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M&T Bank 8-K Report, Regulation FD Disclosure (Jan 18, 2024)

Reports
Regulation FD·Exhibits & Filings
Filing Date
Filed January 18, 2024
Period End
January 18, 2024
In the record · 2016–202610-K1110-Q338-K161

MTB filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 161 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Jan ’16Jan ’16
  2. Leadership change8-K · Jun ’22Jun ’22
  3. Leadership change8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed January 18, 2024. Cited figures are marked; the original filing is the authoritative source.

On January 18, 2024, M&T Bank Corporation furnished an investor presentation under Item 7.01 (Regulation FD) and attached it as Exhibit 99.1.

The presentation reports full-year 2023 GAAP revenues of $9,643 milliona, up from $8,179 million in 2022, and GAAP net income of $2,741 million, up from $1,992 million. GAAP diluted EPS was $15.79 versus $11.53, which the presentation describes as growth of +37% year over year. On a GAAP-Adjusted basis, which excludes the FDIC special assessment and other notable items, diluted EPS was $15.72 for 2023 versus $14.17 for 2022.

Fourth-quarter 2023 results were weaker: GAAP net income was $482 millionb and diluted EPS was $2.74, which includes a $197 million FDIC special assessment. Adjusted diluted EPS was $3.62. Credit and balance sheet metrics showed pressure.

Criticized C&I and CRE loans rose $1.5 billionc quarter over quarter, with increases in non-owner-occupied C&I and CRE loans. The full-year net charge-off ratio was 0.33% of average loans, and the fourth-quarter ratio was 0.44%. Net interest margin fell 18 basis points quarter over quarter to 3.61%, driven by higher deposit funding costs.

The CET1 capital ratio was an estimated 10.98% at December 31, 2023, and tangible book value per common share was $98.54d. For 2024, management guides to taxable-equivalent net interest income of $6.7 billion to $6.8 billion, fee income of $2.3 billion to $2.4 billion, and GAAP expenses of $5.25 billion to $5.30 billion.

It expects net charge-offs of about 40 basis points of average loans. Share repurchases are paused, with resumption to be considered after the 2024 stress test results, further clarity on Basel III Endgame rules, and a stabilizing economic outlook.

02—Key points

Key Highlights

  1. Full-year 2023 GAAP net income of $2,741 million and diluted EPS of $15.79, versus $1,992 million and $11.53 in 2022; GAAP-Adjusted diluted EPS was $15.72.
  2. Fourth-quarter 2023 GAAP net income fell to $482 million (diluted EPS $2.74) from $765 million in 4Q22, including a $197 million FDIC special assessment.
  3. Net interest margin declined 18 basis points quarter over quarter to 3.61%, driven by higher rates on customer deposit funding.
  4. Criticized C&I and CRE loans increased $1.5 billion quarter over quarter; criticized CRE loans were 26.7% of total CRE outstanding at year-end versus 23.7% at September 30, 2023.
  5. CET1 capital ratio was an estimated 10.98% at December 31, 2023, and tangible book value per common share rose to $98.54.
  6. 2024 outlook calls for taxable-equivalent net interest income of $6.7 billion to $6.8 billion, fee income of $2.3 billion to $2.4 billion, and GAAP expenses of $5.25 billion to $5.30 billion.
  7. Share repurchases are currently paused, with resumption to be considered after 2024 stress test results and clarity on Basel III Endgame regulations.

03—Questions

Frequently Asked Questions

  1. How did M&T perform in full-year 2023 compared with 2022?

    GAAP revenues were $9,643 million versus $8,179 million, and GAAP net income was $2,741 million versus $1,992 million. GAAP diluted EPS was $15.79 versus $11.53. The presentation attributes the EPS growth to a year-over-year increase of +37%. GAAP-Adjusted diluted EPS was $15.72 versus $14.17.

  2. Why did fourth-quarter 2023 earnings decline?

    GAAP net income was $482 million and diluted EPS was $2.74, compared with $765 million and $4.29 in 4Q22. The presentation cites a $197 million FDIC special assessment in 4Q23 expenses, higher deposit funding costs that compressed net interest margin to 3.61%, and a $225 million provision for credit losses compared with $90 million a year earlier.

  3. What credit trends did management highlight?

    Criticized C&I and CRE loans rose $1.5 billion quarter over quarter, led by non-owner-occupied C&I (+$663 million) and CRE (+$816 million). Net charge-offs were 0.33% of average loans for the full year and 0.44% in the fourth quarter. Management notes that 96% of criticized accrual loans are current and that the nonaccrual loan reserve ratio was about 13%.

  4. What is the 2024 outlook and capital return plan?

    The company expects 2024 taxable-equivalent net interest income of $6.7 billion to $6.8 billion, a net interest margin in the 3.50s, fee income of $2.3 billion to $2.4 billion, and GAAP expenses of $5.25 billion to $5.30 billion. Net charge-offs are expected to be about 40 basis points of average loans. Share repurchases are paused, with resumption to be considered after the 2024 stress test results and Basel III Endgame clarity.

04—Continue

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