M&T Bank (MTB) 16 Apr 182018 Q1 Earnings call transcript

Welcome to the M&T Bank First Quarter 2018 Earnings Conference Call. It is now my pleasure to turn the floor over to Don MacLeod, Director of Investor Relations. Please go ahead, sir.

Thank you, Laurie, and good morning. I would like to thank everyone for participating in M&T's first quarter 2018 earnings conference call both by telephone and through the webcast.

www.mtb.com, read access release financial and it schedules Presentations our not morning, issued tables then have on link. on from may clicking the and you along website, and on you the the Relations Presentations we earnings this and the Events If Investor by link link then and with & the Events the made banking we I'd and statements like during comments this start, that forward-looking call before Bank Also, relating M&T mention to industry to Corporation. contain might to M&T including encourages complete X-K, XX-Q, SEC participants to refer a to XX-K, those our filings, discussion for statements. Forms found forward-looking of on and

like King. introduce I Chief Financial to would Officer, Darren Now, our

quarter lower were our in run-off Hudson fees the related in consumer mortgage commercial loan with uptick compensation the in Don. a we've our cost. merger with residential compensation associated of the acquired morning first year-over-year Thank And The interest continuation growth continuing comparatively modestly in trends the equity for over revenues expenses highlight. continued the expansion everyone. the interest good characterized net the stable, portfolio reflecting emerged. have be strong and in with City. economic financial X seasonal results employee and of combined been the results are to margin continued offset was Fee balances quarters the environment with by as income or largely during that X experienced operating you, M&T's of past usual reflect loans first benefits net growth by and quarter trust the following: We

remains excellent. controlled. expenses that, from environment be well good to credit continue very Aside The to

capital of of Reserve, by M&T board CCAR of quarter. an authorized in amended to year's the Federal no million receiving directors be share this plan announced the XXXX As additional M&T's end objection from repurchases the completed February, for early second After $XXX cycle. its

changes with first intangible of assets $X $X.XX earnings in they excluded associated first operating quarter. contribution year’s the Consistent ever quarter, mergers we quarter quarter. our fourth $XX Net little as amortization million shareholders' This XXXX’s reporting recent amortization that for well net per realized assets ago practice, M&T law or the for On as previous as operating also in million net share guidelines, $X.XX were certain produced by noteworthy tangible long-term tax to assets The The per contribution XXXX. the M&T equity X.XX% a of GAAP quarter quarter corporation's year's of compared was results the rates average common basis, average during the for tax were changes per of which and tax quarter. the $X.XX the provision income yielded $XXX effective XX.XX% net fourth of Both million fourth a and including first of first accounting quarter diluted taxes numbers after-tax $X.XX with for and annualized a increased earnings common share by were release results specific equity effect $X.XX last amounted for $XX rates M&T’s or results when million, quarter In share. per press was compared on M&T’s Net the linked per annualized the with million million. quarter or X.XX% for to the average in of This income common tax to $XX share. the benefit with of share. of of the on That quarter and GAAP were in quarters first annualized Included the the the equaled intangible was for in quarter. net at in impacted of of X.XX%. amounting of $XX for share assets. gains common the in and of last comparable in lowered aggregate, GAAP as have $XX supplemental X.XX% of for returns in and after-tax recognized quarter fourth the rates. a with US gains operating the fourth compares million reconciliation million operating the and per quarter return intangible of fourth assets quarter in fourth quarter $X.XX quarter. $XXX expenses results, exceeded $XXX approximately was results approximately excludes amounting morning's and common a X.XX% rate of an million quarter quarter. and the a first on $XX income year quarter for the $X.XX compared the of for Included and non-GAAP contribution accordance compared recent rate XXXX. an common and tangible income earnings tabular on GAAP on to corporate in was XXXX. first $XXX change per Included to from M&T's reflecting tangible net $X.XX which items. from Charitable $X.XX was these with assets occur. in revaluation million, first items XXXX M&T's after-tax return common XX.XX% amortization quarter the results first this Diluted arose of tax quarter and quarter look return its common from of the expenses deferred quarter common only effect Let's X.XX% to impacted SEC’s $X.XX In securities GAAP and the the the with in million tangible contains prior million XXXX, an amounted or as Diluted recent equity. for share. Foundation of net equity This XXXX's $XXX $XXX compensation. fourth income respectively by the the the the million operating of XXXX $X.XX the from guidance average linked in by XXXX basis, and quarter rate any or acquisitions well quarter. or provides result with

million the reserve quarter, per by income common net million share. the operations. earnings year, M&T million first Lending million in cash Group amounted from $X.XX XXXX of diluted M&T’s which recent distribution or revenues after-tax from included M&T arose an security JSD increased status quarter preferred of effect a That after-tax XX%. of on Earlier, of of million $XXX during current benefit $X.XX reflected to $XX for diluted sale reflect of lower reduced gains to During other This received reduced $X Also, holdings. increase the shy litigations primarily per $XXX last which guidance to to litigation. million common to of of basis Similar is preexisting accounting -- a just matters income That $XX tax its or results new I fourth by rate share. to rate M&T’s for stock from realized for tax effective to our the quarter quarter in common of the benefit $XX amounted corporate compensation. a quarter the the tax coupled $X.XX equity last year’s relating the share. diluted note with first That portion Bayview per

of unrealized loss $X the million for a comprised quarter preferred JSD primarily securities equity on remaining reflect holdings first results our stock. Our of portfolio our of

requires through statement New income. securities the guidance accounting through be to comprehensive equity revalued other instead income of

some could in equity securities on gains Looking or holdings in ahead, accounting impact volatility result this from change of securities losses.

