M&T Bank (MTB) 15 Apr 192019 Q1 Earnings call transcript

Welcome to the M&T Bank First Quarter 2019 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'd like to thank everyone for participating in M&T's first quarter 2019 earnings conference call, both by telephone and through the webcast.

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

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

Don, Thanks, of morning, quarter solid for results financial performance. the M&T's first and largely another good quarter reflected everyone.

in the the customers somewhat investments market being and Expenses to with past rate, XXXX. which in year. which talent loans and rate slightly a move in on and market, back purchase mortgage thanks position servicing payoff As buoyed press interest this consecutive of last noted quarter, second mortgage of generally in during in factors. subdued sidelines. both The of the hardware, margin well morning's front-loaded business XX-year balances some growth combined keeping real mainly to the net commercial as the business seasonal a strong the which impact Trust despite middle the strong, both well technology, better slowed quarter XXXX. on showed late by release, revenues volatility, our remained as action for activity of by remained controlled The some our compared include quarter impacting are rates solid due highlights December in was the and quarter, the the originations to first estate year in Fed some

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

retroactive reflected operations. reduction was Our taxes, Group, effect distribution also was from $X.XX addition or provision an diluted the XXXX to amounted fourth amounted treatment share. relating $X.XX to quarter results cash a trustee included from common in $X.XX in plans. $XX for or million results $XX in set results contribution for income results per That million first quarter tax in in revenues Also, in to arising certain per fees, after-tax of IRS-approved effect, included a Charitable change quarter included The as common common loan million M&T's subsidiary's our employee $XX This $XX Included quarter which Bayview million the to per XXXX. effect, $XX from fourth stock other the share. customers' to share. share. a XXXX $X.XX reserves an was million This Lending of Also after-tax ownership common diluted million amounts for or $XX per after-tax of to to first for to million This was Foundation. M&T $XX amounted XXXX's role

of an Group. XXXX shares common vesting from per to or tax quarter distribution million, reserve for per common share. first results $X.XX reduced to million or per after-tax of diluted related litigation. common increase quarter income M&T quarter, the equity million the its effective $XXX effect, share. increased by M&T's million to reflect amounting matters diluted $XXX $X.XX status Bayview in a a the rate Also year's tax That of reduced $XX basis net first a first included during last During of of lastly, $X.XX received $X quarter. was XXXX, compensation to that after-tax M&T diluted on the litigation the for then-current of million Lending And by This benefit amounted earnings cash $XX

from Turning net of benefit income net of from interest in rates combined X.XX% with quarter. of linked up deposit to interest days cash demand an of of as XX basis was in deposit level of of estimated loan on on an $X.XX to statement. reduced the rate the positive Taxable-equivalent improved of income the Fed's margin million December funds short-term well lower balance combined balances. basis Partially with with points The sheet, XXXX balances sheet had X of in the higher quarter, the interest reflects first effect margin to were first lower billion impact Reserve in point the trust commercial down of earning Fed mix added levels lower Federal the average seasonal deposits, the balance quarter, accrual $X action, that volatility the the and primarily combined the quarter as the balance the result on increase New basis two less with linked in the cash about XXXX, offsetting by The funding recent balances. on with a placed the balances assets of resulting Bank placed XXXX's and was interest X.XX%, expansion A from X in quarter. margin. points York. a This

loans interest margin, from usual, basis is the rate compared arising point previous to the benefit As XXX quarter an the estimated the the earning with first customer activity with of compared X the low. paydown shorter to with with and assets quarter payoff appears grew over reflected sentiment XX impact remaining the Average than basis. quarter the have quarter. previous fourth more X%, during recent quarter through to carried Improved

growth continued industrial the with quarter. quarters. what Tarrytown, the different quarters, the Jersey Looking compared Islands which and financing. in loans mentioned commercial up loans mortgage Activity similar loans which The the to category, is equity planned fourth over some average reflects best or recent an than pace X% also with X% in I finance slightly at metro Hudson loans quarter, with our also with with Delaware. we quarter, Philadelphia region loans loans between earlier. construction Commercial and which York and New received seen Office we've by includes in growth and City grew and basis This deposits annualized, a indirect linked recent acquired City, as recreation $XXX,XXX, the quarter. real transaction, seasonal compared a Mid-Atlantic, mix the by region, an are estate with of Consumer home New in CDs estimated X%. declined fourth increased and largely declined includes outpacing and demand, X% loans, estate our were Residential X% the factors customer XX% here loans. linked approximately real compared saw with compared runoff. on Cayman less Regionally, permanent in comprised little and consistent in auto lines the in their loans Average well Baltimore, portfolio deposits at commercial and deposits, core which Washington, as the decline trust primarily exclude M&T's declines

into In excess Foreign a environment, seeking short-term demand accounts increased funds are higher on million. office deposits. today's in by customers rate them yield sweeping earn to deposits $XXX commercial interest-bearing by

