MTB: CEO at our NYC Dinner: Boring Banking and Basics

研报英文原文证据摘录

MTB: CEO at our NYC Dinner: Boring Banking and Basics

M&T Bank Corporation Equity Research

Summary

Long-Term Consistency w/ Capital Mkts/Commercial Tailwinds

Beauty is in the eye of the beholder. During our dinner, M&T noted that its culture and consistent

strategy, core deposit funding, and community-banking approach are under-appreciated, at least

until recessions and stress events. Yet, at this point in the current cycle, we still prefer higher beta,

more capital markets-oriented banks until industry loan growth becomes more broad-based and

sustainable. The wildcard is if and when MTB pursues another acquisition since, in our view, MTB is a

survivor. What follows are our takeaways from our dinner last night with M&T's CEO (Rene Jones) and

CFO (Daryl Bible).

There is a lot to like about M&T. It's "beautifully boring" with consistent performance over decades

and, near term, better positioned with capital (excess), credit (little NDFIs and CRE is in the rearview

mirror), and costs (est. 180bp positive operating leverage in 2026 and another 100bp+ in 2027).

Indeed, M&T is projected to achieve an est. 17.5% ROTCE by 2028 (our est. and consensus), which is

a touch above its long-term 17% target and its max performance-vested stock unit payouts (per its

proxy).

The bear case, in our view, is that "boring" does not get rewarded as much in an environment with this

degree of capital markets-oriented and regulatory tailwinds. Further, while commercial loan growth

seems to be picking up (roughly half of total), net loan growth continues to be diluted by sluggish

CRE (1/6), though M&T emphasized that all segments are growing (incl. consumer and residential

mortgage - each about 1/6). Finally, its footprint is one of the slowest growing among all large-cap

banks.