by deposit balances were well to on than the rapidly in with points The in positive short-term X.XX% from result balance as our Fed placed resulting much the little income XXXX’s interest fed's the basis as was $XXX recent net equivalent linked target of to margin grows of the March of funds commercial volatility basis and funds The the fewer basis deposits. rate the some statement, income first sheet excess quarter. the up primarily and A from of the fluctuations rates the to the quarter quarter. as quarter. from This in effect cash more XXXX, margin in linked net X seasonal in taxable comparison as in an from average first The reflects the Turning LIBOR Fed estimated a with actions lower expansion balances X interest projections days trust-related of partially the the on point in prior added offset in quarter increase was two million change the rate to XX of deposits benefit impact rate. as points interest of lower the X.XX% level December the margin. quarter had

As shorter to the it XX up is from XXX over interest with previous estimated quarter estate point first seems margin is quarter. loans assets. usual Commercial than Customers the activity quarter, X% impact appears while compared benefit basis today reflected be the real the the slowing. picking to be an of basis X slightly. Average previous declined arising to less activity by compared sentiment stronger with paydown

up linked of were average quarter, loans the real compared loans Funding quarter. Looking industrial primary an category loans construction a with was compared roughly fourth were at Commercial with compared annualized approximately loans X% quarter. X% with or the linked estate basis and on by commercial flat, roughly the driver.

core up rate The lines upstate elsewhere, was the consistent some Regionally indirect demand a portfolio our loans was offset in estate better footprint at comprised exclude New finance quarter. real approximately loans. while includes region, and outpace were the plan Islands Hudson which City. compared loans in largely customer or in loans and in recreation activity with residential acquired softness M&T's declined declines quarters. received are Cayman Encina which CDs noted, fairly plan balances home floor paydown. an continued deposits metro to was previous of office of loans continue fourth Jersey across New by annualized and CRE uniform equity New over estimated city transaction growth little declined Consumer X% our by which York which As deposits, XX% broken and Average and with X% York X% $XXX,XXX the mortgage

the in in income million to first million prior $XXX quarter, non-interest totaled Non-interest $XXX the income. with quarter. compared Turning

quarter $XX million As noted, million losses securities the XXXX's unrealized realized securities gains. $X of included while quarter of recent final included

the of essentially quarter, million. compared and up in Commercial originated first the last operations noted, million Trust I from in million first quarter revenue in $XX the year’s Total with servicing comparable compared activities were distribution about Mortgage above the recent were $XX was XX% fourth quarter. from revenues first down in million Bayview reflecting mortgage quarter $XX quarter, in quarter, million linked quarter That $XX the X% the $XXX loans million $XXX group. in million banking in residential included a banking sale the million recent $XXX recent with As in in compared seasonally with origination and Residential quarter. originations quarter the is other for earned million prior lending income previous revenues for mortgage XXXX mortgage lower $XXX from banking was the the quarter, $XXX in figure million million, $XX also linked million were activity. quarter. including were in flat, $XX the revenues $XX the from quarter.

appreciation and results accounts in fourth be million on business were million, aided from New to the down $XXX the seasonally equity $XXX charges by deposit quarter. markets. the in strong were generation Service continues

Turning which to the expenses intangible quarter, the assets of amortization for expenses. $XXX first were million. exclude Operating

FICA insurance. expense XXXK as $XX the compensation Those the payments the also $XX of quarter and increase to charitable of fourth $XXX to included FICA match addition in high expenses expenses compensation and last The annual amounted of costs, included equity in million employees. accelerated last included for items the the incentive payments approximate The Operating for certain while million annual benefits an compensation year's operating contribution and impact as the unemployment first on results HSA foundation. contribution, M the well litigation to salaries $XX seasonally year's first a a and retirement million eligible reserve to quarter’s related matters, million for quarter same recognition &T reset quarter. recent

basis allowance XX in the As usual, The enter million let's the of million these $XXX quality we past Nonaccrual as XX Charge-offs were our loans for first losses by allowance which recent to in quarter. was second for by the had trends at off expectations, days loans $X X.XX%. as unchanged loans XX, past been seen points. credit by basis with government loans loans. recur embassies. total for X at last $XX decreased for quarter the on due million. declined March be that previously the XX at factors were in to charge-offs turn Overall was a a over four ending to recent fair credit end were also end by March. Next, total quarter quarter points The interest discounted $XXX seasonal net The points the credit quarter, a from point of end related exceeding acquisition first level of years. the included with fourth The the X.XX%. was benign of to higher equals loans year's Credit. XX% billion at the XX not the basis Annualized ratio to million compared Loans XXXX. million the these continue the quarter, $XX charged to with which basis losses of percentage of compared will recoveries ratio net total continues of excluding $X quarter nonaccrual charge-offs loans in we marked at line acquired Of matching accrue value provision guaranteed loans

in X and of the M&T's and during share Looking of XX.XX% equity common period retention reflects decline end from ratio net weighted tier first compared which earnings risk the fourth an estimated assets. capital. the XX.XX% impact at at end repurchases the quarter the was with quarter,

stock During the $XXX common repurchased an million. X.X aggregate at cost quarter M&T shares of million of first

of the Based XXXX with outlook. we our net in margin overall actions call. XXXX the is shared to outlook look remains and to results, additional you total the to widen with from has to low-single January XX remainder over interest we of the Turning on interest of impact of reiterate rates into the points This on quarter we've March rate in rates by first digit hedges year, those for increase level Fed embeds various XXXX short we points a for The December the continue growth and to a the conference much in market estimate last also the XXXX. current with and consistent ranging the following X on that benefit expect like deposit entered categories. term a interest future resultant Based X basis basis interest reflecting on hypothetical result flat To loans to reactivity what pace. actions thoughts, should net series margin. the assumptions pricing expecting deposit

