M&T Bank at Barclays Conference: Strategic Focus Amid Uncertainty

On Wednesday, 07 May 2025, M&T Bank (NYSE:MTB) participated in the Barclays Americas Select Franchise Conference, where CFO Darrell Bible discussed the bank’s performance and strategic outlook. Bible highlighted the bank’s strong capital position and commitment to fundamentals, while acknowledging economic uncertainties. Despite challenges, the tone remained cautiously optimistic, focusing on sustainable performance and strategic investments.

Key Takeaways

• M&T Bank maintains a strong capital and liquidity position, with improving credit quality.
• The bank is committed to strategic investments, with five major projects nearing completion.
• Net interest margin increased, and the bank anticipates continued positive pressure.
• M&T Bank plans to return capital to shareholders through buybacks and potential dividend increases.
• The bank is not actively pursuing mergers but remains open to strategic market opportunities.

Financial Results

• Net interest margin rose by 8 basis points in Q1 to 3.66%, with expectations for further improvement.
• Interest-bearing deposit costs decreased by 27 basis points in Q1.
• Fee income is projected to grow in the mid to high single digits, while expense growth is expected to be modest at around 2%.
• The criticized book reduced by 27%, and the nonaccrual book by 33% over the past year.
• M&T aims for an 11% CET1 ratio by year-end, with a long-term target of 10%.
• Over $600 million in share buybacks were completed in Q1, with potential for dividend increases.

Operational Updates

• M&T is advancing seven key strategic projects, with significant investments in infrastructure.
• Three projects nearing completion include the general ledger, the commercial delivery system, and new data centers.
• The bank is transitioning applications to the cloud and investing in cyber and digital sectors.
• M&T is preparing for Liquidity Coverage Ratio compliance for category three banks.

Future Outlook

• Net interest income is expected to grow between 2% and 3.5%.
• The bank is focusing on expanding in New England, optimizing revenue and expenses, and simplifying operations.
• M&T is not currently pursuing mergers and acquisitions but is open to strategic deals.

Q&A Highlights

• Commercial and industrial customers show investment hesitancy due to tariff uncertainties.
• A significant investment interest was noted from a customer in Baltimore.
• The bank is navigating uncertainties related to new tax policies and regulatory changes.
• M&T is optimistic about improvements in its stress capital buffer this year.

For more details, please refer to the full transcript below.

Full transcript - Barclays Americas Select Franchise Conference:

Jason: We’ll get started with day two of our America Select Franchise Conference. Returning this year, very pleased at M and T Bank, kicking us off this morning from the company of Darrell Bible. As I think many of know, chief financial officer joined M and T in mid twenty twenty three and was CFO of, you know, Truist and BB and T prior, and also was at this conference in those roles as well. So, Daryl, welcome back.

Darrell Bible, Chief Financial Officer, M and T Bank: Yeah. Thanks, Jason. Thanks for inviting us here. We love coming to this conference.

Jason: Appreciate it. Maybe we’ll start, you know, big picture. You know, I think of M and T. You know, I think of community focused banks, you know, strong retail banking footprint in the Northeastern New England, Mid Atlantic portions of The US, you know, 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.

Darrell Bible, Chief Financial Officer, M and T Bank: Yeah. So if you if you had a chance to read Renee’s annual shareholder letter, he said that the only thing constant is change, and change it is for sure shit this year, and and we are living and breathing it. I would tell you, though, M and T is starting from a position of strength. You know, we’ve had a good of high capital, a lot of liquidity. Our credit, is getting better.

So all that is going in our direction. You know, we stick to the fundamentals of how we operate our company really on capital allocation, liquidity, and transparency is really key. When you talk to our customers, you know, there are a few customers that are being impacted directly. But for the most part, the consumers, so I went through delinquencies this past April. Delinquencies still are really good on the consumer side.

They haven’t shown weakness yet in that space. Their spending patterns with our debit card seem to be pretty consistent for the season that they’re in. You still have stress in the lower end of consumer, but you’ve had that for several years now, so that’s not really a change. We did comment on the earnings call that we had a, you know, record volume in indirect, lending in both in auto, RV, and marine, I would think that, auto was definitely more tariffs related in that getting up front ahead before car prices go up. When you look at the RV and marine, you know, those are really made in The US, so there really isn’t much impact from a tariff perspective.

