M&T(MTB) - 2025 Q3 - Quarterly Results

Executive Summary & Key Highlights Third Quarter 2025 Performance Overview M&T Bank Corporation reported strong third-quarter 2025 results with significant increases in net income and diluted EPS compared to both the previous quarter and the prior year, driven by higher net interest income and noninterest income, alongside improved asset quality Earnings Highlights | Earnings Highlights | 3Q25 | 2Q25 | 3Q24 | | :----------------------------------- | :--- | :--- | :--- | | Net income | $792 million | $716 million | $721 million | | Diluted earnings per common share | $4.82 | $4.24 | $4.02 | | Return on average assets - annualized | 1.49 % | 1.37 % | 1.37 % | | Return on average common shareholders' equity - annualized | 11.45 % | 10.39 % | 10.26 % | Selected Ratios | Selected Ratios | 3Q25 | 2Q25 | 3Q24 | | :----------------------------------- | :--- | :--- | :--- | | Net interest margin | 3.68 % | 3.62 % | 3.62 % | | Efficiency ratio (1) | 53.6 | 55.2 | 55.0 | | Net charge-offs to average total loans - annualized | .42 | .32 | .35 | | Allowance for loan losses to total loans | 1.58 | 1.61 | 1.62 | | Nonaccrual loans to total loans | 1.10 | 1.16 | 1.42 | | Common equity Tier 1 ("CET1") capital ratio (2) | 10.99 | 10.99 | 11.54 | CFO Commentary The CFO highlighted strong fee income and earnings growth, attributing it to prudent lending, improved credit quality, and loan growth. The company also returned capital to investors, including an 11% increase in quarterly dividends - M&T's businesses generated strong fee income in 2025, contributing to earnings growth in the recent quarter[5] - Improved credit quality and loan growth reflect dedication to prudent lending[5] - The company returned capital to investors, including an 11% increase in quarterly dividends on common stock[5] Key Operational and Financial Developments Key developments include an increase in taxable-equivalent net interest income, growth in average loans (commercial and industrial, consumer, residential real estate), higher noninterest income driven by earnout payments and investment distributions, and an increase in noninterest expense due to severance and impairment charges. Asset quality improved, and share repurchases continued - Taxable-equivalent net interest income increased $51 million QoQ due to an additional earning day, favorable repricing, and an alignment of amortization periods for municipal bonds[7] - Average loans increased, reflecting higher balances in commercial and industrial, consumer, and residential real estate loans, partially offset by a decline in commercial real estate loans[7] - Noninterest income rose due to a $28 million earnout payment from the CIT business sale, a $20 million distribution from BLG investment, higher mortgage banking revenues, and a gain on equipment lease sales[7] - Noninterest expense increased primarily due to higher severance-related expense, an impairment of a renewable energy tax credit investment, and a rise in supplemental executive retirement savings plan expenses[7] - Allowance for loan losses as a percentage of total loans declined 3 basis points to 1.58% at September 30, 2025, reflecting improved asset quality[7] - M&T repurchased 2.1 million shares of common stock for $409 million in 3Q25, a decrease from 6.1 million shares for $1.1 billion in 2Q25[7] Non-GAAP Financial Measures Definition and Reconciliation M&T provides supplemental reporting on a "net operating" or "tangible" basis, excluding the after-tax effect of amortization of core deposit and other intangible assets, and merger-related expenses, which management considers nonoperating. This provides an alternative view of performance - M&T's non-GAAP reporting excludes after-tax amortization of core deposit and other intangible assets, and merger-related expenses, which are deemed 'nonoperating' by management[10] Non-GAAP Measures | Item | 3Q25 | 2Q25 | Change 3Q25 vs. 2Q25 | 3Q24 | Change 3Q25 vs. 3Q24 | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Net operating income | $798 | $724 | 10 % | $731 | 9 % | | Diluted