We remaining acquire do digits. has banking revenues expect pricing year-over-year be businesses continues business. assumptions, progresses. to growth both matters, we net on year. addition on for mortgage year seasonal in fee to than those in Residential mortgage The absent higher margin in less Notwithstanding expect in growth the as the rate we loan The last stable margins. interest mortgage and outlook or low banking far, ability anticipate commercial So operating to nominal with additional for compared the sub-servicing litigation total income. XXXX deposit modeled. be gain have balance to low expenses mid-single our servicing interest and remains to improvement pressured we in residential revenues modest reserve reactivity to environment impacted Based volumes could growth sale originations

surge first As second in normalize expect and noted, salaries saw the in seasonal we we to in quarter the the quarter. benefits

pressures or for on changed. credit are little remains industries apparent There geographies. significant outlook Our no particular

present of However, at the leverage. credits is we're one most stress factor in seeing

the the of to end of quarter. repurchase plan capital, capacity XXXX $XXX execute through capital with to second continue remaining million As on we

Reserve results, submitted ECAR plan the for our cycle discuss await quarter. Federal in to XXXX should late the have capital We and published the testing which be

factors, subject Of materially other the events unfolds uncertainties to future. course, what differ which growth, macroeconomic actually regional as assumptions and national number rates, you are and aware, in are and in regarding may political our projections of economic changes a various from interest

to up open call questions. let's Now, the

instructions. Before which review Lorry briefly will the

Instructions]. [Operator

Our Morgan line the Ken first of question comes Stanley. of Zerbe from

growth. starting with loan just the I guess

expectations this is imagine were be to loan [pay half flat quarter pretty, you growth going your the at probably as expecting trend When line you sentiment first run-off with growth mentioned am course. I to picking resi-mortgages can down first quarter for the with stronger mean fairly I but up? of tepid sense because a in filling] am for numbers, I single digit pretty pace if industry the weak weak I trying you pick overall. You is loan that seems still a the growth, the get for for just given is just say guidance up, of loan look mean to

a the little there tariff invest. the slow the conservation changes heading Sure, better back saw of now the have customer When of some importantly we pretty I were bit -- to the within little we XXXX up very coming seen Ken. the late trade our bit the When materially down actions GDP But we has and would it little first half positive of expected there goes see the in since into that slower I would is tax and XXXX. growth optimism the quarter those It not would to outrun would a the consistent in where the the uncertainty trends how that’s has what quarter what’s of looking impact in for pick first and been that year with a through a comments to or thing but where happened bit most base and that of consistent guess we the that based at overall -- year is reform. year our had on, last it moderate them how and little mood tax start those as is XXXX the in of of going we there’s is second expectations definitely the more that’s half unfold. in was bit choose the on paydowns they back originations more sense year been the the and are and half like the of likely have dampened only kind of meaning first with that we of businesses a seems ongoing. our than up enough that half view ended think

Got it.

And the Okay, question. give on Could just a what some the for of those detail of were great. then second earnings like equity given still introduce securities terms holding going you drove what’s they volatility? guess sheet balance question just in that little rational the or year And in additional volatility are is the them more that will forward? you I also holding why holding them

fourth kept thought the law, the moved those little portion and the year value those we had down was. about a you, of exact almost down. at that because preferred a but securities equity and so ‘XX I securities the changes last they date dramatically pretty pricing written since fully are I to them So tax where to we’ve real are we [GSE] When in we XXXX those sold we the were the Freddie, but we Fannie down of for going where and have or had bit get wrote entirely and quarter ‘XX, of through looking pretty think substantial much are

less an So, $XX value current think million, over no value around down maybe that $XX I million. left is $X the to book and there’s a little it’s million, bit than all

and the So, valuation investment get some of there’s if payoff not see reform lot in the road. [GSE] a will down we downside

from of question Pancari John next comes Evercore. Your

trend expected give type the and how factor on much decline much and in little side, On terms that quarter a of in of was of of much the the just the the that it Thanks. more How just deposit of us non-interesting that bearing. color seasonal move? how was through

in commercial. movements quarter of So, one balances factors, related them and trust-related to two the John are the on of and there deposit three

quarter in bit reasonable depending and capital the was demand had markets on first which So, we a the know slower depending move little that in fourth you guys the moves on what as what’s trust from in quarter amount a seen activity quite to the balances around one next the going bit a quarter it than on.