So that people were spending on big ticket items, the last couple of months there, so you just have nice volume there. From a commercial perspective, you know, what I what I would say is our commercial customers are cautious. When you look at and talk to them, I’ve been in talking to them, going out on calls and all that, they they will tell you that that they wanna make investments, but they are just a little bit they don’t know all all the rules of what the impacts are, from that perspective. So I think they’re just on hold. But there’s a lot of people that wanna put money to work.

A lot of people wanna do m and a. That activity is there if US economy settles down and people kinda understand tariffs. If you think, you know, that what’s gonna happen, you know, we’re gonna get new tax, probably positive tax legislation. We’re gonna get lower regulations through a lot of industries and and all that. So I think people are still optimistic, but right now, very cautious.

Helpful.

Jason: Maybe from here, kind of against that backdrop, let me just kind of run through some of the key, you know, income statement drivers. You know, 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.

Darrell Bible, Chief Financial Officer, M and T Bank: Yeah. So when we put the plan together, in the fall of last year, you know, we were optimistic that we could, you know, start the year and actually start to grow a little bit faster than what we have the last couple of years. And, you know, we we continue to grow c and I. C and I is growing. Our consumer book’s growing, from that perspective.

We thought we would, you know, stop decreasing CRE, and it would actually start to grow. And what’s happened is is the CRE portfolio has not growing. It’s still shrinking. And, you know, that’s just causing it to be a a lower balance sheet. So we have lower just loans outstanding.

We have less deposits because we weren’t as aggressive. Because we didn’t need the funding as much to kinda balance that out, for the most part. But, you know, we’re still trying to attract operating deposits, obviously, and all that, but deposits on the margin, we’re just a little bit more price conscious trying to fit the size of the balance sheet that we have now. Everything else is intact, though. I think we feel pretty good about net interest income and the balance sheet feel good that, you know, we’re gonna continue to perform really strong.

Jason: I did notice in a slide deck you posted last night, 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 and I, M and T certainly outperformed. You know, when we kinda think about q ’1, maybe just talk to some of the areas of strengths, weaknesses, you know, on the C and I side. Was that getting in front of tariffs?

And just what your expectations are.

Darrell Bible, Chief Financial Officer, M and T Bank: Yeah. So what I would tell you is on the commercial side, utilization has been relatively soft, especially in the floor planning. Now that the cars are being purchased, you know, there’s not as many new cars going on the lot, so you’re definitely down in in dealer commercial services. You can see those numbers pretty easily. But middle market seems to be growing a little bit.

Not huge, but a little bit of growth there. You know, the core growth in C and I is really coming from our specialty businesses, corporate and institutional fund banking, and those type of businesses is really what’s driving, the C and I growth for the for the most part. If you look at, other parts of the portfolio, CRE is you know, we had a lot of runoff in CRE, and that runoff wasn’t all bad. A lot of it was criticized loans, so that was actually a positive, as we continue to to lower our criticized numbers. But, you know, we’re we’re hoping that that runoff will slow down some.

Our originations are starting to build. If you look in March, you know, we put, you know, new exposures on in the mid three hundreds. In April, a little mid four hundreds. We probably have to get to, like, five or 600 in actually what we’re booking in a month for us to start to stabilize and grow. So we’re building, and, you know, we plan to get there sometime in the second half of of this year.

Jason: That’s helpful. And then, you know, perhaps maybe to kinda kinda shifting gears in net interest margin. You had a nice eight basis point increase in the in the first quarter to 3.66%, which is kinda one of the highest in our coverage. You know, interest bearing deposit cost fell 27 basis points, which was also on the upper end. Let me talk to kind of your outlook for margin and deposits from here.

Darrell Bible, Chief Financial Officer, M and T Bank: We’re pretty optimistic on net interest margin. You know, we have a lot of favorable things that we know are gonna happen. Our swap book that we have, what’s rolling off and rolling on, We know for the rest of ’25 and, into ’26, you know, we’re gonna be pricing higher in that book. Right now, it’s probably gonna go up 30 plus basis points and all that, and that’s just gonna happen over time, which is positive. We’re still getting positive impacts on the fixed assets on our balance sheet.

