M&T(MTB) - 2025 Q2 - Quarterly Report

Glossary of Terms This section provides definitions for key terminology used throughout the financial report Part I. Financial Information This part contains the unaudited interim financial statements and management's discussion and analysis of financial results Item 1. Financial Statements (Unaudited) Presents the unaudited consolidated balance sheet, income statement, cash flows, and changes in equity for the specified periods Consolidated Balance Sheet – June 30, 2025 and December 31, 2024 Details the company's assets, liabilities, and shareholders' equity as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (Dollars in millions) | Metric | June 30, 2025 | December 31, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Total assets | $211,584 | $208,105 | $3,479 | 1.67% | | Total liabilities | $183,059 | $179,078 | $3,981 | 2.22% | | Total shareholders' equity | $28,525 | $29,027 | $(502) | -1.73% | | Loans (a) | $136,116 | $135,581 | $535 | 0.39% | | Total deposits | $164,453 | $161,095 | $3,358 | 2.08% | Consolidated Statement of Income – Three and six months ended June 30, 2025 and 2024 Outlines revenues, expenses, and net income for the three and six months ended June 30, 2025, and 2024 Consolidated Statement of Income Highlights (Dollars in millions, except per share) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Total interest income | $2,609 | $2,789 | $(180) | -6.45% | | Total interest expense | $896 | $1,071 | $(175) | -16.34% | | Net interest income | $1,713 | $1,718 | $(5) | -0.29% | | Total other income | $683 | $584 | $99 | 16.95% | | Total other expense | $1,336 | $1,297 | $39 | 3.01% | | Net income | $716 | $655 | $61 | 9.31% | | Diluted EPS | $4.24 | $3.73 | $0.51 | 13.67% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Total interest income | $5,169 | $5,534 | $(365) | -6.60% | | Total interest expense | $1,761 | $2,136 | $(375) | -17.56% | | Net interest income | $3,408 | $3,398 | $10 | 0.29% | | Total other income | $1,294 | $1,164 | $130 | 11.17% | | Total other expense | $2,751 | $2,693 | $58 | 2.15% | | Net income | $1,300 | $1,186 | $114 | 9.61% | | Diluted EPS | $7.55 | $6.76 | $0.79 | 11.69% | Consolidated Statement of Comprehensive Income – Three and six months ended June 30, 2025 and 2024 Reports net income and other comprehensive income components for the three and six months ended June 30, 2025, and 2024 Consolidated Statement of Comprehensive Income Highlights (Dollars in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Net income | $716 | $655 | $61 | 9.31% | | Net unrealized gains on investment securities | $67 | $18 | $49 | 272.22% | | Cash flow hedges adjustments | $56 | $22 | $34 | 154.55% | | Total comprehensive income | $841 | $693 | $148 | 21.36% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Net income | $1,300 | $1,186 | $114 | 9.61% | | Net unrealized gains on investment securities | $214 | $8 | $206 | 2575.00% | | Cash flow hedges adjustments | $164 | $(95) | $259 | 272.63% | | Total comprehensive income | $1,679 | $1,094 | $585 | 53.47% | Consolidated Statement of Cash Flows – Six months ended June 30, 2025 and 2024 Summarizes cash flows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Consolidated Statement of Cash Flows Highlights (Dollars in millions) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Net cash from operating activities | $1,479 | $1,962 | $(483) | -24.62% | | Net cash from investing activities | $(2,985) | $(1,457) | $(1,528) | 104.87% | | Net cash from financing activities | $1,725 | $(458) | $2,183 | 476.64% | | Net change in cash, cash equivalents and restricted cash | $219 | $47 | $172 | 365.96% | Consolidated Statement of Changes in Shareholders' Equity – Three and six months ended June 30, 2025 and 2024 Details the changes in shareholders' equity accounts for the three and six months ended June 30, 2025, and 2024 Shareholders' Equity Changes (Six Months Ended June 30, 2025 vs. January 1, 2025) (Dollars in millions) | Metric | January 1, 2025 | June 30, 2025 | Change (Amount) | |:---|:---|:---|:---| | Total shareholders' equity | $29,027 | $28,525 | $(502) | | Total comprehensive income | - | $1,679 | $1,679 | | Purchases of treasury stock | - | $(1,742) | $(1,742) | | Common stock cash dividends | - | $(436) | $(436) | Shareholders' Equity Changes (Six Months Ended June 30, 2024 vs. January 1, 2024) (Dollars in millions) | Metric | January 1, 2024 | June 30, 2024 | Change (Amount) | |:---|:---|:---|:---| | Total shareholders' equity | $26,957 | $28,424 | $1,467 | | Total comprehensive income | - | $1,094 | $1,094 | | Issuance of Series J preferred stock | - | $733 | $733 | | Common stock cash dividends | - | $(446) | $(446) | Notes to Financial Statements Provides detailed explanations of significant accounting policies and specific financial statement items 1. Significant accounting policies Outlines the accounting principles and policies applied in preparing the interim financial statements - The consolidated interim financial statements were compiled in accordance with GAAP, using accounting policies from M&T's 2024 Annual Report[29] - Standards applicable but not yet adopted by June 30, 2025, primarily address enhanced disclosure requirements for income taxes and disaggregated income statement presentation of certain expenses, and are not expected to have a material impact[29] 2. Divestiture Describes the sale of Wilmington Trust SP Services Inc and its financial impact - In May 2025, the Company sold Wilmington Trust SP Services Inc, a subsidiary specializing in institutional services, to a third