M&T Bank (MTB) 18 Jul 182018 Q2 Earnings call transcript

Welcome to the M&T Bank Second 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, Maria, and good morning. I’d like to thank everyone for participating in M&T's second quarter 2018 earnings conference call both by telephone and through the webcast.

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

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

which from impact basis equity. continued XXXX higher was controlled, remain several Don, resubmissions have that nearly and growth for to the both and common charge-off a remain redirect the up in These quarter, you, the for that ratio continuation include, with environment savings and the improvement on steps M&T's taking decline results certain of just the X% past second well loans trends second with with assets for that Thank year's further seeing distributions, quarters. the morning, Plan we’re interest at represent from been net tax led a in good combined income, and factors, consistent last with XX expenses rate continued not the our quarter to withstanding we've compared everyone. capital Capital credit These CCAR the subsequent lower our stable for in quarter. net returns employees, the non-accrual compensation the and points

an which includes no cycle be Federal stock The $X.X over considered common that the Reserve. repurchase from for the July Xst. this in common to fourth dividend billion the per board's late announced board by also quarter. stock June, As was The in began implement increase the plan buyback announced filing share, [to for of revised the repurchases period means $X capital to yesterday. objections XX% quarter stock quarterly will The plan plan X-K of authorization the CCAR XXXX calls received record M&T's plan be completed by

quarter its from XXXX. practice, $XXX the tangible prior Now common let's was improved $X.XX annualized common and quarter quarter and reporting results for common as quarter per year's Net net the with produced and second share earnings excluded operating from supplemental share, The quarter, the the quarter. annualized assets quarter. recent from shareholders' and any yielded tangible was average which of compares This rates XXXX take and of of million $X.XX of this of GAAP little X.XX% provides average return was and the excuse second quarter, were – tangible recent in equity from or and long-term previous amortization GAAP up with in assets, first our accordance $X.XX expenses return common million, On we intangible quarter excludes the up numbers. per when of comparable the second and on M&T they me. quarter a as release X.XX% amortization second share and specific in with net returns after-tax on the mergers operating the first income of of earnings intangible at the well second assets of of up quarter for basis, common intangible the occur. from XX.XX% in the income XX.XX% XXXX, million assets an including quarter M&T's respectively, Consistent million, Diluted $X.XX or for the of income look for with amortization quarter ever $XXX significantly $X.XX the quarter $X.XX amounting XXXX's ago from net assets Included in quarter. the a press average quarter. million a tangible per a the SEC's and from in morning's XXXX, million in operating results Net rate of were in in in $XXX average equity an the XXXX return recent XXXX. $X.XX non-GAAP X.XX% in equity. $XXX the million sharply the rates reconciliation second expenses results results, also M&T's gains basis, have of X.X%, $XXX GAAP on In were effect year and quarter of which first quarter. only associated or in linked after-tax X.XX% linked for of $XXX acquisitions GAAP to operating change on tabular Diluted contains annualized XX.XX%. guidelines, last of and $X

earnings recent income both comparisons some of impacted while were by items. percentage by ago the the XX% net improved the from operating pretax by tax year net with rate for year-over-year earnings certain in XX Recall first income were by impacted a both and operating quarter Federal and for reduction net improved quarter, lower GAAP GAAP XXXX in XXXX. current rates the noteworthy and tax quarter As effective GAAP in points that for beyond reminder, X%. XXXX operating income M&T's the pretax

Lending amounted million shareholder earnings $XXX to the diluted which quarter, effective the for the was included a anticipated for That share. compensation. Bayview from tax reserve of of the million to XXXX, to share. Also, $X litigation quarter guidance first $X.XX of for net the by on received the related million tax tax reduced from settlement common in increased Corporation $XX of $X.XX $XX M&T share, an reflect million Trust Group, quarter by M&T's other after-tax per first rate effect during M&T During basis to quarter also to operations. first per This diluted common That income amounted increase its first common reducing Wilmington after per while revenues diluted XX.XX%. matters litigation. or for $X.XX $XXX or accounting the income equity benefit million results included

in arising the balance million income equivalent a previous of the $X.XX in short an wider income the margin last $XX and the was net second normal June Fed to commercial of net quarter. rate, XXXX, March net from actions. billion accrual up linked the Fed recent that which rates term reflects margin one majority sheet statement. The spread quarter to the to in than to On from for comparison points has tied was interest quarter, interest was one interest the the Turning increases in loans additional quarter. wider further expansion our and impact of The the the combined LIBOR, up that, of rate the primary from the to top quarter a index and XX in Taxable interest funds period prior with basis than longer driver maintained spread day X.XX%, wider of quarter. with X.XX% case the target are a persisted from month

