M&T Bank at Boston Conference: Strategic Transformation Insights

On Thursday, 06 November 2025, M&T Bank (NYSE:MTB) presented at The BancAnalysts Association of Boston Conference, offering a strategic overview of its transformation under CEO René Jones. The bank has seen significant growth, doubling in size and earnings per share over the past eight years. While showcasing technological advancements and operational improvements, the bank also addressed challenges like market perception and regulatory changes.

Key Takeaways

• M&T Bank has doubled its size and earnings per share since 2017.
• Significant investment in technology has tripled spending and improved system resiliency.
• The bank is focused on disciplined capital allocation and strategic acquisitions.
• AI is being leveraged to enhance credit and liquidity management.
• Easing regulations could improve returns on equity for larger banks.

Financial Results

• Earnings per share have grown at an average of 8.5% annually over the last eight years.
• Return on Tangible Common Equity has averaged just under 16%.
• The bank is trading at approximately 9.5 times earnings, making share repurchases attractive.
• M&T Bank is generating significant capital, considering loans, acquisitions, and share repurchases for deployment.

Operational Updates

• Technology spending has increased threefold, with a shift from 60% outsourced to 80% insourced resources.
• System resiliency has improved, reducing incident management issues by 80%.
• The bank employs approximately 1,000 engineers, with customer-impacting releases now five times more frequent.
• Commercial real estate concentration has been reduced to improve market perception.

Future Outlook

• M&T Bank aims to maintain operational excellence and resiliency while focusing on liquidity.
• The bank remains cautious about capital deployment due to economic uncertainties.
• AI strategies prioritize data integrity, with a focus on credit and liquidity management.
• Regulatory easing is expected to benefit both large and small institutions.

Q&A Highlights

• Capital deployment prioritizes ensuring business capabilities and return on investment.
• The bank is cautious about loan growth but remains open to strategic acquisitions.
• Wilmington Trust's role in Tricolor securitizations involves assessing potential fraud exposure.
• Concerns were raised about transparency and hidden leverage in non-bank financial sectors.

In conclusion, M&T Bank's strategic transformation reflects a balance of growth, technological investment, and prudent capital management. For a deeper dive into the conference details, please refer to the full transcript below.

Full transcript - The BancAnalysts Association of Boston Conference:

Jerry Benson, Research Analyst, Fidelity: Testing, testing. Can you guys hear me? There we go. Thank you. I'm Jerry Benson. I'm a research analyst at Fidelity covering the U.S. banks, and I have the pleasure of hosting René Jones of M&T Bank today. M&T is a community-focused banking franchise that provides retail and commercial banking, trust, wealth management, and investment services. Founded in 1856, it's headquartered in Buffalo, New York, and at September 30, it had $211 billion in assets. Presenting today for M&T is René Jones, Chairman and Chief Executive Officer. René has been with M&T for over 30 years, and prior to becoming CEO in 2017, he was the Chief Financial Officer in 2005, where he led the key functions of the finance division. Later, when promoted to Vice Chairman, he oversaw the growth of the company's wealth and institutional businesses. Please join me in welcoming René.

René Jones, Chairman and Chief Executive Officer, M&T Bank: All right. Thanks, Jerry.

Jerry Benson, Research Analyst, Fidelity: René, it's been your last appearance at Babb was in 2023, I believe. It's been a couple of years.

René Jones, Chairman and Chief Executive Officer, M&T Bank: Yes.

Jerry Benson, Research Analyst, Fidelity: Just curious if you could walk us through. There's been a lot of strategic work done at the bank over the past few years, and actually since you took over as CEO in 2017, which includes balance sheet transformation, more fee diversification, tech transformation. I was curious if you could kind of walk us through and provide an update of all these initiatives.

René Jones, Chairman and Chief Executive Officer, M&T Bank: Yeah. Thanks, Jerry. Thanks to everybody for being here. It's always fun to be at this conference where we get the collection of everybody. It's one of my favorites. Yeah. Next month, it will have been eight years since Bob passed, and I took over as CEO. It gives you a chance to step back and reflect on what the journey we've been on. We've effectively, over that time, doubled the size of the bank. We've essentially doubled the size of our earnings per share. We've reshaped our thinking about our balance sheet in terms of the level of commercial real estate that we had, which is a topic we'd be happy to talk about. There's a lot of logic behind that. That was not about credit.