If you look at our loan portfolio, if you look at what we get in the consumer portfolio from the indirect channels, some of the residential mortgages, we are repricing up with what’s rolling off anywhere from a hundred to 50 basis points. And if you look at our investment portfolio, with the maturities we have left, 3 or $4,000,000,000, the average rate of what’s rolling off is around three and a half, and our purchases of the mix of what we’re buying now is around 5%. So that’s also gonna happen. So with all that in play, I feel optimistic that our margin should have positive pressure as the year plays out, from that perspective. The the wildcard and what we really don’t know is, you know, how much loan growth you have and the shape of the the curve.

We’re pretty neutral, from a short end, but the shape of the curve will matter. If it flattens out, obviously, that will create more pressure, you know, less net interest income. Steeper curve will provide more net interest income.

Jason: I guess so. So historically, M and T has been, I think, viewed as a relatively more asset sensitive bank. Sounds like that’s kinda changed over the last few years, and now you’re, you know, more, you know, more neutral. Just talk so if the Fed cuts two times or four times, does it make that big of a difference?

Darrell Bible, Chief Financial Officer, M and T Bank: So we we ran our models, and with four cuts, it it really doesn’t impact. It’s really the shape of the curve. It’s really the impact. It is the biggest driver. After that, it comes into a loan growth and the deposit growth, making sure you can keep both oars in the water and and trying to grow that there.

And then pricing. We had really good reactivity on our deposit beta this past quarter. You know, we plan to be in the 50, you know, plus type percentages as we move forward. I think that that’s a good number for us. You know?

And on the credit side, lending side, the credit spreads and all that, you know, are somewhat aggressive, but we’re still getting decent spreads and getting good returns on what we are booking from originations.

Jason: So I guess, think about your guidance for the year. We have kind of up 2% to up three and a half percent, I think, what it implies. You know, I guess when you think about low end versus high end, it was one of the biggest drive variables.

Darrell Bible, Chief Financial Officer, M and T Bank: I I I think it’s pricing, growth, and shape of the curve are the three variables that really drive that. And you really can’t control any of those for the most part. You know, we’ll go on what the market gives us from that perspective. But businesses are working hard. We’re performing well.

We’re competing well against the competition in the marketplace. So I’m optimistic that we’re gonna have good net interest income this year and into next year.

Jason: And then, you know, maybe shifting gears to the the fee side. Actually, looking calling for a decent fee income growth for this year, you look at your guidance. You know, q one was a bit, I think, mixed, for you and and some others. A lot of banks actually kinda guided down on fee income, for the year. You kinda talked to the upper end of your guidance.

Just maybe talk about maybe some of key drivers of that and kinda why you’re different from some of your peers maybe.

Darrell Bible, Chief Financial Officer, M and T Bank: Yeah. We’ve invested a lot in our businesses, and and it’s starting to show through. I’d start first with our corporate trust and loan agency business. That continues to perform at record levels. We’re continuing to gain share in that space.

We’re actually in you know, right now in Europe, we’re actually gonna go out and do marketing with the sales team here. We’re we’re growing actually in Europe in this business as well. We followed some of our customers from The US over here, and now we’re just trying to grow in that space, from that perspective. So that that’s a good guy. Wealth is doing well.

Obviously, you have the asset, the AUM issue with the volatility of, you know, what valuations are, and they go down, and they go back up and and all that. So that’s it’s a little bit up and down, but we are growing, wealth clients, which is the good core growth that you have there. If you look at service charges, our treasury management business has done really well last year, starting off this year really strong, high single digit, low double digit type of growth year over year. So investments we’ve made in those businesses also performing well. But I think that the the one that’s that’s really positive is mortgage, both on the residential side as well as the commercial side.

Residential, you know, we have a production origination team, and that will fluctuate as rates move, in in the marketplace. But from a servicing perspective, we’ve added some good subservicing to our portfolio out of fee income. There’s opportunities. Whenever you see big transactions in that space, you know, you saw with mister Cooper and Rocket, that creates a lot of dislocation in there. So we may have other opportunities there as well to actually capitalize on over time, which would actually be a positive, for us.

