M&T Bank Corp at Barclays Global Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jason Goldberg - Barclays - Analyst : So we were just talking on the side about your last couple of days, your first I guess management offsite with some new members. I mean, share with us what went on there.

Question: Jason Goldberg - Barclays - Analyst : Interesting. With the first ARS session, I've been asking this a lot to presenters. M&T did put out a slide deck last night, which I was flipping through. And I guess a couple of things in there. One of them maybe didn't appreciate. It's slide 16 jumped out in terms of just how much you've reduced the asset sensitivity over the last few years. And also, you had a bit just on fee income, and not only fee income, but fee income diversification. Can you maybe talk to how M&T is positioned as clearly the Feds are going to pivot next week? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 12:15PM, MTB.N - M&T Bank Corp at Barclays Global Financial Services Conference

Question: Jason Goldberg - Barclays - Analyst : And just maybe talk to maybe some of the -- what happens like with fee income and some of the drivers there in lower rate environment?

Question: Jason Goldberg - Barclays - Analyst : And then one of the things that always stuck out to me, the different M&T, is just the community banking approach. Maybe just talk to how that's performing and expectations there.

Question: Jason Goldberg - Barclays - Analyst : I want to shift gears and turn to capital for a moment. We'll put up the next slide. But in that vein, M&T, we started the buyback in the third quarter and obviously, a lot of movement in capital. We got the Basel III end game preview, I guess, yesterday. It looks like M&T will avoid the RWA inflation.

Question: Jason Goldberg - Barclays - Analyst : That is good. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 12:15PM, MTB.N - M&T Bank Corp at Barclays Global Financial Services Conference

Question: Jason Goldberg - Barclays - Analyst : I'll give it a drop in rates. Interesting.

Question: Jason Goldberg - Barclays - Analyst : (inaudible) a question even better. So maybe keep that in mind as you're answering the ARS question that (inaudible). So you answered part of my question. You also mentioned on the earnings call that despite the ability to opt out of CCAR next year, whatever they call it now, you're going to opt in. So I guess maybe what actions are you taking to lower your SCB? And just how does that -- how does both the potential [lull] of SCB as well as yesterday's news inform your buyback expectations for next year?

Question: Jason Goldberg - Barclays - Analyst : Helpful. The audience seemed below your $2 billion expectation in your commentary.

Question: Jason Goldberg - Barclays - Analyst : That was before.

Question: Jason Goldberg - Barclays - Analyst : I have this later on, but I'm going to ask you this now. 0% of the audience picked bank acquisitions. And M&T has historically been a very good bank acquirer, particularly when some banks are struggling, and there's definitely a lot of regional banks struggling right now. Can you maybe talk to your appetite around bank acquisitions?

Question: Jason Goldberg - Barclays - Analyst : Got it. Maybe to up the next ARS question and maybe shift to credit quality. Can you maybe talk to the impact that lower rates could have on a credit quality outlook. I think one of the concerns has been, particularly in commercial real estate, that -- have a difficulty refinancing. And as rates come down, how -- what impact does that have? And just how do you think that translates into overall credit costs? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 12:15PM, MTB.N - M&T Bank Corp at Barclays Global Financial Services Conference

Question: Jason Goldberg - Barclays - Analyst : And maybe talk to maybe some of the drivers in the C&I portfolio. There's been some lumpiness there.

Question: Jason Goldberg - Barclays - Analyst : Got it. We're at the halfway mark. So we have to go to guidance.

Question: Jason Goldberg - Barclays - Analyst : So you put out a comprehensive slide deck with your expectations. Maybe just talk about net interest income. I mean, the 2024 guidance is all unchanged. But I guess throughout the year, the rate tightening cycle get pushed out and your NII guide continue went up. Now we're going into an easing cycle and despite going from two cuts to four cuts, NII guide unchanged. So maybe talk to, expand on what's driving that. And one of the things you mentioned on the onset was $25 billion in cash. As the Fed begins to ease, and I suspect there'll be some lag on deposit repricing, just how does that inform your view on NII as we look into next year?