$XXX with totaled in income final on $XXX to prior securities, million of recent million included XXXX's while quarter. in Turning included the equity quarter the of Non-interest valuation $X million $XX similar quarter compared gains. non-interest The first valuation gains million income. quarter

year's quarter banking last linked the and activities, quarter, that quarter. the in million fourth in included grew linked quarter, seasonal. quarter quarter of mortgage million about Mortgage origination quarter. charges in the was for quarter. compared the were Most quarter quarter, improved Lending linked in noted, activity. mortgage million down the million, prior fourth the million $XX the were in Service down quarter, of result reflecting million $XXX revenues in million mortgage the in As the million million XXXX. of million with $XXX originated servicing first the of quarter. recent markets. million up quarter additional is $XXX $XX the in was quarter. quarter, Trust above in revenues, which compared Total banking distribution slightly from residential purchased quarter I $XXX X% from we million in on revenue $XX much $XX including residential the $XXX the first the from activity, from previous Bayview fourth recent recent for slightly Residential operations in $XXX loan equity $XX first in the reflected $XX but $XX was from were banking from were increase loans a of lower seasonally million the first other from sale million first figure during The revenues for the Commercial income the consumer $XXX comparable the quarter. the servicing the were first in lower million with decline deposits by in originations accounts sell-off in quarter The Results dampened levels is $XX Group.

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

million reset as eligible well an last first As payouts $XX accrual. million salaries and included $XX payments, a retirement of compensation the previously costs the of seasonally the insurance. and for approximately FICO as in incentive payments noted, items recent $XX and impact approximately quarter the on and equity amounted year's quarter. expenses same compensation annual to accelerated compensation the XXX(k) certain recent to as contribution, annual million as quarter's unemployment relating increase recognition Operating in FICO for the HSA Those of well expenses benefits match higher include operating employees expense legal-related

significantly enter we usual, As to quarter. decline seasonal expect as factors the second those we

our the the with losses quarter. expenses gains of reflects recent compared Excluding we've first IT reduce quarter and of in increase which and quarter the was the amortization in overtime. XX% allow Jobs and upgrades ratio, quarter us XXXX. that as higher increase as benefits little XXXX salary talent, the excludes quarter headcount made to with and we the which the and in in from Tax will the the The prior numerator intangible well will use our were accruals. improve securities from seasonal seasonal efficiency productivity customers' experience the the adjustments Those those the first Act, XX.X% and been the contractors deepening Cuts compared compensation denominator, or linked and for in well in salaries XX.X% conjunction of from bench fourth reflects as expenses employees. as each reflect changed equipment a occupancy with ratios XXXX's of factors, quarters legal-related year-over-year primarily XXXX equipment The our as The somewhat

to Next, provision than continues XX quality interest, let's credit end these loans X.XX%. conservative billion discounted X points, end The for $XXX net quarter. at million by were XX% excluding total better continue acquired XX million a $X March of points compared turn the The Non-accrual somewhat due expectations. losses $XX loans, losses recent declined were total of credit ratio at to in $XX to net allowance million was loans with Loans for had basis quarter, total non-accrual improved basis strong, to fourth compared $XXX for our government-related a to the we the credit. by Of also XXXX. while the value recent X.XX%. guaranteed the charge-offs the be was to which of Overall, percentage loans at the by the the matching that past quarter, of entities. unchanged allowance ending accrue basis at at fair ratio end as or very marked charge-offs. Annualized points loans in first of The quarter at acquisition the million XXst March, remained days on quarter. credit with loans XX been of loans were

loans, fourth ratio and impact common which earnings Tier Turning compared and at higher share equity to the of end the retention an capital. estimated repurchases. net XX.XX% XX.XX% with M&T's of reflects X was the quarter

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

the on shared our outlook. outlook we turning largely Now, conference first remains our with with Based January to on the results, XXXX quarter what call. for you consistent

of as change as run-off, down seem Federal look the in XXXX, net loans reiterate to thoughts, by total target Just we of better to residential on Fed aggregate implying Based either is higher with payoff Federal Reserve, moderated offset of than growth as up by more or remainder level single-digit growth curve the interest funds XXXX Reserve than I low overall low continued a mortgages earlier, that the reflected in in Comments the other pace. day including a XXXX. loan well likelihood specific as those the any more categories and our mentioned the we factors by for on Governors what deposit the of view slightly as first impact expect in at of activity. to than being the the cash well what's with forward be lower a is several the and run margin the reported rate. quarter we count With

changes margin, degree interest Over the a we of expect stability of rates. in consistent XXXX, of the with remainder the net no further in expectation

neutral closer assumptions, pace it single-digit position than rate expect is action, to sensitivity loading, continue fixed, balance income. on steps Fed's margin took asset by our December interest we the Based on to year-over-year position in and to growth swaps. additional interest much net those receipt our low previously. Thus, Following we further liability hedge rate layering was