And then commercial mortgage, or the RCC business continues to perform very well. It’s really subject to what happens in the five and ten year treasury, and that can smooth up and down. But when it goes down, they lock in a lot of lot lot of product and get a lot of fee income. So we’re still optimistic. You know, we’ll be, you know, mid to high single digits in in fee growth.

Jason: 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 kinda talking about a lot of initiatives that you’re spending some money on.

Darrell Bible, Chief Financial Officer, M and T Bank: We got them still.

Jason: Maybe you could provide an update on some of the stuff you’re working on and maybe some of the bigger stuff and kinda where you see it.

Darrell Bible, Chief Financial Officer, M and T Bank: You know, we’re getting at a point, though. We have about seven really key strategic projects going on in our company right now. I’d say out of the seven, five of them have nine digit spend over the life of those projects. When you look at that seven, there’s three that are getting pretty close to completion. You know, one would be the general ledger.

You know, we’re well past 50% of the way there. I’m sure you get that done hopefully in the first part of twenty twenty six, but that’s a couple hundred million dollars, putting in a new financial system. It’s not just the general ledger. It’s all the systems, profitability. We’re actually putting in liquidity stuff for category three and and all that.

So all that is a part part of that project. The other one would be, you know, how we re rebuilt our commercial delivery system for how we generate credits and put loans on the books and all that. That should be finished end of this year or earlier than that, from that perspective. Another big project we’re working on is we’re putting in, three new data centers. They went live a quarter ago.

And we’re now putting the applications out there, and we’re putting the applications that are cloud ready up into the cloud, from that perspective. That will go for a couple more years, but making good progress. You know, I I call cyber and digital just those are those are growing businesses for us. They’re always gonna be there. We’re always gonna be investing in them, and those are critical.

But we’re making really good progress and, you know, feel good about getting these all these big ones done. And we got some other big ones that we’re starting up now that will kinda fill the boat, but maybe not quite as large as what we got going on right now.

Jason: Then I guess, hypothetically, if the economic environment’s, you know, 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 think about that?

Darrell Bible, Chief Financial Officer, M and T Bank: You know, M and T has a really good mindset, from, like, managing from a budget perspective. You know? And if we need to tighten our belts or whatever, you know, people really buy into that and really would would do that. For the projects that we have that are, like, within a year of completion, we probably wouldn’t slow those down or pause those. The other ones, you could slow down.

There’s a lot of other things that we’re starting up now and and how we kinda do our automation and workforce planning and and other things that will kinda play off the next couple of years. But, you know, if you look at it, I I our efficiency ratio is really strong. We’re in the the mid fifties. We really don’t wanna go lower than that because we still need to make investments in this company. So the way I look at it, it’s more of a balancing act.

You know, we wanna make sure that, you know, we we get our good stewards to our shareholders and give good returns, capital generation, which which we’re doing, but we’re also making the necessary investments in this company to protect us for the long run and and really help grow the company future and all that. And right now, I think we’re just in a really good space of that balance, and it seems to be playing out pretty well.

Jason: Got it. You know, maybe shift gears to credit quality. I mean, nonperforming assets, charge offs, criticized loans all improved in the first quarter, yet kind of all the economists out there are telling us things are gonna deteriorate. Maybe just kinda talk to what’s your outlook.

Darrell Bible, Chief Financial Officer, M and T Bank: You know, I I can’t say that we’re agnostic to anything going on out there. I mean, we have, you know, some upgraded or downgraded credits, like, in government contractors. Oh, we had some nonprofits we we’ve downgraded. Our exposure in the DC, greater area is about a little around 300,000,000, so we don’t have a large exposure there from a CRE perspective. So we’re watching a lot of those areas and companies that that could have issues, but aren’t seeing too much of that to date.

You know, we’re really good at last five quarters where we’ve been able to shrink our criticized loans. We did have an increase in C and I was one large credit. It was basically a roll up strategy on a heavy trucking company that just didn’t quite hit their targets, from that perspective. You know, on the outlook, you could see a couple more c and I credits maybe go into into criticized. But net net, we still feel that our criticized balances should be coming down throughout the year, maybe not at the pace of what we did last year, but still in that same general direction.

