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M&T BANK CORP (MTB)·Q1 2025 Earnings Summary

Executive Summary

  • EPS of $3.32 missed S&P Global consensus ($3.40), while revenue of $2.18B also missed ($2.35B); net interest margin widened to 3.66% QoQ and YoY, supported by deposit cost declines and balance sheet mix . EPS/Revenue consensus values from S&P Global*
  • Credit trends improved: nonaccrual loans fell to 1.14% of loans (down 11 bps QoQ), net charge-offs declined to 0.34% (annualized), and criticized CRE balances dropped $667M QoQ .
  • Management introduced 2025 outlook: TE NII $7.05–$7.15B, fee income $2.5–$2.6B (high end), total GAAP expense $5.4–$5.5B, NCOs ~40 bps, tax rate ~24.5%, average loans $135–$137B, deposits $162–$164B, CET1 ~11% .
  • Capital return and resilience remain central: CET1 estimated 11.50% (down 18 bps QoQ on buybacks), $662M repurchased in Q1; TBVPS rose 2% QoQ to $111.13, reinforcing capital generation and shareholder returns .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion and deposit cost control: NIM rose +8 bps QoQ to 3.66% aided by lower interest-bearing deposit costs (-27 bps QoQ) and favorable mix; total deposit cost fell to 1.70% from 1.90% in Q4 and 2.06% in Q1’24 .
  • Credit improvement: nonaccrual loans dropped $150M QoQ to $1.54B (1.14% of loans), net charge-offs fell to 0.34% (annualized), and criticized CRE balances fell $667M QoQ .
  • Strategic execution and capital return: $662M buybacks and TBVPS up to $111.13; guidance frames NIM in mid-to-high 3.60s and TE NII $7.05–$7.15B for 2025, highlighting momentum in margin trajectory .
    Quote: “Net interest margin increased 8 basis points… reflecting our efficient balance sheet and the strength of our deposit franchise.” — CFO Daryl Bible .

What Went Wrong

  • Top-line miss vs consensus and sequential revenue down: Revenues fell to $2.306B from $2.385B in Q4 (noninterest income down $46M QoQ on absence of prior-quarter securities gains and BLG distribution), while S&P revenue consensus was higher at ~$2.35B . Revenue consensus values from S&P Global*
  • Expense pressure and seasonal items: Noninterest expenses rose +4% QoQ to $1,415M, driven by $110M seasonal comp, higher software fees; efficiency ratio deteriorated to 60.5% from 56.8% .
  • CRE headwinds and payoffs: Average CRE loans declined -6% QoQ (−$1.6B), with elevated payoffs and competitive market conditions; management lowered loan outlook primarily due to CRE .
    Quote: “It’s really our CRE portfolio… challenges… payoffs and paydowns and muted origination activity with increased market competition.” — CFO Daryl Bible .

Financial Results

Reported Results vs Prior Periods

MetricQ1 2024Q4 2024Q1 2025
Revenues ($USD Billions)$2.260 $2.385 $2.306
Net Interest Income – TE ($USD Billions)$1.692 $1.740 $1.707
Noninterest Income ($USD Billions)$0.580 $0.657 $0.611
Provision for Credit Losses ($USD Billions)$0.200 $0.140 $0.130
Net Income ($USD Billions)$0.531 $0.681 $0.584
Diluted EPS ($)$3.02 $3.86 $3.32
Net Interest Margin (%)3.52 3.58 3.66
Efficiency Ratio (%)60.8 56.8 60.5

S&P Global Consensus vs Actuals (EPS, Revenue)

MetricQ1 2024Q4 2024Q1 2025
EPS Consensus Mean ($)3.12*3.74*3.40*
EPS Actual ($)3.01*3.77*3.32*
Revenue Consensus Mean ($USD Billions)$2.262*$2.346*$2.347*
Revenue Actual ($USD Billions)$2.060*$2.245*$2.176*

Values retrieved from S&P Global*

Noninterest Income Breakdown

Category ($USD Millions)Q1 2024Q4 2024Q1 2025
Mortgage Banking Revenues104 117 118
Service Charges on Deposits124 131 133
Trust Income160 175 177
Brokerage Services29 30 32
Trading & Non-hedge Derivatives9 10 9
Securities Gains/(Losses)2 18 —
Other Revenues from Operations152 176 142
Total Noninterest Income580 657 611

Key Performance Indicators (KPIs)

KPIQ1 2024Q4 2024Q1 2025
Net Interest Margin (%)3.52 3.58 3.66
Net Charge-offs (% Avg Loans, annualized)0.42 0.47 0.34
Nonaccrual Loans (% of Loans)1.71 1.25 1.14
Allowance for Credit Losses (% of Loans)1.62 1.61 1.63
CET1 Capital Ratio (%)11.08 11.68 11.50
Tangible Book Value per Share ($)99.54 109.36 111.13
Total Deposit Cost (%)2.06 1.90 1.70

