M&T Bank at RBC Capital Conference: Strategic Growth Insights

On Wednesday, 05 March 2025, M&T Bank (NYSE: MTB) presented at the RBC Capital Markets Global Financial Institutions Conference. The bank’s CFO, Daryl Bible, shared insights into M&T’s strategic direction, highlighting both opportunities and challenges. While expressing cautious optimism for 2025, Bible pointed to potential impacts from tariffs and regulations. The bank remains committed to its community banking model and long-term shareholder value.

Key Takeaways

• M&T Bank is optimistic about 2025, focusing on community banking and long-term growth.
• The bank is navigating economic uncertainties, including tariffs and federal funding cuts.
• Strategic priorities include expanding in New England and Long Island and upgrading technology.
• M&T Bank is open to acquisitions but prioritizes internal projects for now.
• Loan growth is driven by C&I and consumer lending, while CRE balances are expected to stabilize.

Financial Results

Loan Growth:

• Loans grew in the last four quarters of 2024, driven by C&I and consumer lending.
• CRE balances are decreasing due to payoffs, with stabilization expected mid-year.
• The total loan book is projected to grow in the second half of 2025.

Deposits:

• Non-interest-bearing deposits have stabilized at 30% of total deposits.
• Both interest-bearing and non-interest-bearing deposits have shown good growth.

Balance Sheet and Capital:

• The balance sheet is smaller than expected due to slower lending.
• M&T Bank is repurchasing shares, with a $4 billion repurchase program authorized.
• The CET1 ratio target for 2025 is 11%, with a long-term target of 10% and a hard limit of 8.75%.

Operational Updates

Strategic Priorities:

• Expansion in New England and Long Island.
• Enhancing risk management frameworks and updating aging platforms.
• Transitioning to Oracle Cloud for financial systems by early 2026.
• Improving client service and back-office efficiency.

Acquisitions:

• Focus is on completing internal projects before considering acquisitions.
• Emphasis on cultural fit, credit quality, and deposit franchise.

Commercial Real Estate (CRE):

• Open to most CRE categories except office.
• CRE pipeline includes construction and permanent loans, with funding expected in 12-15 months.

Future Outlook

Loan Growth and NIM:

• CRE balances are expected to level off mid-year, with loan book growth in the second half.
• Net Interest Margin (NIM) guidance remains in the mid-360s, with potential for improvement.

Capital Allocation and Regulatory Landscape:

• Prioritizes customer and community support, dividends, and share repurchases.
• Optimistic about potential easing of M&A approvals and stress testing transparency.

Q&A Highlights

Stress Testing Transparency:

• M&T desires more visibility into credit and PPNR models and convergence of Basel III and stress testing rules.

Industry Consolidation and Capital Allocation:

• Open to acquisitions that align culturally and financially.
• Focuses on supporting customers and communities, paying dividends, and share repurchases.

Private Credit:

• Private credit firms are seen as both competitors and clients.
• Private credit lending may limit the Fed’s ability to inject liquidity during stress periods.

In conclusion, M&T Bank’s strategic focus remains on growth and stability, navigating economic uncertainties while maintaining a commitment to its community banking model. For more details, please refer to the full transcript below.

Full transcript - RBC Capital Markets Global Financial Institutions Conference:

Unidentified speaker, Interviewer: for joining us for our next fireside chat. Many of you know M and T Bank Corporation, headquartered in Buffalo, New York with about $2.00 $8,000,000,000 in assets. When we look at this company, it’s one of the premier companies I mentioned yesterday when we had Northern Trust here, it was M and T and Northern Trust are the only two banks during the financial crisis that didn’t cut or eliminate their dividends, which says a lot about the quality of the balance sheet of M and T. The market cap though, this was priced a few days ago, is about $32,000,000,000 With us today is many of you know Daryl, Daryl Bible, the Chief Financial Officer. He joined M and T in the summer of twenty twenty three.

And prior to that, he was down at Truist and legacy BBNT and has been in the banking industry now about thirty years. So, Darryl, welcome.

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: Forty three years, actually.

Unidentified speaker, Interviewer: Oh, forty three. Okay. Yeah. Yeah.

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: Yeah. I didn’t know And we came right out of yeah. Right out of college.