party[30] - The transaction resulted in a gain of $10 million, included in 'Other revenues from operations' for the three-month and six-month periods ended June 30, 2025[30] - The divested subsidiary's revenues and expenses were not material to the Company's consolidated results for the periods presented[30] 3. Investment securities Details the composition, maturity, and fair value of the investment securities portfolio Investment Securities Portfolio (Dollars in millions) | Category | June 30, 2025 | December 31, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Available for sale | $21,540 | $18,849 | $2,691 | 14.28% | | Held to maturity | $13,024 | $14,195 | $(1,171) | -8.25% | | Equity and other securities | $1,004 | $1,007 | $(3) | -0.30% | | Total investment securities | $35,568 | $34,051 | $1,517 | 4.46% | - At June 30, 2025, the Company owned 3,427 individual debt securities with aggregate gross unrealized losses of $1.1 billion[35] - The Company concluded it expected to recover the amortized cost basis of its investment and does not intend to sell, nor is it anticipated to be required to sell, any impaired investment securities at a loss[35] Debt Securities by Contractual Maturity (June 30, 2025, Dollars in millions) | Maturity | Available for Sale (Amortized Cost) | Available for Sale (Fair Value) | Held to Maturity (Amortized Cost) | Held to Maturity (Fair Value) | |:---|:---|:---|:---|:---| | Due in one year or less | $2,895 | $2,900 | $82 | $82 | | Due after one year through five years | $4,912 | $4,940 | $641 | $631 | | Due after five years through ten years | $0 | $0 | $1,399 | $1,360 | | Due after ten years | $0 | $0 | $548 | $487 | | Mortgage-backed securities | $13,651 | $13,700 | $10,354 | $9,513 | | Total | $21,458 | $21,540 | $13,024 | $12,073 | 4. Loans and allowance for loan losses Analyzes the loan portfolio composition, credit quality, and adequacy of the allowance for loan losses Loan Portfolio Summary (Dollars in millions) | Loan Type | June 30, 2025 | December 31, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Commercial and industrial | $61,660 | $61,481 | $179 | 0.29% | | Commercial real estate | $20,155 | $20,780 | $(625) | -3.01% | | Residential real estate | $24,117 | $23,166 | $951 | 4.10% | | Consumer | $25,772 | $22,570 | $3,202 | 14.19% | | Total Loans | $136,116 | $135,581 | $535 | 0.39% | | Allowance for loan losses | $(2,197) | $(2,184) | $(13) | 0.59% | | Net Loans | $133,919 | $133,397 | $522 | 0.39% | Nonaccrual Loans (Dollars in millions) | Loan Type | June 30, 2025 | December 31, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Commercial and industrial | $787 | $696 | $91 | 13.07% | | Commercial real estate | $376 | $468 | $(92) | -19.66% | | Residential real estate | $265 | $279 | $(14) | -5.02% | | Consumer | $141 | $148 | $(7) | -4.73% | | Total Nonaccrual Loans | $1,573 | $1,690 | $(117) | -6.92% | Allowance for Loan Losses and Net Charge-offs (Dollars in millions) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Beginning balance (Allowance for Loan Losses) | $2,184 | $2,129 | $55 | 2.58% | | Provision for credit losses | $235 | $350 | $(115) | -32.86% | | Net charge-offs | $(222) | $(275) | $53 | -19.27% | | Ending balance (Allowance for Loan Losses) | $2,197 | $2,204 | $(7) | -0.32% | Loan Modification Activities (Six Months Ended June 30, 2025 vs. 2024, Dollars in millions) | Loan Class | 2025 Total Modified Loans | 2024 Total Modified Loans | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Commercial and industrial | $223 | $209 | $14 | 6.70% | | Commercial real estate | $452 | $377 | $75 | 19.89% | | Other commercial construction | $214 | $197 | $17 | 8.63% | | Residential | $87 | $105 | $(18) | -17.14% | | Total | $986 | $916 | $70 | 7.64% | 5. Borrowings Summarizes short-term and long-term borrowings, including recent debt issuances and available credit facilities Borrowings Summary (Dollars in millions) | Category | June 30, 2025 | December 31, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Short-term borrowings | $2,071 | $1,060 | $1,011 | 95.38% | | Long-term borrowings | $12,380 | $12,605 | $(225) | -1.79% | | Total Borrowings | $14,451 | $13,665 | $786 | 5.75% | - In June 2025, M&T issued $750 million of senior notes (5.179% fixed, maturing July 2031) and M&T Bank issued $750 million of senior notes (4.762% fixed, maturing July 2028)[72] - In July 2025, M&T issued $750 million of subordinated notes (5.40% fixed, maturing July 2035)[72] - M&T Bank had secured borrowing facilities available with the FHLB of New York and the FRB of New York totaling approximately $18.1 billion and $24.7 billion, respectively, at June 30, 2025[73] 6. Shareholders' equity Details the components of shareholders' equity, including outstanding preferred stock series Preferred Stock Outstanding (Dollars in millions, except per share) | Series | Shares Issued and Outstanding (June 30, 2025) | Carrying Amount (June 30, 2025) | Annual Dividend Rate | |:---|:---|:---|:---| | Series F | 50,000 | $500 | 5.125% | | Series G | 40,000 | $400 | 7.304% | | Series H | 10,000,000 | $261 | 5.625% | | Series I | 50,000 | $500 | 3.500% | | Series J | 75,000 | $733 | 7.500% | | Total | 10,215,000 | $2,394 | | - On August 15, 2024, M&T redeemed all outstanding shares of the Series E Preferred Stock[75] 7. Revenue from contracts with customers Disaggregates noninterest income subject to revenue recognition standards Sources of Noninterest Income Subject to Revenue Recognition (Six Months Ended June 30, Dollars in millions) | Classification | 2025 | 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Service