It was about sort of how do you navigate and continue to be considered very, very safe when opportunities come up. We have done all of that. And we have sort of remained very profitable. Today we are probably 20-25% more profitable than the average peer in our group, which means that we are generating lots of capital. Actually, we happen to be sitting on quite a bit of that capital and thinking about how we release it. Over that same time, we have really sort of, I call it tech transformation, but really it is a way in which we work and the way in which we think. There was a need for the bank to be more modern. More entrepreneurial. I often tell the story of in October 2017, when we asked Bob Wilmer.

What's your I wish?" What he said was that in the 1980s and 1990s, we were much more entrepreneurial, and I think we've lost that, and it would be fun to get it back. We have been on a journey there where our tech transformation today, we spend three times more than we did eight years ago. We have every one of our stats, our resiliency. At the time, we had 60% of our technology resources outsourced. Today, 80% are insourced. We needed to do that to sort of gain control so that we could make the changes that we thought we wanted to make. You guys will laugh at this, but if you take yourself back to eight years ago and you look at your notes, the questions you were asking are, how are you going to keep up with the big guys?

What apps are you going to release? Are you going to copy the B of A app that talks to you and all that stuff? Really, what's happened is we've not, that's not the way it sort of played out, but it's played out in terms of capabilities, resiliency, how many releases can you do? Today, we probably do 5X the number of releases that touch our customers than we did before. We are 80% down in terms of incident management. Our systems are up and running at a much more consistent pace. Not only is that the case, if you look over the seven years, it just is a continuous drop. All of that was around the idea that we needed a modern capability, and we also had to change out our entire talent. There's not a single person left in IT.

Leadership today that was there back eight years ago. It's had a pretty significant effect, not just on the bank and how we think about technology, but how we all work. We have 300 teams of agile teams that get reallocated across whatever it is that we happen to need. In the past, what you had was some analyst in a particular business who was heavily focused on getting something done, a particular feature, and then they had one technologist. Today, those groups are groups of 10 individuals that have everybody in every skill set that you need all the way through to compliance. It makes us much more flexible, much more adaptable. We used all that to go through a period, which is probably three years long, to sort of redo our infrastructure.

As we get to probably the first quarter, we'll have redone the general ledger system and all of the, we call it Project Rise, all of the financial systems that are out there. This is hugely important in the current environment where you'll ask a lot of questions about AI, but for us, it's, is your data there? Is it flexible? Can you move it? Can you get it when you need it? That will have been done. We've also redone our entire commercial credit process over the last three years, making it more flexible, more agile, and also sort of access to information so you can do your job a lot easier. We're in the middle of redoing all of our digital platforms. It goes on and on, but we're sort of coming out of this period where we've been sort of.

Rebuilding and redouble-downing on our infrastructure. As we think about it today, the two themes that we talk about today are how do we team better together across our businesses to grow, sort of moving into a growth mode, and how do we achieve operational excellence, which we believe resiliency. In these times are going to be really important. Stuff is going to happen to you, whether it be cyber or whatever it may be. The question is, how quickly can you react and how quickly can you make it a non-event for your customers and get through that? With the complexity that's going on today, we think that's actually one of the most important things that we're now poised to be able to execute on.

Jerry Benson, Research Analyst, Fidelity: When you think about just a couple of things you said, you talked about how you shifted, and maybe we could just get a couple of data points, just how many engineers you employed like eight years ago before this journey began and what it is now, and maybe a couple of metrics like incidences as well as fraud events and how that's improved.