Unidentified speaker, Interviewer: Anyway, maybe, Daryl, we could start off with, just some macro thoughts and macro questions in view of the fact of what’s going on. And I know it’s early earlier in the year, but what are you guys seeing aside from what we heard this week with tariffs? But what’s the underlying economic trends that you’re seeing in your franchise?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: From an economic perspective, I think there’s a lot of uncertainty with our customers that we’re seeing right now and whether it’s tariffs, regulations or whatever, I think a lot of people are on pause. But I think when you look out over the next quarter or two, I think that certainty will come more into the picture and I think people will start making more investments in their companies would be my best take. Inflation is a real issue. If you look at our consumer portfolio, we’re mainly a prime portfolio, But you do see stress in the lower levels of consumer, which we’re fortunate not to have much of on our books. So that’s a reality.

And there are some maybe certain pockets like office, you still don’t want to do office. Skilled nursing is probably still a little bit sketchy and some of the highly leveraged transactions backed by PE. But net net overall, our credit quality is improving every quarter. We’re getting stronger. We’re deploying our capital more and more.

So I think what we actually feel, we’re heading in a really good positive direction as the year plays out. So we’re actually pretty bullish about twenty twenty five and beyond.

Unidentified speaker, Interviewer: Daryl, we hear a lot about the expansion banks are doing in the Southeast or the Southwest growth areas of our country. Obviously, M and T’s footprint is the Northeast. And can you share with us some of the successes you have in building density and in driving that profitability in an economy that doesn’t grow as fast as other parts of the country?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: Yes. I mean, at M and T, I view us as a regional champion. We operate in 13 states plus the District Of Columbia, and we really go to market each and every day to serve our customers and our communities to the best of our abilities. And we do, I think, a really good job. When you look at who we compete against in these markets, we compete against the three big guys that are out there and we compete against some of our regional peers and then the smaller banks, but nobody really has the M and T model.

When I look at our M and T model, we call it the community banking model. We have scale for good products and services, but we go to market like a small bank. We have 27 regions, 27 regional presence that have decision making and are empowered to kind of meet the needs of that community based upon what products and services are needed in those areas. And that’s really how we compete and how we win each and every day. So I think that’s really positive for us.

Yeah.

Unidentified speaker, Interviewer: And maybe it’s the tariffs, but when you look at risk factors in your outlook for the economy, what are some of the ones you have identified? And again, maybe it’s the tariffs because it’s so new.

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: So we did a study with some of our customers. We surveyed about 500 to 600 of our customers and and said what impacts would tariffs have on you and 17% came back and said they could potentially have a negative impact with tariffs. Didn’t say they were having it, not real, but it said there was a possibility. There was also a group out there that actually says they will benefit from tariffs. It’s not just one-sided.

Right. It goes both ways from that. What I would say is if you look at, I think the reality of what’s really happening right now is that Doge, as they are cutting FTEs out of the government and cutting the spending, you’re actually seeing we’re seeing we don’t have a huge exposure to this, but we’re actually seeing some customers basically, some of their funding gets cut off. If they’re a federal contractor type customer that they are dependent on or if they’re a nonprofit that’s depending on grants, those are coming through very quickly. It’s not a huge number on all that, but it’s reality that’s setting in right away from that.

Unidentified speaker, Interviewer: Can you share with us, especially with Renee, your chairman and CEO, being involved with the Bank Policy Institute? The regulatory landscape is changing. We’re getting new folks as heads of these agencies. It appears that they’re going to be more constructive in working with the banking industry. What’s your guys’ view of what you’re seeing and hearing down in Washington?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: I think we’re very positive, very bullish from what we’re seeing. And when you start with let’s start with like the regulation piece of it, I think the Fed and the other regulators are fed right now really focused on stress testing. Powell has been very open about that and really pushing his team to be more transparent around scenarios and models, talking about potentially averaging results to kind of smooth the volatility in that whole process. I think that’s real. That’s probably going to happen maybe some this year and the rest maybe next year.

I think the leverage numbers will probably get calculated and done in a relatively short period of time. I think that’s a positive. Basel III is out there. We’ve done two versions of Basel III now. The Fed is saying capital neutral.

Really, what is the definition of capital neutral? Because if one risk rate goes down a little bit, does that mean another one goes up a little bit? And how does that really settle out for everybody in the industry? Now in the first two scenarios, M and T really wasn’t impacted by Basel III significantly at all. We really don’t have an AOCI issue at all.

It might actually be above water right now when you look at our mark. So I think that’s a positive. But in the operational risk, what was a negative for us, but the credit side of that was a positive for us. So net net, we really didn’t have a negative impact with Basel III. So I think we’re from our perspective, we’re indifferent from that.