charges on deposit accounts | $270 | $251 | $19 | 7.57% | | Trust income | $359 | $330 | $29 | 8.79% | | Brokerage services income | $63 | $59 | $4 | 6.78% | | Merchant discount and credit card interchange fees | $83 | $80 | $3 | 3.75% | | Other revenues from operations | $39 | $35 | $4 | 11.43% | | Total | $814 | $755 | $59 | 7.81% | - Deferred revenue decreased from $57 million at December 31, 2024, to $52 million at June 30, 2025[79] 8. Pension plans and other postretirement benefits Reports the net periodic benefit cost for defined benefit and defined contribution plans Net Periodic Benefit for Defined Benefit Plans (Six Months Ended June 30, Dollars in millions) | Metric | Pension Benefits 2025 | Pension Benefits 2024 | Other Postretirement Benefits 2025 | Other Postretirement Benefits 2024 | |:---|:---|:---|:---|:---| | Service cost | $4 | $5 | $1 | $1 | | Interest cost on projected benefit obligation | $54 | $58 | $1 | $1 | | Expected return on plan assets | $(93) | $(101) | $0 | $0 | | Amortization of prior service credit | $0 | $0 | $(1) | $(1) | | Amortization of net actuarial gain | $(1) | $(1) | $(2) | $(1) | | Net periodic benefit | $(36) | $(39) | $(1) | $0 | - Expenses for defined contribution pension and retirement savings plans totaled $90 million for the six months ended June 30, 2025, up from $85 million in the prior year[82] 9. Earnings per common share Presents the calculation of basic and diluted earnings per common share Basic Earnings Per Common Share (Six Months Ended June 30, Dollars in millions, except per share) | Metric | 2025 | 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Net income available to common shareholders | $1,226 | $1,131 | $95 | 8.40% | | Weighted-average shares outstanding (thousands) | 161,701 | 166,705 | (5,004) | -3.00% | | Basic earnings per common share | $7.58 | $6.79 | $0.79 | 11.63% | Diluted Earnings Per Common Share (Six Months Ended June 30, Dollars in millions, except per share) | Metric | 2025 | 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Net income available to common shareholders | $1,226 | $1,131 | $95 | 8.40% | | Adjusted weighted-average shares outstanding (thousands) | 162,511 | 167,372 | (4,861) | -2.90% | | Diluted earnings per common share | $7.55 | $6.76 | $0.79 | 11.69% | 10. Comprehensive income Details the components and changes in accumulated other comprehensive income Accumulated Other Comprehensive Income (Loss), Net (Dollars in millions) | Component | June 30, 2025 | December 31, 2024 | Change (Amount) | |:---|:---|:---|:---| | Investment securities | $61 | $(153) | $214 | | Cash flow hedges | $63 | $(101) | $164 | | Defined benefit plans | $95 | $98 | $(3) | | Other | $(4) | $(8) | $4 | | Total | $215 | $(164) | $379 | - Total other comprehensive income (loss) for the six months ended June 30, 2025, was a gain of $379 million, compared to a loss of $92 million in the prior year[23][85] 11. Derivative financial instruments Discloses the use and fair value of derivative instruments for hedging and other purposes Interest Rate Swap Agreements - Designated as Hedges (Notional Amount, Dollars in millions) | Category | June 30, 2025 | December 31, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Fair value hedges | $6,100 | $5,365 | $735 | 13.70% | | Cash flow hedges | $26,650 | $30,819 | $(4,169) | -13.53% | | Total | $32,750 | $36,184 | $(3,434) | -9.49% | Fair Values of Derivative Instruments (Dollars in millions) | Category | June 30, 2025 (Asset) | December 31, 2024 (Asset) | June 30, 2025 (Liability) | December 31, 2024 (Liability) | |:---|:---|:---|:---|:---| | Derivatives designated as hedging instruments | $27 | $6 | $4 | $3 | | Derivatives not designated as hedging instruments | $238 | $249 | $550 | $819 | | Total Derivatives | $265 | $255 | $554 | $822 | - The net effect of interest rate swap agreements decreased net interest income by $106 million for the six months ended June 30, 2025, compared to $213 million for the same period in 2024[100] 12. Variable interest entities and asset securitizations Describes the company's involvement with VIEs, including asset-backed securitizations and tax equity partnerships Asset-Backed Notes Issued to Investors (Dollars in millions) | Issue Date | Collateral Type | June 30, 2025 (Notes to Investors) | December 31, 2024 (Notes to Investors) | |:---|:---|:---|:---| | August 2023 | Equipment finance loans and leases | $214 | $297 | | March 2024 | Automobile loans | $302 | $371 | | August 2024 | Equipment finance loans and leases | $478 | $561 | | February 2025 | Automobile loans | $627 | $0 | | May 2025 | Equipment finance loans and leases | $520 | $0 | | Total | | $2,141 | $1,229 | Tax Equity Partnerships (Carrying Amount and Future Funding Commitments, Dollars in millions) | Category | June 30, 2025 (Carrying Amount) | December 31, 2024 (Carrying Amount) | June 30, 2025 (Future Funding Commitments) | December 31, 2024 (Future Funding Commitments) | |:---|:---|:---|:---|:---| | Affordable housing projects | $1,527 | $1,384 | $596 | $467 | | Renewable energy | $104 | $135 | $101 | $46 | | Other | $35 | $37 | $0 | $0 | | Total | $1,666 | $1,556 | $697 | $513 | - The reduction to income tax expense from investments accounted for using the proportional amortization method was $20 million for the six months ended June 30, 2025, up from $15 million in 2024[111] - The reduction to income tax expense from renewable energy credit investments was $12 million for the six months ended June 30, 2025, down from $20 million in 2024[111] - Maximum exposure to loss from investments in tax equity partnerships was $2.1 billion