Jason: And I guess within you mentioned a couple of criticized, you know, credits, potentially any area industries of note? Or

Darrell Bible, Chief Financial Officer, M and T Bank: No. It’s just all

Jason: over. Specific.

Darrell Bible, Chief Financial Officer, M and T Bank: Yeah. I mean, PE related could be some of that.

Jason: Got it. And then just with respect to commercial real estate gets a lot of headlines, yet MIT never seems to have any losses. So, oh, just maybe talk to

Darrell Bible, Chief Financial Officer, M and T Bank: You know, the the key to that, to be honest with you, starts with client selection. We are really good at getting the the clients that support their credits and and really do that. I mean, everybody thought we’re gonna have all these losses last several years, and that didn’t happen. No.

Jason: And it it I’m still waiting.

Darrell Bible, Chief Financial Officer, M and T Bank: Yeah. So our client selection is really, really strong. You know? And we’re we’re opened up for business. Obviously, we aren’t looking to grow our office portfolio, but multifamily, industrial, good retail market, construction, we’re putting new loans on.

So we we feel pretty good about where we are. I think our CRE criticized will continue to to fall. We have a pretty good trajectory over the next year or so as those maturities come up. Sense.

Jason: And then you talk to just what’s going on with the allowance for credit losses. You know, we saw, I think, from you and some others, you know, a slight build in the first quarter as, you know, the economic outlook softened during q one. You know, we got additional information on April 2. You know, banks have kind of qualitative quantitative reserves. But just how do you think about the reserves now we sit here in in q two and forecasts have kind of been downgraded more, but what you’re seeing, it sounds like at the onset, you know, consumers, corporates are still holding in.

Darrell Bible, Chief Financial Officer, M and T Bank: So if you look at the allowance with CECL, you know, you have to start with the macro factors. If you look at our models that we have, there’s really four macro factors that really make a difference for our allowance. One is GDP. The other one’s unemployment. And then because of our CRE portfolios, HPI and PREPI are the other two.

And if those start to turn negative, then we’re gonna probably have to add more allowance. It’s just the math of how that goes. The other thing that you have to look out for is right now, if you look at our book, there’s more upgrades than downgrades. But if that would flip where all of sudden the book starts to get more downgrades than upgrades, that would be fed into the models, and you would have a negative, you know, increase in in your allowance, type of impact. You know, right now, we aren’t seeing a whole lot.

Know, it’s still feeling relatively good. We’re watching it very closely, but it’s talked about delinquencies, customers, and all that. You know, our customers are strong. They’re just really cautious right now because they don’t really know, you know, how it would invest in and what to do until they really know all the specifics coming out of DC.

Jason: Got it. So I guess on I guess on the two q, you know, provision reserve, I guess it’s one of those things that are too early in the quarter to make a call and you kinda revisit it to get end of the quarter. And

Darrell Bible, Chief Financial Officer, M and T Bank: But we always do a a mid month one, so we’ll know something, know, next month. And then we kinda true it up into the last month of the quarter and all. But right now, I we don’t see a recession coming. We see a slowdown right now happening. We’ll see if it actually turns into a recession or not.

But if they if they get this tax, you know, policies passed, that will be a positive. It could help help, bounce back from that and and all that. I know there are some customers that will get hurt with tariffs, but there’s also other customers you talk to that actually benefit with the tariffs going on. So it’s not all negative. It’s just there’s change going on is really the impact.

Jason: Makes sense. And then on capital, you know, 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. You did step up the buyback, doing over $600,000,000 in the first quarter after $200,000,000 in Q3 and Q4 last year. How do we think about, I guess, the near term buyback just given kind of the step up in q one?

Darrell Bible, Chief Financial Officer, M and T Bank: You know, it’s we’re gonna be opportunistic. You know, if we think that the stock is relatively inexpensive, we’re gonna jump in and purchase more stock. So right now, we think the stock is inexpensive. It’s not why we think it’s a good time to to buy our stock, obviously. You know?

But we’re committed to the 11% ratio. You know, we wanna continue to get our criticized numbers down. Lower. I mean, they’ve done a great job. You know, we’ve shrunk our criticized book 27% and our nonaccrual book 33% this past year.