But from an industry perspective, it’s definitely moving in the right direction. And I think the interest around long term debt is probably dimmed, if not vanished away and all that. So I think from a regulation perspective, it is good. Supervision, I think we’re also hopeful to see some positive movements there as well. I think the examiners maybe will have more flexibility in how they basically call issues and all that to kind of broaden it out to really focus on the more material issues rather than calling more minor issues the same thing as a more material issue.

From that perspective, I think there could be more certainty around M and A acquisitions. You saw what Travis Hill did at the FDIC. But definitely getting people in the seats that you can talk to and be reasonable with and they can basically say we can probably get a deal like this approved and actually get it done in a timely manner. I think we’re moving back in that direction and all that. So I think that that could be a positive.

So we are really bullish and positive from a regulator perspective.

Unidentified speaker, Interviewer: And coming back to the stress test, we hear about transparency. What should That’s one of Renee’s fundamentals he talks about. Oh, absolutely. And the transparency, what should if you had to pick one or two areas that you’d like to see very transparent that you see and then all of us in this audience see from the stress test? Is there some particulars on how they calculate the losses through the cycle for commercial real estate?

Or what would be your one or two transparency data points that you’d like to see?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: The transparency around the models, call it credit models, PPNR models, has been non existent since we’ve been doing stress testing. I think having more visibility on those models, I think, is going to happen. That’s a reality. Yes. And I hopefully that happens sooner rather than later and we get to weigh in on if we agree with that or don’t agree with how they’re modeling from that perspective.

But that would be one easy way you could see transparency from that. But there’s other things out there that making sure that you kind of know how things the rules around the stress capital buffer versus what is your real capital requirement, the convergence of Basel III and stress testing needs to get figured out. It can’t be just a discussion with the Fed without actually having specific rules from that perspective. I think needs to be ironed out and decide, follow the rules of actually what you have to do and all that rather than talk in meetings and not really follow something that’s transparent. Yep.

Unidentified speaker, Interviewer: You mentioned a moment ago about Travis Hill rolling back the FDIC twenty twenty four M and A guidelines to something that’s more parallel or equal to what we had two, three, four, five years ago. What’s your view on the outlook for the consolidation of the industry? M and T, of course, has built a very strong franchise, not only through organic growth through acquisitions and has done them well. So what’s your guys’ view on that as we go forward?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: Yes. I’d say first and foremost, we’re focused on our four priorities in our company, and we’re working hard to complete a lot of projects internally. That said, we have been acquisitive over time and believe that that is something that’s really important to us. As far as from an acquisition perspective, we will do acquisitions when we think we’re ready to do acquisitions. For us, it really comes down to is it a good cultural fit is first and foremost, which is really important.

If you look at making sure that they’re a good credit bank, they have a good quality liability deposit franchise are really key things that we would look forward as we move forward. For us, it’s trying to one of our priorities is building out New England, Long Island, so that is definitely of interest. And I get a lot of questions around that, but to be honest with you, we’re spending zero time on it for the most part. And we are basically just working on trying to work our projects and get those finished through there. It will come in time when it happens.

And M and T has a great track record. People want to partner with us long term, and it will happen when it makes sense. But the last acquisition we did with Peoples was a perfect transaction because it had great culture, credit, liabilities, and actually had a lot of positive intangibles that made us all better.

Unidentified speaker, Interviewer: And speaking of culture, when a deal is announced and is closed and if you use the closing date as the starting point, how long does it take to culturally bring the acquisition target into the M and T culture in convincing everybody the M and T way is the best way to go? So I

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: have never done it with an M and T, but haven’t done it a fair amount in other places. So I think it’s relatively consistent. But depending on the size of the transaction, it’s easily, you know, probably two to four years depending on it. And it’s not one and done. It’s consistent repetition of why we’re doing it, what is our purpose, explaining how we do stuff and all that.

We have now people’s performance in our branch system, business bankers are now at the M and T legacy production levels, You know, but that’s three plus years of of getting that there, but we’re there now and all that. So I think it’s just a matter of working on that. It’s repetitive and a lot of training and getting people to understand the why I think is really important and all that. But it’s I think we’re really good at that. We excel when we acquire people and and bring them aboard and get them on top Yep.

With us.