at June 30, 2025[111] 13. Fair value measurements Provides information on assets and liabilities measured at fair value on a recurring and nonrecurring basis Assets and Liabilities Measured at Fair Value on a Recurring Basis (Dollars in millions) | Category | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Total Assets | $22,755 | $19,961 | $2,794 | 14.00% | | Trading account | $93 | $101 | $(8) | -7.92% | | Investment securities available for sale | $21,540 | $18,849 | $2,691 | 14.28% | | Equity securities | $274 | $235 | $39 | 16.60% | | Real estate loans held for sale | $583 | $521 | $62 | 11.90% | | Total Liabilities | $554 | $822 | $(268) | -32.60% | - Loans subject to nonrecurring fair value measurement decreased from $847 million at December 31, 2024, to $644 million at June 30, 2025[121] - Changes in fair value recognized for partial charge-offs of loans and loan impairment reserves were decreases of $157 million for the six months ended June 30, 2025[121] 14. Commitments and contingencies Outlines significant credit-related commitments, legal contingencies, and other potential liabilities Significant Credit-Related Commitments (Dollars in millions) | Commitment Type | June 30, 2025 | December 31, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Commitments to extend credit | $52,139 | $50,671 | $1,468 | 2.90% | | Standby letters of credit | $2,305 | $2,260 | $45 | 1.99% | | Commercial letters of credit | $40 | $58 | $(18) | -31.03% | | Financial guarantees and indemnification contracts | $4,503 | $4,335 | $168 | 3.87% | | Commitments to sell real estate loans | $1,424 | $1,142 | $282 | 24.70% | - The Company's maximum credit risk for recourse associated with loans sold under the Fannie Mae DUS program totaled approximately $4.3 billion at June 30, 2025[129] - The remaining liability related to the FDIC special assessment was $108 million at June 30, 2025, down from $157 million at December 31, 2024[134] - The range of reasonably possible losses for legal matters, beyond the existing recorded liability, was between $0 and $25 million at June 30, 2025[133] 15. Segment information Presents financial results for the company's reportable operating segments - The Company's reportable segments are Commercial Bank, Retail Bank, and Institutional Services and Wealth Management[136] Net Income (Loss) by Reportable Segment (Six Months Ended June 30, Dollars in millions) | Segment | 2025 | 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Commercial Bank | $462 | $406 | $56 | 13.79% | | Retail Bank | $722 | $918 | $(196) | -21.35% | | Institutional Services and Wealth Management | $249 | $272 | $(23) | -8.46% | | All Other | $(133) | $(410) | $277 | 67.56% | | Total Net Income | $1,300 | $1,186 | $114 | 9.61% | Total Revenue by Reportable Segment (Six Months Ended June 30, Dollars in millions) | Segment | 2025 | 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Commercial Bank | $1,438 | $1,416 | $22 | 1.55% | | Retail Bank | $2,402 | $2,562 | $(160) | -6.24% | | Institutional Services and Wealth Management | $771 | $778 | $(7) | -0.90% | | All Other | $91 | $(194) | $285 | 146.91% | | Total Revenue | $4,702 | $4,562 | $140 | 3.07% | 16. Relationship with BLG and Bayview Financial Discloses financial relationships and transactions with BLG and Bayview Financial - M&T holds a 20% minority interest in BLG; no distributions were received from BLG for the three-month and six-month periods ended June 30, 2025[142] - The Company sub-services residential mortgage loans for Bayview Financial with outstanding principal balances of $157.6 billion at June 30, 2025, up from $111.5 billion at December 31, 2024[143] Revenues from Sub-servicing Loans for Bayview Financial (Dollars in millions) | Period | 2025 | 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Three Months Ended June 30 | $55 | $31 | $24 | 77.42% | | Six Months Ended June 30 | $95 | $63 | $32 | 50.79% | - The Company had various lending commitments to Bayview Financial totaling $1.0 billion at June 30, 2025, with $666 million outstanding[144] - Bayview Financial maintained $3.5 billion of deposit balances at the Company at June 30, 2025, up from $2.2 billion at December 31, 2024[144] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Provides management's perspective on the company's financial condition, results of operations, and key business trends Financial Overview Summarizes key financial results and performance drivers for the recent quarter and half-year periods Summary of Financial Results (Dollars in millions, except per share) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---| | Net income | $716 | $584 | $132 (23%) | $1,300 | $1,186 | $114 (10%) | | Diluted earnings per share | $4.24 | $3.32 | $0.92 (28%) | $7.55 | $6.76 | $0.79 (12%) | | Taxable-equivalent net interest income | $1,722 | $1,707 | $15 (1%) | $3,429 | $3,423 | $6 (0%) | | Provision for credit losses | $125 | $130 | $(5) (-4%) | $255 | $350 | $(95) (-27%) | | Other income | $683 | $611 | $72 (12%) | $1,294 | $1,164 | $130 (11%) | | Other expense | $1,336 | $1,415 | $(79) (-6%) | $2,751 | $2,693 | $58 (2%) | - QoQ increase in net interest income reflects one more calendar day of earnings and favorable impact from interest rate swap agreements, partially offset by $20 million lower taxable-equivalent interest income due to municipal bond amortization alignment[150] - QoQ increase in noninterest income driven by higher residential mortgage banking revenues and gains on sales of an out-of-footprint loan portfolio ($15 million) and a subsidiary ($10 million)[150] - YoY H1 increase in net interest