René Jones, Chairman and Chief Executive Officer, M&T Bank: Eight years ago, we did not have a single person in the company with the title of engineer. We had one guy whose wife was from Buffalo and who was the designer of Windows 7, who worked at the bank, but he refused to tell anybody he was an engineer because he did not want to be an outlier. Today, we probably have 1,000 engineers, whether they are user design engineers, whatever the discipline is. The change in the capabilities for us has resulted in, I think I talked about some of them, but like the incidents, we probably had 100 significant incidents a year. I think we have talked about most of them. It is just that the agility of our ability to actually go and respond is just much, much higher than it was before. Technical debt would be one that you guys would understand.

Instead of talking about what apps and what things have you deployed, per se, like we look at our end-of-life systems, and today that's about things that are getting close to end-of-life are about 7%. In the industry average, it would be about 12%. So we can see that we're actually having a pretty big impact on those things. They're really important.

Jerry Benson, Research Analyst, Fidelity: All right. Thank you for all that. Just at the balance sheet transformation, just where you're at now and if there's any more to go or back in growth mode, as well as just the fee diversification, the progress made there.

René Jones, Chairman and Chief Executive Officer, M&T Bank: Yeah. I mean, the fee diversification part has just come over time, mostly through acquisitions where we acquired a capability. We've sort of decided whether we want to keep it or not. If we keep it, we lean into it. We pretty much offer every service to a commercial customer that there is, all the way from starting your business all the way to Wilmington Trust at the end. That has happened very slowly, but you see that it has provided a lot of stable source of income over time. What was your other part of your question?

Jerry Benson, Research Analyst, Fidelity: Just on the balance sheet transformation. There's been a big reduction on the commercial real estate side, and you said it was not credit-related, and just elaborate.

René Jones, Chairman and Chief Executive Officer, M&T Bank: We made that shift at the beginning of 2019. We had just felt that our concentration risk was high. It wasn't that there was a problem with the credits. It was that when something happened like 2023, people would sort of label us. That's a pretty big deal for us because if you look at our outsized returns and growth that we've actually produced early in our franchise years, they all came from crisis. As I said, we've probably produced a return over the last eight years that averaged just under 16% ROTCE, 8.5% compounded growth per year, and earnings per share. How you outperform that is you take advantage of crises. You saw that in 2013. People just all of a sudden labeled us the commercial real estate bank.

In our minds, what we decided to do was to try to continue to offer all the same services and more to our commercial real estate customers, but just not using the balance sheet as much as we did. The idea is that you'll get the markets to be more comfortable, which gives you more wherewithal to take advantage of disruptions, which is part of our history. Most of our growth has come through disruptive periods.

Jerry Benson, Research Analyst, Fidelity: Just one more on the tech transformation. I mean, a lot of heavy lifting has been done. Just perhaps you could share a few thoughts. Everyone is talking about AI and the implications for their businesses going forward. Just how are you guys thinking about it and different impacts that you expect?

René Jones, Chairman and Chief Executive Officer, M&T Bank: Yeah. I mean, it's a big topic, but to try to break it down. We've doubled down on focusing on data, data integrity, data access, and making sure that we have across the bank, so with no spaces missing, a very regimented process to understand our data. We think that we're not going to be the ones that develop the AI solutions. They're going to be vendored out too. They're going to be provided by vendors to us. To differentiate yourself, having that quality understanding of your data and how you use it, how it gets produced, I think is really important. There are a bunch of categories. We too have probably 100 use cases. I chalk that up to getting the environment to learn about AI and how it works and getting them to be comfortable with things. But in my mind.

If I were to pick areas to focus on, it would be much like my annual letter. It'd be fundamentals. I was telling the story earlier. Someone asked me, it was actually a regulatory person, like, "You're usually like a third mover. You're never a first mover in technology. Why does it feel like with these issues of AI and stablecoin that you guys are moving up to try to be like a first mover?" I am concerned about falling behind on liquidity. Of all the uses that you could apply AI to, I think the ones that we would like to focus on are the fundamentals: credit, liquidity, how fast the deposits move. If you think about what we do today with cyber, and we have 150.