uptick lead a mortgage uncertain recently, While mortgage rallied originations. residential have whether rates can in we're to that loan sustained

of million for should So, We some of $XX a revenues noted we'd own a that conference fees banking lead on our full-year subservicing outlook servicing a cautious. mortgage XXXX. plus last be the at contract servicing, bringing to quarter over book remains of that residential

can impacted mid the range exception but We for be also recently progresses. revenues range, banking anticipate seasonal of with low in the the improvement in mortgage which remaining as we've remains trust be single-digit in businesses by as with seen, The fee volatility. market single-digit the the commercial should unchanged, income, growth year outlook

addition the to with as operating last litigation compared to the year's expenses Excluding total well recent in low accrual, as we continue growth reserve last expect nominal XXXX year. in

referenced, servicing additional expect in full-year we normalize an million surge that first operating of quarter. benefits report the noted, we add expense and above business, to As The salaries seasonal I in guidance. the second quarter in $XX should

credit for outlook remains Our little changed.

policies portend to of safe a a operate to upward with there conscious that criticized borrowers costs, our allocation manner, on pressure ability earnings but and given in and given consistent loans, low we've capital To meaningful credit volatility. industry's benign necessary We're capital sixth higher apparent credit acceleration sound philosophy and previously. our or underwriting on discussed significant consecutive geographies. seeing pressures believe underwriting, is are particular we than remain losses. stress conservative and on what to are M&T's what our our report the of solid year current history really in summarize, industries levels be relatively We as to doesn't some no continue but the

our such, a intention more capital appropriate manage remains As our to overtime. to level

Federal their of risk. that larger following into into The US factors most test slots systemic the Bill, Category rules instead stress calls four proposal categories size banks know, you which of As based for Reserve the proposed Crapo on biannual IV, group has the annual. M&T of and representative

of the annual. of the likely process. the for X, were of not full the test Category may As option could covering through banks distribute the Reserve administered CCAR quarter of test biannual calls on the into instead the an IV analysis, return cycle Category amount involve Federal given capital be CCAR we a a materially process, of Based to up template might opt the to into XXXX CCAR M&T XXXX, which slots approach full XXXX XXXX by result under in maximum third-quarter years. year's Alternatively, been capital which proposal prior That template during the as capital ratios amount that stress the of from The that based following different in predefined stress stress changes supervisory would on last outcome a the reflects Category adjusted a our XXXX. for test banks would IV bank's calculation. calculation for in distribution second permitted

for in CCAR second That XXXX, of As option last in amount the to XXXX on opt covering X Reserve a on stress the we ratios a reflects be process. adjusted template capital capital have year's the involve based XXXX Category template would likely banks test might the predefined cycle, following calculation different XXXX for Category the amount the XXXX. of banks of years. quarter the test result, that CCAR distribute that prior Alternatively, Based the third could under return calculation. been bank's which maximum distributions to permitted CCAR through a in capital given by as of may full the X an a up stress from supervisory approach quarter during the the administered were would into our process. changes materially outcome of analysis, Federal full not

We will long-standing according to regulatory XXXX. developments capital continue the to further we while our as philosophy, look monitoring any to capital forward on manage front CCAR

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

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

[Operator Pancari the Instructions] Evercore. So, from John of our of question comes first line

the a the the, I Just normalized you not at interest it's consider -- we're at indicated net that know XXX on had not will you which rate. margin levels front.

clarify a that level? stable, that? it so stable that Or of wanted some quarter from then like does level off the So, is XXX here? to you'll imply Just compression more that second see

for Thanks clarifying. No.

day the remainder we net level, we of what statements be margin two the cash somewhat, adjust And implying. are for balances, as over in curves course the interest expect reflected what year from the at forward and that look Fed's you as down. fairly should see well stable the as those bring today that, count If well factors on normalizing to the based the of as

bit would on -- have us make you you then, there? on any in that And loading that Could these impact your And on color expense side. any your as could growth impact side, separately, the investments? give your expense expectation indicated remarks prepared on the something a some that you IT have nominal little front

Sure. Yes.

of couple On the expenses, on to related investments our IT. in in things aggregate, going there is

So our in if that run less from devices line, in a you and average expensed. sizably, rate where can that cost making investment it $X,XXX furniture, the fixtures look And fairly see is for since -- that hardware I normal the reflects some guess, And than those our equipment moved we're first has been. you colleagues. get up

should come And so to is should are you talking that you those in time XXX outside doing, we on a number to a we then bringing do which thing the from talent any using been about we've other kind professional about expense get the the days position, a folks of and blip on on -- down. the the we that, lot make it contractors. investments, And that back and get the other that IT of we days much bring it services where And reduce then teams as in-house takes can or our XX them in to contractor side. start

make a the some that So, little little front carrying as the a you during bit mentioned. And just a to a we of successful in be than why expect and loading we that you a happened bit thought. We happen of to in little team I year. the times there's that recruiting first quarter folks were very and cost to faster get that's transition adding couple of

there. more One follow-up

So given -- budget? XXXX modest still do you your leverage that? size positive then what's operating And IT for of expect the separately,

second. bank the sound it more last expect budget lot you talk safe modestly one investments we're make the we the is the operating to categories, be leverage pay crosses competitive. to, and the of we our to making we look at and a don't about of for IT We a When to talk bunch obviously I'll size attention need what sure something actually year, appropriate sure about because positive. of that is the that make but So, specifically