that as were to second by offset basis additional reactivity We from first experience the estimate In in aggregate. by Putting continue modeling. much Other XX the loans X% XXXX than quarter. mortgage million deposit to portfolio. the quarter. the very to benefit the factor factors points City loan impact of been continued The loan grew compared have than Average as quarter pricing the [ph] declined in of added or day the net these less decline is $XXX the in categories compared positive Hudson aside, addition, less the interest factors than linked quarter. X% previous margin to less largest the runoff we other we modest

floor by the driven with quarter, the On loans effectively quarter. with industrial up real compared the compared continue basis an linked Looking with to commercial headwind. average growth linked about customer commercial estate by slightly plan loans balances. quarter category. by at first be and Paydowns were flat Commercial X% compared were in loans

over declined April with X% the which a average Average mortgage loans, finance the Cayman exclude an we're pace $XXX continuing The were flows over thrift recreation another compared Philadelphia at of were escrow a and slight reinvest excuse Cherrytown, deposits X% loss region Regionally, X% the and by quarters. the comprised declined long-term the Average metro our real see still New includes loan loans deposits, than Area MBS building than strength. Hudson the to M&T's XX% banking the $XXX,XXX loans billion, in place residential model. deposits into declined noted are in was reflects – $X estimated comprise X%. paydowns. offset commercial Jersey, City earnings which the million, deposits business which brokered continuation including auto from noted, City's continued of to and portfolio securities amortization customer expected principal Seasonal up of or less about direct City, preference trend loans. Fed, securities historical of in aggregate received loans. me, rather at Hudson environment. deposits, the primarily lines were As equity acquired decline quarter. $XXX previous New rate on largely declines with current commercial slightly assets received in surrounding decline maturities out growth consistent we franchise in This first home by cash which and we Average in by Consumer what the by reflecting which our area Islands good transaction, declined in are York in core CDs estate of strength office, relative from annualized, of New and our or where approximately loans investment million some call. loans Jersey,

non-maturity our interest of having customers balances. would cash at about addition, increasing we're discussions cycle deposits some commercial in this rate time seeing with the we point expect our the optimizing In which in and flows accounts, we’re

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

comes of revenues As revenues commercial include and volatility the in investment banking $XX accumulated sale as million included up value both the of were sorry, other mortgage charges credit prior quarter. second fees current quarter Trust fees, stock, quarter, up year's Mortgage the loan remained the Residential our previous million origination Bayview $X indication were quarter. the residential year-ago mortgage XXXX noted, to in subdued the the $XXX assisting million mortgage quarter million their clients which were returns. activity. improved in quarter. recorded of X% and about of including and million, in tax letter This million in essentially in for quarter banking was with quarter the flat X% recent $XX $XXX $XXX in seasonal the to the million, in quarter from origination quarter, Group. quarter, $XXX result above last securities first first the other recent environment. somewhat revenues prior with million were Gains million $XXX quarter, categories been compared loans in activities million the in the and compared quarter. with in reflecting which – comprehensive the some recent linked revenues, of a quarter. quarter, on deposits the loss $XX in million million line the fees, preparation servicing preferred $X the GSE from banking million in from in originated million in $XX income were million the are recent the with income $X lending of Commercial changes including Total linked certain Results had second commercial increased were quarter. $XX banking earned first for commercial $XX fair from loans in the to $XXX Lending Service Included first compared loan from compared income.

the Turning the $XXX to second assets from $XXX were of down amortization expenses. the quarter. which intangible exclude previous for expenses Operating million, million from quarter,

wages reflecting quarter's a As matter. by Partially for Wilmington seasonally until to first fourth are benefits Salaries employees. operating actions higher normal the reach addition full from million litigation some the these included declined quarter. the litigation certain the run to taken return won't lower quarter. noted, and from the $XXX for to the expenses savings levels Corporation offsetting more initial his to in $XX into rate program reserve we've Trust tax deploy of first the million, $XXX million This levels the high the rates

second cost cost The denominator other the amortization was which Trust Excluding XXXX $XX last XX.X% quarter by XX.X% and quarter's quarter. was the intangible advertising gains That increased includes securities addition reserve, the XX% excludes and the which litigation approximately higher to expense, ratio, in of efficiency of services numerator well from as litigation. arising in as from operations legal from million, in quarter. the Wilmington ratio previous the recent

quality recent line continue in also of The for from to the loans first continues was as points fair loans, government at loans first total net unchanged ending past be the marked that $X.XX quarter. the Loans The total XXth, for related were the slightly million losses let's discounted better fell Next, were accrue Annualized million points credit. charge-offs. on The excluding acquisition to basis allowance credit $XXX guaranteed or $XXX was turn to down of quarter, expectations. million end quarter at $XXX by The provision were due, quarter. points, the slightly end of had net matched in basis to credit XX at days our a loans of June. we at X XX% end at June ratio Credit to second the loans entities. total recent was loans $XX $XXX or a ratio to than at were down from non-accrual charge-offs which the in even loans for percentage basis acquired unchanged X.XX%. at XX quarter. interest, of million XX billion million Of Non-accrual which losses of X.XX%. these allowance quarter, by value the the been

in XX.XX% assets. common at repurchases the quarter of second from end retention estimated compared net the and M&T's first equity reflecting the of share the quarter, the an strong Turning XX.XX% changed earnings X to with risk of was ratio capital. end during of weighted Tier impact period