Solid professionals in our cyber unit who sit in rooms and monitor for anomalies that are happening anywhere in our space so that we can prevent crooks from coming. You could apply that same technology to your customer behavior patterns and possibly learn more and not get surprised about runoff and deposits or activities that might happen. I use that as an example, but to me, those would be the way we would prioritize. It's not just about expenses, which seems almost relatively easy. It's much more about, are we focusing on the fundamentals to build a strong bank?

Jerry Benson, Research Analyst, Fidelity: Okay. Maybe we could shift a little bit. You talked about the investments, all the investment spend, all the efforts. Of course, being Cap 3 ready. Maybe talk about the recent easing in the regulatory environment and how that can impact competition. With the big banks, which is the theme of the conference, asked, will this result in a step up in ROEs?

René Jones, Chairman and Chief Executive Officer, M&T Bank: Will it result in a step? Yeah, it probably will result in a step up in ROEs. I mean, just no mystery. The flexibility on capital is really important. When you have a historically, when you had a test where the variability of the answer was high, you can't then go to the low point and keep your capital or even the median. You've got to keep extra capital just because of the uncertainty of the test from year to year, as an example. I think the last part of your question, yeah, probably you will see a noticeable change in sustainable ROEs from what's happening there. The thing that always baffles me, and maybe you guys can help me with this. We spent all this time talking about, well, there's lots of regulation and there's a lot of technology investment that we all need to make.

What that means is that the small banks are not going to be able to survive, and it is going to be really hard on them because they do not have the ability to scale on that spending. When we find out that it is going to ease in the regulatory environment, we say, well, it is only the big banks that are going to win. I cannot reconcile that space at all. I think it is true that there is going to be a big impact on the largest institutions, but the pound-for-pound impact, everybody has to keep a BSA/AML environment. One bank cannot have a better one than the other. Relief in those spaces against not having to do as much around documentation of things and really focusing on finding real criminals and so forth, I think is actually a huge relief for smaller institutions.

Jerry Benson, Research Analyst, Fidelity: Right. I mean, given as you spoke to the ease in regulatory standards, though, it is an advantage for the big banks, even more of a competitive advantage. The last time we discussed bank M&A, you spoke to not needing to be a national player with scale because your community-focused model is able to achieve adequate scale on a regional basis. I'm just curious if that view has changed at all given the change in the environment.

René Jones, Chairman and Chief Executive Officer, M&T Bank: No. It hasn't changed at all. In part because it's been working. And it's not right or wrong. We just don't have, like if you took two paths and you said, "Okay, I want to be a national bank. I want to be everywhere," and then you take our approach, they're just very, very, very different paths. Quite frankly, you can see it in the balance sheets and the income statements that get produced by those things. They're completely different. If you're trying to grow and get loan share and then you have to, after the fact, actually focus on deposits, you're going to get a different balance sheet and income statement than what we do, which is we focus heavily on dominating. Around depositories. That's our thing. It tends to give us lots of leverage. It gives us pricing power.

It gives us awareness power in the places that we're at. If you were to look at, on a scale of awareness of banks, you'll see them all jumbled in the middle. You see, really separating from the pack will be like Capital One and JPMorgan. You look at that and you say, "How is this working?" If you run the same thing for Baltimore, you see us up top. That is what people sort of miss. All the things are about on a national scale, but the question is, what is your reputation and the awareness and how well you do your job for those people that you concentrate on? I think for me, as you get further and further away from home and more geographies, I think the management challenge goes up.

Because you're really an organization that is built around culture and cultural norms, some of which are documented, many of which are not. Having enough people to deploy across that kind of a geography who will make the same decisions that you make, I think becomes more and more challenged as you get larger.

Jerry Benson, Research Analyst, Fidelity: Right. You have a very strong balance sheet generating a lot of capital, been very active, share repurchases. Maybe you can talk about how you evaluate buying back your own stock versus making acquisitions and even to the extent like your stock is very attractively valued, how that influences the level you buy back.

