UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
CURRENT REPORT
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Item 7.01. Regulation FD Disclosure.
On January 18, 2024, M&T Bank Corporation ("M&T") posted an investor presentation to its website. A copy of the presentation is attached as Exhibit 99.1 hereto. From time to time, M&T may use this presentation in conversations with investors and analysts. The presentation can be found on the Investor Relations page of M&T’s website at ir.mtb.com/events-presentations.
The information in this Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liability of such section, nor shall it be deemed incorporated by reference in any filing of M&T under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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99.1 |
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M&T Bank Corporation presentation dated January 18, 2024
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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M&T BANK CORPORATION |
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Date: January 18, 2024 |
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By: |
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/s/ Daryl N. Bible |
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Daryl N. Bible |
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Senior Executive Vice President and Chief Financial Officer |
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Exhibit 99.1
Disclaimer This presentation may contain forward-looking statements regarding M&T Bank Corporation (“M&T”) within the meaning of the Private Securities Litigation Reform Act of 1995 and the rules and regulations of the Securities and Exchange Commission (“SEC”). Any statement that does not describe historical or current facts is a forward-looking statement, including statements based on current expectations, estimates and projections about M&T's business, and management's beliefs and assumptions. Statements regarding the potential effects of events or factors specific to M&T and/or the financial industry as a whole, as well as national and global events generally, on M&T's business, financial condition, liquidity and results of operations may constitute forward-looking statements. Such statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond M&T's control. Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," or "potential," by future conditional verbs such as "will," "would," "should," "could," or "may," or by variations of such words or by similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and may cause actual outcomes to differ materially from what is expressed or forecast. 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 liabilities, and interest rate sensitivity; prepayment speeds, loan originations, loan concentrations by type and industry, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; levels of client deposits; ability to contain costs and expenses; changes in the Company’s credit ratings; the impact of the People’s United Financial, Inc. (“People’s United”) acquisition; domestic or international political developments and other geopolitical events, including international conflicts and hostilities; changes and trends in the securities markets; common shares outstanding and common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; federal, state or local legislation and/or regulations affecting the financial services industry, or M&T and its subsidiaries individually or collectively, including tax policy; regulatory supervision and oversight, including monetary policy and capital requirements; governmental and public policy changes; political conditions, either nationally or in the states in which M&T and its subsidiaries do business; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board, regulatory agencies or legislation; increasing price, product and service competition by competitors, including new entrants; technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products and services; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition, divestment and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements. These are representative of the factors that could affect the outcome of the forward-looking statements. In addition, as noted, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, and other factors. M&T provides further detail regarding these risks and uncertainties in its Form 10-K for the year ended December 31, 2022, including in the Risk Factors section of such report, as well as in other SEC filings. Forward-looking statements speak only as of the date made, and M&T assumes no duty and does not undertake to update forward-looking statements. Annualized, pro forma, projected, and estimated numbers are used for illustrative purposes only, are not forecasts and may not reflect actual results. This presentation also contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States ("GAAP"). Management believes investors may find these non-GAAP financial measures useful. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Please see the Appendix for reconciliation of GAAP with corresponding non-GAAP measures, as indicated in the presentation.