income reflects an 8 basis-point widening of the net interest margin[158] - YoY H1 decline in provision for credit losses mainly reflects improved levels of criticized loans[158] - M&T repurchased 6,073,957 shares of common stock in Q2 2025 at a total cost of $1.1 billion; no share repurchases occurred in H1 2024[152] Supplemental Reporting of Non-GAAP Results of Operations Presents non-GAAP financial measures to provide additional insight into operating performance Supplemental Non-GAAP Results (Dollars in millions, except per share) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---| | Net operating income | $724 | $594 | $130 (22%) | $1,318 | $1,208 | $110 (9%) | | Diluted net operating earnings per share | $4.28 | $3.38 | $0.90 (27%) | $7.66 | $6.89 | $0.77 (11%) | | Annualized return on average tangible assets | 1.44% | 1.21% | - | 1.32% | 1.20% | - | | Annualized return on average tangible common equity | 15.54% | 12.53% | - | 14.03% | 13.99% | - | | Efficiency ratio | 55.2% | 60.5% | - | 57.8% | 58.0% | - | | Tangible equity per common share (period end) | $112.48 | $111.13 | $1.35 (1%) | $112.48 | $102.42 | $10.06 (10%) | Taxable-equivalent Net Interest Income Analyzes net interest income and margin, detailing the performance of earning assets and interest-bearing liabilities Taxable-equivalent Net Interest Income and Margin (Dollars in millions) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---| | Taxable-equivalent net interest income | $1,722 | $1,707 | $15 (1%) | $3,429 | $3,423 | $6 (0%) | | Net interest margin | 3.62% | 3.66% | -4 bps | 3.64% | 3.56% | +8 bps | | Net interest spread | 2.80% | 2.82% | -2 bps | 2.80% | 2.52% | +28 bps | | Contribution of interest-free funds | 0.82% | 0.84% | -2 bps | 0.84% | 1.04% | -20 bps | - H1 2025 net interest margin widening driven by a 55 basis-point decrease in the cost of interest-bearing liabilities, partially offset by a 27 basis-point decline in the yield received on earning assets[161] Average Loans (Dollars in millions) | Loan Type | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---| | Commercial and industrial | $61,036 | $61,056 | $(20) (0%) | $61,046 | $57,486 | $3,560 (6%) | | Commercial real estate | $25,333 | $26,259 | $(926) (-4%) | $25,794 | $32,077 | $(6,283) (-20%) | | Residential real estate | $23,684 | $23,176 | $508 (2%) | $23,431 | $23,071 | $360 (2%) | | Consumer | $25,354 | $24,353 | $1,001 (4%) | $24,856 | $21,558 | $3,298 (15%) | | Total Average Loans | $135,407 | $134,844 | $563 (0%) | $135,127 | $134,192 | $935 (1%) | Average Investment Securities (Dollars in millions) | Category | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---| | Available for sale | $21,048 | $19,702 | $1,346 (7%) | $20,378 | $12,801 | $7,577 (59%) | | Held to maturity | $13,222 | $13,702 | $(480) (-4%) | $13,461 | $15,089 | $(1,628) (-11%) | | Equity and other securities | $1,065 | $1,076 | $(11) (-1%) | $1,070 | $1,251 | $(181) (-14%) | | Total Average Investment Securities | $35,335 | $34,480 | $855 (2%) | $34,909 | $29,141 | $5,768 (20%) | Average Deposits (Dollars in millions) | Deposit Type | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---| | Noninterest-bearing | $45,153 | $45,436 | $(283) (-1%) | $45,294 | $48,175 | $(2,881) (-6%) | | Savings and interest-checking | $94,042 | $91,573 | $2,469 (3%) | $92,814 | $87,300 | $5,514 (6%) | | Time deposits of $250,000 or less | $10,669 | $10,489 | $180 (2%) | $10,579 | $12,196 | $(1,617) (-13%) | | Time deposits greater than $250,000 | $3,053 | $2,954 | $99 (3%) | $3,004 | $3,486 | $(482) (-14%) | | Brokered savings and interest-checking | $9,921 | $9,991 | $(70) (-1%) | $9,956 | $8,111 | $1,845 (23%) | | Brokered time deposits | $568 | $777 | $(209) (-27%) | $672 | $4,510 | $(3,838) (-85%) | | Total Average Deposits | $163,406 | $161,220 | $2,186 (1%) | $162,319 | $163,778 | $(1,459) (-1%) | Average Borrowings (Dollars in millions) | Category | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---| | Short-term borrowings | $3,327 | $2,869 | $458 (16%) | $3,100 | $5,595 | $(2,495) (-45%) | | Long-term borrowings | $10,936 | $11,285 | $(349) (-3%) | $11,109 | $10,631 | $478 (4%) | | Total Average Borrowings | $14,263 | $14,154 | $109 (1%) | $14,209 | $16,226 | $(2,017) (-12%) | Provision for Credit Losses Discusses the provision for credit losses in relation to net charge-offs and overall asset quality trends Provision for Credit Losses (Dollars in millions) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---| | Provision for credit losses | $125 | $130 | $(5) (-4%) | $255 | $350 | $(95) (-27%) | | Net charge-offs (H1) | - | - | - | $222 | $275 | $(53) (-19.3%) | Nonperforming Asset and Past Due Loan Data (Dollars in millions) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | |:---|:---|:---|:---|:---| | Nonaccrual loans | $1,573 | $1,540 | $1,690 | $2,024 | | Real estate and other foreclosed assets | $30 | $34 | $35 | $33 | | Total nonperforming assets | $1,603 | $1,574 | $1,725 | $2,057 | | Accruing loans past due 90 days or more | $496 | $384 | $338 | $233 | | Loans 30-89 days past due | $1,368 | $1,447 | $1,655 | $1,387 | | Nonaccrual loans as a percent of total loans | 1.16% | 1.14% | 1.25% | 1.50% | | Commercial real estate loan concentration (% of Tier 1 capital + ALLL) | 129% | 133% | 136% | 151% | - Nonaccrual loans increased $33 million QoQ, reflecting a $125 million increase in commercial and industrial nonaccrual loans, partially offset by reductions in consumer ($50 million) and commercial real estate ($23 million) nonaccrual loans[200] - Criticized investor-owned commercial real estate