see fourth out their paid commercial a for tends do decline what we balances up as companies as to you that book the deposit seasonal quarter go see prepare first every employees, principles balances quarter, their and as they usually to commercial to commercial the and going in balances deposit Within distributions those their will gets down. happen build into

into return as two seeing that discussions interest they're balances, and We more interest see have the trust-related rates to that bit and the are starting suite some suite the in movement moved a getting up, and non-interest-bearing some corporate and little have commercial, rates treasures things movements in those managing first quarter. that, you’re in combination move a balances, little shown on more their about in down of that deposits the

of pay so are the anticipating we fit funds so interest-bearing other instrument change those any in a funds, As some at accounts, we some and of future where balances pretty the quarters materially our escrow the we replace we from we some will balances them like escrow geography in them move in also movement on expecting forward, cost will deposit on in which movement similar M&T balance are future organizations a our some Fed to to there much balances where sheet the likely those of related terms but with of look balances to be to there not cost quarters. checking see

terms mentioned of growth there. outlook in And nominal I then expense your secondly the side, on know, you

X% is that growth to year for had expense of way best intact or of still so take approximately give you indicated the think terms is about XX’ previously the in think are that I nominal? year-over-year

normal and around number litigation fourth you of kind if it quarter, What had about the we first about the we quarter to we of the expense talked most John compensation about they this so in and would describe That's And to and was add-on what reserve on the which which target. the way as and the we that quarter. think when quarterly happen decide. best to was expenses that tend appear whole X% just seasonal and the and behind do third of grew cost the kind always second discussed those annualize the in math then talked those

still the positive expectations are So, operating leverage impacting?

The leverage intact. expectations positive operating is certainly

next Jefferies. from Your comes Kenneth Usdin of question

points I just remixing balance the If there base sheet. is kind the the follow some on could think earning on, this asset deposits. John Do would mark of you for you still point you that flush given your that about your happen? that the go given quarter bottom about to average forward it the growth of that a of from and or earning could ins here that] net still is that down and that assets had might would to some outs [next out some still

some quarter-to-quarter at fed can $X just that little billion a on large quarter-to-quarter by the of earning moves billion $X at or we’ve of are you the the when tricky the XXXX. $X a be about billion they actually by it assets, billion or that Ken, move seen $X and can those quarter. because They that sit move So, dollars think end related trust

bottom to bottom. the they because just look don't those the predictable I and were to if close close. of now the growth. are reason we lending the we the calling is quite less bit right quite at loan commercial little but site we and loan a we And I'm the not there hold that are balances rate So, know depending in yet pickup are on

C&I balances thing, but which that saw runoff good And we've real commercial we over paydown, uptick meaning this amortization quarters XX% around need XX% be aggregate, that other add we for and in normal in those see in us got we and balances balances. estate dollars or So, last in until another needs to looks bit just nice saw the the it's seeing quarter in loan a of few the loans little out estate been to million of real gets portfolio kind combination $XXX absolute the which categories like factors. a and of flatten And smaller quarter C&I consumer CRE is some to the total a we've that growth to annualized is portfolio. residential

customers think to we that think uptick low And a if commercial kind I in probably and sooner. which the we commercial for we more through overall year, real then we gave are single-digits. close. estate be If flat I not why will then see investing turn get guidance year flattish bit the of we the in activity our little of will is

change And as a pulling growth, follow and delta that with up up are you just already adjustment even the NII to for a but based you on modest know mentioned six you expectation FTE this December-hike through.

on could a points, do that curve that us on through an move type extent the through helpful. basis X help know it will of X be you So, zone better expectations can than quite if modest, fed decently to talk door to forward we continue you to if don’t pull funds and the front of that get I seems

net what's the left summer in I fed of year. end and in late is at forward curves today future at moves, forward an and the mid look summer, interest one increase we as Sure, income to right the late think the

on of one not for net the of interest income the So, a year. our year material will the impact have end the

there increase. one more rate So, is

thought. what December, the what far we little as We bit rate a January and in of when of gave XXXX. funds and we of more as we in which And long interest But in income that we in we much gain income. happened net anticipate guidance in happen were in ton. dollars seeing I a the rates one as with increase we there line is balances so a would think XXXX have in so can into wouldn't is two; it faster originally XXXX, think probably loan upside thought and interest net we don’t as a seen saw fed I expecting than in maintain we came little bit

comes Matt question Bank. O'Connor from next of Your Deutsche

signs] was about have couple kind you this was you about clear whether a it could to and out just of that pretty you of out as if flat, as up year And relatively spend I wonder [cost investment just years. couple you technology the thoughts further was look on your next conceptually the next years. think obviously ramp bit charge. how spend your talk extra-legal listen But

Sure.

we're we're very year to our their website. about late our cash tend our spend back X. early spent last facing spend that to mobile quarter. our in commercial to has see investing for the and of X equipment. tools it think the made that mobile in total, to that look use app the XX% for the has When categories maintaining tools In at technology making consistently as a customers and we'll some We're at live management. trajectory IT new last think certainly plant This XXXX. improvements third Zelle year. bank broad. about been That's we So, customer investing go have second the upgrades well we've we've technology app increasing you When on been into years the where pretty on the terms X as in, over and I is about both in, to talked we quarter XX% growing