net operating earnings per common share | $4.87 | $4.28 | 14 % | $4.08 | 19 % | | Annualized return on average tangible assets | 1.56 % | 1.44 % | | 1.45 % | | | Annualized return on average tangible common equity | 17.13 % | 15.54 % | | 15.47 % | | | Efficiency ratio | 53.6 | 55.2 | | 55.0 | | | Tangible equity per common share | $115.31 | $112.48 | 3 % | $107.97 | 7 % | Net Interest Income Analysis Taxable-equivalent Net Interest Income Taxable-equivalent net interest income increased both quarter-over-quarter and year-over-year, primarily due to favorable earning asset and interest-bearing liability repricing, which widened the net interest spread Taxable-equivalent Net Interest Income (Dollars in millions) | Item | 3Q25 | 2Q25 | Change 3Q25 vs. 2Q25 | 3Q24 | Change 3Q25 vs. 3Q24 | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Net interest income - taxable-equivalent | $1,773 | $1,722 | 3 % | $1,739 | 2 % | | Yield on average earning assets | 5.59 % | 5.51 % | | 5.82 % | | | Cost of interest-bearing liabilities | 2.71 % | 2.71 % | | 3.22 % | | | Net interest spread | 2.88 % | 2.80 % | | 2.60 % | | | Net interest margin | 3.68 % | 3.62 % | | 3.62 % | | - Taxable-equivalent net interest income increased $51 million QoQ, driven by an additional earning day, favorable earning asset and interest-bearing liability repricing, and a $20 million impact from municipal bond amortization alignment[11] - Taxable-equivalent net interest income increased $34 million YoY, reflecting favorable repricing and a 28 basis point widening of the net interest spread[12] Average Earning Assets Average earning assets saw a slight increase quarter-over-quarter due to investment securities purchases and net loan fundings, despite lower interest-bearing deposits. Year-over-year, average earning assets decreased slightly, with loan growth and investment securities purchases offsetting a significant decline in interest-bearing deposits at banks Average Earning Assets (Dollars in millions) | Item | 3Q25 | 2Q25 | Change 3Q25 vs. 2Q25 | 3Q24 | Change 3Q25 vs. 3Q24 | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Interest-bearing deposits at banks | $17,739 | $19,698 | -10 % | $25,491 | -30 % | | Investment securities | $36,559 | $35,335 | 3 % | $31,023 | 18 % | | Total loans | $136,527 | $135,407 | 1 % | $134,751 | 1 % | | Commercial and industrial loans | $61,716 | $61,036 | 1 % | $59,779 | 3 % | | Real estate - commercial loans | $24,353 | $25,333 | -4 % | $29,075 | -16 % | | Real estate - residential loans | $24,359 | $23,684 | 3 % | $22,994 | 6 % | | Consumer loans | $26,099 | $25,354 | 3 % | $22,903 | 14 % | | Total earning assets | $190,920 | $190,535 | — % | $191,366 | — % | - QoQ, average earning assets increased $385 million, driven by investment securities purchases and net loan fundings, partially offset by lower interest-bearing deposits at banks[13] - YoY, average earning assets decreased $446 million, with a $7.8 billion decrease in interest-bearing deposits at banks offset by investment securities purchases and loan growth[14] Average Interest-bearing Liabilities Average interest-bearing liabilities increased quarter-over-quarter due to higher long-term borrowings from senior and subordinated note issuances, partially offset by lower short-term borrowings. Year-over-year, the increase was primarily driven by non-brokered interest-bearing deposits and higher long-term borrowings Average Interest-bearing Liabilities (Dollars in millions) | Item | 3Q25 | 2Q25 | Change 3Q25 vs. 2Q25 | 3Q24 | Change 3Q25 vs. 3Q24 | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Savings and interest-checking deposits | $104,660 | $103,963 | 1 % | $98,295 | 6 % | | Time deposits | $13,990 | $14,290 | -2 % | $17,052 | -18 % | | Total interest-bearing deposits | $118,650 | $118,253 | — % | $115,347 | 3 % | | Short-term borrowings | $2,844 | $3,327 | -15 % | $4,034 | -30 % | | Long-term borrowings | $12,789 | $10,936 | 17 % | $11,394 | 12 % | | Total interest-bearing liabilities | $134,283 | $132,516 | 1 % | $130,775 | 3 % | - QoQ, average interest-bearing