René Jones, Chairman and Chief Executive Officer, M&T Bank: Yeah, Jerry. What we do is we sit around a lot and have this discussion. We take opposite sides. Daryl's been a tremendous addition, right? Because he'll say, "Yeah, so what? M&T did it that way. Here's how we think about it." It actually adds quite a bit of value. Today is an interesting time. First of all, I think banks are sold. I think the regulatory relief of change is going to have other banks who were not, banks who were going to sell, are probably going to think about selling. Think about it as a window. From our perspective, we have to think about, are we doing the right thing for our franchise?

One of the facts that if I look back over time, we've done lots and lots of deals, pretty much they've been at 10-9 times earnings after cost saves. That has been the purchase price, somewhere in that space. Then we would transform the institution and create a fair amount of value from there. We're trading at like 9.5 times earnings. Without buying a bank, it makes our stock repurchase look really strong, really attractive, I should say. Now, we have this other issue, which is, because we didn't have the AOCI issue, we have a lot of capital, and now we're generating a lot of capital. We have a lot of capital to deploy and figure out where to go. We're trying to be very disciplined about it. Should it be loans? Should it be some other investment?

Should it be an acquisition? Or do we just return it? I think down the road, you might see multiple of those uses over time. The conundrum is when you look at all that. What I believe is that bank stocks look cheap, even if you adjust for some correction of recession or something like that. When you look at the IRRs on deals, you kind of shake your head. I was saying, well, our corporate finance guys, I'm like, no, go back and do that again because that does not make sense. On the flip side, you get some four-year payback. I would say two to two and a half is our history. After thinking about it and thinking about it, what you realize is that the problem is that our stock is actually such a low currency, right? That the trade is pretty close.

Even though the return looks kind of high. The return of our own stock actually looks really high as well. Purchasing our own stock looks really high as well. We have to think about that. We have to think about if there was something that we wanted to do that was a strategic fit and produced the right returns, how do we think about longer-term paybacks? I think of it like you would not do something just for doing it, even if it was a positive NPV, but if it makes sense to help your franchise round itself out to move to one, two, or three deposit share or something like that, you probably would try to take advantage of that.

Jerry Benson, Research Analyst, Fidelity: Right. That being the primary factor, just good quality deposits that dominate some sort of region in your footprint.

René Jones, Chairman and Chief Executive Officer, M&T Bank: I mean, think about this. First of all, we were healthy. In 2012. Was it 2012? I can't even remember anymore. Eleven. We would have never gone out and entered the two Wilmington Trust businesses on our own in capability. The reason we took on that risk was because we could get the number one deposit share in Delaware. As we went into the boardroom and sat down to decide to do it, the question we asked is, could we sell those two businesses? We did the transaction. We said, let's spend a little time trying to learn about them. They actually had capable people in that part of the institution. The thing that got us there was number one deposit share in Delaware. That's who we are.

It's one of the reasons why people thought, I think some thought that when you go on this journey to lower your real estate concentration, your margins, your historically high margins, aren't going to be there. It hasn't changed a bit because most of our pricing power comes from the depository.

Jerry Benson, Research Analyst, Fidelity: Right. Understanding that banks are sold and not bought. There is a lot of other factors at play. We are just talking asset size. What is the profile deal for M&T and maybe kind of the high end and the low end, max size, min size?

René Jones, Chairman and Chief Executive Officer, M&T Bank: We don't have a lower limit. Because if you think about it, there could be something out there that really is maybe not that meaningful to the bank, but really meaningful to the region. If you think about it, we've decided not to be a national bank, so we better be focused on achieving our goal where we are. I wouldn't say there's a lower limit there. I think we were talking about this earlier, like MOEs and stuff like that don't make sense to me. The way I think about that is the most recent acquisition we did, we had 17,000 people. We added 5,000 people. We were running the bank. Then we would produce these curves, which were customer experience, employee experience in particular. Then we'd do it across different channels. We'd see them.

In the beginning, in Peoples, it was like if M&T was at a 55, you could see like a negative 54. Think of that as culture. I do not know who you are. I do not really care whether I believe the same things that you believe. Over time, we had that running for about almost four or five years. They have converged. At the point of convergence, you are operating the same culture. This idea that you could do like an MOE, I just do not see it because at least we believe the way we run the bank, it is about culture, it is about norms, it is about trying to build an enduring company.

