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Chief Financial Officer Commentary

"I am pleased with the solid financial results we obtained in the first quarter. M&T's start to the year reflects the consistency and strength of our diversified banking model, healthy levels of capital and liquidity as well as improved credit results. We continue to invest in our people, technology and processes to better serve our customers. We remain steadfast in our goal to make a difference in the communities where we work and live."

- Daryl N. Bible, M&T's Chief Financial Officer

Non-GAAP Measures (1)

M&T consistently provides supplemental reporting of its results on a "net operating" or "tangible" basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill and core deposit and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with merging acquired operations into M&T (when incurred), since such items are considered by management to be "nonoperating" in nature.

Taxable-equivalent Net Interest Income

Taxable-equivalent net interest income decreased $33 million in the recent quarter as compared with the fourth quarter of 2024 largely due to two less calendar days in the recent quarter.

• Average interest-bearing deposits at banks decreased $3.9 billion and the yield received on those deposits declined 32 basis points.

• Average investment securities increased $801 million and the rates earned on those securities increased 12 basis points.

• Average loans and leases decreased $879 million and the yield received on those loans and leases declined 11 basis points.

• Average interest-bearing deposits decreased $2.3 billion and the rates paid on such deposits declined 27 basis points.

• Average borrowings declined $74 million and the rates paid on such borrowings decreased 3 basis points.

Taxable-equivalent net interest income increased $15 million as compared with the year-earlier first quarter.

• Average interest-bearing deposits at banks decreased $11.0 billion and the yield received on those deposits declined 101 basis points.

• Average investment securities increased $5.9 billion and the yield earned those securities rose 70 basis points.

• Average loans and leases grew $1.0 billion while the yield received on those loans and leases decreased 26 basis points.

• Average interest-bearing deposits rose $334 million while the rates paid on those deposits declined 56 basis points.

• Average borrowings decreased $1.8 billion and the rates paid on such borrowings declined 24 basis points.

Average Earning Assets

Average earning assets decreased $4.0 billion, or 2%, from the fourth quarter of 2024.

• Average interest-bearing deposits at banks decreased $3.9 billion reflecting a decline in average deposits, purchases of investment securities and share repurchases.

• Average investment securities increased $801 million primarily due to purchases of fixed rate agency mortgage-backed securities and U.S. Treasury securities during the first quarter of 2025 and the fourth quarter of 2024.

• Average loans and leases decreased $879 million primarily reflective of lower average commercial real estate loans of $1.6 billion resulting from lower origination activity and higher payoffs, partially offset by higher average commercial and industrial loans and leases of $352 million, average consumer loans of $318 million and average residential real estate loans of $88 million.

Average earning assets decreased $4.0 billion, or 2%, from the first quarter of 2024.

• Average interest-bearing deposits at banks decreased $11.0 billion reflecting purchases of investment securities, loan growth, lower average balances of deposits and short-term borrowings and share repurchases.

• Average investment securities increased $5.9 billion primarily reflecting purchases of fixed rate agency mortgage-backed securities and U.S. Treasury securities since the beginning of 2024.

• Average loans and leases increased $1.0 billion predominantly due to higher average commercial and industrial loans and leases of $4.2 billion, reflecting growth spanning most industry types, and average consumer loans of $3.2 billion, reflecting recreational finance and automobile loan growth. Partially offsetting those increases was a $6.4 billion decline in average commercial real estate loans.

Average Interest-bearing Liabilities

Average interest-bearing liabilities decreased $2.4 billion, or 2%, in the recent quarter as compared with the fourth quarter of 2024. Average interest-bearing deposits declined $2.3 billion reflecting maturities of customer and brokered time deposits.

Average interest-bearing liabilities declined $1.5 billion, or 1%, from the first quarter of 2024.

• Average interest-bearing deposits rose $334 million reflecting a $2.8 billion increase in average non-brokered deposits, partially offset by a $2.5 billion decrease in average brokered deposits. That decrease reflects maturities of brokered time deposits, partially offset by an increase in brokered savings and interest-checking deposits.