So they’ve come down a fair amount, but they still should come down a little bit more. The board, in January, approved our long term target of CET one of 10%. Yeah. And we’re just we don’t feel comfortable getting to that stage yet, but as we continue to maybe improve in our credit quality and still have strong earnings and we don’t go into a recession, you could see something else potentially down the road. My next question is we think 11% seems too high.

Jason: So it sounds like your your port agrees. So, you know, no good deed goes unpunished. Now we’re taking 10%. You know, when do you think that comes into play?

Darrell Bible, Chief Financial Officer, M and T Bank: You know, I I think we’ll just see how it goes. You know, we opted in for stress testing too. You know, we opted in because we really think you know, last year, we were one of the three banks that actually dropped a little bit in the stress capital buffer. But with a lower credit size, lower CRE, and better, you know, earnings, PPNR,

Jason: and

Darrell Bible, Chief Financial Officer, M and T Bank: all that right now, we feel that it should actually be better. We’re still at the higher end of the stress capital buffer for our peers. We wanna continue to move that down further, and we hope, to make a lot of progress this year on doing that.

Jason: I guess with the improvements we’ve seen at M and T plus, you know, an 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, you know, where the SEB ends up?

Darrell Bible, Chief Financial Officer, M and T Bank: My team has a guess, but I I it’s it’s it’s off the record, and I gotta tell you what it is.

Ryan: I’ll press Ryan.

Darrell Bible, Chief Financial Officer, M and T Bank: Later. We’ll we’ll see what happens.

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

Darrell Bible, Chief Financial Officer, M and T Bank: You know, I I don’t view the averaging versus nonaveraging as a big deal, be honest with you. I mean, directionally, I I don’t I don’t think we care one way or the other. Transparency, though, is really important. You know? And having transparency in how they come up with their scenarios, how they run these models, and all that, I I think, is is is is critical, and that should come out, from that perspective.

We’ll see if that happens or not, but, I just it’s what we run-in a as an industry, and I think we just need to understand how they’re coming up with figures that they come up with these loss rates and projections and all.

Jason: Got it. And then, you know, we last did a fireside chat in my New York conference in September, and I felt like you hinted it, like, maybe more focused 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.

Darrell Bible, Chief Financial Officer, M and T Bank: Yeah. I think we’re big believers. First and foremost, dividends are really important to us. We’re one of two banks that didn’t cut the dividend during the great recession, so we take that very, very seriously, from that perspective. But, you know, dividends are really just a reflection of the earning power of the bank.

And, you know, our earnings power continues to increase. You know? And, you know, I think you will see at some point probably this year that we will probably have an increase to the dividend that represents the earning power that we’re showing right now.

Jason: Got it. And then, you know, another use of capital is bank m and a. I guess M and T has historically been, you know, a good acquirer. You know, it seems like we’re a few years removed from the Peoples deal, you know, which looked to be fairly additive. Let me just kinda just talk talk to the kind of current bank m and a environment and how you’re thinking about it.

Darrell Bible, Chief Financial Officer, M and T Bank: You know, we we aren’t we really aren’t spending much time on it. We’re really focused on our four priorities we have in the company, building out New England, you know, improving our risk framework, optimizing our revenue and expenses as well as simplifying the company through resiliency and improving that. I’m sure there will come a time when we actually do acquisitions because we have been acquisitive in the past. But M and T is not gonna surprise the marketplace, whatever. I mean, we’re very consistent.

You know, we usually do end market deals or we do market banks that maybe will be on the fringe of our market and maybe a newer market and all that. So we’ll we’ll be very consistent, from that. I don’t see us leaping across the country. We don’t wanna be a national bank. We wanna be, you know, a dominant bank in the markets that we serve and really, do a great job there, with our community banking model that we have that we offer, to our customers.

Jason: I guess there hasn’t really been I guess there’s been a kind of a slowdown in the bank m and 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. You know, do you

Darrell Bible, Chief Financial Officer, M and T Bank: think And the double count, Mike. And

Jason: The capacity 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 you know, do you expect that to result in kind of a pickup in industry wide m and a in the near term?

Darrell Bible, Chief Financial Officer, M and T Bank: You know, people are are expecting that. You know, for us, you know, we we’re successful at the type of bank that we operate. You know, we really try to serve our customers and our communities, and we’ve been able to purchase banks in both administrations. Peoples was done in the Biden administration. So we think we can work with either party and and all that just because we really do the right thing and serve our clients and do do what we say we are going to do from that.

