M&T Bank Q1 Earnings Miss Estimates on Rise in Non-Interest Expenses

Core Viewpoint - M&T Bank Corporation's first-quarter 2025 adjusted net operating earnings per share of $3.38 fell short of the Zacks Consensus Estimate of$ 3.41, although it showed an improvement from $3.09 per share in the same quarter last year [1] Financial Performance - The company's net income available to common shareholders was$ 547 million, reflecting an 8.3% increase from the prior-year quarter [2] - Quarterly revenues amounted to $2.31 billion, missing the Zacks Consensus Estimate by 1.6%, but representing a 2.2% year-over-year increase [3] - Net interest income (NII) rose nearly 1% year over year to$ 1.71 billion, although it was below the estimate of $1.75 billion [3] - Total non-interest income reached$ 611 million, up 5.3% year over year, driven by increases in trust income, service charges on deposit accounts, and mortgage banking revenues [4] - Total non-interest expenses were $1.42 billion, up 1.4% year over year, exceeding the projected$ 1.39 billion [4] Loan and Deposit Trends - Loans and leases, net of unearned discount, were $134.6 billion as of March 31, 2025, showing a slight decrease from the prior quarter [5] - Total deposits increased by 2.7% sequentially to$ 165.4 billion, surpassing the estimate of $160.9 billion [5] Credit Quality - Net charge-offs decreased by 17.4% to$ 114 million compared to the prior-year quarter, better than the estimate of $151.2 million [6] - The provision for credit losses was$ 130 million, down 35% from the year-ago quarter, also better than the estimate of $149.7 million [6] - Non-performing assets declined by 33% year over year to$ 1.57 billion, which was lower than the estimate of $1.64 billion [6] Capital Position and Profitability - The estimated Common Equity Tier 1 ratio improved to 11.50% from 11.08% in the first quarter of 2024 [8] - Tangible equity per share increased to$ 111.13 from $99.54 in the first quarter of 2024 [8] - Return on average tangible assets and average tangible common shareholder equity were 1.21% and 12.53%, respectively, compared to 1.08% and 12.67% in the prior-year quarter [8] Capital Distribution - M&T Bank repurchased 3,415,303 shares of its common stock for$ 192.06 million in the first quarter of 2025 [9] Outlook - The rising NII and non-interest income are expected to support M&T Bank's organic growth, while the strengthening capital position and improving credit quality will bolster its financials in the long run [10]