Jerry Benson, Research Analyst, Fidelity: Okay. I have one more general bank question for you or industries, but I'm going to pause right now just to see if there's any questions from the audience.

René Jones, Chairman and Chief Executive Officer, M&T Bank: How do you pick in front?

Jerry Benson, Research Analyst, Fidelity: Yeah, why don't you just do that? I think the mic is coming down.

René, you said a bunch of great things on capital.

Unidentified speaker: Hi, I'm Madame Ghazali of Morgan Stanley. René made a few comments on the capital side. You're sitting on a lot of capital. You're thinking of ways to deploy it. More flexibility on the rules and regulatory side also gives you more flexibility to manage down that capital. You're already doing buybacks, so it's highly accretive. You're already doing that. What in your mind is the highest priority for deploying that excess capital here and how quickly can you do it from an organic basis?

René Jones, Chairman and Chief Executive Officer, M&T Bank: This might not be what you want to hear. The number one priority would be making sure that we have all the capabilities that our businesses need in order to get things done. That could be not just technical capability, but it usually comes in the form of human capital. Hiring talent, keeping people, that's really important to us. From there, it's just a matter of trying to figure out what's going to have the most meaningful impact if you take all the operations as a given. It would just be we would go back and forth based on return. If we had the right transaction to do, we would do it. We're less likely to enter some completely new capability that we're not familiar with.

Today, if you think about it, if you do not count the loans to NDFIs, there is not any loan growth really in the space. We are sort of sitting in this really good spot, which is we are generating lots of cash, but we are a bit cautious as to where to deploy it because we want to make sure that those actually are positive NPVs as well. It is not a bias, really. It is important for us to continue to expand our franchise.

Unidentified speaker: Do you just view the capital as earnings in store and you'll deploy it as you see opportunities? Or is there an urgent?

René Jones, Chairman and Chief Executive Officer, M&T Bank: No. We have this big, good problem, which is relative to everybody else, we didn't invest our cash, so we don't have the AOCI. If you look at the ratios today, our capital ratios look kind of like everybody else's, but really our tangible ratios are really, really high. Unfortunately, I don't know why, but people look at the regulatory ratios. We have to make sure in order to, if we were to capitalize on all of that right away, what would end up happening is the rating agencies would start to give us grief. All that's going to normalize over time because eventually what's going to happen is that AOCI is going to go away.

You're going to probably see regulatory capital ratios for the whole peers groups come down to 10, maybe to 9-9.5, where they were, if you think about it. That's going to give you a lot more freedom as you move forward. What we already, if you think of the pace at which we've bought back shares this year, it's really significant. Doing more in our minds is, okay, let's wait and see what happens with the environment. We've just finished all these investments and maybe there'll be opportunities that come up. Maybe if there's a downturn, you're going to see us be able to deploy that capital pretty quickly.

Jerry Benson, Research Analyst, Fidelity: Julian?

René Jones, Chairman and Chief Executive Officer, M&T Bank: Oh, sorry about that.

Unidentified speaker: M&T subsidiary Wilmington Trust was the trustee for Tricolor, I think for all of their securitizations. Can you give us any color about that? Maybe what went wrong? I believe the trustee role included collateral verification. Are there any other areas in general that you're worried about or that you're kind of intensifying scrutiny of?

René Jones, Chairman and Chief Executive Officer, M&T Bank: Okay, I get two of those are two sort of separate things. We've put out our queue, and I'm probably not going to say anything more than it's in our queue. The way I would describe it, I think that might give you context, is that typically our role, in one form, we played a role as custody and paying agent. In another role around securitizations, we played the role of trust, those same roles, plus the role of trustee. Typically what will happen for that business is we like that business because it's countercyclical, because if a security fails or if an instrument fails, it's almost 100% of the time credit. Because we don't do a lot of large corporate, we end up being not conflicted. People hire us for that reason.