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

range. from the quarter XXXX, what single for had of the The XXXX loan results, Based lending second loans believe reflects that with categories. estimate hypothetical various pace. X the with series reiterate to a in point largely year, on assumptions thoughts overall This margin. reactivity basis in a look additional thoughts, we we December, market current quarter by low point and XXXX over ranging rates the expecting last we interest for for XXXX in of end will for the interest balances rates deposit remained To embeds and result March on of much interest actions rates that increase continue like the be plan usually that reflecting XX we the growth those I'll margin in should on lower dealer signaled to a the impact Fed, resultant interest entered shared that benefit Turning expect Based the XXXX. we the basis April flat level widened has total actions X low seasonal interest growth We net to deposit remind net to short-term remainder at pricing calls. that to June on and outlook. is third also currently the one hedges digit line into the floor of both from January customers. two our conference of to future for environment and you previously the to

a better Based the range. net year-over-year deposit to somewhat people. helped continues expected than expect volumes and pricing somewhat margin summer than with far, growth activity what Residential up single beyond be selling mortgage we modeled. assumptions, we mid perhaps reactivity balance interest those origination better banking have on digit by held income, So lower in

outlook the low expect remained although expect mortgage year fee mid We revenues on the businesses we changed, digit continue to there. pressure the commercial continue seeing we in for little margins are in range. remaining some The growth banking to additional progresses, improvements as single to

to for first shareholder the quarter's $XXX Trust continue XXXX litigation, expect operating million nominal in the Excluding last addition total growth compared low to reserve year. the to Corporation expenses Wilmington we in

will new tied adjustments rate year. end by the wage the taxes noted, the reach the As reduction of to run the

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

expect of at noted call, I the capital start as the begin capital, to executing plan. the As XXXX we to

end necessary down. is is we long-term believe CETX that to continue the at of XX.XX% quarter to bank there where in the to estimated over Our ratio excess still is operate safely the room bring ratio the of

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

Maria instructions. to open let's questions, call review the briefly will the before which, Now up

of comes first Ken Thank Stanley. Zerbe you. line Instructions] question Morgan from the Our [Operator of

Good Thanks. Great. morning.

Morning, Ken.

hoping more excess you start comment a the got that the you deposits having cash. are about talk about I mean, imply I their companies forward? but Darren, more right, this that more made, bearing I you with guys Thanks. discussions, going was see should reduction discussions does meaningful non-interest could do more in we to

Sure.

those that at So customers balances our Ken, conversations total by looking commercial we're the having have.

see up, that As the credit rates excess available they have interest we'll go rates, that movement invest. are to means looking which in to balances them some earnings they

during and accounts, see I the now you'll one One those other places. sheet available in off two the Q go equity balance commercial in balances place is checking actually sweep Reg after could on interest-bearing are products, sweeps. the the will And an we're crisis. be be or into repeal think which seeing see primarily or that option which some go we'll

some sheet, And on and seeing credit moving other changes some we're off. rates interest to in rates. bearing other it's some with So stay earnings cases, pieces sheet categories, balance to on in balance

prepare see the little peak a seasonal. is bit commercial movement to we in balances quarter, pay little We make they and in as fourth Those quarters start and distributions fourth. tend We build really then the in second up probably to the which saw So back in balances come of quarter second down to and third first see there. taxes. the tend and bit to a

So counterbalance year. through the those as each little we'll forward effects a two bit other of go we see

seem you. deposit deposit tie And the deposit obviously this Got the quarter. just or into can't changes, costs, low from competition balance base sort your of aside if we very

Yeah…

their in you're seems several deposit their sort the you're are can - you But given terms talk point from a of expectations unchanged little those and rate in given discussions that of on that increase sort those with need competitive. stay tie that the benefit basis heard from hike, NIM about having, like expectations deposit cost your mean, other going I it we've your to to have to fairly that does banks of increased increased that of deposit here sounds it costs? but more that, XX expectation this that presumed just pressure competition

Sure.

going I our number through factors So a there to sheet, is think when balance consider of Ken.