liabilities rose $1.8 billion, primarily due to issuances of senior and subordinated notes, partially offset by lower average short-term borrowings[15] - YoY, average interest-bearing liabilities increased $3.5 billion, largely from a $3.6 billion increase in non-brokered interest-bearing deposits and higher long-term borrowings[16] Credit Quality and Provision for Credit Losses Provision for Credit Losses The total provision for credit losses remained stable quarter-over-quarter but increased slightly year-over-year. Net charge-offs increased both QoQ and YoY, while the allowance for loan losses as a percentage of total loans decreased, reflecting improved asset quality Provision for Credit Losses (Dollars in millions) | Item | 3Q25 | 2Q25 | Change 3Q25 vs. 2Q25 | 3Q24 | Change 3Q25 vs. 3Q24 | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Provision for loan losses | $110 | $105 | 5 % | $120 | -8 % | | Provision for unfunded credit commitments | $15 | $20 | -25 % | $— | 100 % | | Total provision for credit losses | $125 | $125 | — % | $120 | 4 % | | Net charge-offs | $146 | $108 | 34 % | $120 | 21 % | | Net charge-offs as % of average loans (annualized) | .42 % | .32 % | | .35 % | | - The allowance for loan losses as a percentage of loans outstanding decreased from 1.61% at June 30, 2025, to 1.58% at September 30, 2025, due to lower criticized commercial real estate loans[19] Asset Quality Metrics Nonaccrual loans continued to decline both quarter-over-quarter and year-over-year, indicating an improvement in asset quality, particularly in commercial real estate, commercial and industrial, and consumer loan categories. However, accruing loans past due 90 days or more increased significantly year-over-year Asset Quality Metrics (Dollars in millions) | Item | 3Q25 | 2Q25 | Change 3Q25 vs. 2Q25 | 3Q24 | Change 3Q25 vs. 3Q24 | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Nonaccrual loans | $1,512 | $1,573 | -4 % | $1,926 | -21 % | | Total nonperforming assets | $1,549 | $1,603 | -3 % | $1,963 | -21 % | | Accruing loans past due 90 days or more (1) | $432 | $496 | -13 % | $288 | 50 % | | Nonaccrual loans as % of loans outstanding | 1.10 % | 1.16 % | | 1.42 % | | - The decrease in nonaccrual loans compared to September 30, 2024, primarily reflects reductions in commercial real estate, commercial and industrial, and consumer nonaccrual loans[20] Noninterest Income and Expense Noninterest Income Noninterest income significantly increased both quarter-over-quarter and year-over-year, driven by higher mortgage banking revenues, distributions from earnout payments and investments, and increased trading account gains Noninterest Income (Dollars in millions) | Item | 3Q25 | 2Q25 | Change 3Q25 vs. 2Q25 | 3Q24 | Change 3Q25 vs. 3Q24 | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Mortgage banking revenues | $147 | $130 | 13 % | $109 | 36 % | | Service charges on deposit accounts | $141 | $137 | 2 % | $132 | 7 % | | Trust income | $181 | $182 | -1 % | $170 | 7 % | | Brokerage services income | $34 | $31 | 9 % | $32 | 9 % | | Trading account and other non-hedging derivative gains | $18 | $12 | 66 % | $13 | 34 % | | Other revenues from operations | $230 | $191 | 21 % | $152 | 50 % | | Total Noninterest income | $752 | $683 | 10 % | $606 | 24 % | - QoQ, mortgage banking revenues rose $17 million due to increased residential mortgage loan servicing income and higher gains on commercial mortgage loan sales[24] - QoQ, other revenues from operations increased $39 million, reflecting a $28 million earnout payment from the CIT business sale, a $20 million distribution from BLG, and a $12 million gain on equipment lease sales[24] - YoY, other revenues from operations increased $78 million, including the aforementioned distributions and gains, plus higher merchant discount, credit card, and letter of credit fees, and tax-exempt income from bank-owned life insurance[24] Noninterest Expense Noninterest expense increased both quarter-over-quarter and year-over-year. The QoQ increase was mainly due to higher severance-related expenses and an impairment of