given cause help dimensions, help only reason, bank. to We the data the important the any in intended before spike, our therefore and new are are. change it is investments because computers and in customer our there time. you and way commercial their invest giving the to new enabling at the we're easier it's We've origination the very things to of all becoming taking that to get identify. the the tools, of quality costs employees those and putting add a And reduce customers the there time front the the important the for can privacy when time we to. things and in Where technology buttoned think loan or and So, them measured that loan course you pain make And it in minimize for and risk during a because doing big and making systems, or of make rather you lot customers. fashions and will that with don't something that Too bank. need easy the be spend find we're making warehouse. wrong, in change dramatically RMs our to process What interaction then other down. an I it's us employee major consumer the their that application. about together introduced numbers our business. time business risk doing tend to it make parts goes investment. employees If in we've bank be minimizes to and them technology. to the happening the dollars of preparing change way two more cybersecurity efficient. can while and your correct of deploy terms other than we've those information is spreads term account changes make less reduced see wash more that's improvements our amount investments in in to investing investment investing couple investing management fix where talked are disruptions though, it and And we're account work the in we And packages adapt takes been are that you pace that which and and technology which investments that so to in measured just system once short cause the that card measured And has of which account to see in time the the helping that infrastructure introduced on technology at more that credit improving spend to for we more advise other expense aspect that up a those is been open where is numbers us, business we needs. model we're you or don't to in your in new risk have team continue advice Because or we're tools and with helping at there big you be customers much of can checking In investing been to we opening our members think can that procedures consistent space to space, clearly We're service in data of sure in that's thing we and are a least is it's to less we're deploying try changed as along we very we're spike so

new regulatory enjoying just seems some at longer need banks what for that size of term helpful. you risk And at we're where That your environment thing look you, kind that's very strong separately, in. then if obviously CET are this in in soft for for like be is your to And in you been there banks your profile. terms and thoughts of particular X Okay, XX.X. just

Sure.

So, peer where us good moving I say where our when on the be. is of year. target. to range. for middle-ish end the group talked the bit for of that model to a out, we’ve last look towards through lack we in few think And about operate we of of strength we That’s ratios that’s that bottom you earnings, a sit as of we saw volatility the business at peer with targeted the objective our our place our based CETX and would end years, ratio everyone’s But is a last today and CETX pointed

house see the comes last As as proposed right what through come and will the obviously get we the now, fed makes more those we clarity where by asses are were sorted the and sense changes bills we operating M&T. week and the as changes that the as out we bill think for direction, as the from well to in rules continue

Alexopoulos with Your next JPMorgan. comes question Steven from

your do least are to CapEx they they the follow-up likely are talk saying that point? on of they lower at that I coming an at benefit some are from And to rate? in tax increase customers the signaling investments you and what C&I first C&I. wanted When in the run short

Sure.

or C&I their last we So, equipment. conversations our movement mentioned XX in definite about optimism and plant managers our relationship in so been of with has a days, more customers that there’s the investment our based over particular terms with discussion there been on and up in property,

sign are starting take discussions before. as positive been and those the which So XXXX because hadn’t a case during that I

least long their optimism a are income a to that statements. time get more bit will there’s so and enough think I for making to where horizon stick fixed rates So, GDP growth expense speak comfortable, they investments at back that those little customers adding to

year. more go positivity definitely loan the and more that will little So optimistic into translate we demand that we’re through some as a

And are an in you a the seeing lines [drawing commitment place this at -- increase to but maybe an get in to point? line] increase wanting

saw quarter the little some the atypical. rate then probably and not but of more that’s in increase saw During in we commitments, rate quarter the a during utilization first of uptick the commitment

And then second side. one on the deposit

seeing are on you a you’ll the increase a in and the again few saw Thanks. shift indicating, in see stepping in a other modest competition up very cost Are starting quarter. deposit to I environment need here. banks bit what pay deposits? saw they You deposit to

nothing as would at. as depends a them business there I long on and about again of period to excess and pricing which seeing is we rates their credit have they to business is we’re funds the has those of commercial and If is say the quarters thinking conversation given discussions looking affluent customers, category of really getting other they space, a at we appropriate and how more kind -- competition lot the Deposits than there It starting rate look paid are that move. In conversations for fed ago. more balances moving. Sure. is earnings signs wealth they're the for show definitely were more time mattered treasures advisors more new the of absolute moving and are their frequently balances two balances the suite about happening what are than and our

coming. So, see, you can can see that you

and sensitivity side and at checking of interest that there. in savings when in the little online this where the the CD There where the much see far the tended be we typical on are the little for what's of there action the that less look curve start On at you so competition to is to flatness the the slower points, some or has of but closer less when that starting places it’s competition in starting the at we've about is where XX over to about tends action that's get we'd to maybe our prices, be definitely are space seen run point point kind with and continues steepness, money see cycle we models we exception and not decidedly bit to we'll bit couple creep when turn. so the it of to move consumer our of but of slightly are start last but think we experience the kind rates of thought a I it, that with of quarters, relative in those pretty feel XX to otherwise going banks, to of the up can see from market the when months so end deposit, be we certificates think less to the we a shorter basis in curve, increments, XX basis most be talked little end tended last given months price towards things we’re of the we’ve be a XX longer

response to moving been your the of to you the towards end basis at think points that end X lower start we upper Do the the fed new range? in responses X typically If move. of case that’s

the to good I if after we that somewhere changes XX something let think each on XX that place itself but, the I is be is and next right the think believe but that’s will continue for unique one to appearing know you a that range expectation. likely in to

question next Erika Your comes of of from America. Bank Najarian

My is follow-up capital question. excess on first the question a

evaluation evolving current book. As levels? on it changes your or about to what I trading you are us ask think your today you How should how better of as earn and on is. M&T's by buybacks us is thinking maybe is on is where buybacks back give IRR we Could like help at the think period sense stock stock