Purpose To make a difference in people’s lives. Mission We are a bank for communities – committed to improving the lives of our customers and all the communities we touch. Operating Principles Local Scale Credit Discipline Operating & Capital Efficiency
Making a positive impact on our communities, customers, and colleagues Fostering Prosperity in Our Communities Investing in Our Employees Strong Governance and Consistent Leadership Preserving our Environment Sustainability Accomplishments and Highlights Note: All data except for SBA data are as of December 31, 2022. (1) Numbers above reflect legacy M&T and do not include People’s United Bank (“PUB”). Consistent investment in talent development programs spanning 4 decades 9.5 years average employee tenure >760,000 hours of training for M&T colleagues 82 Employee Resource Group chapters with over 7,000 employee participants 83% employee engagement Ranked #6 SBA Lender in the country (FY2023), the 15th consecutive year among the nation’s top 10 SBA Lenders $2.26 billion in financing to projects that contain affordable housing; 2,657 home purchase loans to low-and moderate-income residents ~159,000 hours dedicated by M&T staff to volunteering in our communities ~$47 million in The M&T Charitable Foundation grants committed to supporting our communities Highest possible CRA rating from Federal Reserve since 1982 94% of Board members are independent More than 40% of our Board of Directors team is diverse (24% of directors were women, 18% of directors were people of color) 59% of directors had tenure of five years or less 18-year average tenure for executive management $231.6 million invested in the renewable energy sector 13% reduced electricity consumption since 2019(1) 46% reduced Scope 1 emissions since 2019(1) 14% reduced Scope 2 emissions since 2019(1)
Revenues grew +18% YoY to $9.6 billion PPNR, grew +22% YoY to $4.2 billion Diluted EPS, grew +37% YoY Note: (1) See Appendix 1 for reconciliation of GAAP with these non-GAAP measures. GAAP ($ in millions, except per share) 2023 2022 Revenues $9,643 $8,179 Noninterest Expense $5,379 $5,050 Provision for Credit Losses $645 $517 Net Income $2,741 $1,992 Diluted EPS $15.79 $11.53 Return on Assets 1.33% 1.05% Return on Common Equity 11.06% 8.67% Net Interest Margin 3.83% 3.39% Net Charge-offs % Avg Loans 0.33% 0.13% GAAP - Adjusted (Non-GAAP)(1) ($ in millions, except per share) 2023 2022 Revenues $9,418 $8,042 Noninterest Expense $5,182 $4,577 Provision for Credit Losses $645 $517 Net Income $2,730 $2,426 Diluted EPS $15.72 $14.17 Return on Assets 1.33% 1.28% Return on Common Equity 11.01% 10.65% PPNR $4,232 $3,471 Full Year 2023 Earnings Highlights
Revenues declined -8% YoY to $2.3 billion PPNR, declined -9% YoY to $1.0 billion Diluted EPS, declined -36% YoY Note: (1) See Appendix 1 for reconciliation of GAAP with these non-GAAP measures. GAAP ($ in millions, except per share) 4Q23 3Q23 4Q22 Revenues $2,300 $2,335 $2,509 Noninterest Expense $1,450 $1,278 $1,408 Provision for Credit Losses $225 $150 $90 Net Income $482 $690 $765 Diluted EPS $2.74 $3.98 $4.29 Return on Assets 0.92% 1.33% 1.53% Return on Common Equity 7.41% 10.99% 12.59% Net Interest Margin 3.61% 3.79% 4.06% Net Charge-offs % Avg Loans 0.44% 0.29% 0.12% GAAP - Adjusted (Non-GAAP)(1) ($ in millions, except per share) 4Q23 3Q23 4Q22 Revenues $2,300 $2,335 $2,373 Noninterest Expense $1,253 $1,278 $1,228 Provision for Credit Losses $225 $150 $90 Net Income $628 $690 $801 Diluted EPS $3.62 $3.98 $4.50 Return on Assets 1.19% 1.33% 1.60% Return on Common Equity 9.77% 10.99% 13.20% PPNR $1,043 $1,057 $1,148 Fourth Quarter 2023 Earnings Highlights
Net Interest Income & Net Interest Margin QoQ Drivers Taxable-equivalent net interest income(1) decreased -$55 million QoQ Driven largely by higher interest rates on customer deposit funding An unfavorable funding mix change Partially offset by higher interest rates on earning assets Net interest margin declined -18 bps QoQ to 3.61% Unfavorable deposit mix shift (-7 bps) Cost of additional liquidity (-6 bps) Net impact from the higher rates on customer deposit funding, net of the benefit from higher rates on earning assets (-5 bps) Note: (1) Taxable-equivalent net interest income is a non-GAAP measure that adjusts income earned on a tax-exempt asset to present it on an equivalent basis to interest income earned on a fully taxable asset. (1)