• Average borrowings decreased $1.8 billion reflecting lower average short-term borrowings from FHLB of New York, partially offset by issuances of senior notes and other long-term debt since the beginning of 2024.

Provision for Credit Losses/Asset Quality

The provision for credit losses was $130 million in the first quarter of 2025 as compared with $140 million in the immediately preceding quarter and $200 million in the first quarter of 2024. The allowance for credit losses as a percentage of loans outstanding increased from 1.61% at December 31, 2024 to 1.63% at March 31, 2025 reflecting a modest deterioration in the macroeconomic forecasts. Net charge-offs totaled $114 million in 2025's first quarter as compared with $160 million in 2024's final quarter and $138 million in the year-earlier quarter, representing .34%, .47% and .42%, respectively, of average loans outstanding.

Nonaccrual loans were $1.5 billion at March 31, 2025, $150 million lower than at December 31, 2024 and $762 million lower than at March 31, 2024. The lower level of nonaccrual loans at the recent quarter end as compared with December 31, 2024 and March 31, 2024 reflects decreases in commercial real estate and commercial and industrial nonaccrual loans.

Noninterest Income

Noninterest income in the first quarter of 2025 decreased $46 million, or 7%, from 2024's fourth quarter.

• The net gain on bank investment securities in the fourth quarter of 2024 reflected realized gains on the sales of Fannie Mae and Freddie Mac preferred securities, partially offset by losses on non-agency investment securities.

• Other revenues from operations decreased $34 million reflecting a $23 million distribution from M&T's investment in BLG in the fourth quarter of 2024 and lower loan syndication fees and merchant discount and credit card fees in the recent quarter.

Noninterest income rose $31 million, or 5%, as compared with the first quarter of 2024.

• Mortgage banking revenues rose $14 million due to higher gains on sales of commercial mortgage loans and increased residential mortgage loan sub-servicing fees.

• Service charges on deposit accounts increased $9 million reflecting a rise in commercial service charges.

• Trust income increased $17 million predominantly due to higher sales and fees from the Company's global capital markets business and improved market performance in the wealth management business.

• Other revenues from operations decreased $10 million reflecting a $25 million distribution from M&T's investment in BLG in the first quarter of 2024, partially offset by higher letter of credit and other credit-related fees.

Noninterest Expense

Noninterest expense rose $52 million, or 4%, from the fourth quarter of 2024.

• Salaries and employee benefits expense increased $97 million, reflecting $110 million of seasonally higher stock-based compensation, payroll-related taxes and other employee benefits expense, and the impact of annual merit increases, partially offset by two less working days in the first quarter of 2025.

• The increase in outside data processing and software costs largely reflects higher software licensing fees and maintenance expenses.

• Other costs of operations decreased $50 million reflecting a $20 million loss on the redemption of certain of M&T's trust preferred obligations and a $27 million write-down of two vacated office facilities each in the fourth quarter of 2024, and lower costs associated with the Company's supplemental executive retirement savings plan primarily related to market performance. Partially offsetting those favorable factors was a $12 million pension-related distribution benefit recognized in the fourth quarter of 2024.

Noninterest expense increased $19 million, or 1%, from the first quarter of 2024.

• Salaries and employee benefits expense increased $54 million reflecting higher salaries expense from annual merit and other increases, higher average employee staffing levels and a rise in incentive compensation, including stock-based compensation expense.

• Outside data processing and software costs rose $16 million reflecting higher software licensing fees and maintenance expenses.

• The decline in FDIC assessments reflects the estimated incremental special assessment expense of $29 million recorded in the first quarter of 2024.

• Other costs of operations decreased $16 million reflecting lower costs associated with the Company's supplemental executive retirement savings plan in the recent quarter and losses on lease terminations related to certain vacated properties in the first quarter of 2024.