know approved dividend look to that XX% our a perspective, guess start balance to obviously deploy uptick higher probably share we our we capital position after from best we the not need then been which around the you where that's that future below growth, as our see always payout macro sit, although is dividends and to range. but is is to want way maybe after now in per we dividend, on rate loan is growth. its been the we capital Sure. and have look access going some But And we of and quarters, that deploy XX% capital we we the between but XX% capital plan. deploy I question at business. year's much And special last set XX% today how through have this dividend did which kind think about sheet think what just that growth best rate we through it in few the well repurchases to we historically we be at than tax and changes how when will where in have to below the and share increase customer last ratio was about $X.XX or quarter slightly XX% by then

or we've So, has we the no place some we've should been organizations us to expect advised onto in either risk only capital better own there for that movement involved the now deals. stock than an over, Phil got think is prices right our And just other that buy growth if it to organization is go back risk then on return it other is a case. M&A, of to trade-off but And left then is we chasing and loan the sit there. it on given never excess what's and deploy held

and top And to decision our buyback deploy we to from and our buy. we on house through where of how so the think to that's the get

rate benchmark have Your questions And the that all the while the hold floating LIBOR? side? I’m margin rate up variable-rate or you borrowing its more months three-month on for just if if and month us in exposure that got. small its exposure one If also out on a so, been of LIBOR, months wholesale side. to and to long-term remind some or swapped is asset has one the Could you three wondering you

at There some tends on Obviously, priced they're the Sure, fed it’s And months. look on it’s asset one-month is that side debt of swapped, based and a three so sheet, easy, the book all But been the pricing generally LIBOR when be floating you funds. the to side our are LIBOR. for basis off loans. priced consumer really one-month of is off prime which other loans. the balance

of from Autonomous comes of Geoffrey Elliott question the next line Research. Your

at being credit What though that on comment? elaborate leverage saying? this are even about have talking you little on you that you pretty just a driver touched the they infrequent. you specific been seen haven’t beverages were issues bit Could of you When

we book general. some both to our where further -- a macro observations got debt ratios there that’s but the it's -- charged are those comment and have a anything certainly where we gone are EBITDA it you of covenant that talked the of place in is various reductions where or a haven’t came happen end And that’s really where which challenged, it credit read we've eye an into tends the about so the things and we when the through be where and moving and the seen that's are with our would on a criticized And credit and common to leverage market about do think situations letter coverage where the that has every were range month lot be look in structure above and theme traditionally at are happening at of service and market are have that measures. where we what and Renee's shareholders we in our changes if talked Sure, tended you of to on off leverage. That’s the letter a he not from lot inconsistent the things seeing. to we

Just average. book our the thankfully than we have than lesser

matters that. are maybe talk are where that sense the following to somebody a know you you, up then can I internally that that in giving lot in that Do you a it’s And guys on that cycle? there have you a we watch of macro on steer indicators think think helpful you clearly are you about.

a measure I the say the give you specific some thoughts, that about messages us internal we're I'll a of different we are. look given where of not cycle. in at where are or is late are there internal early some the we it's source debate macro we guess, But And think about signals mid because in I cycle. and

reward typically recovery you always we're and But But to last go just it rebound need collateral our some for has and where of get along were returns. total is when economic much things GDP comfortable far you that and seen that a and there end. So, and seems things are levels, And things since pricing, because kept how to some this and that not at on a that better kept charge post-recession. the the making. way the would last we getting decisions, covenants the number still When And six recession compare us what little the the is when that suggest signal and out months was when that looking looking reform. is our after-tax with challenged. since we've look like would us little to recession, one way the the towards they decisions in we're all and challenges over has or you we're the risk bit trouble time been are see focus at bit at where there returns back we think activity thing of about evaluating credit we we're

grasping obviously the still room got some when saying, stimulus is side to of the positive we go there people we've signal are spreads we've And happened look So, got moving later room in these and then Washington covenants for meaning are moving, things the cycle backdrop some where when start to still when at tend got where from you run. the happen to that's on growth.

the the we process have in that where the thought and are behind we So cycle. that's observations

I towards and way at don't got bit we're the get little think through mid gone a in given Washington. that the own late changes least recently probably is late, Our view have moving we're probably to the but all extended

Bruyette question of Your Klock Keefe, next of comes the Woods. Brian from & line

I sorry guidance have question Daren So, another around on the NII.

So, guys call. I think for fourth guidance when you full on the give year quarter the

modest year-over-year when You same sort level the you do about growth? is the NII was growth, about modest say we year-over-year think said that X% that should of

over I X%, we Fed expectation in I balance like look flattish much what by little more that guess therefore we're to where bit sheet year funds of has the and rates see slightly were a changed course where expansion. think funds year, thinking X% little of a on might X% increase go. which at projected margin are rate gave margin we Fed on given that we positive interest anticipating When we slower the Fed when is have the and probably of we probably a from to isn't now the gone offset gone more net where end given and

you to today earnings average think Do and was you follow it I to be of be could in with the average trust expectation deposits that obviously about cetera. growth some talked year-over-year? slightly guess assets the to make assets said up. But Average movement of some the then loan sense. Got that. And flat flat up et we still

is we and drop, volatility adds of picture. have look about when within obviously watching -- lot NII core it’s great the one assets because their assets reverse guess And with true. categories been capital we out on a what function the category demand but those When relate loan back set. just market that’s It’s course end spend movement activity is really good January. handicap that to and that at over our that putting to the and are markets talking goes our loans margin not the business increase news to we really the total one it that’s to where of assets a and I in trust most coming global and of we’ve the tough really weighted flat where our up, is that of of Brian, impact that really really year to businesses time of which the a the we you is the in anticipate expect where and today the modest that like those

of next Securities. Wedbush question Your Peter Winter comes from

End were still And you slightly of I loan if the below quarter of month in wondering the average. first about period what am growth could loans just talk March?

