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M&T Bank 8-K Report, Regulation FD Disclosure (Jun 11, 2024)

Reports
Regulation FD·Exhibits & Filings
Filing Date
Filed June 11, 2024
Period End
June 11, 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 June 11, 2024. Cited figures are marked; the original filing is the authoritative source.

M&T Bank Corporation posted a 2Q 2024 investor update on its website on June 11, 2024, for use in investor and analyst conversations.

The presentation reports quarter-to-date trends through May 2024, including average deposits of $163.9 billiona, average loans of $134.5 billion, and a taxable-equivalent net interest margin guided to the mid-3.50s. Management expects GAAP expense of $1.290 billion to $1.310 billion for the quarter and says share repurchases were paused during 2Q24. The company expects its CET1 ratio to build from 11.08% to over 11.35%.

For full-year 2024, the outlook calls for taxable-equivalent net interest income of $6.85 billionb, fee income of $2.3 billion to $2.4 billion, GAAP expense of $5.25 billion to $5.30 billion, and net charge-offs of about 40 basis points of average loans. Credit metrics are presented as elevated but manageable. Criticized commercial loans rose $364 million quarter over quarter to $12.9 billion, while permanent office commercial real estate is under 3.5% of total loans and its maturities are described as spread out.

Liquidity sources are stated at about 135%c of adjusted uninsured deposits as of March 31, 2024. The presentation also emphasizes long-term profitability and capital strength. It cites a net operating return on tangible common equity of 17.60% for 2023 and 12.67% for 1Q24, a 1Q24 CET1 ratio of 11.08%, and a top-quartile CET1 position among peers.

02—Key points

Key Highlights

  1. 2Q24 outlook: taxable-equivalent net interest income of $1.700 billion (+/-) with net interest margin in the mid-3.50s; GAAP expense of $1.290 billion to $1.310 billion, reflecting seasonally lower compensation.
  2. Full-year 2024 outlook: taxable-equivalent net interest income of $6.85 billion, fee income of $2.3 billion to $2.4 billion, and GAAP expense of $5.25 billion to $5.30 billion, excluding incremental FDIC special assessments.
  3. Share repurchases are paused in 2Q24, with a decision to be evaluated after second-quarter results; the CET1 ratio is expected to build from 11.08% to over 11.35%.
  4. Credit: full-year net charge-offs expected at about 40 basis points of average loans; the 1Q24 net charge-off ratio was 0.42% and the allowance-to-loans ratio was 1.62%.
  5. Criticized C&I and CRE loans increased $364 million quarter over quarter to $12.9 billion, driven by C&I, while permanent office CRE is less than 3.5% of total loans and about 85% of that portfolio matures in 2025 or later.
  6. Liquidity: liquidity sources represent ~135% of adjusted uninsured deposits as of March 31, 2024; 64% of deposits are insured or collateralized.
  7. Rate sensitivity: the presentation reports Mar. 2024 NII sensitivity of negative $50 million for a +200bps scenario, and states M&T has moved toward approaching neutral asset sensitivity.

03—Questions

Frequently Asked Questions

  1. What is the company's full-year 2024 earnings outlook?

    The presentation guides to taxable-equivalent net interest income of $6.85 billion (+/-), fee income of $2.3 billion to $2.4 billion, and GAAP expense of $5.25 billion to $5.30 billion, excluding incremental FDIC special assessments. It also assumes a taxable-equivalent tax rate of 24.0% to 24.5%, excluding a discrete tax benefit in 1Q24.

  2. Is M&T buying back shares?

    Share repurchases were paused during 2Q24, and management said they would be evaluated after second-quarter results. The presentation links the capital build to an expected CET1 ratio rise from 11.08% to over 11.35%.

  3. How is the company's credit quality trending?

    Net charge-offs are expected to be lumpy quarter to quarter, with full-year expectations of about 40 basis points. Criticized commercial loans rose $364 million to $12.9 billion in 1Q24, with 97% of criticized accrual loans current. The allowance for credit losses was 1.62% of loans at March 31, 2024.

  4. How exposed is the company to commercial real estate and office loans?

    Commercial real estate is 24% of total loans, down from 31% in 2019. Permanent office IRE is less than 3.5% of total loans, with New York City at about 0.5% of total loans. The presentation states that about 85% of the permanent office portfolio matures in 2025 or later and that the weighted average LTV across permanent IRE is 56%.

04—Continue

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