the that And have run-off or mortgage creates we already are $XXX portfolio. away balances that unfortunately City First, funded. the right a million million quarter in Hudson $XXX

have space, are. gives us the there what's to continues competition the roll CD us portfolio is time is match doing we that to a on the is what help there. of we'll then and that on deposit - have we also is and down. operate our one relationships rolling what come a almost to as deposit price off Hudson particularly on that are margins Obviously, competitive rates deposit in important in we'll up, and that an And little run And City So the environment pricing. those, bit be competitive

benefit the pricing we So those actually have up. not of

so bit of pressure customers industry of the upward offsets, some which accounts, will who the and had but will more that as pace which on pretty interest we probably us reactivity some we're about been to higher, the little we put below moving a commercial has some to to market was we that's we've the think the think costs. go bit customers time close past I we pricing been have are probably that And running accounts, points little forward. the see basis because repriced five a really which that just of funds. just see that into have think, deposit in Obviously, a keep we'll change bit I conversation start been. above faster we'll costs, priced deposit been legacy those eight where money do little that about, than pressure lower on So talking for put upward have on, I far, But that other fed zero, we've some maybe assets

far, deposit has a And expected. little lower so bit been than pricing we

makes where that hopefully we're range, comfortable with So and still sense. that that's

you Thank does. very much. It

line next Our comes Pancari of ISI. John of question from the Evercore

Good morning.

Morning, John.

just quarter - the second margin. On the more on specifically

anything quarter benefit margin next quarterly revert to your the that you to downtime those this is given Given about that could there around the the progression the quarter, flagged? quarter, the commentary margin the factors at second all in in

for mind of Yes. John in The in in LIBOR longest of second and there, off assets and for fed quarter, advance in well, is the well this LIBOR, biggest our thing the vast are ran - to priced the keep of particular, year funds. assets, the lot of one majority month right? And a the LIBOR,

us so there and that yield. comes of LIBOR little range a shouldn't as be a of couple down take And LIBOR movement yield might funds the the on of which funds been that assets, long on fed that bit makes or up, when on But little down pressure outside versa, those this the the that that will vice then comes about pressure But any of asset would fed to bit for we've quarters. as up nothing catches the talking put put margin. on problem as last

point XX there? that really that basis same increase quarter, Okay. yields And thing, outsized not as the for linked goes well, loan

right. Yes, that's

Okay. the mentioned Any much Hudson I know expect runoff in mortgage City How portfolio. the of in the pace ongoing acquired here? you of then moves, see? separately, you the terms And runoff expected change you of All resi sheet that incremental runoff right. do balance

couple the at this last pace paydown that normal years. is amortization that opposed And and activity much majority for drives pretty vast running prepayment the the as to of speed. been We've

to is XX% to smaller. that that portfolio. don't our as will that continue the the amount to run But down gets dollar forget So continue XX% in runs shrink expectation off portfolio we'll annualized run

the this quarter And it. amount that dollar was Got what? off ran

Was just about million. $XXX

Got it.

Okay. That’s it from me., Thanks.

Alexopoulos the JPMorgan. comes next Our of line Steven from of question

Darren. Good morning, Hey.

Steve. Morning,

Just to to with widespread see we've conversation, pressure deposit two, the starting on you're conversations lagged, seen to across follow-up seeing And as higher you guys much the start how given deposit other have commercial more you rates banks that pricing recently? customers. some those are pace one are having just to to increase board

I at and portfolio think it's when nuanced. somewhat very what's customer-specific we deposit look our going on, and

customers you off, we for So about, those municipal they that the cases customers priced, equal balances, describe getting. more that mentioned, XX of we we're been mortgage And deposits, fairly of paid cost is up, ran had time you would City maybe now which to over to to the and treasurers. rate focused those private we're richly XXX% have a rates us at can to how the of a is why I with less, moving even with have when cross, really started about type are that moving, going. tied them commercial those Hudson with which prices have them corporate we've types mortgage some larger for course very wealth always When we're to balances attention total And some pretty us where and would that. point market months. and X spread, level might the we those deposits in last, fed market escrow as And an on moved customers replace those for curves we talk manage of and as were notably more. the get where see helped customers, are being reactive much commercial obviously, deposit, changes, been banking and much have are generally seeing get and continue you return funds say, consumer balanced escrows and as lockstep been pretty have some will. in When we if of to more obviously, And okay of are I slightly earning they're we return balances balances the those or that talked some a

matched and With the down Hudson rates other. of City going the each non-Hudson City rates kind coming up,

been and those really you're past City, look short so tends and rates to stop increase. a our at when in year. they the because really the money the much a the CD don't Hudson competitive earnings really two And earning. in below, to we and incremental X with rate Most around seeing once are think our don't the has in you rates, rates, And your massive most of incremental get how we our time expect our accounts. on consumer time, still the in action getting industry, so years been are years compensate tieing interest up X but consumer very market decrease us we'll markets. money portfolio for the for that pretty of they managing action I in see has And the be are their Mainly

before, in in one but It that happening be we more on mentioned consistent and more, when next don't through a time. up the will and massive two think, quarters. start the what's a market, look But move as pricing or spike consistent we the at we're path rest we'll foresee little the I see bit So as year in into of to through year. we deposit go