The problem you have is that when there's fraud, all that sort of goes out the window, and you have to really understand what exactly occurred. When you think about, which you guys have all read about, but I'll just talk about the construct I'll give you is. In that particular thing, you've got a practitioner, an auto dealer who happens to be a lender, who happens to be a servicer. Think of all the roles that the servicer actually plays in terms of information. You have, I don't know, four or five warehouse lenders in addition to that. When you get to the securitization, you have all kinds of parties, which you guys are familiar with around the securitization. What you know is that the bondholders are going to get their money back.

They're going to make sure they do everything to get their money back. When you ask the question, will you get sued, what will happen, it's just that's probably the process that we all go through. It's very different from the credit environment. It's impossible for us, particularly today, to really tell what impact that's going to have. What happened, who did what, and it has to get unpacked. Unlike if you were a warehouse lender and you had a loan, the loan is just bad. That's kind of easy. In the fiduciary space and all those roles that everybody's playing, underwriters, examiners, auditors, all the way through, you really have to understand what transpired in the transaction to be able to understand whether you have exposure. I hope that helps. That's sort of how we think about it.

You see a second part to your question?

What would it be like?

Oh, yeah.

Are there areas like any kind of cockroaches? How percent are you? Where are you increasing security?

Yeah. I haven't seen a cockroach in Buffalo. I've seen a lot of bad stuff, but I haven't seen a cockroach in Buffalo. Yes, it's a natural thing for us. I think that question is great. One of the things that you see in other things in our portfolio from the past is that there's real pressure on a subsegment of the economy. If you sit back and look overall, everything looks great. There's a lot of capital investment because of AI and other technologies that are happening. Underneath, you're beginning to see all these things around the 9% inflation that we had, which caused prices to go up, the higher interest rates, and then the tariffs coming in. That's having a real effect on the low end of the consumer. It's real. We were just here this morning.

I did a panel with the Boston Chamber of Commerce. I had the CEO of Ann Taylor, Talbots, and all those brands, all women-driven buying brands. We had a grocer from Chelsea who predominantly deals with the Hispanic community. We had a guy who's a big, big entertainment and hospitality venues. When you listen to them, you see the stress. What you tend to find is that when you get long in the cycle and you begin to look at those things, you've got to figure out where the weak links are. There are all those operators who just are new to the business, who weren't there before. I think when we look at things like, it's made me think, for example, what do we call value chain financing or buy here, pay here. We don't need a bank, you're just friction.

Then you start to realize, wait a second, you've changed the control structure in those businesses or thinking about it. If you're then going to the securitization markets, have you been prepared for that change in that structure? Each time we see one of these things, the job is to actually scan the portfolio, think about other ways it could manifest itself. The goal is to stay on top of those things so that you never have some big spike. A lot of the things that have happened in some sense could turn out to be good, because we need resets when there's so much innovation going on in the economy to be able to make sure we've thought end to end, like what are the impacts that could occur. We got one on the right before Brent.

Unidentified speaker: Hi, Chris Spark with Wells. In your 2022 annual letter, you got the rate story right. Rates were zero. You predicted that they were going to go higher. They did. How does that impact your view right now with the rates potentially going lower and your decisions with AOCI and the excess cash you're generating? Thanks.

René Jones, Chairman and Chief Executive Officer, M&T Bank: Yeah, that's a great question. The source was a little different. There were two things. We had all this cash, we didn't know why we had it. A lot of the things that happened that are positive for us are that we didn't know. We were sitting around with $35 billion-$45 billion of cash that we never had before, and we just couldn't figure out why it was we had it and therefore what would happen to it. The second part was just literally like finance 101. I hate to say it that way, but it's literally like you just don't get paid enough. I think it was something like we got an extra eight basis points for taking this massive risk on that trade.

Sometimes I think what happens is we tend to take those individual trades, those individual economic decisions, and we say, well, it's a big bank, we can just go to make them. You really have to think about that. Those two things had us avoid the process. As we look today, you've got a different level of risk just by the fact that the rates moved. You're still going to think about when they were at 5%, what's the probability they go to 7%? That math and that risk-reward is just a totally different equation. I mean, you were on the worst possible place you could be in any cycle at that moment. As I look forward, we're focused on keeping our balance sheet neutral. We're not necessarily worried that we don't have asset growth, so we're looking for.