Unidentified speaker, Interviewer: Daryl, you just touched on the four pillars that you’re that’s what you’re focused on. Can you remind us what those four pillars are and how you’re executing on that?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: So I talked about building out New England, Long Island. Next one is building out our risk framework throughout the company. And that’s basically involving getting consistency in our risk system so that we can manage risk throughout the company, credit risk, operational risk and all that consistently throughout the whole company. We’re making really good progress with that. I think that’s positive.

We are working on resiliency. So we have some age platforms that we’re currently updating, one of them being in my world. We have a older general ledger system that we’re replacing. When we are successful sometime in the early part of twenty six, we’ll be the first major bank in The US that will be all on the cloud, will be an Oracle Cloud financial system, which will be really good to have, very easy to scale with a system like that. And the last one is optimization, trying to get better serving our clients from a revenue perspective and also working in the back office and making them more efficient and more automated and all that.

So all those are going on at the same time and making really good headway in all the projects. Yes.

Unidentified speaker, Interviewer: M and T has seen some nice average loan growth through the last three or four quarters. Can you share with us what your views are on loan growth this quarter and into 2025? And maybe it is a good time you had an eight K filing last night, gave an update on the quarter and the outlook for the year, maybe touch on that as well.

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: Yes. So last four quarters, we’ve been able to actually grow loans all through ’24 in the midst of still shrinking our CRE book. We did that by growing C and I in our consumer book. I think when you look at 2025, at least the early start of it is C and I is still growing, consumer is growing, but we’ve had larger payoffs in CRE and our CRE balances are actually falling. And we opened up in the fourth quarter the ability to start booking more CRE and we have a pipeline of 2,000,000,000 coming in.

That sounds relatively good. But for a company our size, for CRE not to run off, we need to have a pipeline of $4,000,000,000 or $5,000,000,000 from that. So we’re still targeting more middle of the year before that grows. But our hope is that we can get balances, and CRE to level off and then maybe get the whole total loan, book to start growing second half of the year would be really helpful from that perspective. On the deposit side, I think the disintermediation with non interest bearing has basically stabilized, kind of bottomed out kind of where we thought it would be about 30% of our deposits are non interest bearing and that’s kind of where we are.

We’ve had good growth in both sides of that this quarter and we’ll continue to grow that. So that’s actually performing nicely. But if you look at our balance sheet that we have versus what we said we might have or a smaller balance sheet because we’re behind significantly on the lending side. And if you remember in January, ’1 of the things I said is if our loan growth or RWA growth doesn’t happen, we would repurchase more shares, which is exactly what we’re doing. That’s what we said we would do is what we’re executing to from that perspective.

From the fee side, fees and expenses are both on track, doing really well, following plan as expected. We have a lot of momentum in our corporate trust and loan agency business. We won some sub servicing business with Bayview. We’ve specialized in the FHA lending, which is something that we believe we have a really good niche in that we’re positive in. We’re adding more resources in our wealth area that are growing nicely.

And then, you know, we have added resources in both residential and commercial mortgage because of the level of rates you aren’t seeing volumes there. But as rates have come down a fair amount and all that, you could see a pickup in that activity come second quarter, which would be really positive for us. So I actually am very positive and have everything really strong outlook from a fee perspective.

Unidentified speaker, Interviewer: Yep. And coming back, it’s unique what you said about commercial real estate since I know you’ve downsized it, but now you’re starting to, like you said, see originations come in. Can you give us some color? Is it what types of commercial real estate projects? Is it construction versus mortgage?

Is it healthcare versus retail versus office, etcetera?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: Yes. So for what we’re adding? Yeah. Yeah. So we’re pretty much open to most CRE categories, office with the exclusion.

When you look at what we’re attracting in our pipeline, it’s a good mix of construction loans. Construction loans don’t really fund for probably twelve to fifteen months, but we’re supporting our customers that we’ve supported for many years. We think that’s really important. And we continue to do that. And then it’s permanent loans.

Permanent loans are multifamily, retail, industrial, healthcare, all those areas I think are positive.

Unidentified speaker, Interviewer: And coming back to the outlook, when you think about the net interest margin for the year, how is that tracking do you think and what do you think might end up at the end of the year?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: So from a margin perspective, we gave guidance in the mid 360s. Right. I would say we are a smaller balance sheet, so that means we have less earning assets. But we have a really good net interest margin. We’re getting good repricing activity in the first quarter.

So I’m very positive in how the direction of NIM is going, and I think that will play out well. I think our guidance is still mid 360s, but it could be better than that as the year plays out if it continues to do that. But the NII is just off because we’re a couple of billion shorter in earning assets right now. But we run a very efficient, very profitable balance sheet. We have a lot of capital flexibility.