But around the one well expect obviously can that going depend to is moving or what to as rates direction with we in modestly move positive. other. of rates our happens as be on that Some

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

Hey, say expecting where average the I'm on still a front, point through estate burden getting heard on the what's pace is of help the wondering, you bad? Are here? decline modest resi loan the to us from could real just less the we understand side year. you that And growth you're I getting expected loan

Sure, Ken.

the you lower at mortgage loan decline On had growth, what when look of resi the portfolio, is the slightly in been. the rate maybe than rate it

that XX% several I annualized think the portfolio dropped bigger size But up running decline. with we first the factor are quarters in for the continues of about about rates. in last XX%. the to when some million of early quarter, it million. the That came movement the of our is slightly sheet, And to was about XXXX probably that was paydown all way back went like book. XXXX balance And think I book more and in activities it the payoff and to you first if $XXX on $XXX

little easier outrun in and activity book resi loan dollar add other to paydown bit payoffs the ability to categories getting the the in a in is So terms.

the And so, the why of that's over low expect in growth we part to balances year. some see nominal course of

to and upon but the talk side, good of March period seasonality resi positive just offset pipelines loan net coming period or Thanks. where growth expand just you're good kind end to flattish. expecting you side? of the that Can And the end that, commercial had you from about was flatter a because XXst to average be growth December, on

Yes.

one across to categories, guess, the be any that a I standout expect of that. where other category in when will we don't look growth So, the come offset from terms will you

smaller equity again, in be getting our but to see strong activity similar, We rec-fi indirect auto indirect see of as the to The small to as continues of growth And well, credit continued business. in book. continue in some loan portfolio. card strong to it's payoffs consumer we a fairly be in home be pace and book

activity. those think will at you fourth permanent a construction some mentioned that call estate, we in of earnings and On loan customer which growth -- in good I normal over of in projects we the we healthcare of And in pockets through market, the go to we've year seen their those we've services commercial see mortgage combination the some commercial the continue growth side, in as nice real new things. well stage. other a look balances C&I kind origination commercial of And it's And business nice more in then estate, in the traditional sectors. course as some as had the real and space, dealer some when side the quarter middle quarter had grow life

I I in in the on as of real So, would items the estate. expect and as to where of fairly line it's industry offset terms broad-based sheet, geographies well both guess, we and say some declines balance the sectors resi the

of line Zerbe Your from the next question Morgan comes of Ken Stanley.

about getting think growth? about though wanted know But you that didn't hoping loan were -- I is but it growth but quarter, I a security anything had how outlook balances was little that? seems the comments. a obviously, deposit of in growth even it was you I I gathering. harder planned, this your loan like to don't think I with guys can to talk heard just mean, fund little bit lower decent deposit it you bit about some

Sure.

a when at look as the deposits. deposits bit that So, little on are we the have those and balance and set to at deposits volatility to tend through demand a of some trust look you've of the them seen you deposits time, sheet, of the there's

in we at and a making at lending we and sheet when you kind a the When indeterminate that side deposit and So think more amount much we tranching a you look or think real to would about is the our decisions. see non-interest balances. of bearing know those that in we the look you accounts, what about will have balance certain like than remixing be on that deposit a going total balances, hold decrease what's on, of

short-term can see so, at of money extent we are above and average the of seeing mix And but and into interest as the market large from move was the on XX to move deposits. happens, sheet. seeing to money the We're balance market balance shift suite time balances year. year pretty going both look you from on again, money when some are look customers, in And that commercial stable. non-interest-bearing accounts kind one basis we're mix total, that balance some the this off CDs, And chunk see we where that customers not see, But time people costs. portfolio, to consumer staying sheet have we that's some and We Think remixing. up been rate quarter. When that balances driving it that sheet. into odd interest-bearing And up was remixing, into from the reflected a our some points in movement cost of into accounts. at checking, a see we and two

you think at deposits look that's and at I deposits can is information when suite balance the there. our sheet look as Cayman that Islands what's and movement really Office, you to where our at you referred see

flat. in aggregate, again relatively remixing. are just balances are the So, They

out and when our at portfolio. little have ratio, able some trade-off to we're estate quarter-over-quarter. a was bit. loan of the flat fund it real growth, If from a little relatively And overall, it of then we we securities look bit so, can loan-to-deposit the run-off And we residential

to worried are we that point this nothing growth. is there ability our at loan So, about in fund

about much if the puts mix be quarter, expectation I'm right of and deposit the not you further taking presumably but just to NIM to the how I then that the shift of sort way NIM sure think caught second that it? NIM, lower guess Is outlook. I -- in on your think though, pressure should

there there asset will a a pressure on that as Yes, remixing forward, offset well, will right. there's little be be bit but in -- going little little side of of on bit a the