Change 4Q23 vs Average Balances, $ in billions, except per share 4Q23 3Q23 4Q22 3Q23 4Q22 Interest-bearing Deposits at Banks $30.2 $26.7 $25.1 13% 20% Investment Securities $27.5 $28.0 $25.3 -2% 9% Commercial and Industrial “C&I” $55.4 $54.5 $49.9 2% 11% Commercial Real Estate “CRE” $33.5 $34.3 $35.8 -2% -6% Residential Mortgage $23.3 $23.6 $23.3 -1% - Consumer $20.6 $20.2 $20.4 2% 1% Total Loans $132.8 $132.6 $129.4 - 3% Earning Assets $190.5 $187.4 $179.9 2% 6% Deposits $164.7 $162.7 $163.5 1% 1% Borrowings $13.1 $12.6 $5.4 4% 142% Common Shareholders’ Equity $24.5 $24.0 $23.3 2% 5% As of Quarter End Book Value per Common Share $150.15 $145.72 $137.68 3% 9% Tangible Book Value per Common Share(1) $98.54 $93.99 $86.59 5% 14% Tangible Common Equity / Tangible Assets(1) 8.20% 7.78% 7.63% 42 bps 57 bps Common Equity Tier 1 (CET1) Capital Ratio(2) 10.98% 10.95% 10.44% 3 bps 54 bps Balance Sheet – Overview Note: The table above reflects the reclassification of the substantial majority of its loans secured by commercial real estate that were considered owner-occupied to commercial and industrial loans as described on slide 21. (1) See Appendix 2 for reconciliation of GAAP with these non-GAAP measures. (2) December 31, 2023 CET1 ratio is estimated. (2) Capital levels strong with CET1 ratio of 10.98%(2)
Balance Sheet – Average Loans QoQ Drivers Average loans +$0.2 billion or less than +1% QoQ: C&I loans increased +2% (+$854 million) QoQ, driven by growth in our dealer, fund banking and corporate and institutional businesses CRE loans declined -2% (-$834 million) QoQ, driven largely by our continued strategy to better serve CRE customers in most capital-efficient manner possible Residential mortgage loans decreased -1% (-$234 million) QoQ, driven by pay downs in the held-for-investment portfolio Consumer loans increased +2% (+$368 million) QoQ, driven by growth in recreational finance, producing higher margins on consumer products Note: The chart above reflects the reclassification of the substantial majority of its loans secured by commercial real estate that were considered owner-occupied to commercial and industrial loans as described on slide 21.
$55.7B TOTAL Balance Sheet – Securities and Cash Average Investment Securities and Yield Securities and Cash – at 12/31/23 Duration Pre-tax Unrealized Loss AFS ~1.3 years $251 million HTM ~5.4 years $1,022 million Total Debt Securities ~3.7 years $1,273 million $56.7B TOTAL
Balance Sheet – Average Deposits QoQ Drivers Average deposits +$2.0 billion or +1% QoQ: Continued deposit mix shift to higher cost deposits given increased competition and customer behavior Approximately 75% of the increase in average deposits is due to customer deposit balances Average demand deposits declined -$3.8 billion in favor of commercial sweeps and customer money market savings and time deposits
Change 4Q23 vs $ in millions 4Q23 3Q23 4Q22 3Q23 4Q22 Mortgage Banking Revenues $112 $105 $82 8% 38% Service Charges on Deposits $121 $121 $106 - 14% Trust Income $159 $155 $195 2% -19% Brokerage Services $26 $27 $22 -3% 17% Non-hedge Derivatives / Trading $11 $9 $14 23% -18% Securities G/L $4 - ($4) - - Other Revenues from Operations $145 $143 $267 2% -45% Noninterest Income $578 $560 $682 3% -15% Income Statement – Noninterest Income Noninterest income increased +$19 million or +3% QoQ: Mortgage banking revenues increased +$8 million QoQ: Reflects higher margins on sales of commercial real estate loans Gain (loss) on bank investment securities increased +$4 million QoQ. Trust income increased +$3 million or +2% QoQ: Reflects improved sales activity Other revenues from operations increased +$3 million or +2% QoQ: Reflects higher letter of credit and other credit-related fees Note: (1) 4Q22 noninterest income included a $136 million gain on sale of M&T Insurance Agency. (2) 2Q23 noninterest income included a $225 million gain on sale from the sale of Collective Investment Trust business. QoQ Drivers Gain on MTIA Sale(1) Gain on CIT Sale(2)