a renewable energy tax credit investment, while the YoY increase also included higher employee staffing levels and technology infrastructure costs Noninterest Expense (Dollars in millions) | Item | 3Q25 | 2Q25 | Change 3Q25 vs. 2Q25 | 3Q24 | Change 3Q25 vs. 3Q24 | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Salaries and employee benefits | $833 | $813 | 2 % | $775 | 8 % | | Outside data processing and software | $138 | $138 | — % | $123 | 12 % | | FDIC assessments | $13 | $22 | -41 % | $25 | -50 % | | Other costs of operations | $136 | $113 | 21 % | $128 | 6 % | | Total Noninterest expense | $1,363 | $1,336 | 2 % | $1,303 | 5 % | - QoQ, salaries and employee benefits expense increased $20 million due to higher severance-related expense[28] - QoQ, other costs of operations increased $23 million, reflecting higher expenses from the supplemental executive retirement savings plan and an impairment of a renewable energy tax credit investment[28] - YoY, salaries and employee benefits expense increased $58 million due to annual merit increases, higher average employee staffing, increased severance, and medical benefits[28] Income Taxes The Company's effective income tax rate decreased quarter-over-quarter but increased year-over-year. The prior year's lower rate was due to a discrete tax benefit - The effective income tax rate was 22.8% in 3Q25, compared to 23.4% in 2Q25 and 20.7% in 3Q24[27] - The lower tax rate in 3Q24 reflected a discrete tax benefit related to certain tax credits[27] Capital and Liquidity Capital Ratios M&T's capital ratios remained strong and well above regulatory minimums. The CET1 capital ratio was estimated at 10.99% at September 30, 2025, consistent with the prior quarter but lower than the prior year Capital Ratios | Capital Ratios (%) | 3Q25 | 2Q25 | 3Q24 | | :----------------------------------- | :--- | :--- | :--- | | CET1 | 10.99 % | 10.99 % | 11.54 % | | Tier 1 capital | 12.49 % | 12.50 % | 13.08 % | | Total capital | 14.35 % | 13.96 % | 14.65 % | | Tangible capital – common | 8.79 % | 8.67 % | 8.83 % | - M&T's capital ratios remained well above the minimum set forth by regulatory requirements[30] - The CET1 capital ratio for M&T was estimated at 10.99% as of September 30, 2025, with total risk-weighted assets estimated at $159.5 billion[31] Shareholder Returns and Liquidity M&T continued to return capital to shareholders through dividends and share repurchases. Quarterly cash dividends totaled $234 million for common stock and $36 million for preferred stock. Share repurchases decreased significantly quarter-over-quarter. The company's estimated Liquidity Coverage Ratio (LCR) exceeded regulatory minimums - Cash dividends declared on common and preferred stock totaled $234 million and $36 million, respectively, for 3Q25[30] - M&T repurchased 2.1 million shares of common stock for $409 million in 3Q25, a decrease from 6.1 million shares for $1.1 billion in 2Q25[32] - The tangible common equity to tangible asset ratio increased 12 basis points QoQ, reflecting lower share repurchases[32] - M&T's estimated LCR was 108% at September 30, 2025, exceeding applicable regulatory minimum standards[33] Company Information Conference Call Details Details for M&T's third-quarter financial results conference call, including dial-in numbers, webcast link, and replay information, are provided for investors - Investors can participate in the 3Q25 conference call via dial-in or live webcast on M&T's website[34] - A replay of the call will be available by phone and archived on the website until October 23, 2025[34] About M&T Bank Corporation M&T Bank Corporation is a financial holding company headquartered in Buffalo, New York, offering banking products and services across the eastern U.S. and trust-related services globally through its Wilmington Trust-affiliated companies - M&T is a financial holding company based in Buffalo, New York[35] - Its principal banking subsidiary, M&T Bank, provides banking products and services with a branch and ATM network spanning the eastern U.S. from Maine to Virginia and Washington, D.C.