M&T Bank Corp Q4 2024 Earnings Call Summary

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

Question: Manan Gosalia - Morgan Stanley - Analyst : Hi, good morning.

Question: Manan Gosalia - Morgan Stanley - Analyst : Daryl, can you unpack your comments on capital and buybacks? I think you've said previously that you can stay above an 11% CET1 ratio, and do about $2 billion in buybacks. I don't know if I should be reading too much into the tilde 11% guide on CET1. Does that imply you can do more than $2 billion this year and bring that capital ratio down from 11.7%?

Question: Manan Gosalia - Morgan Stanley - Analyst : Great, very clear. Thank you. And on criticized loans, they were done nicely about $1 billion. The question is what is driving that the most right now, and what matters most for that to continue to come down in 2025? Is it the short end, the long end? Is it getting updated financials from your borrowers and the upgrades that come from that? What's most important from here?

Question: Manan Gosalia - Morgan Stanley - Analyst : So it sounds like from a credit perspective, from a charge off perspective, your outlook hasn't really changed. And I know in the past, you've said that you've been a lot more punitive on classifying those criticized loans. So as the base of decline in the criticized loans slows, does that change how you're thinking about the actual impact to the income statement from the credit of the portfolio? Or is that still pretty much in line with how you thought about it before?

Question: Manan Gosalia - Morgan Stanley - Analyst : Great. Thank you.

Question: Bill Carcache - Wolfe Research - Analyst : Thanks. Good morning Daryl.

Question: Bill Carcache - Wolfe Research - Analyst : I wanted to start off on the progress you've made in reducing your CRE exposure. It's been well reflected in your declining stress capital buffer. But as you reflect on that improvement, what's been the response from the client side, you're there for them. But have they noticed a difference as you've actively taken that concentration ratio from 136% -- on to 136% from 183%.

Question: Bill Carcache - Wolfe Research - Analyst : As a follow-up on your earlier credit comments, Daryl could you frame the stress in the portfolio if we were to get no more cuts from here versus two to three more? Is it going to be enough relief for some of your borrowers if we didn't get any more cuts from here?

Question: Bill Carcache - Wolfe Research - Analyst : And if I could squeeze in one last one, your comments on capital return are very clear, and the relationship between whether we get faster or slower loan growth being a driver of the level of a buyback. But if we did get any kind of acceleration in loan growth, how much of that would you expect to drop to the bottom line and ultimately drive greater positive operating leverage, versus the level that you'd look to reinvest in the business?

Question: Bill Carcache - Wolfe Research - Analyst : Very helpful. Thanks for taking my questions Daryl.

Question: Ebrahim Poonawala - BofA Securities - Analyst : Hey, good morning.

Question: Ebrahim Poonawala - BofA Securities - Analyst : I guess a couple of follow-up questions. I just -- when you think about the margin outlook and your margin guidance, if we don't see any move from the Fed, and if you can remove loan growth, like how do you think the trajectory of the NIM plays itself out from here? Like should we think about it as the bankbook repricing should continue to be a tail end, and deposit costs are stable to lower, or is that not the right framework? And how to think about what NIM would do in a static balance sheet? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 16, 2025 / 1:00PM, MTB.N - Q4 2024 M&T Bank Corp Earnings Call

Question: Ebrahim Poonawala - BofA Securities - Analyst : That's helpful. And this is a separate question on the four priorities you lay out on slide 23. As we think about the expense outlook for this year, you have some larger tech projects going on. Does that set the stage for sort of lower expenses, more efficiencies over the next few years, or do you think the level of investment spend is likely to continue for the medium term as we think about where efficiency ratio of (inaudible) are headed?

Question: Ebrahim Poonawala - BofA Securities - Analyst : Understood. Thanks for taking my questions.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Hey, Daryl.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Good, thanks. I'd like you to see if you could frame out first the expansion, you talked about the focus on New England and Long Island. And through organic growth, how long do you think it will take you to get to the levels or the contribution to the consolidated numbers that these areas that you've targeted for these areas. And that -- in saying that, how big do you think they could get as a percentage of the total pie? What's the ideal kind of exposure? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 16, 2025 / 1:00PM, MTB.N - Q4 2024 M&T Bank Corp Earnings Call

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Very good. And then obviously you've got some great years of experience, and you've seen how regulatory changes have taken place over the years. Any thoughts on what to expect as we all know, with the incoming administration, there will be a new controller of the currency, and new head of the FDIC, as well as the Consumer Financial Protection Bureau, and then the big news in my view at least was the resignation and the Vice Chair of Safety and Soundness at the Fed. Any thoughts or comments on the way you guys are looking at all of this?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Great, appreciate the color. Thank you, Daryl.

Question: John Pancari - Evercore ISI - Analyst : Morning, Daryl.