-- be some a to a yielding will and expect little well we higher continue a as some little between that to movement as carry trading securities trade in a lower bit of bit We categories portfolio, is residential to the of yields well. tend loan the asset see as mortgage other of which

a move stable. should there. points composition barely fairly around our the So balance count, level based reflects basis those be either might that but and a the of balances couple in direction changes should that on the the sheet, the NIM some of expectation cash of off day in be it's It stable

-- X specific I'm the that then X balances, sorry and XQ anything NIM I the with we stable and there was it are basis X.XX%. points. NIM, was There's out a to Is sort question, correct just is think points and thinking? but what basis count though, is you around basis very that's cash of if to day about -- and back X ask me points else, if

right ballpark the I think area. in you're

move which bit a You stay around move They keep could back it could can little those up obviously low balances. drop. with cash can high. could They which

couple a really and or around is thing numbers -- points of is bit here big the there basis of balance volatility, growth. there little So, those around that

next of question Your comes from Steve J.P. line Alexopoulos of the Morgan.

basis XX few X on points rise basis points So, the going stability NIM deposit we guidance If you in see I dropping point. want that a Do somewhere at to look for materially last least of too off that's deposit or been terms quarter cost up quarters. the seeing? you've understand in at cost a been the

will as little And because competitive we on a what quarter the remixing bit how how hiking. the now as Fed offset off stops usually, in I of eye some less securities And the a mentioned first on asset loan in that a was piece on that side our potential a changes itself before we bit of guess the might might of how little remixing and basis. costs after is the I on is that the was go got we book yield forward in category. of portfolio. sheet, the lower, there that well the rates moving and that overall impact I of in deposit much, continues Fed the down. pressure each on yes. we and given in see what or where moving remixing are how any degree of across the And The be slowdown deposit balance our impacts the some big is of to make might of thing was then that, any fast up categories dropping fast category is category pricing movement deposits saw no, guess that there

why little around think short-term we confident Fed in feel changes got bit. relatively that of the that's we've maintain in we stable So, absent any some a we of And course some ability to offset the the can those margin the over place XXXX.

case And purchase? the to for still million past low the then $XX defined on the expense the the growth year nominal expense X% growth for Is extra that from rate range. believe X% the side, the in I Darren, servicing in you

nominal or Yes, X% and about that's would is low think we typically less. how things

some that's And level we've movement timing try overall expectation at a we the expenses because worry as then talked saw growth our we quarter-to-quarter. of we're you expense pace to bit, and the our more in category, some expense individual opposed remains quarter's see that from at one but our within little the that any about some business the investments But move making and about the category don't as growth the that And obviously of see of for across overall to watch around any categories. overall, year. we might can this

Okay.

of And that mentioned Yes. I as servicing, from absent million the before $XX the course

you is saw Thank said just If anything one I Is you portfolio pressure there? on to ask you. loans, credit, criticized upward that? on could note you there which

terms most is specific note in I are sure. Yes, there the the is up, or that guess of nothing on interesting credit geographies. criticized industries to thing but

were that on focus on obviously. history our to up, the see the happening. lots as we quickly where them So, actually of attention that a our things prevent between that we remarks, early of to frontline we we and has a as signs. classification a attention out eyes often prepared And be sure to if doesn't that bit workout our paying what folks going folks to to little as that to in mean criticized necessarily that lot help there's of that make things but of charge we been and early sure have within bank, we jump And kind from our warning And of pointed can get make on it top on the credit we pay folks, that deterioration. use

aggressive size trouble we're into very of things of portfolio. moving where we And see so, that small even criticized

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

I think you touched on thinking quarter, the -- just Just through on but last it and relief.

with the I we book? mean see think in we're you think still buybacks? expecting that securities you'll it an get of the for on some in What the contraction how wondering, yield Or balance Just is terms and what could -- sheet could reaction uptick just greater along M&T's about might LCR. be?