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest Income (TE)FY 2025N/A$7.05–$7.15B Introduced
Net Interest MarginFY 2025N/AMid-to-high 3.60s Introduced
Noninterest (Fee) IncomeFY 2025N/A$2.5–$2.6B; trending to high end Introduced
GAAP Expense (incl. intangible amort.)FY 2025N/A$5.4–$5.5B Introduced
Net Charge-offs (% avg loans)FY 2025N/A~40 bps Introduced
Tax Rate (TE basis)FY 2025N/A~24.5% Introduced
Avg LoansFY 2025N/A$135–$137B Introduced
Avg DepositsFY 2025N/A$162–$164B Introduced
CET1 Capital RatioFY 2025N/A~11% target; repurchases flex with RWA Introduced
Common DividendQ1 2025$1.35 (paid) $1.35 (declared/paid) Maintained
Preferred DividendsQ2 2025 pay datesN/ASeries H $0.3515625; Series J $0.46875 per depositary share Announced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Net Interest Margin and Deposit CostsQ3: NIM widened to 3.62%; deposit costs eased; brokered TD run-off . Q4: NIM 3.58; deposit costs down; brokered TD down; TE NII flat .NIM 3.66 (+8 bps QoQ); interest-bearing deposit costs -27 bps QoQ; total deposit cost 1.70% .Improving margin trajectory
CRE Portfolio and Criticized LoansQ3: CRE criticized and nonaccruals declined . Q4: Nonaccruals fell to 1.25%; criticized improved .Criticized loans down $516M QoQ (CRE -$667M); CRE payoffs elevated; competitive structure/pricing .Ongoing de-risking; still headwinds
Capital & BuybacksQ3/Q4: CET1 rose (11.54%→11.67%), $200M buybacks per quarter .CET1 11.50% (est.), $662M buybacks; CET1 ~11% target for 2025 .Higher capital return with CET1 glidepath
Fee Income DriversQ3/Q4: Mortgage banking, trust, service charges strong; BLG distribution in Q4 .Fee income $611M; growth in mortgage sub-servicing, trust, service charges; no BLG distribution; high-end FY guide .Building momentum (ex one-offs)
Macro/Tariffs & Customer BehaviorNot a focus in Q3/Q4 releases.Tariff uncertainty; consumers steady; auto/marine/RV volumes strong; business investment on pause .Mixed macro; sentiment weaker
Regulatory Outlook/Stress TestNot discussed in Q3 PR; Q4 PR references SCB, stress test result effective .Tailoring emphasis; FDIC pulling back RRP; opted into stress test; expecting lower SCB .Potentially constructive regulatory environment

Management Commentary

  • “Our first quarter results represent a strong start to the year… Net interest margin increased 8 basis points… We executed $662 million in share repurchases… fee income grew… asset quality continued to improve…” — CFO Daryl Bible .
  • “We expect taxable equivalent net interest income to be $7.05–$7.15 billion, with net interest margin increasing through the year and averaging in the mid- to high 360s.” — CFO Daryl Bible .
  • “We are definitely pretty neutral [to rate moves]… deposit betas 50+%… we have $4B of securities repricing higher; swap book accretion → NIM in 370s by late ’25/early ’26 is possible, though not our base case.” — CFO Daryl Bible .
  • “The CRE pipeline is building… portfolio should bottom by Q4 on averages; focus on disciplined structure, client selection; growing multifamily and industrial.” — CFO Daryl Bible .
  • “We tweaked CECL scenarios toward weaker macro (unemployment ~5%)… provision would’ve been closer to $110M without the tweak.” — CFO Daryl Bible .

Q&A Highlights

  • Deposits/NII: Management sees deposit growth trending toward the high end of guidance; will use incremental deposits to reduce higher-cost liabilities or build liquidity, supporting NII and margin trajectory .
  • Fee outlook: Removal of BLG distributions from assumptions; confidence in fee growth from trust, structured loan agency (ICS), service charges, mortgage origination and sub-servicing .
  • CRE dynamics: Elevated payoffs (including early prepayments by REITs) and competitive pricing/structure; portfolio remix (less office, more multifamily/industrial) and pipeline building; expect average CRE balances to bottom by Q4 .
  • Rate sensitivity: Bank is broadly neutral to parallel shifts; identified “knowns” (securities roll-up, consumer repricing, swaps accreting) underpinning margin confidence .
  • Capital & stress test: Buybacks resumed post-blackout; CET1 glide to ~11% contingent on RWA; opted into stress test with expectation of lower SCB over time .
  • Expenses/flexibility: Seasonal comp to abate in Q2; ability to adjust project pace if revenue pressure intensifies, while targeting positive operating leverage for the year .

Estimates Context

  • Q1 2025 EPS missed consensus by ~$0.08 ($3.32 vs $3.40); revenue missed by $0.17B ($2.18B vs $2.35B). Prior quarter (Q4 2024) EPS slightly beat consensus ($3.77 vs $3.74), but revenue missed ($2.25B vs ~$2.35B). Values retrieved from S&P Global*
  • Implications: Consensus for FY 2025 may need to reflect (1) fee growth skewed to later quarters (sub-servicing ramp, origination sensitivity), (2) NIM trajectory mid-to-high 3.60s with deposit costs declining and swaps/securities accretion, and (3) lower CRE balances near-term with rebuild pacing into 2026 per construction pipeline .

Key Takeaways for Investors

  • Margin trajectory is the core near-term catalyst: deposit cost relief, securities roll-up, and swaps accretion underpin NIM in the mid-to-high 3.60s for FY’25; watch Q2 seasonal normalization and day count .
  • Credit normalization remains favorable: nonaccruals and criticized CRE trending down; allowance ratio slightly higher on macro tweaks, not underlying performance deterioration .
  • CRE is the swing factor for loan balances: elevated payoffs and competition keep average CRE down near-term; pipeline (construction, multifamily, industrial) suggests bottoming by Q4 with 12–15 month funding lag .
  • Fee income mix improving: trust, service charges, and mortgage sub-servicing support high-end FY fee guide; absence of one-offs (BLG) reduces volatility .
  • Capital deployment flexible: CET1 ~11% target with continued buybacks scaled to RWA; TBVPS growth and strong liquidity provide downside support in macro uncertainty .
  • Regulatory tone potentially constructive: stress test opt-in with expectation of lower SCB and tailoring focus may incrementally aid capital planning and expense efficiency .
  • Trading lens: Near-term stock reaction likely hinges on margin prints vs guide and deposit cost trajectory; medium-term thesis rests on sustained NIM improvement, fee resilience, and visible CRE stabilization .