loans totaled $4.6 billion (19% of such loans) at June 30, 2025, improved from $6.0 billion (23%) at December 31, 2024[207] - The allowance for loan losses totaled $2.2 billion at June 30, 2025, representing 1.61% of loans outstanding[229] - The reserve for unfunded credit commitments was $80 million at June 30, 2025, up from $60 million at December 31, 2024[229] Other Income Details the components of noninterest income, including mortgage banking and trust income Other Income Components (Dollars in millions) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---| | Mortgage banking revenues | $130 | $118 | $12 (11%) | $248 | $210 | $38 (18%) | | Service charges on deposit accounts | $137 | $133 | $4 (3%) | $270 | $251 | $19 (8%) | | Trust income | $182 | $177 | $5 (3%) | $359 | $330 | $29 (9%) | | Brokerage services income | $31 | $32 | $(1) (-1%) | $63 | $59 | $4 (6%) | | Trading account and other non-hedging derivative gains | $12 | $9 | $3 (33%) | $21 | $16 | $5 (30%) | | Other revenues from operations | $191 | $142 | $49 (33%) | $333 | $304 | $29 (9%) | | Total Other Income | $683 | $611 | $72 (12%) | $1,294 | $1,164 | $130 (11%) | - Residential mortgage loans sub-serviced for others increased to $157.6 billion at June 30, 2025, from $111.5 billion at December 31, 2024, due to a new arrangement effective February 2025[234][235] - H1 2025 other revenues from operations include a $15 million gain on the sale of an out-of-footprint residential builder and developer loan portfolio and a $10 million gain on the sale of a subsidiary specializing in institutional services[244] - BLG income was $0 for H1 2025, compared to $25 million in H1 2024[242][246] Other Expense Analyzes the components of noninterest expense, including salaries, benefits, and operational costs Other Expense Components (Dollars in millions) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---| | Salaries and employee benefits | $813 | $887 | $(74) (-8%) | $1,700 | $1,597 | $103 (6%) | | Equipment and net occupancy | $130 | $132 | $(2) (-2%) | $262 | $254 | $8 (3%) | | Outside data processing and software | $138 | $136 | $2 (1%) | $274 | $244 | $30 (12%) | | Professional and other services | $86 | $84 | $2 (2%) | $170 | $176 | $(6) (-3%) | | FDIC assessments | $22 | $23 | $(1) (-4%) | $45 | $97 | $(52) (-53%) | | Advertising and marketing | $25 | $22 | $3 (14%) | $47 | $47 | $0 (0%) | | Amortization of core deposit and other intangible assets | $9 | $13 | $(4) (-31%) | $22 | $28 | $(6) (-21%) | | Other costs of operations | $113 | $118 | $(5) (-4%) | $231 | $250 | $(19) (-8%) | | Total Other Expense | $1,336 | $1,415 | $(79) (-6%) | $2,751 | $2,693 | $58 (2%) | - QoQ decrease in salaries and employee benefits reflects seasonally higher stock-based compensation, payroll-related taxes, and other employee benefits expense in Q1 2025[249] - YoY H1 decrease in FDIC assessments includes a $34 million special assessment expense recognized in H1 2024[252] - YoY H1 increase in outside data processing and software costs reflects enhancements to technology infrastructure, cybersecurity, and financial recordkeeping systems[252] Income Taxes Explains the provision for income taxes and the effective tax rate for the reported periods Income Tax Provision and Effective Tax Rate (Dollars in millions) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---| | Provision for income taxes | $219 | $177 | $42 (24%) | $396 | $333 | $63 (19%) | | Effective tax rate | 23.4% | 23.2% | +0.2% | 23.3% | 21.9% | +1.4% | - H1 2024 income tax expense reflected a $17 million net discrete tax benefit related to the resolution of an income tax matter inherited from the acquisition of People's United[253] - New federal tax legislation signed on July 4, 2025, is not expected to have a material impact on the Company's effective tax rate[253] Liquidity Risk Assesses the company's liquidity position, funding sources, and ability to meet obligations - Core deposits, the most significant funding source, totaled $150.9 billion at June 30, 2025, up from $147.5 billion at December 31, 2024[255] - Total uninsured deposits were estimated to be $75.8 billion at June 30, 2025, with approximately $9.6 billion collateralized by the Company[258] Available Liquidity Sources (Dollars in millions) | Source | June 30, 2025 | December 31, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Deposits at the FRB of New York | $19,234 | $18,805 | $429 | 2.28% | | Unused secured borrowing facilities (FRB of New York) | $24,700 | $24,546 | $154 | 0.63% | | Unused secured borrowing facilities (FHLB of New York) | $18,063 | $17,655 | $408 | 2.31% | | Unencumbered investment securities (after estimated haircuts) | $25,845 | $24,019 | $1,826 | 7.60% | | Total | $87,842 | $85,025 | $2,817 | 3.31% | - M&T's parent company liquidity, inclusive of projected repayment of notes receivable from bank subsidiaries, covered projected cash outflows for 38 months at June 30, 2025[262] - M&T estimates its Liquidity Coverage Ratio (LCR) on June 30, 2025, exceeded the regulatory minimum standards applicable to a Category III institution[264] Market Risk and Interest Rate Sensitivity Evaluates exposure to market risk, primarily interest rate risk, and its potential impact on earnings and equity - The Company uses interest rate swap agreements to manage interest rate risk, with an aggregate notional amount of $18.5 billion currently in effect and $14.3 billion in forward-starting agreements at June 30, 2025[268][269] Sensitivity of Net Interest Income to Changes in Interest Rates (Dollars in millions) | Change in Interest Rates | Calculated Increase (Decrease) in Projected Net Interest Income (June 30, 2025) | |:---|:---| | +200 basis points | $(70) | | +100 basis points | $(17) | | -100 basis points | $8 | | -200 basis points | $(1) | - M&T's cumulative upward deposit pricing beta was approximately 55% from Q1 2022 through Q2 2024, and its cumulative downward deposit pricing beta was approximately 52% from Q3 2024 through Q2 2025[270] - The percentage impact to the Economic Value of Equity (EVE) resulting from a 100 basis-point increase and decrease in market interest rates was -4.2% and 1.4%, respectively, at June 30, 2025[271] - Fair values of non-hedging derivative assets and liabilities were $194 million and $518 million, respectively, at June 30, 2025[274] Capital Reviews the company's capital position, regulatory capital ratios, and capital management activities Shareholders' Equity and Select Ratios (Dollars in millions, except per share) | Metric | June 30, 2025 | December 31, 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Total shareholders' equity | $28,525 | $29,027 | $(502) | -1.73% | | Common shareholders' equity | $26,131 | $26,633 | $(502) | -1.88% | | Tangible common shareholders' equity per share | $112.48 | $109.36 | $3.12 | 2.85% | | Shareholders' equity to total assets | 13.48% | 13.95% | -0.47% | -3.37% | | Tangible common shareholders' equity to tangible assets | 8.67% | 9.07% | -0.40% | -4.41% | - On January 22, 2025, M&T's Board of Directors authorized a $4.0 billion common share repurchase program, replacing the prior $3.0 billion program[283] - M&T repurchased 6,073,957 shares of common stock in Q2 2025 at a total cost of $1.1 billion[283] Regulatory Capital Ratios (M&T Consolidated, June 30, 2025) | Ratio | Value | |:---|:---| | CET1 capital | 10.99% | | Tier 1 capital | 12.50% | | Total capital | 13.96% | | Tier 1 leverage | 9.81% | - M&T's Stress Capital Buffer (SCB) is estimated to be 2.7% effective October 1, 2025, down from 3.8% at June 30, 2025[284] - No goodwill impairment was identified in the Q4 2024 annual test, and no events were identified to reduce the fair value of a business reporting unit below its carrying amount at June 30, 2025[287] Segment Information Provides a detailed financial summary and analysis for each reportable business segment Net Income (Loss) by Reportable Segment (Six Months Ended June 30, Dollars in millions) | Segment | 2025 | 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Commercial Bank | $462 | $406 | $56 | 13.79% | | Retail Bank | $722 | $918 | $(196) | -21.35% | | Institutional Services and Wealth Management | $249 | $272 | $(23) | -8.46% | | All Other | $(133) | $(410) | $277 | 67.56% | | Total Net Income | $1,300 | $1,186 | $114 | 9.61% | Commercial Bank Segment Financial Summary Commercial Bank Segment Highlights (Six Months Ended June 30, Dollars in millions) | Metric | 2025 | 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Net income | $462 | $406 | $56 | 13.79% | | Total revenue | $1,438 | $1,416 | $22 | 1.55% | | Provision for credit losses | $96 | $154 | $(58) | -37.66% | | Average loans | $78,084 | $80,317 | $(2,233) | -2.78% | | Average deposits | $45,738 | $43,242 | $2,496 | 5.77% | - Noninterest income increased $63 million (20%) YoY H1, driven by a $15 million gain on the sale of an out-of-footprint residential builder and developer loan portfolio and a $14 million rise in credit-related fees[297] - Average loans decreased YoY H1 primarily due to a reduction in average commercial real estate loans, partially offset by growth in commercial and industrial loans[297] Retail Bank Segment Financial Summary Retail Bank Segment Highlights (Six Months Ended June 30, Dollars in millions) | Metric | 2025 | 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Net income | $722 | $918 | $(196) | -21.35% | | Total revenue | $2,402 | $2,562 | $(160) | -6.24% | | Net interest income | $1,960 | $2,161 | $(201) | -9.30% | | Noninterest income | $442 | $401 | $41 | 10.22% | | Provision for credit losses | $150 | $128 | $22 | 17.19% | | Average loans | $52,803 | $50,325 | $2,478 | 4.92% | | Average deposits | $89,781 | $91,977 | $(2,196) | -2.39% | - YoY H1 net interest income declined due to a 45 basis-point narrowing of the net interest margin on deposits and lower average deposit balances[302] - YoY H1 noninterest income increased due to higher residential mortgage loan sub-servicing revenues related to a new arrangement effective February 2025[302] - YoY H1 provision for credit losses rose due to higher net charge-offs of indirect consumer loans[302] Institutional Services & Wealth Management Segment Financial Summary Institutional Services & Wealth Management Segment Highlights (Six Months Ended June 30, Dollars in millions) | Metric | 2025 | 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Net income | $249 | $272 | $(23) | -8.46% | | Total revenue | $771 | $778 | $(7) | -0.90% | | Net interest income | $337 | $380 | $(43) | -11.32% | | Noninterest income | $434 | $398 | $36 | 9.05% | | Noninterest expense | $432 | $408 | $24 | 5.88% | | Average loans | $4,015 | $3,418 | $597 | 17.47% | | Average deposits | $18,874 | $16,764 | $2,110 | 12.59% | - YoY H1 net interest income decreased predominantly due to a 96 basis-point narrowing of the net interest margin on deposits[306] - YoY H1 noninterest income increased reflecting higher sales and fund management fees from global capital markets business and increased fee income from Wealth Management business[306] All Other Category Financial Summary All Other Category Highlights (Six Months Ended June 30, Dollars in millions) | Metric | 2025 | 2024 | Change (Amount) | Change (%) | |:---|:---|:---|:---|:---| | Net loss | $(133) | $(410) | $277 | 67.56% | | Net interest income (expense) | $51 | $(244) | $295 | 120.90% | | Provision for credit losses | $4 | $65 | $(61) | -93.85% | | Noninterest expense | $321 | $383 | $(62) | -16.19% | - YoY H1 net interest income increased due to favorable internal funds transfer pricing methodologies and lower net interest expense from interest rate swap agreements[311] - YoY H1 noninterest expense decreased reflecting lower FDIC assessments (including a $34 million special assessment in H1 2024) and lower other costs of operations[311] Recent Accounting Developments References disclosures on significant accounting policies and recent accounting pronouncements - A discussion of the Company's significant accounting policies and critical accounting estimates can be found in M&T's 2024 Annual Report[310] - A summary of recent accounting developments is included in note 1 of Notes to Financial Statements[310] Forward-Looking Statements Provides a cautionary statement regarding forward-looking information contained in the report - Forward-looking statements are based on current expectations, estimates, and projections about the Company's business, and management's beliefs and assumptions[312] - Important factors that could cause actual outcomes to differ materially include economic conditions, changes in interest rates, credit losses, liquidity, regulatory changes, and market volatility[315] - The Company assumes no duty and does not undertake to update forward-looking statements[317] Quarterly Trends Presents key financial data and ratios for the past six quarters to highlight trends Key Quarterly Financial Trends (Dollars in millions, except per share) | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |:---|:---|:---|:---|:---|:---|:---| | Net income | $716 | $584 | $681 | $721 | $655 | $531 | | Diluted earnings per share | $4.24 | $3.32 | $3.86 | $4.02 | $3.73 | $3.02 | | Net interest margin (taxable-equivalent basis) | 3.62% | 3.66% | 3.58% | 3.62% | 3.59% | 3.52% | | Nonaccrual loans to total loans | 1.16% | 1.14% | 1.25% | 1.42% | 1.50% | 1.71% | | Average total assets | $210,261 | $208,321 | $211,853 | $209,581 | $211,981 | $211,478 | | Average deposits | $163,406 | $161,220 | $164,639 | $161,505 | $163,491 | $164,065 | Reconciliation of Quarterly GAAP to Non-GAAP Measures Provides reconciliations of GAAP financial measures to their non-GAAP counterparts Key Non-GAAP Reconciliations (Q2 2025, Dollars in millions, except per share) | Metric | GAAP | Non-GAAP | |:---|:---|:---| | Net income | $716 | $724 (Net operating income) | | Diluted earnings per common share | $4.24 | $4.28 (Diluted net operating earnings per common share) | | Other expense | $1,336 | $1,327 (Noninterest operating expense) | | Efficiency ratio | - | 55.2% | | Average assets | $210,261 | $201,733 (Average tangible assets) | | Average common equity | $26,272 | $17,744 (Average tangible common equity) | Item 3. Quantitative and Qualitative Disclosures About Market Risk Refers to the MD&A section for detailed disclosures on market risk management and sensitivity Item 4. Controls and Procedures Confirms the effectiveness of disclosure controls and procedures and discusses changes in internal controls - M&T's disclosure controls and procedures were effective as of June 30, 2025[326] - The Company has begun a multi-phase implementation of new financial recordkeeping and reporting systems, which will change certain processes and internal controls over financial reporting[327] - No changes have been identified during Q2 2025 that have materially affected, or are reasonably likely to materially affect, M&T's internal control over financial reporting[327] Part II. Other Information This part includes disclosures on legal proceedings, risk factors, share repurchases, and other required information Item 1. Legal Proceedings Refers to the financial statement notes for information regarding legal proceedings Item 1A. Risk Factors States there have been no material changes to the risk factors disclosed in the 2024 Annual Report Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details the company's common stock repurchase activity during the second quarter of 2025 Issuer Purchases of Equity Securities (Q2 2025, Dollars in millions, except per share) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Number of Shares as Part of Publicly Announced Programs | Maximum Approximate Dollar Value of Shares that may yet be Purchased Under the Programs | |:---|:---|:---|:---|:---| | April 1 - April 30, 2025 | 1,863,741 | $165.93 | 1,862,812 | $3,028 | | May 1 - May 31, 2025 | 3,260,089 | $182.63 | 3,257,058 | $2,434 | | June 1 - June 30, 2025 | 954,215 | $183.76 | 954,087 | $2,258 | | Total | 6,078,045 | $177.69 | 6,073,957 | | - On January 22, 2025, M&T's Board of Directors authorized a program under which $4.0 billion of common shares may be repurchased, replacing the prior $3.0 billion program[331] Item 3. Defaults Upon Senior Securities Reports no defaults upon senior securities during the period Item 4. Mine Safety Disclosures Indicates that this item is not applicable to the company Item 5. Other Information Confirms no changes to Rule 10b5-1 trading arrangements by executives or directors - No executive officers or directors adopted, terminated, or modified a Rule 10b5-1 trading arrangement in the three months ended June 30, 2025[333] Item 6. Exhibits Lists the exhibits filed with the report, including required certifications Signatures Contains the formal signatures authorizing the filing of the report