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M&T BANK CORP (MTB)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered $4.82 diluted EPS (+14% QoQ, +20% YoY) on revenues of $2.513B, with NIM up 6 bps to 3.68% and efficiency ratio improving to 53.6% .
  • Strong fee momentum: noninterest income rose 10% QoQ to $752M, driven by mortgage banking, a $28M CIT earnout, $20M BLG distribution, and equipment lease gains .
  • Asset quality improved: nonaccrual loans fell 4% QoQ (to 1.10% of loans) and criticized CRE declined broadly; TBVPS rose 3% QoQ to $115.31 .
  • Vs. Street: EPS beat by ~$0.42; revenue modest miss versus S&P Global consensus (see table), with revenue recognition definitions differing from GAAP reported totals .*
  • Outlook: Q4 NII (TE) ~$1.8B, NIM ~3.70%, expenses $1.35–$1.37B, NCOs 40–50 bps; CET1 10.75–11.00% with buyback flexibility and focus on deposit growth .

What Went Well and What Went Wrong

What Went Well

  • NIM expansion and operating leverage: NIM rose to 3.68% (+6 bps QoQ), revenues grew faster than expenses, driving a better efficiency ratio (53.6%) .
  • Fee income strength: Mortgage banking (+13% QoQ) and other revenues (CIT earnout, BLG distribution, equipment lease sale) supported noninterest income +10% QoQ .
  • Credit and capital: Criticized CRE balances declined across property types; TBVPS +3% QoQ; CET1 steady at 10.99% alongside $409M buybacks and an 11% dividend increase .

Management quotes: “Fee income excluding notable items [was] a record level… Revenues grew more than expenses, resulting in our third quarter efficiency ratio of 53.6%.” — CFO Daryl Bible . “We continued to return capital to our investors including an 11% increase in quarterly dividends.” — CFO Daryl Bible .

What Went Wrong

  • Elevated net charge-offs: NCOs rose to 0.42% (vs. 0.32% in Q2), driven by two large C&I resolutions totaling $49M .
  • CRE averages still contracting: Average CRE loans declined 4% QoQ (−$980M) amid payoffs and prior portfolio sale; management expects bottoming around late Q4/Q1 .
  • Expense pressure in select lines: Salaries/benefits up on severance (+$17M sequentially), and other costs up due to SERP market impacts and impairment of a renewable energy tax credit investment .

Financial Results

Headline metrics vs prior periods

MetricQ3 2024Q2 2025Q3 2025
Revenues ($USD Millions, GAAP)$2,332 $2,396 $2,513
Diluted EPS ($)$4.02 $4.24 $4.82
Net Interest Margin (%)3.62 3.62 3.68
Efficiency Ratio (%)55.0 55.2 53.6
ROA (%)1.37 1.37 1.49
Net Charge-offs (% Avg Loans, annualized)0.35 0.32 0.42

Income statement detail

Metric ($USD Millions)Q3 2024Q2 2025Q3 2025
Net Interest Income (GAAP)1,726 1,713 1,761
Net Interest Income - Taxable-Equivalent1,739 1,722 1,773
Noninterest Income606 683 752
Provision for Credit Losses120 125 125
Noninterest Expense1,303 1,336 1,363
Net Income721 716 792

Noninterest income mix

Category ($USD Millions)Q3 2024Q2 2025Q3 2025
Mortgage Banking Revenues109 130 147
Service Charges on Deposits132 137 141
Trust Income170 182 181
Brokerage Services32 31 34
Non-hedge Derivatives/Trading13 12 18
Securities Gain/(Loss)(2) — 1
Other Revenues from Operations152 191 230
Total Noninterest Income606 683 752

Balance sheet and capital KPIs

KPIQ3 2024Q2 2025Q3 2025
Average Total Loans ($B)134.8 135.4 136.5
Average Deposits ($B)161.5 163.4 162.7
CET1 Capital Ratio (%)11.54 10.99 10.99
TBVPS ($)107.97 112.48 115.31
Nonaccrual Loans ($M)1,926 1,573 1,512
Allowance for Loan Losses (% Loans)1.62 1.61 1.58

Vs. Wall Street (S&P Global)

MetricQ3 2025 ConsensusQ3 2025 ActualSurprise
EPS ($)4.39*4.82 +0.43 (beat)
Revenue ($USD Millions)2,441.3*2,388.0* / 2,513.0 GAAP −53.3 vs SPGI (miss)

*Values retrieved from S&P Global.

Note: S&P Global’s “actual” revenue classification (2,388.0M)* may differ from GAAP “Revenues” aggregation reported in the earnings materials ($2,513M) .

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025)Current Guidance (Q3 2025)Change
NII (Taxable-Equivalent)Q4 2025N/A~$1.8B New quarterly outlook
NIMQ4 2025N/A~3.70% New quarterly outlook
Noninterest IncomeQ4 2025N/A$670–$690M New quarterly outlook
Expenses (incl. intangible amort.)Q4 2025N/A$1,350–$1,370M New quarterly outlook
Net Charge-offs (% avg loans)Q4 2025N/A40–50 bps; FY <40 bps New quarterly + FY reaffirmed
Tax Rate (TE)Q4 2025N/A23.5%–24% New quarterly outlook
Average LoansQ4 2025N/A$137–$138B (C&I/consumer growth; moderating CRE decline) New quarterly outlook
Average DepositsQ4 2025N/A$163–$164B New quarterly outlook
CET1 RatioQ4 2025Operate 10.75%–11% 10.75%–11.00% (buyback flexibility) Maintained
FY NII (ex-notable)FY 2025$7.0–$7.15B (range lowered in Q2) Low end of $7.0–$7.15B Tightened to low end
FY Noninterest Income (ex-notable)FY 2025High end of $2.5–$2.6B Well above prior top end (mgmt commentary) Raised (qualitative)
FY Expenses (incl. intangible amort.)FY 2025$5.4–$5.5B (lower end in Q2) Top half of $5.4–$5.5B Higher within range