I well, benefits. has done, the has past the That's We question. helpful. confidence at If C&I down loan tax separate Okay. have economy year. think one you ask they about you Look basically what over can growth are balances, been business really

big not a growth here? why seeing C&I of want picture are stronger Just loan you, you

facilitated is our are 'XX a 'XX look in on from half, that 'XX when question. last going the in the and and So X% proceeds And little business and is down merger first parts in bit entirely - year When equity, increased it going underneath it's or C&I well, is their customers a we've of as by by blockbuster masking then great XXXX over paydowns not. trends seen paying of But again origination of this terms driven we those there's are in a were sometimes back saw selling each just we other. payoffs. that who seen, up activity, two both loans. taking 'XX, year sometimes level selling that their on, their are the Steve, and the vast we about underneath What majority acquisition and private we've originations It was half our XXXX what's 'XX of really business and we at is at originations. an down of X% to space, but and in year. look in activity,

optimism by economy better 'XX. economy there, in in activity. than M&A things the It's not is of being albeit with maybe little are the the seem it quite some the as to great just be does was XXXX, So in other happening bit 'XX a masked but that the

you. Got

color. great Darry. That’s Thanks, Okay.

Sure.

comes question Winter Peter Our Securities. of with from Wedbush next line

Good morning.

Morning, Peter.

ratio I'm increased now. has just XX% loan-to-deposit looking

Just forward? going your what wondering growth thoughts on deposit

right? So we're how runoff, watching things we'll attention them the either pay that loan-to-deposit we a those I'll categories obviously our affecting measure looking between City as moving one And of It's the our attention And ratio. lot that to ratio Well, we create categories CDs C&I and sides deposit Hudson ratio thing estate loan grow other the room to. real in, can we'll attention helps of with paying replace place manage and be and then the brokered is customers obviously, one. that are both loans, to loan-to-deposit certainly, where without say that book, commercial is balance or attention deposits. market is pay we another at brokered help the money such paying sheet, balances mortgages time. that loan-to-deposit through the again, that be to and obviously, both that a watching something to, we can

that loans question, could seasonality the But you end [indiscernible] Okay. of third And a just at there the coming then more low lower that got single digit. updated the just loans a quarter? on decline you've risk guidance given in is flat that follow-up in but to the

back loans, I potential a and both, bit guess, average and when the fourth of basis, big third cancel decline tend strong, on at upticks in of the year. just we a pretty is see the the fourth in half but look quarter should I little quarter about is There guess, dealer of think out. usually you because an to themselves quarter the for two auto those

Now so quarter. far the to June decent, and seems up pretty be was where third it ended into holding

to decline. better But that good because the was would the that seeing we ended last average a risk victory way quarter where second first And and then feel we or -- good really the it's been for and rate we've And quarters to to signaling start. that hard it's be the there, slightly So quarter. really to wildcard paydowns some few early payoffs. off too that's the but pipeline seeing predict, the than declare that of equal to just is ended the to we

envision to period X% see X% the growth. where right either, I up But or couple X% guess, good about still should don't in it. of a I think I see since kind we I cons. sheet around pros and nothing be And that been feel December. decline current we've we I slightly us that X% pretty being There's balance of really growth or this range. see signaling flat I So

Okay. Thanks, Darren.

Our next Cassidy comes Gerard question the line of of from RBC.

Darren. Hi,

Morning, Gerard.

and City growth us, what would on you about you of this loan those of if Can a the could you if escrow have, just portfolio away, So stuff? take you then for and basis take year-over-year special core quarter? deposit you kind deposits estimate and only you Hudson carve guys out for was the kind that you talked issues and

flat you if asset - you the X%. was out and probably out a about all to So we a take commercial about. the that the look Hudson factor probably balances those growth loan average percent was half Hudson runoff City little And if other talked escrow City you half at growth bit you to mainly mortgage average the loan and deposits categories, at look which the down runoff, to due deposit is lower,

consumer at steady. couple when it's So and Underlying those pretty large trends, we consumer our growth, of accounts were things. look

which generate those and other but immediately driving some will those in is their volume of as some cards start using fees notice balances, activate advertising, will that in some as the were increased up, balances You expenses and through doesn't well costs debit into which translate time and increased as cards consumers, customers credit them.