But, you know, the the the people that are getting into the seats are definitely pro growing the economy. They are definitely, you know, more like minded. So they’re like the acting chair of the FDIC, Travis Hill, you know, his changes that he made to Living Well. The reason I know this so well is we’re submitting ours in another month. What he took out and what he put in and and stressed is really just practical.

I mean, he’s really trying to get the information and the data to resolve a bank in trouble over a weekend or create a bridge bank. All this other theoretical stuff was basically taken out. And I think a lot of people getting in the seats will have, you know, much more realistic you know, if governor Bromman gets supervision, you know, she talks about tailoring a lot, but she also talks about, you know, the the core and key things that banks really have to worry about. You have your credit risk. You have cyber risk, interest rate risk, liquidity, capital.

Those are the core things that can really hurt the company and all that. And I I think that’s the direction that these people are gonna really focus on. And, you know, all these other things that are out there that were created in the roles, you know, has created a big cottage industry Mhmm. Of consultants that are all making a lot of money, basically fixing all these other issues out out there. But I think if you stick to the core fundamentals and really focus on, you know, what banks could actually get in trouble with and actually hurt the company, I think that that’s how I would go.

And I think they’re more like minded from that

Jason: perspective. Makes sense. Earlier, you mentioned you’re getting kind of LCR compliance for category three. I guess M and T is a category four bank. I guess, how do you think about that shift to category three?

You know, does it make sense to cross it a little bit? Do you wanna cross it a lot? You know? And just what is there a lot more work you have to do? And and keep in mind, I know that that all may change anyway.

Darrell Bible, Chief Financial Officer, M and T Bank: We have no idea. But, you know, it’s it’s what I’ve learned, you know, over my career is that you always wanna be prepared for opportunities that come your way from that perspective. And, you know, when my my prior life, when the the two banks in the Southeast came together, you know, the bank that I worked for was already operating at a category three level from a credit perspective, interest rate, liquidity, capital perspective. We didn’t really have any questions from the regulators about that, from from that standpoint. So it’s just the mindset that, you know, we know we’re gonna grow.

We don’t know when it’s gonna happen, but we wanna be there and be able to do it if that opportunity comes our way. It’s kind of a mindset where we have now at M and T.

Jason: 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, you know, do we expect to be beneficial? I know in the prior one, we’re kinda not concerned, but, know, thinking about maybe more long term debt, more liquidity. But just maybe someone’s talk about some of the potential other changes that could occur.

Darrell Bible, Chief Financial Officer, M and T Bank: So, you know, if you look at it, I think Basel three is out there. You know, we’ll we’ll see what if governor Obama gets in there, what she wants to do with that. But it’s probably going to be more focused on things that are more meaningful. And, you know, right now, you talk to the the Fed, chairman Powell or whatever. They say it will be neutral, to whatever they impact.

You don’t have the details of what that really means, from that, so the devil’s in the details from that. But I I think all these things that are out there may or may not happen. Or if they happen, it’s gonna be done to regularly focus on the key risks that you really should be focused on from from running a bank and making sure you have strong fundamentals out there. And, you know, what whatever it is, we’ll work on it, and we’ll get it done and and fix it. But I think you have more rational people in the seats right now than coming.

Jason: Maybe I’ll pull up and see if there’s any questions from the audience. Wait. Let’s maybe just wait for the mic.

Ryan: Mentioned earlier the C I well, not the C and I lending, but the C and I customers are maybe on the investment side a bit more hesitant. Do you see that already in C and I lending, a new business that is coming?

Darrell Bible, Chief Financial Officer, M and T Bank: Well, we have this one customer in the Baltimore area. He wants to invest $6,070,000,000 dollars in some hotels. But until he really knows how these tariffs play out or whatever, he’s just on hold. He has all the projects scoped out. It’s ready to go and all that, but you have that, you know, throughout the footprint.

There there are people that wanna make these investments. They just the uncertainty, you know, they they need I mean, a good business person needs to kinda know the rules, and then they can comply and do what they need to do, from that. And that was kind of the advantage the last time Trump was in the administration is you kinda knew where people stood, and there was that actually created a lot of economic activity. There weren’t things changing. So, hopefully, that things get settled down at some point.