Change 4Q23 vs $ in millions 4Q23 3Q23 4Q22 3Q23 4Q22 Salaries & Benefits(5) $724 $727 $693 - 4% Equip & Occupancy $134 $131 $135 2% - Outside Data Proc & SW $114 $111 $106 3% 8% Professional and other services $99 $89 $129 12% -23% FDIC Assessments $228 $29 $24 676% 849% Advert. & Marketing $26 $23 $27 11% -7% Other Expense $110 $153 $231 -28% -52% Operating Expense(1) $1,435 $1,263 $1,345 14% 7% Merger-Related - - $45 - -100% Intangible Amortization $15 $15 $18 - -15% Total Noninterest Expense $1,450 $1,278 $1,408 14% 3% Income Statement – Noninterest Expenses Operating expenses (excluding merger-related and amortization of core deposits and other intangible assets) increased +$173 million or +14% QoQ; or decreased -$24 million or -2% excluding the FDIC special assessment of $197 million in 4Q23. Other expense decreased -$43 million or -28% QoQ, reflecting: Losses associated with certain retail banking activities recognized in 3Q23 Lower merchant discount and credit card fees Professional and other services increased +$10 million or +12% QoQ: Reflects lower legal-related expenses in 3Q23 Note: The table above reflects the other expense recategorization described in more detail on Slide 21. (1) See Appendix 1 and 2 for reconciliation of GAAP with these non-GAAP measures. Noninterest operating expense excludes merger-related expenses and amortization of core deposit and other intangible assets. (2) 4Q22 adjusted efficiency ratio excludes $135 million in charitable contributions from numerator and $136 million gain on sale of M&T Insurance Agency from denominator. (3) 2Q23 adjusted efficiency ratio excludes $225 million gain on sale of CIT from the denominator. (4) 4Q23 adjusted efficiency ratio excludes $197 million FDIC special assessment from the numerator. (5) Non-merger-related severance charges for 4Q23, 3Q23 and 4Q22 were $12 million, $6 million and $1 million, respectively. QoQ Drivers Charitable Contribution(1) Adjusted Efficiency 50.7%(2) Adjusted Efficiency 53.4%(3) FDIC Special Assessment(1) Adjusted Efficiency 53.6%(4)
Credit Nonaccrual Loans Net Charge-offs Provision for Credit Losses Allowance for Credit Losses Net charge-off ratio YTD of 0.33% equal to long-term average
Criticized C&I and CRE Loans $1.5B QoQ Criticized Increase: Non-owner-occupied C&I Loans +$663 million CRE +$816 million Permanent CRE +$441 million Construction +$375 million 96% of criticized accrual loans are current 53% of criticized nonaccrual loans are current Loan Review Activity: Completed thorough CRE reviews covering more than 60% of all CRE loans, including maturities in the next 12 months, construction loans, watch loans and all criticized loans Also reviewed C&I portfolio, with a focus on watch and all criticized loans Reserve Impact: Criticized loans generally carry higher loss reserves Reflecting strong collateral values, the reserve ratio for nonaccrual loans was ~13%
Criticized CRE Loans December 31, 2023 September 30, 2023 Outstanding Criticized Accrual Criticized Nonaccrual Total Criticized Outstanding Criticized Accrual Criticized Nonaccrual Total Criticized (In millions) Permanent finance by property type Apartments/Multifamily $ 6,165 $ 1,184 $ 115 $ 1,299 $ 6,198 $ 1,006 $ 102 $ 1,108 Retail/Service 5,912 1,075 227 1,302 5,989 925 246 1,171 Office 4,727 879 185 1,064 4,898 859 270 1,129 Health services 3,615 1,364 117 1,481 3,683 1,038 175 1,213 Hotel 2,510 496 210 706 2,677 614 240 854 Industrial/Warehouse 2,034 224 13 237 2,114 177 19 196 Other 314 28 2 30 301 2 5 7 Total permanent 25,277 5,250 869 6,119 25,860 4,621 1,057 5,678 Construction/development 7,726 2,527 174 2,701 7,881 2,187 139 2,326 Total commercial real estate $ 33,003 $ 7,777 $ 1,043 $ 8,820 $ 33,741 $ 6,808 $ 1,196 $ 8,004 Percent criticized - total commercial real estate 26.7% 23.7%