Question: Jason Goldberg - Barclays - Analyst : Helpful. Maybe up the next ARS slide in terms of deposits. I guess, you're one of the few banks that saw interest-bearing deposit cost decline last quarter and like another mass reduction this quarter. If I look at all deposit growth, it does look to be lagging peers. We have limited data

Question: Jason Goldberg - Barclays - Analyst : Yes, one of the few banks to be talking constructively on C&I loan growth. I guess what -- you gave us industries that's driving that. But what, I guess, allows you to grow where others can't? And it's -- I would say it's M&T, so it's not getting credit.

Question: Jason Goldberg - Barclays - Analyst : And then before -- if they look at deposits, the core data shows a continued mix shift with noninterest-bearing fall more than interest-bearing. With the Fed expected to cut, I guess, how do you see that -- or where do you see that mix leveling off?

Question: Jason Goldberg - Barclays - Analyst : We put the next ARS question. I guess as the audience responds to this, maybe just talk to, as you look out, what do you need to see maybe for -- to come in the high end versus the low end of expectations?

Question: Jason Goldberg - Barclays - Analyst : And I guess one of the things you expect this quarter is just smaller balance sheet. Looking out, I guess, how do you see the overall size of the balance sheet evolving throughout next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 12:15PM, MTB.N - M&T Bank Corp at Barclays Global Financial Services Conference

Question: Jason Goldberg - Barclays - Analyst : The audience sees a little bit of margin expansion from current levels next year (inaudible)

Question: Jason Goldberg - Barclays - Analyst : And I guess your outlook for fee income and expenses, you talked about seeing some of the onset, you have benefit of lower rates. And then I guess, in that vein, as you -- I guess without thinking on our expenses, you approach the 2025 budgeting cycle. You'd have -- you called for some expense growth this year. How are you thinking about the outlook for 2025?

Question: Jason Goldberg - Barclays - Analyst : What? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 12:15PM, MTB.N - M&T Bank Corp at Barclays Global Financial Services Conference

Question: Jason Goldberg - Barclays - Analyst : Do you want to talk on CRE?

Question: Jason Goldberg - Barclays - Analyst : We've covered it earlier.

Question: Jason Goldberg - Barclays - Analyst : I mean once you said classified and criticized are all coming down.

Question: Jason Goldberg - Barclays - Analyst : So when you say CRE is obviously a broad --

Question: Jason Goldberg - Barclays - Analyst : So it's CRE ex-office. And is that, I guess, driven by some of the other banks pulling back more broadly kind of creating opportunities? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 12:15PM, MTB.N - M&T Bank Corp at Barclays Global Financial Services Conference

Question: Jason Goldberg - Barclays - Analyst : The past several conferences, even before you -- and with you, we've talked about wanting to move CRE off balance sheet and leverage some capabilities you're building there. So it sounds like you continued with that as well as maybe more comfortable using your balance sheet for your customers?

Question: Jason Goldberg - Barclays - Analyst : Actually, what else haven't I asked you that I should be asking you?

Question: Jason Goldberg - Barclays - Analyst : My last question? We talked about buyback. I'm talking about acquisitions. We haven't talked about dividends. I guess, any thoughts around there?

Question: Jason Goldberg - Barclays - Analyst : So we get the $2 billion buyback and a decent dividend increase?

Question: Jason Goldberg - Barclays - Analyst : Interesting. And I guess it's -- because you talked about buyback, you talked about dividend increase. You talked about your action a few banks C&I growing growth of consumer loan growth and now this opportunity to grow commercial real estate. So it sounds like it's --

Question: Jason Goldberg - Barclays - Analyst : Right. And I guess you have -- you feel like you have enough capital to do all of the above.

Question: Jason Goldberg - Barclays - Analyst : And I guess, something you touched on and expand on is you talked about how lower rates drive down criticized and classified commercial real estate loans. I assume when something goes criticized, classified, you're putting up reserves against it. As those come out of those buckets, how does that inform the overall allowance?

Question: Jason Goldberg - Barclays - Analyst : Does that make you maybe increase your desire to do an acquisition?