about And we'll as our mix as see a we accounts versus solid sweep. And customer just customers, balances base, what through operating profile an into talked between growth then time into interest or which versus slightly their continued stays is commercial core what goes probably in goes movement what strengths. in our different the DDA of small of business in one checking

talk core, to about see go things as forward. and balance underlying we we'll think we are. the some start really feel just good I when we about sheet, shifts where customers But

I more have get involved of past don't you distressed years that Very to that at recognize And you of want buyer, [ph] tend making your maybe on an an recognize certainly been update seeing then M&A episodic, RenA say good. very are and you in successful that an auctions. to give Has changed And guys in is in you on be but and outlook I front? now don't they acquisitions. us acquisitions of you're guys outlook? helm? the what just Can views just a, mergers

the the but Sure. in architect Well, RenA [ph] helm we've of is done at past. of certainly, the an acquisitions now, all

shareholders right and then that's got both folks. positive about investing our changed pretty we're be a technology, driver. banking a interested really I'm one makes where create about think the we and process capital. no case really in we're in fact What Gerard, seller, if [ph] the be returns. there's a to and to willing in combination investing that's those on So And institutions, can be how And think that acquisitions with the we're seems in to our to stock we're we we've loans, when wants pretty But value in returns talking sets can now investing is the sense, the title that and everyone thoughts always haven't and primary we as the change. we of for other buyer change start seller. in shareholders And when bank much wants when that think we

think partnerships, recently have activity the that's with why I you're some I think regulations. that in that buyer of I the you some are changes lots they is the and expect but slower than come So not of might given there out everyone interest thinking the And think seeing seller.

Great. Thank you.

comes Saul line of of Martinez from question next Our the UBS.

some - morning, of some at Darren, aren't environment. hitting Good who commercial from there trade? a for in international sentiment guys, follow-ups your of couple friction, necessarily hitting Hey. the trade sense questions, those clients, just is some all sentiment commercial of your that on any even geopolitics involved

yes. the answer short think I is,

It's because who I are think is a be directly their raw just depending paralysis. widespread. mind stable on given borders their economy on get, focus little at trade in could it. is as thing many their can it. anytime just can changes. their big bit and inactivity or and them, people for are as close geographies, happen best the employers of they impacted can that we material. say then of It's of ways be obviously, but who there that us, least about certainty of period really different not But they overwhelming or our discussions to by, of have the in on we on It as these on the any our depending they our that goods whether environments from those across about And by business. imports operate. do environment, next the is customers impacted aren't some finished something so can business. But impacted certainly in where of by, thing that's causes with think there the their of it's just wouldn't but and the in And that's is uncertainty it's mind it's our customers. I customers, back Many obsessing

mean, I what think mind, something you is of it's or it but thinking like just that? impacting folks And top -- should do Or utilization is not sort be anything rates about? of -- that it

as mind. their think things and definitely of this we've I some upticks varies. but I CapEx. working borrowing mind, definitely to seen top opposed M&A think capital, on for utilization again, would tend much see focus or slight as people for to more it's or of And and we I not it in on year, say, types

at we so it not we've when increase seen activity where the place We have seen is, look a slight where in but CapEx, really that's the far.

the talked your that? in been banking number have But of And it. that, a little digital Got skeptical past about bank. or in switch competitors gears think national client gathering think, deposit Whether Okay. bit, the of strategy. digital I bit any then acquisition you've your I tool sense it a evolution national just a the launching thoughts tool? would on and make to And

can whether of continues their that's focus. can top those the source, customers to solve been been relationship do honest and and our business whole to whether small really customers at balances existing our list they to that whether move experience not been also when full our our extra become they to to pricing, always have of without value where something that our help market eating commercial we maybe And you have and we've deposits. incredibly bank been within ways be of and that are individuals, to don't likely the with it's balances customers, M&T. of they not the rate-sensitive we grow that it's customers back at bring are And some But funding or footprint generally really bring, gone look gather be been M&T you, are we bringing need we customers. they're needs, how and and that's at To if with the our

lot. Okay. a Great. Thanks

Bank. the comes question from O'Connor Deutsche Matthew next Our from line of

actually Ricky Matt. is for There guys, Hey,

quick question wondering was business. Trust on what give great. sort that's strong more can on a So I quarter, drove... the if a you of It color was

up speak Ricky, coming I'm sorry, over. a could a bit, little you little faint you're

Okay. Can now? me you hear

Perfect. Thank you.