Question: John Pancari - Evercore ISI - Analyst : Just on the credit if I could just go back to that, I appreciate the color you gave on that front. The -- just based upon the your outlook, if credit trends play out as you had noted, we expect a bit more stress in office but some improvement elsewhere. Do you expect that you could see continued reserve releases through 2025? I know you put the reserve declined about a bit this quarter, very modest. But could you expect continued release if credit plays out as you had described?

Question: John Pancari - Evercore ISI - Analyst : Okay. Thank you. And then just separately, back to the capital and M&A topic, I know you did mention that when you're looking at your markets of interest and broader expansion, inorganic would be an opportunity to speed up the process. As you look at your markets, could you maybe just give us a more broadly your view, your updated view on whole bank deals particularly given the evolving regulatory backdrop that you just mentioned in terms of the upcoming Trump administration. Thanks.

Question: John Pancari - Evercore ISI - Analyst : Got it. Alright, thanks, Darryl.

Question: Peter Winter - D A Davidson - Analyst : Good morning. Daryl, can you talk about borrower sentiment today in terms of loan demand? And what you think it'll take to get them to be more aggressive in terms of demand?

Question: Peter Winter - D A Davidson - Analyst : Got it, and then just as a follow-up. Can you talk about deposit competition, and would you say DDA migration has stabilized, and actually could start growing in '25?

Question: Peter Winter - D A Davidson - Analyst : Got it. Thanks Daryl.

Question: Frank Schiraldi - Piper Sandler & Co. - Analyst : Hey, good morning Daryl.

Question: Frank Schiraldi - Piper Sandler & Co. - Analyst : Just trying to work through, some of the numbers you talked about just on the call here in terms of margins such as the pick-up and swaps and repricing securities and loan book and the deposit betas. And just wondering if we think about exit rate for 2025, just curious you'd be willing to talk about any guardrails there, seems like you could perhaps get to the sort of a [380] number. And, so just curious there or maybe just updated thoughts on more normalizing them as we move through the year.

Question: Frank Schiraldi - Piper Sandler & Co. - Analyst : Okay. And then just follow-up on stock buybacks, presumably still going through (inaudible) again, you seem pretty comfortable with that 11% CET1 sort of regardless. But I'm just wondering aside from whether loan growth throughout the year turns out stronger or weaker than anticipated, is there otherwise back loading, anticipated repurchase activity, holding some back for later in the year, or do you think it should we expect a pretty consistent throughout 2025?

Question: Frank Schiraldi - Piper Sandler & Co. - Analyst : Okay, great. I appreciate it. Thanks.

Question: Erika Najarian - UBS Securities - Analyst : Hi, good morning, and just to follow-up on that line of questioning, Daryl. I think it's an off cycle year this year for DFAST for Category IV banks. Are you planning to maybe address that stress capital buffer this year by opting to participate? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 16, 2025 / 1:00PM, MTB.N - Q4 2024 M&T Bank Corp Earnings Call And also maybe I'll ask the second question here, like how should we read into the Federal Reserve press release that was issued in December 23, essentially saying that they were going to look to improve the transparency of the stress test, and also sort of the bank lawsuit and how that could sort of impact your path from you mentioned like 11% this year to over the long term 10%?

Question: Erika Najarian - UBS Securities - Analyst : Great. That's helpful. Thanks Daryl.

Question: Christopher Spahr - Wells Fargo Securities - Analyst : Hi, good morning. So Daryl, you have a lot of comments about the investments you're putting into the company, and yet when I kind of look at the expense guide, it seems to be relatively measured. So I'm just wondering what are the sources of the cost savings or the offsets that you're getting within the franchise, and how repeatable those may be? Thanks.

Question: Christopher Spahr - Wells Fargo Securities - Analyst : (technical difficulty) less head count over time, less manual operations? Just -- again, what are the underlying drivers for the savings?

Question: Christopher Spahr - Wells Fargo Securities - Analyst : Okay, thanks. And then one last follow-up, your office count shrunk a little bit over the last year. Do you expect that to expand going forward?

Question: Christopher Spahr - Wells Fargo Securities - Analyst : All right. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 16, 2025 / 1:00PM, MTB.N - Q4 2024 M&T Bank Corp Earnings Call

Question: Matt O'Connor - DeutscheBank Securities - Analyst : Well, thanks for squeezing me in. Just a question on fees. I mean, the trends have been good. The outlook is solid, but do you feel like you need maybe a broader product set, both to boost kind of the contribution of fees to overall revenue. And then I guess I'm thinking specifically like in capital markets where more of your peers have kind of veered into that over the last several years, and you're still relatively small and some of the hedging services you provide and things like that.

Question: Matt O'Connor - DeutscheBank Securities - Analyst : That's helpful. Thanks for the detail. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 16, 2025 / 1:00PM, MTB.N - Q4 2024 M&T Bank Corp Earnings Call