Criticized C&I Loans December 31, 2023 September 30, 2023 Outstanding Criticized Accrual Criticized Nonaccrual Total Criticized Outstanding Criticized Accrual Criticized Nonaccrual Total Criticized (In millions) Commercial and industrial excluding owner-occupied real estate by industry Financial and insurance $ 10,679 $ 346 $ 3 $ 349 $ 9,675 $ 11 $ 1 $ 12 Services 6,715 295 100 395 6,587 293 30 323 Manufacturing 5,981 549 65 614 5,973 395 58 453 Motor vehicle and recreational finance dealers 6,242 164 51 215 5,442 20 97 117 Wholesale 3,803 180 45 225 3,659 235 60 295 Transportation, communications, utilities 3,342 195 71 266 3,347 205 49 254 Retail 2,727 102 35 137 2,809 119 52 171 Construction 2,092 173 62 235 2,147 170 55 225 Health services 1,950 297 28 325 1,925 321 22 343 Real estate investors 1,684 189 4 193 1,743 132 2 134 Other 1,889 123 50 173 1,751 78 59 137 Total commercial and industrial excluding owner-occupied real estate $ 47,104 $ 2,613 $ 514 $ 3,127 $ 45,058 $ 1,979 $ 485 $ 2,464 Owner-occupied by industry Services $ 2,162 $ 154 $ 51 $ 205 $ 2,120 $ 160 $ 58 $ 218 Motor vehicle and recreational finance dealers 1,867 10 7 17 1,872 7 7 14 Retail 1,541 107 13 120 1,468 35 30 65 Wholesale 940 28 2 30 952 40 3 43 Manufacturing 842 64 24 88 827 74 22 96 Real estate investors 818 26 12 38 841 27 16 43 Health services 656 55 26 81 656 49 22 71 Other 1,080 32 21 53 1,097 30 21 51 Total owner-occupied real estate 9,906 476 156 632 9,833 422 179 601 Total $ 57,010 $ 3,089 $ 670 $ 3,759 $ 54,891 $ 2,401 $ 664 $ 3,065 Percent criticized - excluding owner-occupied real estate 6.6% 5.5% Percent criticized - owner-occupied real estate 6.4% 6.1% Percent criticized - total commercial and industrial 6.6% 5.6%
Capital CET1 capital ratio increased +3 bps to 10.98%(1) at 4Q23 Tangible book value per share increased +5% to $98.54 Note: (1) December 31, 2023 CET1 ratio is estimated. (2) See Appendix 2 for reconciliation of GAAP with this non-GAAP measures. CET1 TBVPS(2) QoQ Drivers Tangible common equity to tangible assets was 8.20% at the end of 4Q23 AFS and pension-related AOCI would have impacted the CET1 capital ratio by ~(20) bps at the end of 4Q23 (1) (1)
2024 Outlook 2024 Outlook Comments Income Statement Net Interest Income Taxable-equivalent $6.7 billion to $6.8 billion NIM in the 3.50s Reflects the impact of higher deposit funding costs and impact of Fed cuts Expect to shift portion of cash to securities Potential additional hedging actions to protect NII as rates decline Fee Income $2.3 billion to $2.4 billion Lower rates to drive stronger growth in residential and commercial mortgage banking revenues Growth in trust income from higher equity markets (CIT-related 2023 trust income was ~$60 million) Includes estimated Bayview distribution GAAP Expense Includes intangible amortization $5.25 billion to $5.30 billion Continued focus on managing expense Includes seasonally higher compensation in 1Q (~$110 million) Includes amortization of intangible in the $53 million range Net Charge-Offs % of Average Loans ~40 basis points NCO normalization in commercial and consumer loan portfolios CRE NCOs remain elevated Tax Rate Taxable Equivalent 24.5% +/- 50bps Average Balances Loans $134 billion to $136 billion Growth in commercial and consumer, declines in CRE and residential mortgage Deposits $163 billion to $165 billion Focus on growing customer deposits Brokered deposits expect to decline through the year Share Repurchases Currently paused Resumption to consider: 2024 Stress Test Results, further clarity on Basel III Endgame regulations, and stabilizing economic outlook