Asset growth for the sake of asset growth in terms of keeping our neutral position. I don't think there's anything fancy that we're doing other than trying to stay neutral, think about what happens if rates go up. What happens if they continue to come down. We're kind of in an advantaged place right now because as we built the bank to be neutral for changes in interest rates over the last couple of years. We've got this steep curve, which actually is giving us some benefit in the margin.

Unidentified speaker: René, Brent Aaronson from Portolus Partners. The last time the Buffalo Bills were in the Super Bowl, we had a pretty wicked credit cycle in 1991, early 1990s. I want to follow up on Julian's question. Where are we in the credit cycle? Where do you think we are? We've seen some flare-ups, but could you try and dimension this and give us some ideas to dimensioning and pace? Thank you.

René Jones, Chairman and Chief Executive Officer, M&T Bank: While we don't have a lot of cockroaches in Buffalo, we may win the Super Bowl. Does that answer your question? It's a great question. I think it's a hard question. I think that it's been a long run without any credit problems. I mean, really, you can't count the pandemic because there was so much infusion. We didn't see anything there. And 15 years without a real credit cycle. That might tell you that it's time. I think the way it works is that you get these events, and if you get them over time and you can begin to identify risk, you could actually put yourself on a path. If nothing goes wrong, you could put yourself on a path for another period of expansion. The question is, how do we get more risk identification?

The thing that used to worry me a lot, it worries me a little bit less because of what I see the industry doing, is that if you think of the financial crisis, there were two things. There were a regular recession, there were high asset prices on mortgages, all that stuff. What we underestimated is how much leverage was in the system. We were just looking at, again, the regulatory capital ratios, and we were missing the fact that we had CDOs and CDOs and CDOs squared, and we had more leverage. That fuel made the situation very different. Today, the banking industry does not provide most of the loans. That is where all the transparency is. Oftentimes when we talk or we have written about non-bank financials in the private credit markets, we are actually not saying that they are not a good development.

We think they're an outstanding development. When we started our careers, we couldn't securitize real estate and middle market loans, and now you can. What worries us is the transparency. How do you tell? Relative to 2010, how much leverage is in the system? You need to get transparency and you need things reported, not to say someone's doing something wrong, but just to actually see it. That's what worries me. If we get at that and we can get really informed and we can sort of, to your earlier question, really double down, look at our portfolios and learn from what we're seeing at these small events, you could put yourself on a path to grow again. I mean, if you think about the 1980s and 1990s, there were bumps in there, but a bunch of those bumps were pretty healthy for us.

In the end, not in the moment.

Unidentified speaker: We have time for one more quick question.

René Jones, Chairman and Chief Executive Officer, M&T Bank: Quick means we have 21 seconds.

Unidentified speaker: Yeah, 21 seconds. Let me just follow up to Brent's question then, just then we'll wrap up after this. René, what do you think can be done to improve the transparency so we have better visibility into the actual leverage in the system?

René Jones, Chairman and Chief Executive Officer, M&T Bank: I think it's starting to happen. I think for better or for worse, it'll start through the banking industry. Examiners and other people will start looking, requiring more disclosures, which is just a window into the world. It's maybe not the perfect window, but you'll begin to see that. I think you could get, if you were to get some. The place that you could do it would be through the SEC. I don't think that's going to happen. Not in the current administration. I think it's really, really, everything is very clear about pro-growth. Maybe these events force people to ask better questions about who they're giving their money to and what funds.

Again, if I were to guess, I'd say that we've got a rock-solid industry in that space with rock-solid people, but on the fringe, who are the new players, who's got two years of experience in starting a fund, and who doesn't necessarily have the risk management infrastructure? If we could better understand that, you'd really understand the macro risk in a much better way, much deeper way.

Unidentified speaker: Right. That's great. I appreciate it. Thank you, René. I appreciate it.

René Jones, Chairman and Chief Executive Officer, M&T Bank: Thanks, Jerry. Thanks.

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