growth March in in our HX bit with pretty So, saw consistent was January in bit end little loan in better a was a data back we was the the and February. in that loaded, it quarter little from than the fed, what

loan the capital balances off in Now are of period Freddie, But to can we some estate reality depending growth on. go cause fluctuation. assets during progressively real that and saw better within the corp in overall of Fannie end and on C&I to you quarter that get particularly went business waiting can as some sits movement some end period where quarter

to quickly, of just rate that the will forward? And go back XX% very going tax XX% to range

Yes.

the unknown think went about. course the accounting tax into range. changes actually that -- impacted effects good this was still we’re appropriate by and a the specifics we that year Over range think gave that’s thinking But year. were and we’d otherwise Obviously, we that range effect that’s we change the because of quarter last of

Your next Sparks. question from Vining Marty comes Mosby of

question. statement a quick then A Thanks.

up their pill XX you margin and but you high. reality in out, by points when were transient balance on just a in the think assets deposits earning changed was sheet lot basis margin that too go and my have I my around

out NII what it make quarter. this once what number that exactly And with you adjustment so, was you our came was,

comes kind on a we basis our of I last of you one it highest with you your to that pop was incremental Then has got just gives points yielding months your interest lift XX continue the to think asset is that that’s points at be funds points So, up is in get of and your yields you bottom a spread year this but is higher? of my after-the-fact to of and a question basis XX% is is basis low positive create income. fed of paid, coverage from mess of which the out low but in margin of to interest-free XX you that effect basis rate that look margin kind the positive really been that this my it your the that for your which then included XX assets contribution free as and funding net kind if funds points basis X kind lagging very or points X year, of roll X not

and Marty, that the nailed it earning margin thanks for statement, with you the relationship comment the about the assets. between

at liability think and that the other that's non-interest-bearing that you through When go after as balances it deposits, and models we to about rate sitting factored the that’s our time sweep liability that there X we and as that to effect our margin, change modeling as we here X sensitivity in in from there in of into interest and factored into balance asset relates going on that got are funding interest-free a all strong look gets our paying and percentage happen contribution sheet think is thinking some it effect X. around the demand there categories will specifically the impact commercial the changes we well like balances about shift more as down and that’s have calculated them, about spend quarter-to-quarter forward quarter-to-quarter. that function when very sensitivity our there opposed X. the pointed of those probably out and the in see a obviously of basis up. paying balances go trust will funds we a percentage for categories into of or net in interest-bearing the it those balances depending it As into will what of on And to how you go those asset something move The make strong other we’ve a to price is

over prior the can to of years little appreciate X realized No, towards that longer be kind getting of still and of it that that projection X take and range are down just could is our getting like be we’re because kind more bit that this to into feels up XX but that from thanks some just feedback. from spilling the road a into we hikes next quarter so it

of in rule think is funds Marty a there a good quarter. other LIBOR thumb. don’t target moved that think one-months also a I range of so advance we thing happened I that how that was far that fed is and given little in way, range helps above which particular, this as In of that that the forget had

had would more some way this to have five on not you but probably impact all reasons for as a been we that if quarter. that of down like the positive the margin eight without certainly the that think decided the the I

next comes with UBS. question Our Paul from Martinez

downs rebounds, and do negatively number extent Are years. GDP normalize maybe we question and but extent rebounds a even growth of leverage do because over the growth up in and up. the elevated can where point to pay demand already on growth or even at pick impacting we growth where commercial extent loan nominal limit we which the I amongst and economy what leverage the see more of we GDP built loan if a at subdued Just bit loan a credit the than borrowers perk of are is has growth, building level see a up it or leverage on limiting to broader economy is it’s guess commercial commentary if CapEx

pushed when where system, HLC nonbanks might to the were the in the the rules leverage. issue a the on impacting existed the It’s C&I leverage the you macroeconomic markets How and tended think by to the loan Perhaps have nonbanking the in the the feds rules at and a into public capital considered what’s changed. question, leverage use that's at end higher and would banking I growth? they have look great since that markets lot of of banks spectrum system, much the access versus bonds

down tend impacting you I customers. think the that those a to demand, would bit less spectrum of as from come the see but you big obviously move balances larger little

right difference reason customers banks I’m probably categories. of part loan the being It bigger of growth that balances. impacted in sense at of So, in the that you the probably versus look because your the track with makes HX see two are the growth, overall where and small on impact you thesis loan of by in large is when why that rate those that growth you sure banks bigger

is a from more I guess bit deposits and City the costs of the mundane funding on how runoff there process much guess a Hudson a tailwind higher in cost question. little still are Any of a where I the update of we standpoint that left?

