M&T Bank Corp at Barclays London Select Conference Transcript

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

Question: Jason Goldberg - Barclays - Analyst : Maybe we'll start big picture. I think of M&T, I think of community-focused banks, strong retail banking footprint in the Northeastern, New England, Mid-Atlantic portions of the US, several national businesses. Obviously, a lot of headlines at the moment, several uncertainties, tariffs, multiple path of the economy. Maybe you could just discuss what you're hearing, seeing from your customers as we sit here in early May.

Question: Jason Goldberg - Barclays - Analyst : Helpful. Maybe from here, kind of against that backdrop, let me just kind of run through some of the key income statement drivers. If you back up a bit on the April earnings call, you did modestly temper the outlook for NII loans and deposits, but did increase kind of net interest margin expectations. Maybe just discuss kind of what drove some of those changes.

Question: Jason Goldberg - Barclays - Analyst : I did notice in the slide deck you posted last night, you did kind of reiterate all the earnings drivers you kind of mentioned on the April call. Maybe just talk more a bit about loan growth. In C&I, M&T certainly outperformed. When we kind of think about Q1, maybe just talk through some of the areas of strengths, weaknesses on the C&I side, was that getting in front of tariffs and just what your expectations are?

Question: Jason Goldberg - Barclays - Analyst : That's helpful. And then maybe just kind of shifting gears to net interest margin. You had a nice 8 basis point increase in the first quarter to 3.66%, which is kind of, I think, one of the highest in our coverage. Interest-bearing deposit costs fell 27 basis points, which was also on the upper end. Maybe talk to kind of your outlook for margin and deposits from here.

Question: Jason Goldberg - Barclays - Analyst : I guess historically, M&T has been, I think, viewed as a relatively more asset-sensitive bank. It sounds like that's kind of changed over the last few years and now you're more neutral. Maybe just talk -- so if the Fed cuts 2 times or 4 times, does it make that big of a difference?

Question: Jason Goldberg - Barclays - Analyst : So I guess thinking about your guidance for the year, we have kind of up 2% to up 3.5%, I think, is what it implies. I guess when you think about low end versus high end, maybe what's one of the biggest drive variables?

Question: Jason Goldberg - Barclays - Analyst : And then maybe shifting gears to the fee side, actually looking -- calling for a decent fee income growth for this year if I look at your guidance. Q1 was a bit, I think, mixed for you and some others. A lot of banks actually kind of guided down on fee income for the year. You kind of talked to the upper end of your guidance. Just maybe talk about maybe some of the key drivers of that and kind of why you're different from some of your peers maybe.

Question: Jason Goldberg - Barclays - Analyst : And then I guess, guidance kind of talks to fairly modest expense growth, maybe around 2%, give or take. Just maybe how you kind of think about the outlook for expenses. I remember last year, you were kind of talking about a lot of initiatives that you're spending some money on. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 8:00AM, MTB.N - M&T Bank Corp at Barclays London Select Conference

Question: Jason Goldberg - Barclays - Analyst : Maybe you could provide an update on some of the stuff you're working on and maybe some of the bigger stuff and kind of where you see it.

Question: Jason Goldberg - Barclays - Analyst : And then I guess, hypothetically, if the economic environment is weaker than expected, maybe revenue is soft, do you have the ability to kind of manage expenses to kind of maintain positive operating leverage or maybe that doesn't matter so much? And just how do you think about that?

Question: Jason Goldberg - Barclays - Analyst : Got it. Maybe shift gears to credit quality. I mean non-performing assets, charge-offs, criticized loans all improved in the first quarter, yet kind of all the economists out there are telling us things are going to deteriorate. Maybe just kind of talk to what's your outlook?

Question: Jason Goldberg - Barclays - Analyst : And I guess within -- you mentioned a couple of criticized C&I credits potentially. Any industries of note? Or--

Question: Jason Goldberg - Barclays - Analyst : Got it. And then just with respect to commercial real estate gets a lot of headlines, yet M&T never seems to have any losses. So just maybe talk to--

Question: Jason Goldberg - Barclays - Analyst : No. I'm still waiting.

