Will Decent Loan Demand Aid M&T Bank's (MTB) Q2 Earnings?

Core Viewpoint - M&T Bank Corporation (MTB) is expected to report a decline in both revenues and earnings for the second quarter of 2024, with earnings estimated at $3.53, reflecting a 31.1% decrease year-over-year [1][3]. Group 1: Earnings and Revenue Estimates - The Zacks Consensus Estimate for MTB's second-quarter earnings is $3.53, indicating a 31.1% decline from the previous year [3]. - The consensus estimate for revenues is pegged at $2.27 billion, suggesting a fall of 12.8% from the prior-year reported level [13]. - Quarterly earnings have surpassed consensus estimates in two of the last four quarters, with an average earnings surprise of 0.66% [2]. Group 2: Loan and Interest Income - Demand for commercial and industrial loans, as well as commercial real estate loans, was decent in Q2 2024, supported by the Federal Reserve's high interest rate environment [5]. - The Zacks Consensus Estimate for average interest-earning assets is $193.6 billion, indicating a marginal increase from the prior quarter [6]. - Management projects net interest income (NII) of $1.70 billion, reflecting a 2.6% decline from the previous quarter [7]. Group 3: Expenses and Fee Income - Company expenses are rising due to investments in strengthening franchises, with management expecting expenses between $1.29 billion and $1.31 billion [9]. - The consensus estimate for brokerage services income is $28 million, suggesting a marginal decline from the first quarter of 2024 [8]. - The consensus estimate for non-interest income is $580 million, while management expects it to be $570 million [18]. Group 4: Mortgage Banking and Refinancing - Mortgage rates declined slightly, with the 30-year fixed mortgage rate falling to 6.7% in June, which may have led to a modest rise in refinancing activities [7][23]. - The Zacks Consensus Estimate for mortgage banking is pegged at $108 million, indicating a 3.8% increase from the prior quarter [17]. Group 5: Overall Performance Outlook - The combination of a positive Earnings ESP of +0.31% and a Zacks Rank of 3 suggests that the company may experience an earnings beat this quarter [19][25]. - The inverted yield curve and high funding costs are expected to negatively impact NII expansion [15].