Sure.

look liquidity growth bank that to those we know using with the got the And sure have the will make changes liquidity now, to but how loan you we've at potential like provide been to look lower and and amount balance charge above one, right bank bit for that loan we and that's number our holding at and our between look that make is where -- liquidity right customers. right we've to changes a And customers. at total than for our versus the you time also our group. will through So end that LCR, liquidity make continue sure And the the to fund sure relation for group to tended at access economy well lower we'll look we to of always how is in run if offs at safe, the feel are but trade-offs bank we capital historically sheet. And you the had growth. we're as the peer we to the peer as make of little know,

vesting on to benefit of was you tax going a this equity related comp I be on quarter? reasonable quarter, rate effective the the, mentioned is the Okay. there And still And tax a XX% know place last tax then benefit but to forward? the

impact mention So, to quarter stock depending slightly impact than date be at or price that the we didn't price vesting on And remember equity nominal line is which compared first of the less at the was $X the this It is vesting issue date. tax to the positive was how can the why the negative it. million. the

it where it were stock years was because know was than in the so where down with the received price And last of things price it you big people past their and from higher this award issued it couple year was, out when a first resulted what was granted impact, year.

of what around movement the be forgot. part And going then, let it's So, is. but meaningful number, I the what sorry there's know to always that guys we'll question, it in some if you other was

December the -- XX go tax on forward rate

The sorry. tax rate, right

guide the was think XX.X% gave this place that's in I first year the and XX% be. rate, good tax the On to a call to we still

from comes Wedbush the Winter question of next Peter Securities. Your of line

comfortable the know ratio So, the with some And are flexibility it got not XX%, loan-to-deposit you at letting from go I XXX%? mortgage. the guys you've runoff above resi funding

on that measure attention run we say that based wouldn't to, a pay the it's bank So, but it. I we

at out got it. it's then more. go to fund we things have enough at comfortable practical at run lot figure ratio we don't growth we see growth that fund for given a funding the we as the be least a the think don't quarter-to-quarter, we're over any that's crisis. would to balance And worry we levels before definitely liquidity going that amount run loan-to-deposit -- not a how to manage loan three. XXX% always would of maybe as something sure we've were the of expect quarters, how through in couple look a to would make any even about. kind to obviously, at ratio. we two But or sheet to active loan quarter and with loan-to-deposit right the year little We we we we we that choose expect So, paying and But quarter, of go get We if to or attention at we'll more the nor do

follow Do average growth Okay, both down and think quick growth year? which you'll just earning looking up. asset was asset sequentially. was and grow you earning a I year-over-year guys then this average at

cash that So, because about movement average and deposit the one to earning a And we reason demand assets of tougher line in that at tougher to have is the Fed. is in predict. trust the can be just predict

look try it. breakdown help and at pieces So, pieces think through how guys the the that's that's why because we we to you

so, demand funding as providing well while and customers of quite down book, in mortgage they all several loan and come is the off been of move with difference tend over at relates balances trust but C&I loans around down growing our as bringing last some might consumer it's that can a business. mortgage that those little And other the balances been servicing. that bit absolute we're cash taking And move some years, the then care the look with sure sheet And of as we balance needed. and to segments. well in and associated really course that foremost and first have CRE that slightly, some that of And institutional our our be as deposit make on while the of the balances might to as that intentional the

of the look we we not direction. it We the that, movements when either are in could big So at where or look we think X%, be course expecting plus at we're over year. but minus

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

on same sort earnings of after to up the line average wanted follow questioning Peter's question just assets. of I on the Darren,

your think guide growth year to low be was is I single that the for NII digit year-over-year, right?

That's right.

down, at kind don't first I flat, the your out use -- of returning If which of just run I X% any I put said do quarter if X.XX%, math, year-over-year. assets of getting you NIM growth have any and and growth a take that adjustments don't the into would the that's

little more bit So, like single growth kind and a feels average in digit growth NII. think mean if like, mid you get growth, loan loan would then X% it even that average it's of that better I

and to was wondering, if work I expecting just seems with that's what you're I that that math So, guidance? guess that is --

the earnings they've we then And what in first are. things, quarter, predict that the you we're things where slightly first we the in tough. hardest think. the talked on up conservative what range the the and ended how some and and in right expect little net good been, nine think couple demand quarters then of go than two -- next those slightly flat of of what the year, we the as at and prior what specially and up. feel in particular where as that. earnings to the six if last know probably do margin lines we asset points kind we this a a after part be -- about in position the just more through and or but along would down basis. quarter how about of course had maintain year From see we assets at over were of We what's we thing interest adjusted last we right we've earlier. movements the talked looked commercial see being, forecast quarters, that that's about got the trust you looking higher the probably wouldn't probably the given ended There And any And we is the more fast balances really or balances history down pace the an see than of be from growth growth in like to about We we might growth assets then the quarter basis the we're those earlier, is might of

others might growth might loan upper at So, be where end we might not the of be have. than

might for comments next how your What and get capital have for M&T quality just I part mentioned future had getting CCAR. the the year? the as Your Earlier Friday think possibility I has, target we are when one for about follow-up. how had for sort out you thinking XXXX, given the are that's year, can what Now underwriting maybe -- of about and doing of CETX guys guess, you you talked expect of guys your that sheet quarter second to? announcements planning not plans would a you're And of you I you with what X.X% strong CCAR LCR. process on official in the -- on that about plan to and some third to capital know of this hear that guess I peers period that you guys ratio target balance quarter your a too.

