M&T Bank Earnings Call Nuggets: Future Funding Costs and Interest Rates

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M&T Bank Corp (NYSE:MTB) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Future Funding Costs

Kevin St. Pierre – Sanford C. Bernstein: Just a margin-related question. You had a 4 basis point decline in funding cost. Are there still levers that you can pull to continue to bring that down or maybe talk about funding cost looking forward?

Rene F. Jones – Executive Vice President and Chief Financial Officer: In terms of – I think the answer in terms of pulling levers, no. But what you’re seeing as you go back over the quarters, there’s still a little bit of migration of the time deposit portfolios and there’s from time-to-time some of our long-term borrowings are still rolling down. So I would say that it shouldn’t be zero, but the ability for us to kind of think about our strategy and change that number is pretty low.

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Kevin St. Pierre – Sanford C. Bernstein: On the strength on the non-interest bearing deposit growth, are you seeing a change in depositor behavior or is it all market share gains? You mentioned the disruptions in your markets and HSBC-related strength. Can you characterize how much of that growth is market share gains versus maybe any change in depositor behavior?

Rene F. Jones – Executive Vice President and Chief Financial Officer: Well, let me do this way. The lion share of the growth trends we’ve seen in deposits over the past several quarters – I mean, maybe eight quarters, right, has been on the commercial side, and that continues to be true. Looking into the numbers this quarter what I did notice is that we had pretty decent growth, particularly in December, in our consumer non-interest bearing. So, I think it’s a combination of both. I think, if you were to look at our deposit trends versus others, the differential is probably market share. But what I am surprised at is that despite the improvements in the economy, despite the fact that people are now clearly borrowing, we still haven’t seen a decline in that trend. So, I don’t know what you can gain from that, but that’s probably the best I could do for you.

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