We’re displaying that now as we do that with our share repurchases. So I think it’s all coming into what we thought would happen. And the loan growth is going to happen. It’s just a matter of when it’s going to happen. And when it happens, we will be able to participate and do that.

But right now, it’s not there. So we’re buying back a little bit more stock, which as I said.

Unidentified speaker, Interviewer: Speaking of buying back the stock, can you remind us from the capital standpoint, your CET1 ratio, what you’re comfortable with? And then if it continues to grow because of your earnings, does that then lead you to even buyback maybe more stock going? And if you just remind us the authorization that you have today.

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: Yes. So the Board authorized in January the ability to repurchase $4,000,000,000 worth of stock, which should last us probably for a year and a half plus from that perspective. In January, we targeted 11% CET1 ratio. That’s really what we’re looking for in 2025. We think believe our long term target for CET1 is 10%.

Our board confirmed that in January. We think that’s kind of where we end up long term from that. Recall that we did opt into stress testing. Yep. You know, we originally opted into stress testing because our exposures to both CRE and criticized loans had dropped all through ’24.

And those are one of the higher categories that get losses when you go through stress testing. And we thought our PPR is performing better and we get credit. So we opted in in the belief that we would actually drop in our stress capital buffer again in ’25. We were one of three banks out of 30 that actually dropped in ’24. So that’s why we did it.

Now that we got the scenarios, the scenarios are not as harsh as what they were last year. They actually stress CRE from 40% losses to 30% losses. That will be a significant line item. Sure. So, you know, we’re hopeful that we’re going to have a nice adjustment to stress capital buffer when we see the results in June.

Unidentified speaker, Interviewer: And does management want to keep a certain obviously, you’re required CET1. Is there a comfortable level that you like to run with because nobody wants to run at the required level?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: Yes. So the way we look at it is 10% is our long term target. 10% is what we feel we need long term for M and T to operate. There is a level below 10% that is our hard limit. That’s 8.75%.

So once we get under 10%, we have to earn and try to get back to that to stay above that target level. But the hard stop is at 8.75 That’s approximately 50 basis points under the stress capital level and all that. So if that stress capital level comes down, potentially, you can adjust that limit down. Sure.

Unidentified speaker, Interviewer: Yes. Let’s move over to credit. As I mentioned in the opening comments, M and T has really distinguished itself on managing credit very effectively. In your investor deck that you put out last night, you show how through the cycle how well the company has done. What are you guys seeing on the credit front in terms of potential delinquencies or criticized loans, all the different metrics you look at?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: So back in January, we had a great 24. We dropped a lot of criticized and our non accruals dropped significantly. We signaled in January’s earnings call that we would continue to have that drop, but maybe at a slower pace just because interest rates were a little bit higher and wasn’t sure how that would play out. From what I’ve seen to date, I feel very confident that we’re on path of that. Maybe we’ll exceed a little bit over that.

I think that’s a positive. So we’re still seeing lower criticized, lower non accruals coming through our books to date so far this year, which is a positive. I think that will continue. Hopefully now with rates lower, that will maybe facilitate that even more. So I think that that’s really good.

If you look at like from a loss perspective, losses in CRE last year was pretty de minimis. So far this year, it’s been pretty low. We really scrubbed the book backwards and forwards and believe we’ve pulled out all the really tough credits. And while we still will have some losses in some CRE categories, we don’t think it’s going to be significant losses there. In 2024, we did have some large losses in C and I.

Five out of the six largest charge offs that we had in the company came from a leverage lending book that was backed by private equity. We have since reorganized how we struggle or structure the leverage lending book. So it’s all centralized. We had pockets that weren’t centralized. That’s now centralized.

And usually when they’re centralized, we’ll get on top of it when we see things happen faster. So we feel much better that we can be ahead of that, which is really, really positive. Consumer side, we’re still seeing normalization. I’m still seeing higher losses. People at the lower end of the consumer is still struggling significantly.

We don’t really have much of that on our books at all, but you’re still seeing normalization in the RV book, the auto books, even in our small little credit card portfolio. So we guided to the same charge off number that we had in twenty four and twenty five, 40 basis points, but the mix is different. We’re going to have more consumer losses. Some of it is just because consumers have more losses, but also because of the normalization. And then we’ll have less C and I and CRE losses as we can basically as the year plays out.