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
CRE trajectoryQ1: Pipeline building; expect avg CRE bottom ~Q4 . Q2: Best month in June; growth later in year; criticized down .Average CRE −4% QoQ; approvals doubled; expect bottom late Q4/Q1; focus on multifamily/industrial; still reducing office .Improving pipeline; near bottoming
NIM/NII outlookQ1: NIM mid–high 360s; accretion from swaps & securities . Q2: Mid–high 360s; cautious on loan growth; deposit betas ~54% .Q4 NIM ~3.70%; NII (TE) ~$1.8B; modeled neutral to down 100 bp scenarios; hedging to maintain neutrality .Stable to modestly higher
Deposit costs/betasQ1: IB deposit cost ↓27 bps; core ops focus . Q2: IB cost ↑1 bp; marginal deposits under funding curve; betas ~54% .IB costs ↓2 bps QoQ; avg noninterest-bearing ↓$1.1B; betas expected low–mid 50s on cuts .Slight easing
Credit qualityQ1: NCOs 34 bps; criticized down; modest macro reserve tweak . Q2: NCOs 32 bps; granular; criticized down $1B .NCOs 42 bps on two C&I loans ($49M); nonaccrual ratio down to 1.10%; criticized CRE −$671M QoQ .Mixed: transient C&I charges, broader improvement
Capital & SCBQ1: Opted into stress test; aiming to lower SCB; buybacks ongoing . Q2: SCB to 2.7% from 3.8% effective Oct 1; CET1 ~11% target .CET1 10.99%; SCB 2.7% effective Oct 1; buybacks $409M; dividend increased to $1.50 .Stronger buffers; active capital return
Tech/data investmentsQ2: GL platform, data centers, cloud, debit platform; cost discipline .GL go-live near term; ongoing servicing upgrades; cloud migration to reduce costs .Continuing execution
Regulatory & macroQ1: Tailoring, leverage ratio discussion; tariffs uncertainty . Q2: Macro volatility; cautious guidance .Monitoring tariff impacts; “government shutdown” contingency; pro-business regulatory shifts improving remediation efficiency .Watching risks; process efficiency up
NDFI/SSFA exposureN/ANDFI ~7–8% of loans; conservative stance (capital call lines, REITs, mortgage warehouse); SSFA exposure small; pro-cyclical RWA caution .Transparent, conservative posture

Management Commentary

  • “Operating ROTA and ROTCE of 1.56% and 17.13%… Net interest margin expanded to 3.68%… fee income excluding notable items reaching a record level… efficiency ratio of 53.6%.” — CFO Daryl Bible .
  • “M&T's businesses generated strong fee income… improved credit quality and loan growth… [and] an 11% increase in quarterly dividends.” — CFO Daryl Bible (press release) .
  • Outlook: “Q4 taxable equivalent NII approximately $1.8B… NIM ~3.7%… expenses $1.35–$1.37B… NCOs 40–50 bps… CET1 10.75–11% with opportunistic repurchases.” — CFO Daryl Bible .

Q&A Highlights

  • CRE inflection: Approval rates doubled; focus on multifamily/industrial; office reduction; expect bottom late Q4 or Q1 .
  • Capital & buybacks: CET1 operating 10.75–11%; buyback pacing sensitive to macro and valuation; potential $400–$900M in Q4 depending on conditions .
  • Operating leverage: Confidence in revenue growing faster than expenses via fee strength, NIM expansion, and CRE stabilization in 2026 .
  • NDFI/SSFA: Conservative exposure (~7–8% of loans) focused on lower-risk fund banking, REITs, and mortgage warehouse; SSFA kept small due to pro-cyclicality .
  • Margin sensitivity: Modeled neutral under down-100 scenarios (inclusive of forward curve); deposit betas expected in low–mid 50s on rate cuts; hedging maintains neutrality .
  • Government shutdown risk monitoring: Contractors, SBA, HUD/FHA, healthcare reimbursements, nonprofits; stress likely only if prolonged .

Estimates Context

  • EPS beat: Actual $4.82 versus consensus $4.39* (+~9.6% surprise), supported by strong fee income and NIM expansion, plus notable items (CIT earnout $28M, BLG distribution $20M) .*
  • Revenue miss (SPGI basis): $2,388.0M* actual versus $2,441.3M* consensus; note GAAP “Revenues” reported as $2,513M .*
  • Estimate breadth: 15 EPS estimates and 10 revenue estimates for Q3 2025.*

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Core profitability improved: NIM expansion, fee strength, and better efficiency drove higher EPS and operating returns, with TBVPS up 3% QoQ .
  • Credit remains manageable: Elevated NCOs from two idiosyncratic C&I credits, but nonaccruals and criticized CRE declined; provision steady .
  • Near-term setup: Q4 guide implies maintained NIM (~3.70%), solid NII, and controlled expenses despite seasonal professional services .
  • Capital flexibility: CET1 ~11% with improved SCB (2.7%); dividend increased and buybacks continue, enabling accretive capital return .
  • CRE cycle nearing trough: Approvals and production strengthening; balances expected to stabilize by late Q4/Q1, with focus on multifamily/industrial .
  • Fee durability: Mortgage servicing, trust, and commercial client activity underpin fee breadth; “other” revenues benefitted from specific distributions but underlying momentum remains .
  • Watch list: Rate-cut path and deposit betas, potential government shutdown impacts, and any further large C&I resolutions; management models neutrality and hedges rate risk .