M&T Bank Corporation (NYSE:MTB) Q4 2022 Earnings Call Transcript

It’s moved a little bit. Most People like us will not just look at the baseline, but look at a more severe economic scenario as well as a better one. And you kind of weight those. And it doesn’t necessarily need to be what you see today in the pricing and the spreads versus what’s in the forecast. They should be connected, but they’re not always, right? And there’s always going to be points in time where these disconnects exist. And so we look at it and we think about the provision is keeping the bank safe. It’s capital by another form. But as we underwrite business, we’re always looking at each individual relationship and its ability to pay back. And the spreads are going to be a reflection of the expectation of that credit risk through the cycle.

And so for us, we’ve had so many long-term relationships where we’ve seen the behavior of these clients through the cycle and their willingness to step up and many times bring outside resources to help maintain their payments and stay accruing. And so each organization is different, but that to me is a little bit of why you might see a disconnect between what’s actually pricing today versus what’s in the CECL outlook.

Gerard Cassidy : And just quickly on the CECL outlook, what was the weighted unemployment rate that you guys came up with in your analysis? You mentioned you used the base case, but you also took into account the more severe case as well.

Darren King : Yes. We’re kind of in the 4-1 range on unemployment in the base. And that’s during the R&S period, obviously, right? And so you’re — once you get past that, then you’re reverting to the long term.

Operator: We have reached our allotted time for the question-and-answer session. I will now turn the call back over to Brian Klock for closing remarks. .

Brian Klock : Again, thank you all for participating today. And as always, a clarification of any of the items on the call or news release is necessary, please contact our Investor Relations department at area code (716) 842-5138. Thank you and have a good day

Operator: Thank you, ladies and gentlemen. This concludes today’s conference. You may now disconnect, and have a wonderful day.