Financial Reporting Changes At December 31, 2023, the Company reclassified the substantial majority of its loans secured by commercial real estate that were considered owner-occupied to commercial and industrial loans to reflect the variation in the management and underlying risk profile of such loans as compared with investor-owned commercial real estate loans. Prior periods were reclassified to conform to the current presentation. In the fourth quarter of 2023, the Company completed modifications to its management reporting system to conform its internal profitability reporting with certain organizational changes that resulted in the realignment of its business operations into three reportable segments: Commercial Bank, Retail Bank and Institutional Services and Wealth Management. The change will be reflected in the Company’s upcoming Annual Report on Form 10-K filing for the year ended December 31, 2023. In the fourth quarter of 2023, the Company began presenting “professional and other services” as an individual component of “other expense” while combining the presentation of “printing, postage, and supplies” into “other cost of operations” within the Consolidated Statement of Income. Prior periods were reclassified to conform to the current presentation. Owner-occupied reclassification Segment reorganization Other expense recategorization
Why invest in M&T? Long term focused with deeply embedded culture Business operated to represent the best interests of all key stakeholders Energized colleagues consistently serving our customers and communities A safe haven for our clients as proven during turbulent times and crisis Experienced and seasoned management team Strong risk controls with long track record of credit outperformance through cycles Prudent growth ~2x peers Leading position in core markets 15-20% ROATCE ~9% annual TSR Robust dividend growth 6% TBV per share growth Source: FactSet, S&P Global, Company Filings. Note: Source: FactSet, S&P Global, Company Filings. Note: (1) Branch and deposit data as of 6/30 of the year under consideration, pro forma for pending / closed M&A. Growth vs. peers represents each bank’s median branch deposit growth from 2019-2023 relative to that bank’s median city projected population growth from 2023-2028. (2): ROATCE average from 2013-2023. Adjusted for amortization of core deposit and other intangible assets, merger related expenses, tax rate changes, and normalized provisions for credit losses in 2020. (3): Annual TSR represents CAGR of the average trailing 3 year total shareholder returns (consisting of price returns and dividends assuming reinvestment of dividends received) during 2013-2023. (4): Dividend growth represents CAGR of common dividends per share from 2013-2023. (5): TBV per share growth represents CAGR from 2013-2023. Purpose-Driven Successful and Sustainable Business Model that Produces Strong Shareholder Returns Purpose Driven Organization Successful and Sustainable Business Model Strong Shareholder Returns
Appendix 1 Note: Tables in appendices may not foot due to rounding GAAP to GAAP – Adjusted (Non-GAAP) Reconciliation In millions 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Revenues Net interest income - GAAP $1,827 $1,818 $1,799 $1,775 $1,722 $5,822 $7,115 Total other income - GAAP 682 587 803 560 578 2,357 2,528 Subtotal 2,509 2,405 2,602 2,335 2,300 8,179 9,643 Gain on CIT - - (225) - - - (225) Gain on MTIA (136) - - - - (136) - Revenues - GAAP Adjusted $2,373 $2,405 $2,378 $2,335 $2,300 $8,042 $9,418 Noninterest expense Noninterest expense - GAAP $1,408 $1,359 $1,293 $1,278 $1,450 $5,050 $5,379 FDIC special assessment - - - - (197) - (197) Charitable contribution (135) - - - - (135) - Merger-related expense (45) - - - - (338) - Noninterest expense - GAAP Adjusted $1,228 $1,359 $1,293 $1,278 $1,253 $4,577 $5,182 PPNR Revenues - GAAP Adjusted $2,373 $2,405 $2,378 $2,335 $2,300 $8,042 $9,418 (Gain)/loss on bank investment securities 4 - (1) - (4) 6 (4) Noninterest expense - GAAP Adjusted (1,228) (1,359) (1,293) (1,278) (1,253) (4,577) (5,182) Pre-provision net revenue $1,148 $1,046 $1,084 $1,057 $1,043 $3,471 $4,232 M&T is providing supplemental reporting of its results on a “GAAP – Adjusted” basis, from which M&T excludes the after-tax effect of certain notable items of significance. Although “GAAP – Adjusted” income as presented by M&T is not a GAAP measure, M&T management believes that this information helps investors understand the effect of such notable items in reported results.