[35] - Trust-related services are provided in select markets in the U.S. and abroad by M&T's Wilmington Trust-affiliated companies and by M&T Bank[35] Forward-Looking Statements The report includes a standard disclaimer regarding forward-looking statements, emphasizing that actual results may differ materially due to various uncertain and unpredictable factors, including economic conditions, interest rate changes, regulatory developments, and operational risks. M&T does not undertake to update these statements - The news release and conference call may contain forward-looking statements subject to risks and uncertainties[36] - Actual effects may differ materially from forecasts due to factors beyond M&T's control, including economic conditions, interest rate changes, and regulatory developments[37][39] - M&T assumes no duty and does not undertake to update forward-looking statements[41] Detailed Financial Statements Financial Highlights This section provides a comprehensive overview of M&T's financial performance, including key income statement, balance sheet, and ratio data for the three and nine months ended September 30, 2025, compared to the prior year, and a five-quarter trend analysis Performance Highlights (Three Months Ended September 30) | Performance | 2025 | 2024 | Change | | :----------------------------------- | :--- | :--- | :--- | | Net income | $792 | $721 | 10 % | | Diluted earnings per common share | $4.82 | $4.02 | 20 % | | Cash dividends per common share | $1.50 | $1.35 | 11 % | | Return on average total assets (annualized) | 1.49 % | 1.37 % | | | Net interest margin | 3.68 % | 3.62 % | | | Efficiency ratio | 53.6 % | 55.0 % | | Loan Quality (At September 30) | Loan Quality | 2025 | 2024 | Change | | :----------------------------------- | :--- | :--- | :--- | | Nonaccrual loans | $1,512 | $1,926 | -21 % | | Total nonperforming assets | $1,549 | $1,963 | -21 % | | Allowance for loan losses to total loans | 1.58 % | 1.62 % | | Five Quarter Trend: Net Income (Dollars in millions) | Quarter | Sep 30, 2025 ($ millions) | Jun 30, 2025 ($ millions) | Mar 31, 2025 ($ millions) | Dec 31, 2024 ($ millions) | Sep 30, 2024 ($ millions) | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Net income | $792 | $716 | $584 | $681 | $721 | Condensed Consolidated Statement of Income This section presents the condensed consolidated statements of income, detailing interest income and expense, net interest income, provision for credit losses, and various noninterest income and expense categories for the current quarter and year-to-date, with comparative periods and a five-quarter trend Condensed Consolidated Statement of Income (Three Months Ended September 30) | Item | 2025 ($ millions) | 2024 ($ millions) | Change | | :----------------------------------- | :--- | :--- | :--- | | Interest income | $2,680 | $2,785 | -4 % | | Interest expense | $919 | $1,059 | -13 % | | Net interest income | $1,761 | $1,726 | 2 % | | Provision for credit losses | $125 | $120 | 4 % | | Total other income | $752 | $606 | 24 % | | Total other expense | $1,363 | $1,303 | 5 % | | Income before taxes | $1,025 | $909 | 13 % | | Net income | $792 | $721 | 10 % | Condensed Consolidated Statement of Income (Nine Months Ended September 30) | Item | 2025 ($ millions) | 2024 ($ millions) | Change | | :----------------------------------- | :--- | :--- | :--- | | Net interest income | $5,169 | $5,124 | 1 % | | Provision for credit losses | $380 | $470 | -19 % | | Total other income | $2,046 | $1,770 | 16 % | | Total other expense | $4,114 | $3,996 | 3 % | | Net income | $2,092 | $1,907 | 10 % | Five Quarter Trend: Net Interest Income (Dollars in millions) | Quarter | Sep 30, 2025 ($ millions) | Jun 30, 2025 ($ millions) | Mar 31, 2025 ($ millions) | Dec 31, 2024 ($ millions) | Sep 30, 2024 ($ millions) | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Net interest income | $1,761 | $1,713 | $1,695 | $1,728 | $1,726 | Condensed Consolidated Balance Sheet This section provides the condensed consolidated balance sheets, detailing assets, liabilities, and shareholders' equity