• Net Interest Margin: Increased by 8 basis points to 3.66%.
• Share Repurchases: Executed $662 million in share repurchases.
• Tangible Book Value Per Share: Grew by 2%.
• Fee Income Growth: Increased by 5% year-over-year, or 10% excluding last year's BLG distribution.
• Net Charge-Offs: 34 basis points, below full-year expectations of 40 basis points.
• Diluted GAAP Earnings Per Share: $3.32, down from $3.86 in the prior quarter.
• Net Income: $584 million, compared to $681 million in the linked quarter.
• Return on Assets (ROA): 1.14%.
• Return on Common Equity (ROCE): 8.36%.
• Net Operating Income: $594 million, compared to $691 million in the linked quarter.
• Taxable-Equivalent Net Interest Income: $1.71 billion, a decrease of $33 million or 2% from the linked quarter.
• Average Loans and Leases: Decreased by $0.9 million to $134.8 billion.
• Average Total Deposits: Declined by $3.4 billion or 2% to $161.2 billion.
• Noninterest Income: $611 million, compared to $657 million in the linked quarter.
• Noninterest Expenses: $1.42 billion, an increase of $52 million from the prior quarter.
• Efficiency Ratio: 60.5%, compared to 56.8% in the linked quarter.
• Nonaccrual Loans: Decreased by $150 million or 9% to $1.5 billion.
• CET1 Ratio: Estimated at 11.5%, compared to 11.68% at the end of the fourth quarter.

• Warning! GuruFocus has detected 4 Warning Sign with MTB.

Release Date: April 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• M&T Bank Corp (NYSE:MTB) reported a strong start to the year with an increase in net interest margin by 8 basis points, reflecting an efficient balance sheet and strong deposit franchise.
• The bank executed $662 million in share repurchases, contributing to a tangible book value per share growth of 2%.
• Asset quality improved with a $516 million reduction in commercial criticized balances and a $150 million reduction in nonaccrual loans.
• M&T Bank Corp (NYSE:MTB) received notable recognition, including 13 Greenwich Coalition awards and inclusion in Fortune's Most Admired and Most Innovative Company list.
• The bank's liquidity remains strong, with investment securities and cash totaling $57.9 billion, representing 28% of total assets.

Negative Points

• Diluted GAAP earnings per share decreased to $3.32 from $3.86 in the prior quarter, with net income falling to $584 million from $681 million.
• Average loans and leases decreased by $0.9 million, with lower CRE balances partially offsetting growth in other areas.
• Noninterest income declined by $46 million compared to the linked quarter, with a notable decrease in commercial mortgage banking revenues.
• Noninterest expenses increased by $52 million from the prior quarter, driven by seasonally higher compensation expenses.
• The allowance to loan ratio increased by 2 basis points to 1.63%, reflecting a modest deterioration in the macroeconomic forecast.

Q & A Highlights

Q: Can you provide insights on the net interest income (NII) and deposit flow activity? A: Daryl Bible, CFO, mentioned that while the guidance on deposits was lowered, they feel comfortable being at the higher end of the deposit range. They are experiencing good growth across commercial, small business, and consumer segments. Additional deposits will be used to pay off higher liabilities or increase liquidity.

Q: What is the outlook for fee income, and was there a Bayview distribution in the first quarter? A: Daryl Bible confirmed there was no Bayview distribution in Q1 and it has been excluded from the year's forecast. Despite this, they expect fee businesses to grow significantly in the coming quarters due to strong performance across various segments, including trust, brokerage, and mortgage banking.

Q: How are tariffs and economic uncertainties affecting customer behavior and C&I growth? A: Daryl Bible noted that consumer spending remains consistent, but business customers are pausing investments due to uncertainty. Despite this, M&T has seen growth in C&I, particularly in middle market, fund banking, and institutional sectors. Challenges are more pronounced in the CRE portfolio.

Q: What is the impact of regulatory changes on M&T Bank, and are there any beneficial changes for regional banks? A: Daryl Bible stated that M&T Bank performs well regardless of the administration in DC. Current regulatory leadership appears more focused on economic growth, with potential easing in areas like the supplementary leverage ratio and stress testing, which could benefit regional banks.

Q: How is M&T Bank managing its loan loss reserves amid a changing macroeconomic environment? A: Daryl Bible explained that they adjusted their macro outlook to account for potential economic downturns, increasing the weighting of scenarios with higher unemployment and lower GDP. This adjustment led to a slight increase in loan loss reserves, reflecting caution amid market uncertainties.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.