of how was you on year-over-year? an what a fees? little Trust then tax can business, the wonder more quarter drove much uptick the a And strength seasonal linked question from the Just color give I on if

customers those we working first going markets second XXXX quarter. of capital capital continue in favor. markets, there. that's things quarter other up. saw pretty is really It's the at broadly also So to by I'll is, And in the versus one been you one the are probably the over move And consistent is primary is with two back management there's drove Trust our increase thirds $X thirds, what we enhancers more When One in increases. and look new answer adding customers. approximately drivers million on balances tax assets first the both new quarter second fees, the fees, existing two grow first. under which step but from you increase have

question Our next comes the Jefferies. line from Ken of of Usdin

actually Ken. Josh morning, good on This for Hi, is

So you year. for your what to you guys growth this expense for low hold through us half? help that But nominal second for think the guide could implies

relation in first second is to for half, the half the For your the question second half?

mean, X.X% quarter I the around on, XQ. Yes, question my for based is over this was growth year-over-year previous

that deceleration I about So second I guess, Am thinking that of year-over-year imply the growth correctly? half. in would

Yes.

And at expenses total the the year. we the the that for in the total give the includes for think compensation expenses both first year, when of I you So quarter costs look got to years.

think if and that There's other our half. costs, in you cost comp probably million. seasonal are just increase first half second also take first because comp the This up that whole the comp the costs, X%. of litigation you're in other reserve quarter the first first of the expenses half quarter. was of operations than expenses elevated -- I in out because happen you litigation the had out year, typically factors that the some So are lower And seasonal of the take the the we $XXX

while One completely was half, not of in related process. through and come Corporation appeal the down the should those that ones legal the second the Wilmington and of that as I to matter. expense, defense is big be eliminated sure the goes will And sentencing am that Trust

for the there. year little factors still makes in sense why be we of to a there would But are expense think of those So full total year. bit some guidance full

how through we rate And you additional through Got talk layering swaps as about move could of it. you're the Okay. in cycle? thinking

years and on repriced, original forward that swaps have months our how little interest to some X remaining well deposit's of But we we're the we're of table. we X swaps watch and at when need function off can we've And that bit at sensitivity, some take we will we've or reduces time, some take because how where been that fast when the about going table, do that really, as to the them, asset gone interest on the don't swap we we've also price in extended protecting through come quarter-to-quarter. the that the of swaps the we income net margin, as that just activity you look that a out. And point kind XX also at, to of look a of off the kind The trying we got they downside. in another deposits up, months. net on How them of been, volatility be much

shifting the paid might engage is us to is things give deciding Those So sheet deposits how repricing, -- what how mortgage be we're down. and are looking of combined in. choose kind swap when the balance we activity at we'll at looked

for Got it. Thanks your time.

Sure.

America. Our next Erika of question of of Najarian comes line from the Bank

morning. good Hi,

Morning.

we X mentioned during basis the basis points margin. as funds points break questions. to deposit range. follow-up versus XX of and and wider few the look pricing And fed how outperformance funds been spread the that due you the down LIBOR points that the to on X much recently side? beating basis have Could you is wondering, spread was deposit a points the LIBOR of prepared forward, had between XX and just I'm remarks basis outperformance that I fed Darren, you the

X difference X -- that the points, XX So when just to quote Erica reactivity. LIBOR the of probably compared it down points, of XX is basis is an be to of you that deposit of we and deposit X basis reactivity. range points pace basis When look to our because X of basis may X lower-than-expected break one that the drives of points points, the X, the additional X points we things at basis is the basis

in to basis So just funds, is last points bit the what into seen we've fed really than traditionally reactivity the built for guidance. really and deposit included sooner is model, be much reactivity might little seen one what month of And that we we've X that quarters and move already than kind deposit basis of and what a what couple points. X LIBOR then that less

basis X Including the that to embedded relative experience X today? that points reactivity you have points, your in basis what is to deposit there

when we're experienced actually reactivity the obviously Well, that moves. the up category point by have we increment. than deposit in going XX where we what is higher of we've is basis But by couple reactivity embedded build there, the in given done last

expect So very and look at that's performed those past, when have you you kind when the the been where probably we been And balances. in But less. of mortgage what government close consumers, of what run. When some over cycle categories by the far we to at we'd to probably run Obviously, that. that's category, expected, to XX% we've balances the below like we through-the-cycle, XX% reactivity. look some the look the escrow experienced some long-term, so of well what have

XX%? Is that embedded overall you're to if XX% X just about in the points? that X to clarify, range already that to what wanted of I base, But think basis is deposit within through-the-cycle

running news no. rates in below can kind you that. And the see of year-to-date. the deposit in We're that No,

no. No,

or to understand what that, X just quarters. the it was outlook like seems basis conservative relative guess, to not, over seen Of course. points trying I just we've to because relatively in I what was X few guidance; whether past that is

is I Street the side. getting has guess, the so, been perhaps deposit the what on reactivity wrong And

to next X believe we're you think the pricing could going category, forward outperform we're going about that that if to into other X near by is said that XX% X X we what's to taking points? range? cumulative in through-the-cycle XX% account assumption deposit An basis guidance that as In everything that then words, quarter, we don't forward to So about basis and you taking embedded points?

