On Tuesday, M&T Bank Corp (NYSE:MTB) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Wilmington Trust’s Legacy
Todd Hagerman – Sterne, Agee & Leach: Couple of questions Rene, just in terms of the Wilmington Trust acquisition. First, you know, you mentioned a couple of things on the trust revenue benefit this quarter. Could you give us a better sense just with some the components, as I think about the legacy Wilmington, the private client business, and in particular, like their corporate services business, how that may have contributed or some of the strength in the quarter?
Rene F. Jones – EVP and CFO: Yeah, I think that for the most part most of the businesses held up very, very well on a linked-quarter basis, and as I talked about, the largest portion of the increase then came from some tax services that we provide – tax-related services that we provide to our customers and that tends to be seasonal fees. We also had a bit of a lift because as you bring together the two entities, particular things like the funds – as you merge the funds, you begin to get synergies on net revenues, so net of fees you’re paying to service providers, so those things help. If you look into the business, we saw a little bit of an uptick in the retirement services space. We saw that the capital markets group was a little weaker – or continued weakness is probably what I would say because there hasn’t been much issuance. Having said that, I guess as I think about corporate American, I think about what’s out there, there is a lot of pent-up demand for refinancings, and so I think down the road that probably bodes pretty well for us, but that was slightly weaker than maybe where it typically would run given the capital market. Then also, we’re seeing a little bit of a slowdown in where the agent brought in on syndicated loans because obviously credit is working out better, so we have the engagements we have, but in terms of new business, I mean, that’s slowing, which is probably a good sign for the rest of the business. But overall, we’re on track, we’re sort of above where we expected to be, and that’s nice and I think things are going pretty well there.
Todd Hagerman – Sterne, Agee & Leach: That’s helpful, and then perhaps if you could just give us a sense now with the integration complete, and particularly as I think about like the wealth management business and trust overall, could you give us a sense, just kind of the mix now how that may have changed or how that again just generally breaks down as I think about private client traditional, trust that sort of thing?
Rene F. Jones – EVP and CFO: I guess at some point I’ll break that up for you (indiscernible) right now, in part because we don’t really think about it in exactly that same way, right. So, at some point if we break out CCS, which is the largest portion of the revenues from wealth, when I think about the wealth right, again, I think about what’s going to happen on the wealth side is an addition to the existing customer base. Much of that growth is going to be coming from M&T’s pre-existing clients, right? So as we offer them services, whether they would be cash management, wealth transfer or helping them exit their business, we kind of think of them in that way. So in part, I tend to look at some of that as how we’re doing on our commercial bank side, right, and how is that working with our private bank. So, we don’t really break it out separately that way, but things are pretty stable. I would say that if you think that a year’s passed, I think our marks are probably good for keeping the portfolio relatively stable, but we still have a lot of work to do in order to go out there and penetrate the M&T customer base.
Todd Hagerman – Sterne, Agee & Leach: Yeah, the only reason I asked is just to get from a modeling standpoint with some of the seasonality in some of the businesses just to get a better sense of the mix and how to think about it?
Rene F. Jones – EVP and CFO: Yeah, at some point I guess we’ll lay that out maybe in our Q or not, but I haven’t done that yet so.
Todd Hagerman – Sterne, Agee & Leach: Then just quickly on the mortgage and the benefit this quarter, was there any uptick at all in terms of the reps and warranties similar to what we’re hearing from some of the other companies this quarter?
Rene F. Jones – EVP and CFO: In terms of number of requests?
Todd Hagerman – Sterne, Agee & Leach: In terms of the number of requests, yeah?
Rene F. Jones – EVP and CFO: Yeah, so, the number of request was relatively stable. If you remember, we had talked throughout last year that we were somewhere around 25 to 35 requests. Last quarter or this quarter, maybe we were somewhere around 36, 37 requests. So we were sort of the higher end of that. But they still are in check. Having said that, we’re also concerned about the same sort of things that you saw which is sort of changing behavior. We do our best, in fact, to be surprised to reach out to these other parties to make sure we understand their pipelines and things that are coming to us. But even with that, I would say when you look at our Q, you’ll see that we continue to set aside amounts either for make whole prices on loans, repurchase requests or reserves for future one. So, we’re very cautiously looking at that stuff, and just because no one has called us, doesn’t mean that we take the position that they won’t.
Todd Hagerman – Sterne, Agee & Leach: Can you disclose what that reserve position ended at the quarter?
Rene F. Jones – EVP and CFO: What we do is we keep disclosing how much we’ve charged in the quarter, and I think this quarter that was $10 million, last quarter it was $4 million, a year ago it was about $10 million.
Strong Commercial Real Estate Growth
Craig Siegenthaler – Credit Suisse: Just looking at the commercial real estate growth which is really the opposite of what some of your peers are seeing, can you talk about what geographies and industries you’re supplying this and maybe why your growth is stronger than peers?
Rene F. Jones – EVP and CFO: In commercial real estate?
Craig Siegenthaler – Credit Suisse: Yeah.
Rene F. Jones – EVP and CFO: Yeah, I can talk a little bit about it. I mean I think the growth is also the slip between Philly, New York, Hudson Valley had about annualized growth of 5%. All of our Pennsylvania markets saw about 2% annualized growth, and then in Baltimore, Washington; which includes Delaware, which is important, we’re seeing about 4% growth. I mentioned it’s important, because you got to remember we’ve got the acquired portfolios underneath that are probably still running off, right. So, one of the things that you saw in the addition of our move of stuff from non-accretable to accretable yield, is simply the fact that in Delaware we have higher prepayment fees than we probably initially thought. So, that kind of gives you sense that at least in the quarter, that it’s not really concentrated in one area. I would guess maybe part of the issue is that we probably still have less runoff in real estate because our book is pretty good, pretty clean.
Craig Siegenthaler – Credit Suisse: And then when you think about pricing terms, LTVs, can you talk about how they trended over the last six months here? And especially on LTVs, I know it’s probably because there is wide range, or maybe talk about average – the average LTVs have been trending?
Rene F. Jones – EVP and CFO: Average LTVs have been trending. Well, we’ll start by saying, we haven’t seen a significant pressure – first of all, last quarter I said that there wasn’t much change in terms of pricing pressure over the last six months. This quarter that continued, and quite frankly, even though we had higher volume, our pricing and our ROEs held up very nicely. So, I thought that was very impressive. As you know, we track every deal we do, both in terms of margin, but also in terms of a full P&L. What it tells me is that a lot of the business we’re getting is not just loans business, but it’s probably the operating business as well, which is the only way that you can really get in this environment pretty strong internal ROEs on the business. So, what that helps, my senses that we’re doing a nice job of capturing full relationships. The LTVs I don’t have changed and I would get guess if you think of our total book it sits in the 60s, in terms of loan-to-value on commercial estate, that hasn’t changed at all.
Craig Siegenthaler – Credit Suisse: And how about terms, is terms extending at all in terms of duration?
Rene F. Jones – EVP and CFO: How do I say this? We could have increased volume by moving in that direction, but we chose not to do that, so not for us.
Craig Siegenthaler – Credit Suisse: Got it, but the industry has.
Rene F. Jones – EVP and CFO: I don’t know if it’s a change, but there is a pocket of business out there that you can get, if you wanted to change your standards, it doesn’t make any sense for us to change our standards. So, I don’t know if that’s a change, but when I look overall, I didn’t see a big change this quarter from talking to everybody in terms of competitive pricing and competitive structure.
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