgrading technology, and enhancing risk management capabilities [6][8] - Investments in technology have tripled over the past seven years, with a focus on resiliency and customer experience [6][39] - The bank aims to improve client experiences through enhanced digital services and commercial payments [7][8] 3. Outlook for 2026 - M&T Bank anticipates growth in CRE, with production levels increasing and a positive outlook for 2026 [9][14] - The bank plans to focus on middle-market commercial growth and community markets to drive future growth [11][12] - NII growth is expected to be driven by both margin expansion and balance sheet growth, with a target margin in the low 370s [15][16] 4. Deposit and Fee Income Growth - All six business segments are expected to grow deposits in 2026, with particular focus on consumer, business banking, and commercial sectors [18][19] - Fee income growth is projected to continue, particularly in mortgage sub-servicing and treasury management products [20][21] - The bank plans to highlight capital markets fees as a growing area, which has previously been underrepresented [22] 5. Credit Quality and Risk Management - Criticized assets have decreased from over 14% to closer to 9%, indicating improved credit quality [27] - The bank maintains a conservative approach to lending, focusing on secure mortgage and private equity lending [30][31] - M&T Bank has no significant exposure to recent loan defaults, maintaining a strong credit culture [28][32] 6. Capital Management and Share Repurchase - The bank has a strong capital position, with a dividend payout ratio in the low to mid-30s and an 11% increase in dividends this year [34][36] - M&T Bank repurchased 8.7% of its outstanding shares in 2025, significantly more than peers [35][36] - Future capital priorities include supporting clients, potential M&A opportunities, and continued share repurchases [34][40] 7. Technology Investments - The bank has shifted focus from resiliency projects to client-focused technology investments, enhancing customer acquisition and operational efficiency [43][44] - M&T Bank has improved its operational excellence by consolidating technology and operations under one umbrella [44] 8. Cost Management - The bank has managed to keep costs to a 3% increase while investing in necessary areas, focusing on vendor spend and personnel management [45][46] Conclusion M&T Bank demonstrated a solid financial performance in 2025, with a positive outlook for 2026 driven by strategic growth initiatives, improved credit quality, and continued investments in technology and customer experience. The bank's focus on deposit and fee income growth, along with prudent capital management, positions it well for future success.