at September 30, 2025, compared to September 30, 2024, and a five-quarter trend, highlighting changes in loan portfolios, deposits, and borrowings Condensed Consolidated Balance Sheet (At September 30) | Item | 2025 ($ millions) | 2024 ($ millions) | Change | | :----------------------------------- | :--- | :--- | :--- | | Total assets | $211,277 | $211,785 | — % | | Investment securities | $36,864 | $32,327 | 14 % | | Total loans (gross) | $136,974 | $135,920 | 1 % | | Total deposits | $163,426 | $164,554 | -1 % | | Total liabilities | $182,549 | $182,909 | — % | | Total shareholders' equity | $28,728 | $28,876 | -1 % | Five Quarter Trend: Total Assets (Dollars in millions) | Quarter | Sep 30, 2025 ($ millions) | Jun 30, 2025 ($ millions) | Mar 31, 2025 ($ millions) | Dec 31, 2024 ($ millions) | Sep 30, 2024 ($ millions) | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Total assets | $211,277 | $211,584 | $210,321 | $208,105 | $211,785 | Five Quarter Trend: Total Deposits (Dollars in millions) | Quarter | Sep 30, 2025 ($ millions) | Jun 30, 2025 ($ millions) | Mar 31, 2025 ($ millions) | Dec 31, 2024 ($ millions) | Sep 30, 2024 ($ millions) | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Total deposits | $163,426 | $164,453 | $165,409 | $161,095 | $164,554 | Condensed Consolidated Average Balance Sheet and Annualized Taxable-equivalent Rates This section provides detailed average balance sheet data and annualized taxable-equivalent rates for earning assets and interest-bearing liabilities, offering insights into the composition and yield/cost of the bank's interest-sensitive assets and liabilities, and their impact on net interest spread and margin Average Earning Assets and Rates (Three Months Ended September 30) | Item | Balance 2025 ($ millions) | Rate 2025 (%) | Balance 2024 ($ millions) | Rate 2024 (%) | | :----------------------------------- | :--- | :--- | :--- | :--- | | Interest-bearing deposits at banks | $17,739 | 4.43 % | $25,491 | 5.43 % | | Investment securities | $36,559 | 4.13 % | $31,023 | 3.70 % | | Total loans | $136,527 | 6.14 % | $134,751 | 6.38 % | | Total earning assets | $190,920 | 5.59 % | $191,366 | 5.82 % | Average Interest-bearing Liabilities and Rates (Three Months Ended September 30) | Item | Balance 2025 ($ millions) | Rate 2025 (%) | Balance 2024 ($ millions) | Rate 2024 (%) | | :----------------------------------- | :--- | :--- | :--- | :--- | | Total interest-bearing deposits | $118,650 | 2.36 % | $115,347 | 2.88 % | | Total interest-bearing liabilities | $134,283 | 2.71 % | $130,775 | 3.22 % | | Net interest spread | | 2.88 % | | 2.60 % | | Net interest margin | | 3.68 % | | 3.62 % | Reconciliation of GAAP to Non-GAAP Measures This section provides detailed reconciliations of GAAP financial measures to non-GAAP measures, such as net operating income, diluted net operating earnings per common share, and tangible assets/equity, for both quarterly and five-quarter trends, offering transparency into the adjustments made for non-operating items Reconciliation of Net Income to Net Operating Income (Three Months Ended September 30) | Item | 2025 ($ millions) | 2024 ($ millions) | | :----------------------------------- | :--- | :--- | | Net income (GAAP) | $792 | $721 | | Amortization of core deposit and other intangible assets (1) | $6 | $10 | | Net operating income (Non-GAAP) | $798 | $731 | Reconciliation of Diluted EPS (Three Months Ended September 30) | Item | 2025 ($) | 2024 ($) | | :----------------------------------- | :--- | :--- | | Diluted earnings per common share (GAAP) | $4.82 | $4.02 | | Amortization of core deposit and other intangible assets (1) | $0.05 | $0.06 | | Diluted net operating earnings per common share (Non-GAAP) | $4.87 | $4.08 | Five Quarter Trend: Net Operating Income (Dollars in millions) | Quarter | Sep 30, 2025 ($ millions) | Jun 30, 2025 ($ millions) | Mar 31, 2025 ($ millions) | Dec 31, 2024 ($ millions) | Sep 30, 2024 ($ millions) | | :----------------------------------- | :--- | :--- | :--- | :--- | :--- | | Net operating income | $798 | $724 | $594 | $691 | $731 |