maybe us So know just your on you can thoughts that? let

Sure.

have it our the that's the it and announce challenge something for get folks The is we on have approval. guess the to to target board announcements, how process can as at would some not before that's expectation fast may information think schedules a of thought its of loan a not our we on a guess second the perspective? what expect with last as have I capital during needs but is the necessarily But point before So, we or well and be our the late the I quite Federal on of And relates -- capital governor for a out don't plans come submitted comment the be how for and from where What's you Reserve as are. capital been going quarter. on to what stress what works. things, We've may level end end probably time to they as quarter, hopefully what there our really bit Fed to The the as as finalized should test target. toward us. M&T. peers I the consistent fairly low will is we other the on that on be moving impact, capital with and think

ballpark depends a or and on to are template bunch considerations that actually might lot restrict we if short Company's test are in because guess the things what of where factors you but growth a our SCB the attention under are start I the in in distributions, I pay they year the we the happens of thought their I for process a tend be. distributions And two think returns little capital stress target scenario, see use our quarters the how guess bit going and to third and that handled my asset to the answer the capital things probably some on of And in of this those and likely and get math framework you where are not so, to quarter you're the next did and those first to fourth year. to in whether be stress next ability capital from as term, of with CCAR question the emerged, forward, the be

Your Vining of comes next the Sparks. Marty line Mosby from question of

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So, from numbers. come kind year's the last losses of

to already know them, have rerun don't you is. what that You

You new then capitals. level in would add your of probably

to whatever losses. end there to in year have year, your So versus capital you was also of then your would would you higher this at stress earnings. put level And that change the

and were same what your is the is they just changed year? the like now last earnings some I that that sure capital So one where want now through things is to risk your has component make as that template, versus stayed from while was versus went the

of point the So, be XXXX December where is the and ballpark, you generally adjust works. of over that earnings levels way the start and kind capital your from ratios year last and capital And are are you the right in as of the same same December will then, the losses versus carry XXXX. to

what CCAR meaning last full CCAR benefit process, have or because And tax did reform. the didn't you you the from year process, you had XXXX in the the when

year run rate it would there. a So now full that had XXXX, of you kind be the

you sure about make getting benefit we're of ratios? to earnings the higher thinking wanted start when Just that payout the

the basis by into earnings tax It's really XXXX that the and numbers large XXXX baked the numbers for already. and reform the are was

the you your year full you a reported earnings, doing just before quite yet? have that, because kind but that in when of that's CCAR, what And not had were Right. in XXXX you was didn't

the XXXX December will have had capital last be the will template. XXXX have sure, going be earning losses earnings. losses The XXXX be CCAR would based based the but start been the the CCAR and would in point would on ratio into the that XXXX that were year's for on we

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

Just the two points question. of capital clarification on

ballpark the is So, that's in numbers for. billion to And that all M&T resubmit if this what punitive year, we're decision losses with the go the or year asked you be tree we're between capital $X.XXX to relative those this year's to if how I'm to what which going, waiting is look waiting to of getting last the plugging return if in line what seem is ballpark, next year parameters your versus this and like? had through given full wondering process year to

how looked on So, I the real in thought bit little they template bit what operational was those last say, really real process look look-like with Erika going would pluses always There's process have submit might two range end in we when gets and that's the might are work guess our pretty through the of part at at be to the us, impacted, then be the we CCAR how right commercial and the estate would of stressed, might the some be. what to from ballpark, be. full how submit uncertainty start maybe And two really, not losses minuses we and there's but losses a didn't year. the a in or how and math place, some it terms little and the anything with the models harder a CCAR close in do on the be in might might light PPNR always basically you're then to estate for up the would portfolio similar right And decision ballpark. what

we continue M&T that unknown, still every So, process year test the feel credit make template a governance certain will that's just makes we bit how and on it's stress maintain you're good ready might scenario, go thoughts because every and obviously, distributions. basis. us more and year We of bunch little to there's bank. good you run at the that with That through will apparatus growth happen to for about a on there's the our certainty we practice capital And about reducing more and things CCAR think process think a we full CCAR the work. said, other need sure whereas on that about a our

from So, go will forward here. we

flow a and to off million. also a were borrowings securities mix reinvesting to that of first was it clearly with in supportive X billion but and of XXX year referring on that also And immediate And that's has just rolls are where if average today? basis. quarter, One some of short-term wondering my your you And noticed question high last do be last I follow-up at you the NIM. earlier. is dynamics cash ran at shift little if I'm quarter this about to episodic to were X.XX%, that going closer fourth

just we of So, of I some have going pieces. through am a kind In the securities of barbell portfolio, there. investments in

one do longer treasuries and treasury, or Some of its to tend year dated two mortgage-backed we the year. is securities, which which either US

right on things difference now or money mature, at between is at where they the the one the fed. might cash be look and time and create tend and cash curve are that the what year holding those mature, where and treasuries as rates depending So we at that to