Unidentified speaker, Interviewer: Got it. When you take a look at credit cycles, you and I have been through a few of them, this crazy lending that’s being done before you get to it, you know, foolish underwriting, Is there any evidence that you’re seeing yet that some of competitors or non bank competitors are making loans that just don’t make sense today and, you know, in a credit cycle could be the first round of loans that, get into trouble?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: Yeah. From a structuring perspective, we’re going to use our structures. So, I mean, there’s always people out there that will do structures at a higher risk than we will do, and that happens each and every day. I think what we’re seeing right now though is on the CRE side early into the year, there wasn’t a lot of good production of CRE possibilities that we could lend to. Rates were higher and the ones that we did like were super competitive such that we’re going to make our hurdle from a return perspective and all that.

So the pricing and the competitiveness is really ferocious out in the marketplace. So there’s just not a lot of supply. With rates coming down where they have in the last week or two, definitely frees up more ability for people to do more CRE projects potentially. And that continues to come down more. You maybe have more volumes.

So that might ease up a little bit, but early on, it’s been brutal from a competition perspective from pricing.

Unidentified speaker, Interviewer: Moving to an area, Renee in his letter talked about private credit and regulation. You just touched on leverage lending with PEs. What are you guys seeing in the private credit space? Do you bump into it where some of your customers actually normally would have taken down the loan from you, but rather have gone to the private credit? Yes.

So when we see private credit, we compete against them, but we also they’re our clients

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: as well. So I actually call them frenemies from that perspective. From a competition perspective, it’s definitely clear that they do win and get some loans from our middle market customers. That’s real. That’s out there.

Their type of lending is different than bank lending, though. They tend to be more longer term, more permanent, maybe more subordinated, tend to live with maybe rates 300 to 400 basis points higher than what we would do at the bank side. We’re much more on the shorter end or senior position, kind of more like a revolver. So sometimes we are both in the transaction. Sometimes they take the bank out totally.

It goes both ways. But even when you’re both in there, you know that customer is a higher risk entity because there’s more leverage in that company and all that. So that’s out there. From a customer perspective, we lend to those entities. We have really good relationships with them.

And from a corporate trust loan agency business, you know, some of the growth and success that we’ve had in that space is basically directly driven by private credit because of the servicing fees that we get there. So, you know, they’re really good core customers of us as well from that perspective.

Unidentified speaker, Interviewer: And most of the lending or the lending you do to them as customers, is it working lines of credit for them or do they take your loan and go out and buy a portfolio company or do they use it to pay themselves dividends?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: Typically, we’ll fund an entity for them to basically use to deploy to make investments or acquisitions from that perspective. So it’s we’re actually giving them the capital to and we’re in a more senior position. A lot of times when we do those transactions, we actually have more equity in the structure than if we were to lend directly to the middle market guy. Right. So we actually end up maybe in a stronger position.

Sure. But then we turn right around and compete against them too for that business.

Unidentified speaker, Interviewer: We’re running out of time here. Maybe one last question is, when you and Renee and senior management get together about creating long term shareholder value, what are some of the metrics and focus points that you guys talk about to create that long term shareholder value?

Daryl Bible, Chief Financial Officer, M and T Bank Corporation: I’d go with kind of if you look at Renee’s shareholder letter, we talk a lot about fundamentals, really how banks should be run and how you operate. We focus on how we allocate capital. So we first start with supporting our customers and communities first and foremost. Then we make sure that we pay good, strong, consistent dividends. You hide in that in the beginning, not having to adjust our dividend down during the great financial crisis.

Next is I think we’d look for acquisitions if it made economic sense for all constituencies and was good. And then we do share repurchases. So I think we’re good stewards of how we allocate capital, having good liquidity both on balance sheet and then as a potential funding source and being able to liquidate. I think you see that into the system. In the letter, he gets into talking a little bit about as more and more loans move off of the bank balance sheets to these private credit balance sheets, that’s really limiting the Fed’s ability to actually put liquidity in the system in times of stress because those assets aren’t pledged to anything within the Fed system.

We’re big believers in how we

Unidentified speaker: do and go to work each and every day and being very transparent in what we do and why we do it and all that. So I think that’s really good. When you look at the key measures that we really look at for how we run the company, it’s three measures. One is return on tangible common equity. Second is return on tangible assets.

The last one is growth in tangible book value plus dividends. I think those three measures are really the right way to make sure that we’re getting a good return for shareholders as well as others in the company.

Unidentified speaker, Interviewer: Great. Please turn in a round of applause. Thank you, Daryl, for coming.

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