Appendix 1 Note: (1) After any related tax effect GAAP to GAAP – Adjusted (Non-GAAP) Reconciliation In millions, except per share 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Net income Net income - GAAP $765 $702 $867 $690 $482 $1,992 $2,741 FDIC special assessment(1) - - - - 146 - 146 Gain on CIT(1) - - (157) - - - (157) Gain on MTIA(1) (98) - - - - (98) - Charitable contribution(1) 100 - - - - 100 - Merger-related expense(1) 33 - - - - 431 - Net income - GAAP Adjusted $801 $702 $710 $690 $628 $2,426 $2,730 Diluted EPS Diluted EPS - GAAP $4.29 $4.01 $5.05 $3.98 $2.74 $11.53 $15.79 FDIC special assessment(1) - - - - 0.88 - 0.88 Gain on CIT(1) - - (0.94) - - - (0.94) Gain on MTIA(1) (0.57) - - - - (0.57) - Charitable contribution(1) 0.58 - - - - 0.58 - Merger-related expense(1) 0.20 - - - - 2.63 - Diluted EPS - GAAP Adjusted $4.50 $4.01 $4.11 $3.98 $3.62 $14.17 $15.72
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation In millions 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Other expense Other expense $1,408 $1,359 $1,293 $1,278 $1,450 $5,050 $5,379 Amortization of core deposit and other intangible assets (18) (17) (15) (15) (15) (56) (62) Merger-related expenses (45) - - - - (338) - Noninterest operating expense $1,345 $1,342 $1,278 $1,263 $1,435 $4,656 $5,317 Merger-related expenses Salaries and employee benefits $4 - - - - $102 - Equipment and net occupancy 2 - - - - 7 - Outside data processing and software 2 - - - - 5 - Professional and other services 16 - - - - 72 - Advertising and marketing 5 - - - - 9 - Other costs of operations 16 - - - - 143 - Other expense 45 - - - - 338 - Provision for credit losses - - - - - 242 - Total $45 - - - - $580 - M&T consistently provides supplemental reporting of its results on a “net operating” or “tangible” basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit and other intangible asset balances, net of applicable deferred tax amounts) and gains (when realized) and expenses (when incurred) associated with merging acquired operations into M&T, since such items are considered by management to be “nonoperating” in nature. Although “net operating income” as defined by M&T is not a GAAP measure, M&T’s management believes that this information helps investors understand the effect of acquisition activity in reported results.
Appendix 2 GAAP to Net Operating (Non-GAAP) Reconciliation In millions 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Efficiency ratio Noninterest operating expense (numerator) $1,345 $1,342 $1,278 $1,263 $1,435 $4,656 $5,317 Taxable-equivalent net interest income 1,841 1,832 1,813 1,790 1,735 5,861 7,169 Other income 682 587 803 560 578 2,357 2,528 Less: Gain (loss) on bank investment securities (4) - 1 - 4 (6) 4 Denominator $2,527 $2,419 $2,615 $2,350 $2,309 $8,224 $9,693 Efficiency ratio 53.3% 55.5% 48.9% 53.7% 62.1% 56.6% 54.9%
Appendix 2 In millions 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Average assets Average assets $198,592 $202,599 $204,376 $205,791 $208,752 $190,252 $205,397 Goodwill (8,494) (8,490) (8,473) (8,465) (8,465) (7,537) (8,473) Core deposit and other intangible assets (218) (201) (185) (170) (154) (179) (177) Deferred taxes 54 49 46 43 39 43 44 Average tangible assets $189,934 $193,957 $195,764 $197,199 $200,172 $182,579 $196,791 Average common equity Average total equity $25,346 $25,377 $25,685 $26,020 $26,500 $23,810 $25,899 Preferred stock (2,011) (2,011) (2,011) (2,011) (2,011) (1,946) (2,011) Average common equity 23,335 23,366 23,674 24,009 24,489 21,864 23,888 Goodwill (8,494) (8,490) (8,473) (8,465) (8,465) (7,537) (8,473) Core deposit and other intangible assets (218) (201) (185) (170) (154) (179) (177) Deferred taxes 54 49 46 43 39 43 44 Average tangible common equity $14,677 $14,724 $15,062 $15,417 $15,909 $14,191 $15,282 GAAP to Tangible (Non-GAAP) Reconciliation
Appendix 2 In millions 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Total assets Total assets $200,730 $202,956 $207,672 $209,124 $208,264 Goodwill (8,490) (8,490) (8,465) (8,465) (8,465) Core deposit and other intangible assets (209) (192) (177) (162) (147) Deferred taxes 51 47 44 41 37 Total tangible assets $192,082 $194,321 $199,074 $200,538 $199,689 Total common equity Total equity $25,318 $25,377 $25,801 $26,197 $26,957 Preferred stock (2,011) (2,011) (2,011) (2,011) (2,011) Common equity 23,307 23,366 23,790 24,186 24,946 Goodwill (8,490) (8,490) (8,465) (8,465) (8,465) Core deposit and other intangible assets (209) (192) (177) (162) (147) Deferred taxes 51 47 44 41 37 Total tangible common equity $14,659 $14,731 $15,192 $15,600 $16,371 GAAP to Tangible (Non-GAAP) Reconciliation