So there is more certainty, and investments will continue to be made in in a in a in The US.

Jason: Yeah.

Ryan: Thanks. Just a quick one on on the potential tax cuts coming through. Do you think the the market might react negatively if the tax cuts are totally unfunded because the tariff taxes are really not gonna come through?

Darrell Bible, Chief Financial Officer, M and T Bank: You know, it’s early right now in the in the details, and there there’s a lot of puts and takes going on. And I’m not as close to it as, you know, some others in in out there. But, you know, my my guess is, you know, they’re really trying to we can’t sustain. The US can’t sustain, you know, with the amount of borrowing that we have versus our GDP. I mean, we’re a very profitable country.

We make a lot of money, but we’re just we’re spending too much money right now. And that really needs to get addressed one way or the other in my opinion.

Ryan: Yeah. And then if you sort of, is there a point at which you said a steepening yield curve’s good for your bank? There a point sort of stops becoming good and becomes negative for the economy in in your view when you do your Yeah.

Darrell Bible, Chief Financial Officer, M and T Bank: No. That’s a great question. So if you look at our our company, you know, if we get a really steep yield curve, obviously, that puts stress in a lot of borrowers out in the marketplace. So you you you wanna have a steepness of a curve, but, know, maybe with the short end coming down and the longer end kinda staying where it is, you know, might be better. But it you’re right.

If it gets really steep, that could basically create a lot of more issues for some borrowers, from that perspective. But if rates the good news of a flatter curve is while NII might get hurt, our credit quality would improve. Right? So it’s not all bad, and our mortgage business would would would grow. We we could argue the way we’re diversified that rates falling might actually be a bet net better number for the bottom line.

It just hurts NII more from that perspective.

Ryan: You mentioned earlier the selection in the commercial real estate lending has been working out for you very well. How does it look like on the residential mortgages? Do you see there any changes in trend for for asset quality?

Darrell Bible, Chief Financial Officer, M and T Bank: No. Our our mortgage book is really prime quality. I don’t think we had any net charge offs in ’24 or early part of twenty five in our whole mortgage book. I mean, there’s people charging up, but we’ve got recoveries on it, so net. But we don’t have any loss in that portfolio right now.

Jason: Time for one more. I guess maybe just to wrap it up, Daryl. I get, know, M and T, you know, very consistent results over time, you know, consistent, you know, kinda high ROTCE, you know, type company. I guess maybe, you know, maybe just to wrap it up, kinda what do you think kinda differentiates M and T, and just what keeps that performance so consistent and and high?

Darrell Bible, Chief Financial Officer, M and T Bank: You know, we we start with you know, we’re a bank for our communities. You know? And we really wanna serve not just the regional community. If you think of it, we’re operating 13 states plus, DC. So we’re Buffalo down to Richmond up to Maine, and that’s for our community banking model.

We also have businesses outside that 13 states as well. That’s important, but we also wanna be communities, you know, for other communities in these markets and all that. We really wanna focus on being inclusive. You know, a good example of why we wanna be so inclusive, are we have a big business in in business banking. Our team in Washington DC is very diverse.

It kinda reflects what the people in that market, you know, look like from from that perspective. It’s our highest performing team that we have in business banking today. So so kinda making sure that we emulate, you know, kinda what our markets are that we’re serving, we think is actually a huge advantage for us. So we we have that mindset when we go to work all the time. You know, from a financial perspective, if you look at the incentives like the executive management team has, you know, our our max payout, like, on the performance shares that we get is a 17% return on tangible common equity, one and a quarter return on tangible assets.

We have to do that continuously over over three years. That’s not the highest in the industry, but it’s that consistency is what we’re trying to do. And what the board wants us to do is to to be really good and run a really strong bank, but don’t go for really high risk. You you can get twenty maybe one year or two years, but you can’t continuously stay at 20. So it’s really having a good foundational bank that is really successful continuously over time.

It’s so we can serve our customers in good times and bad times, and we can be consistent in the marketplace. That’s what M and T is all about.

Jason: Perfect. Dowell, thank you for joining us today.

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