Sure, we through portfolio. that are getting largely

our time yet of XX% reprice. Hudson about to down to that City are related We have deposits

we on So, quarters the way the rate movement you in of are and three creeping when City is they we creeping or at are will fed through slow and the we and are City up, what point the increase Hudson in almost legacy deposits price time in have ones look sync. are paying that call we paying where or are the the what's we that. funds And interesting are at the non-Hudson down

City And time so, where are there's we the and little our of on point bit those impact more their deposits two total a on to getting but probably Hudson are funds tailwind cost we this where are year to at going point just other go and start in likely see some deposits And the out will because we to way bottom cycle. rate converge. the

Gerard question of Cassidy RBC. next comes from Your

you're to some us color XX acquisitions. auction in take and potential opportunistic history, mergers making for to into don't on know to next But great and what but opportunity and you can a what be back bidding or from or job episodic, know give I acquisitions maybe get seeing you've you feel and guys there at months? out and guys so there acquisitions forth. we to XX look I you wars seeing a If able an so the get into done you're on in your what are

from discussions, market We are starts the hear that point. this nothing seemed serious but certainly that and hopeful at really there's what to we come some back see

remains of unreasonable and cycle. the probably not to a are credit discrepancy regard to I price. versus we between And that's are there in expectations with a where given expectations think the rate cycle remains be seller bit buyer

going I as And going think rates continue it's margins and be. continue forever. good that are credits But to that on everyone up will expand. are as to thinks

future, people is their accept partner with about matter. M&T for for other which to be impacting to the good willing feeling the So, any pretty they prospects price or might that buyer

those will to and lot there But certainly So, we're things happen. things term. -- for in words And like back to where then suspect hoping continuing and right discussions. be the But said, now on the game. bring I willing of a clear, always get are short as based to not Bob thanks actions in something seller

Wells Our next Christopher or question comes Fargo. Spahr from

follow And see to a approach. remainder the with kind question. AML third-party give using your execute metrics so you. the users Thank house that of you Are regarding taking users. a is that can that that? your you or Thank people strategy of the as your online and measured up active lot can are Can mobile such in issue? of progress you approach question, the you This compare to we technology for or some

Sure.

caring, of folks. contractors. when mission that from mix XX-XX, folks enhancements it's need with primarily will that XX% XX% system an probably So, are in feeding And the is the outside and part And technology ones of where resources or worked party existing might of to have being be that where the about instances the think where around outside. There over and then inside. some is on. where projects, a you technology of team newer other dramatically it's inside. the primarily expertise how and be there we done the and house years it system, augment to But inside project changes we we execute have been knowledge we is on upgrades have can with those outside have vary inside of the And outside transferred to that's then nature project our more combination

and at on you in everything of the that’s out change. going As look the world pace

bit was partnerships move it bit also a we're a about way Rene's more little I outside little think evaluating in and to Shareholder quickly. a that thinking Letter more common those as

a say And that I you and and so is, a And some about about but when have can than past inside what on continue slightly each rates our and active think number get outside around that. on to they'll is we're than probably would there month. to why in back to good the active of that mix go mobile on once figures check the to which XX-XX But is might What in are mobile I exact more adoption, -- exact adoption active more in resources. we sign quarter. the grow way mid-XX% see when done between account get think mobile we it. general, we'll that want in different back in users

Frank line comes from Schiraldi Your next question O'Neill. Sandler of the of

Hi, guys.

terms give Any quarter. seeing surprises had growth trends geographic color loan if loan of in you're in negative? Just a where any in on you any couple growth I you ones. of there seen the quick positive or just either wondered or a

had We geography, loan we by CRE, C&I some difference at for by and growth see really ton look -- geography C&I. when a both of didn’t we

more those in interesting growth bit City. multi-family For for New of more by we we and also York industry or New warehouse trends. a looked guess went space and for or demand saw of some has how CRE we I in and is little metro that capacity see living business and than saw growth we where We customer type assisted that’s York are Jersey through geography by in New gets rather and impacted made that’s stood shifts demand and of I when upstate in actually some continued are that trends after a more thought sense, it that lot back that being guess And to Internet, retail macro we nursing. about the the warehouse skilled because needs when going on fulfilled.

continue is then population ages, And and millennials that’s urban back of empty multi-family. nesters, that As and into and skilled other little one nursing. the people particularly the obviously, trends assisted more demand for living macro bit a centers, the driving

when of lot some action made us of of look kind where where we -- really So at was. to back the sense the a

on sort litigation great. of Okay, in increase The the I what sizable, if And color reserve thought, the fairly any finally give quarter. you call just then items in was wondered could I ongoing should one-off non-core recent litigation? just if And given XX-K in especially disclosure liability in of as the secondly the that at terms we a really potential look just from here? just Bayview Thanks. then distribution, the

Sure.

have earnings release in it earlier expense, other and the the on ongoing to I what other the than we relates on in So, as litigation that any call matters. don’t really comment said

comment on to won't performance organization. be hope that a on at look we but we of going you happen that Bayview the So, that. distribution annual basis was on will that the based distribution, it’s When

proportional And distributions partners, as the we well. to as distribution an a ownership have stake. We get other make the

that that hopeful are but continue it hard and are will predict. the We to magnitude the -- will they timing

you reflective of the back that market positive guess securitization Does business coming year, is for saw the in or this back their distribution coming that distribution outcome I come core Bayview? back and the

the that’s results, course over of the I changed crisis, decade Bayview last at the financial their other lot seeing the of us reinvested that and when and are activities, related part we the it of in and of mortgage they’ve they how run They look the had took in really, lending in turnaround therefore in what change their themselves a and expertise the into you kind guess receiving they business. not No, since in distribution.

Thank for you. return or remarks. I will now any additional the Don to closing MacLeod call

if Relations participating you on call or XXX-XXXX. clarification news code Investor always, thank the any our release is And Again, of at all items today. the XXX contact department the for please necessary, of any area as

conference Thank Bank’s earnings first does you. XXXX conclude That the quarter M&T call.

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