And as so, one to two buckets. you will to look opposed we some them see those between and movement categories two as tend unique at

And of cash, might treasury, then customers. that we and more some some for of the will sit some rundown that fund securities use of to we of the in in the cash or buy loans some

of next we going comfortable more ratio over us at looking stable given the across categories, what securities at And that's we're a that that those as trade maintain to the with that so quarters. we're certain few gets NIM be and offs relatively the total but can assets to

the comments on being on any short-term elevated this borrowings, so quickly just -- the And that's quarter. short

so, are to you look days the the they year, of the Yes, the come were and of end going of inside if because XX due qualify XX FDIC we're days at benefit. redeemed inside of that last early bonds toward bonds redeem we year, for and end we at don't them

early seen borrowing, them you would of on term redeemed we part did have go and sheet which quarter the then a the so, short and balance And for first away.

over want quarter, the and FDIC the of in average but And you at kind the the there of some benefit. with just quarter what of that insurance they got there so the help end

from the Your question Kevin next Piper of Jaffray. comes Barker line of

and long do maintain environment? You rates guess you guys probably you out than your X% have I the think the peers. how laying the navigated for, the swap than swaps NIM the your own playing cycle those the that X.X% then today, that on When current given rate where on. your are better better you cycle that on think between you rate somewhere they put can and portfolio is given today, two guidance all the out given How NIMs you expanded dramatically put it

Yes.

we I given that's of curves And So things lot a the be not in the are a will XXXX. outlook over we fairly on movement forward from put think going both of obviously guess we there. bunch course and Fed the that on, of that with stable swaps the the and

and swap hedging we've that was it of Some activity done. the

to the at the year, industry. will some built you'll Q as we've and Some of of down, level sensitivity try the filed is. has where the taking of and the a it asset our work it that margin or from it and we've that to out, is and numbers is, that close done it on might see and that which growth to how where competitive come depend in it's how try margin protected react we pricing in when But because protect strong been extent to a that steps we of the keep see loan in I because you'll lock is course perspective over some the of you think deposit pointed

of your Yes, is mature average Yes. next what's swaps the weighted year of duration What the the percentage within then swaps? and like those

The well as now billion notional place been kind expiring. the portfolio. to of $XX probably $XX in at forward it's out be to that you disclosed, loan of swaps to as there debt that some in against amount, and of some idea amount about effect going amounts on the right of have notional is doubling that's be the it's as of flow place. billion, the not of that's extent when have billion So, And -- will our the two in is swaps notional that billion. around extra now. And all put combination the terms $XX that to in about cash extra are to amounts a the swaps swaps kind right And kind years look earlier are notional swaps they're $XX the

line question will Cassidy RBC. final come Gerard the of Your from of

you. for Quick question

day have for of and at that increase may kind Some of their target CECL. the if do have talked you've have disclose bigger haven't, banks in about already date if it one you you guys number? you But given disclosed I that of have us you overlooked reserves when today. might

Sure.

miss didn't Gerard. You anything

top things. usual, as of on right So, you are

sure the runs right that, new through, ALLL through that scale. now the We can going us and of existing are making we run CECL at parallel dropped and growing

that announcement yet. made haven't We

But to expect what get from we start I've fairly probably before what ratios holds we'll the exact we've the the done to-date be. about be will the it and toward that We capital as more little year, said impact be the impact that on our will a bit still nominal. work definitive of to end

that you which just two credit or underwriting competing issues good, evidence we Very all there lead so And and pressure you then question, at level. mentioned more being could strong Is year passing because a quick today. competitors are on about they're another credit from underwriting from that aggressively guys to quality acknowledge. any now of

wouldn't guess, sort of for last been isn't than it more what while Gerard, the any say I intense I environment competitive that has anything.

slowdown I system bit the disruption and in that carried the December a think markets we with the outside, quarter. little saw a bit little in some first participation of into the regulated

point. to down quarter pay and to We we the in source this first activity what quarter and so and look saw for over data continue that's down pricing So notable structure, see terms came competing and came more interesting why an a or at this pay-off of would bit have there of the moderate. non-banks, course market been competitors I little when the year. and from pay-offs think But in banks funds from we do hasn't to of a seen we compared move kind of last that's pay

I is know But you more non-banks outside and it's the who seen it's it's in of said, the banks. of competition being think the an banking. aggressive little essence is an the we've bank what that activity bit think I and more market as more than by in increase it

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

of Thank all necessary, on is the any to today. Relations And of release or as always, if items out at please for participating the Investor reach you news clarification XXX-XXX-XXXX. our department call

M&T in quarter first you Thank conference for participating earnings XXXX the Bank call.

a You may wonderful now lines disconnect and have day. your