Income Taxes

The Company's effective income tax rate was 23.2% in the first quarter of 2025 as compared with 22.8% in the fourth quarter of 2024 and 20.0% in the first quarter of 2024. The first quarter of 2024 income tax expense reflects a net discrete tax benefit related to the resolution of a tax matter inherited from the acquisition of People's United Financial, Inc.

Capital

M&T's capital ratios remained well above the minimum set forth by regulatory requirements. Cash dividends declared on M&T's common and preferred stock totaled $223 million and $36 million, respectively, for the quarter ended March 31, 2025.

The CET1 capital ratio for M&T was estimated at 11.50% as of March 31, 2025. M&T's total risk-weighted assets at March 31, 2025 are estimated to be $156.2 billion.

M&T repurchased 3,415,303 shares of its common stock in accordance with its capital plan during the recent quarter at an average cost per share of $192.06 resulting in a total cost, including the share repurchase excise tax, of $662 million, compared with 957,988 shares at an average cost per share of $206.70 and a total cost, including the share repurchase excise tax, of $200 million in fourth quarter of 2024. No share repurchases occurred in the first quarter of 2024.

Conference Call

Investors will have an opportunity to listen to M&T's conference call to discuss first quarter financial results today at 8:00 a.m. Eastern Time. Those wishing to participate in the call may dial (800) 347-7315. International participants, using any applicable international calling codes, may dial (785) 424-1755. Callers should reference M&T Bank Corporation or the conference ID #MTBQ125. The conference call will be webcast live through M&T's website at https://ir.mtb.com/events-presentations. A replay of the call will be available through Monday April 21, 2025 by calling (800) 695-1624 or (402) 530-9026 for international participants. No conference ID or passcode is required. The event will also be archived and available by 3:00 p.m. today on M&T's website at https://ir.mtb.com/events-presentations.

About M&T

M&T is a financial holding company headquartered in Buffalo, New York. M&T's 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. 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. For more information on M&T Bank, visit www.mtb.com.

Forward-Looking Statements

This news release and related conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the rules and regulations of the SEC. Any statement that does not describe historical or current facts is a forward-looking statement, including statements based on current expectations, estimates and projections about M&T's business, and management's beliefs and assumptions.

Statements regarding the potential effects of events or factors specific to M&T and/or the financial industry as a whole, as well as national and global events generally, on M&T's business, financial condition, liquidity and results of operations may constitute forward-looking statements. Such statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond M&T's control.

Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," or "potential," by future conditional verbs such as "will," "would," "should," "could," or "may," or by variations of such words or by similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and may cause actual outcomes to differ materially from what is expressed or forecasted.

While there can be no assurance that any list of risks and uncertainties is complete, important factors that could cause actual outcomes and results to differ materially from those contemplated by forward-looking statements include the following, without limitation: economic conditions and growth rates, including inflation and market volatility; events and developments in the financial services industry, including industry conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, loan concentrations by type and industry, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; levels of client deposits; ability to contain costs and expenses; changes in M&T's credit ratings; domestic or international political developments and other geopolitical events, including trade and tariff policies and international conflicts and hostilities; changes and trends in the securities markets; common shares outstanding and common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; federal, state or local legislation and/or regulations affecting the financial services industry, or M&T and its subsidiaries individually or collectively, including tax policy; regulatory supervision and oversight, including monetary policy and capital requirements; governmental and public policy changes; political conditions, either nationally or in the states in which M&T and its subsidiaries do business; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board, regulatory agencies or legislation; increasing price, product and service competition by competitors, including new entrants; technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products and services; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition, divestment and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

These are representative of the factors that could affect the outcome of the forward-looking statements. In addition, as noted, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which M&T and its subsidiaries do business, and other factors.

M&T provides further detail regarding these risks and uncertainties in its Form 10-K for the year ended December 31, 2024, including in the Risk Factors section of such report, as well as in other SEC filings. Forward-looking statements speak only as of the date they are made, and M&T assumes no duty and does not undertake to update forward-looking statements.

 

 

 

 

  

  

 

 

 

 

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SOURCE M&T Bank Corporation