M&T(MTB)2023-10-18 17:26Financial Data and Key Metrics Changes - M&T's net operating income for Q3 2023 was $702 million, with diluted net operating earnings per share at $4.05, and a net operating return on tangible common equity of 17.41% [7] - Taxable equivalent net interest income decreased to $1.79 billion, down $23 million from the previous quarter, with a net interest margin of 3.79%, down 12 basis points [8] - Non-interest expenses were $1.28 billion, down $15 million from the linked quarter, resulting in an efficiency ratio of 53.7% [12] Business Line Data and Key Metrics Changes - Average loans and leases decreased by 1% to $132.6 billion, with C&I loans slightly increasing to $44.6 billion, while average CRE loans decreased by 2% to $44.2 billion [9] - Average investment securities decreased to $28 billion, with cash held at the Fed and investment securities totaling $59.2 billion, representing 28% of total assets [10] - Non-interest income totaled $560 million, down from $803 million in the linked quarter, primarily due to the absence of gains from the sale of the CIT business [32] Market Data and Key Metrics Changes - Average total deposits grew by $3.3 billion, with average customer deposits increasing by $1 billion, although demand deposits declined by $2.3 billion [31] - The allowance for credit losses increased to $2.1 billion, with net charge-offs at $96 million, down from $127 million in the linked quarter [33] Company Strategy and Development Direction - M&T Bank emphasizes a purpose-driven approach, focusing on local scale and community engagement to drive organic growth and enhance customer experience [4][5] - The company is committed to managing expenses diligently while navigating a competitive deposit environment and maintaining strong liquidity [27][38] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about economic growth slowing but remaining positive, anticipating that inflation pressures will continue to decrease [15] - The outlook for average loan growth is expected to be slightly higher than the Q3 level, with anticipated declines in CRE and residential mortgages [16] Other Important Information - M&T's CET1 ratio at the end of September was estimated at 10.94%, an increase from 10.59% at the end of the previous quarter [14] - The company has invested over $230 million in renewable energy and improved its ESG ratings [6] Q&A Session Summary Question: Criteria for Resuming Buybacks - Management indicated that the decision to resume buybacks will depend on economic stability and regulatory clarity, emphasizing a cautious approach due to current market conditions [21][42] Question: Impact of Higher Rates on Customers - Management acknowledged that higher rates are challenging for customers, but they are actively monitoring portfolios and maintaining strong relationships to support clients [56][82] Question: Outlook for Loan Loss Reserves - Management noted that the increase in reserves was driven by softness in asset values in the CRE portfolio, with ongoing assessments to ensure adequate reserves [117][125]