Question: Jason Goldberg - Barclays - Analyst : Makes sense. And maybe talk to just what's going on with the allowance for credit losses. We saw from you and some others a slight build in the first quarter as the economic outlook softened during Q1. We got additional information on April 2. I know banks have kind of qualitative, quantitative reserves. But just how do you think about the reserves now we sit here in Q2 and forecasts have kind of been downgraded more, but what you're seeing, it sounds like at the onset, consumers, corporates are still holding in?

Question: Jason Goldberg - Barclays - Analyst : Got it. So I guess on the 2Q provision reserve, I guess it's one of those things that are too early in the quarter to make a call and you kind of revisit it at the end of the quarter and--

Question: Jason Goldberg - Barclays - Analyst : Makes sense. And then on capital, you've talked to wanting to get to 11% CET1 ratio by the end of the year. I think you're 11.5% at the end of the first quarter, although you did step up the buyback, doing over $600 million in the first quarter after $200 million in Q3 and Q4 last year. How do

Question: Jason Goldberg - Barclays - Analyst : My next question is, we think 11% seems too high. So it sounds like your Board agrees. So no good deed goes unpunished. Now we're taking 10%. When do you think that comes into play?

Question: Jason Goldberg - Barclays - Analyst : I guess with the improvements we've seen at M&T plus a scenario for the stress test for this year that looked a bit easier than the last two years, albeit still strenuous, any kind of guess in terms of where the SCB ends up?

Question: Jason Goldberg - Barclays - Analyst : I guess, was it last month, the Fed talked about potential changes to the stress test, either shifting to a two-year average, changing some of the transparency, looking maybe deeper into expenses. Can you talk to kind of what your thoughts on the proposal they put out there and then other potential changes?

Question: Jason Goldberg - Barclays - Analyst : Got it. And then we last did a fireside chat at my New York conference in September. And I felt like you hinted like maybe more a focus on a dividend or we can get like a decent dividend increase at some point in 2025. Just maybe talk to how you're thinking about the dividend from here.

Question: Jason Goldberg - Barclays - Analyst : Got it. And then another use of capital is bank M&A. I guess M&T has historically been a good acquirer. It seems like we're a few years removed from the people's deal, which looked to be fairly additive. Maybe kind of just talk to the kind of current bank M&A environment and how you're thinking about it.

Question: Jason Goldberg - Barclays - Analyst : I guess there hasn't really been -- or I guess there's been kind of a slowdown in the bank M&A just in general and whether it's regulatory uncertainty or purchase accounting marks. But it feels like now we have a new regulatory regime, purchase accounting marks have come in either because rate-driven or time-driven. Do you think--

Question: Jason Goldberg - Barclays - Analyst : That's what you said last week, right, the CECL double count will go away, but I think we have to wait a little bit more for that. Can we talk to just -- do you expect that to result in kind of a pickup in industry-wide M&A in the near term?

Question: Jason Goldberg - Barclays - Analyst : Makes sense. Earlier, you mentioned getting kind of LCR compliance for Category 3. I guess M&T is a Category 4 bank. I guess, how do you think about that shift to Category III? Does it make sense to cross it a little bit? Do you want to cross it a lot? And just what -- is there a lot more work you have to do? And keep in mind, I know that all may change anyway

Question: Jason Goldberg - Barclays - Analyst : Got it. And then you mentioned changes to the living will from the FDIC. I guess, what are the tweaks from the new administration from a regulatory standpoint do we expect to be beneficial? I know on the prior one, we're kind of not concerned, but thinking about maybe more long-term debt, more liquidity, but just maybe talk about some of the potential other changes that could occur. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 8:00AM, MTB.N - M&T Bank Corp at Barclays London Select Conference

Question: Jason Goldberg - Barclays - Analyst : Maybe I'll pull up and see if there's any questions from the audience. Maybe just wait for the mic. Unidentified Participant You mentioned earlier the C&I -- well, not the C&I lending, but the C&I customers, maybe on the investment side, a bit more hesitant. Do you see that already in C&I lending and new business that is coming?

Question: Jason Goldberg - Barclays - Analyst : Time for one more? I guess maybe just to wrap it up, Daryl, M&T, very consistent results over time, consistent kind of high ROTCE type company. I guess maybe just to wrap it up, kind of what do you think kind of differentiates M&T and just what keeps that performance so consistent and high?