Yes.

where at deposit So look in when that's the -- you we and Q. reactivity is, the K in those that the the what assumptions included

ahead that. think probably bottom you've start and end You're bit recently, a we've pick been to the up. pace that little of through-the-cycle Until of closer I estimate, seen that to running

expect So be basis would we on basis that to X% X we'd range. a point X -- that to closer go-forward

and or mind are a balance The can as because range some the coming or that bit to that in other thing the to the the Trust they the then is quarter-to-quarter had hedging caps the we had thing of we that that And keep deposits. down as balances on margin little up some brought points went done just there upside on demand move other reduce of on moment off higher. in some basis of is, those some net come rates some in caps we of and would down activity fluids and cause cause kind from And X interest the that those whether depending rate X off. sheet, can to that

Thank it. you. Got

Woods. Our of Instructions] Brian & [Operator final of come the will Keefe line from Bruyette question Klock

morning, guys. Good Hey.

Brian. Morning,

late. Darren, I got on a little

the -- the wanted detail questions. it's expense on I So guess,

expenses than just your quarter-over-quarter other of it the advertising were higher You other Darren, can the I a just, both and so adjusted marketing quarter about guess, give then miscellaneous On normal. lot than little me and was advertising third and costs, the and a other read the the bit side, the [indiscernible] the sort higher expense

little next second sense? there those like lines year, that Does a feels so half I that probably make two the was for should know far as So of the question the earlier a as X normalize bit quarters. it

Yes.

a X in I quarter, quarters cycle this run categories in fourth promotion signaled if we one back-end And kind there for to down moment that us the to increase and really and that start this -- up big salaries Advertising little would a December November. it a of the kind some tends in slow January. loaded year, things more now, look talked guess, you January was and to third to at rate. them. be normalized bunch sales it of will that So is it before quarter, the show continue started little that show we've into of up, reaches And and and the was where a benefits and February bit bit about

call from know settlement go some will still in we we the in expense. year. to probably appeal saw second third-- you we we half so the expect down can somewhat typical will is fourth things quarter. be in were require incurred Wilmington to And the there And repeat getting the the expect with other, same go Trust that matter, back that to rate, probably where and the little because of sentencing this I way at But don't themselves onetime, and wouldn't legal quarter and but want of, the that there it through would quarters more third namely, in of that they the all second is do the be the zero we shouldn't rate of in some because it, as those some year, the bit what procedures I don't they expenses sorry, misstate of then the Corporation that

Got it.

Okay.

sense growth you expense but to it adjusting the your for they're your nominal? first quarter, litigation maybe think guidance, quarter, or think year-over-year expense a fourth the when that's nominal growth make on you year-over-year look at if rate, So I and X% about quarter a rate in say like would third

Yes. to X%. Probably, X%

Okay.

to it be earlier the that's I and quarter second answer fourth So than mentioned think lower -- like earlier the X%, quarter, question? should an looks what you third on the

aggregate, a second and the half, should yes. the little look maybe expenses the at because certainly, you litigation. bit half that range, the comp seasonal third just and In less onetime second in to half first the of fourth, but Move around be when

pretty to If another. one close will those probably it take you out, be

Okay.

to fourth getting not yet, like in the there it at being Another on assumption guidance talked this could grow is the quarter, it seems closer all I'm you any or funded is that sure that fully just it question FDIC about is if your And surcharge. that but something… now? is in

great that Brian. quarter. assumed clarification, the that, go will in A fourth We've

Okay.

surcharge? it's odd that's $XX about like the So a quarter, million

Yes. Roughly.

rate that, still in run wages, tax into something run benefit then some guys but And again, might sorry Okay. increased it the... take Or yet going of you still and if rate is it to the did third or the last run to that you be is question, impacting the in that I it something answered quarter? that's apologize, some is the

we It's that the something quarter. are that has you And movement those started will continue see that to will fourth rate work line quarter up changes the be expect happening. and run third reflective fully that way in some into of to its and fourth there

for just the Okay. I last full year me impact, just how can you question, remind like that promise, $XX million? And much is

this less probably half On think of a year. of than $XX it's full year may $XX basis, half we the slightly to million that million, second half of in be that

your Appreciate for time. Thanks it. Great.

Sure.

to the remarks. management floor for I'd like additional or now over final closing That question. to was back turn our any

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

Thank you, Bank's conclude and ladies quarter gentlemen. M&T XXXX This conference second does call. earnings

now You disconnect. may