M&T Bank Corporation (NYSE:MTB) announces first quarter 2025 results

BUFFALO, N.Y., April 14, 2025 /PRNewswire/ -- M&T Bank Corporation ("M&T" or "the Company") reports quarterly net income of $584 million or $3.32 of diluted earnings per common share.

(Dollars in millions, except per share data)

1Q25

4Q24

1Q24

Earnings Highlights

Net interest income

$        1,695

$        1,728

$        1,680

Taxable-equivalent adjustment

12

12

12

Net interest income - taxable-equivalent

1,707

1,740

1,692

Provision for credit losses

130

140

200

Noninterest income

611

657

580

Noninterest expense

1,415

1,363

1,396

Net income

584

681

531

Net income available to common shareholders - diluted

547

644

505

Diluted earnings per common share

3.32

3.86

3.02

Return on average assets - annualized

1.14 %

1.28 %

1.01 %

Return on average common shareholders' equity - annualized

8.36

9.75

8.14

Average Balance Sheet

Total assets

$     208,321

$     211,853

$    211,478

Interest-bearing deposits at banks

19,695

23,602

30,647

Investment securities

34,480

33,679

28,587

Loans and leases

134,844

135,723

133,796

Deposits

161,220

164,639

164,065

Borrowings

14,154

14,228

16,001

Selected Ratios

(Amounts expressed as a percent, except per share data)

Net interest margin

3.66 %

3.58 %

3.52 %

Efficiency ratio (1)

60.5

56.8

60.8

Net charge-offs to average total loans - annualized

.34

.47

.42

Allowance for credit losses to total loans

1.63

1.61

1.62

Nonaccrual loans to total loans

1.14

1.25

1.71

Common equity Tier 1 ("CET1") capital ratio (2)

11.50

11.68

11.08

Common shareholders' equity per share

$      163.62

$      160.90

$      150.90

(1)

A reconciliation of non-GAAP measures is included in the tables that accompany this release.

(2)

CET1 capital ratio at March 31, 2025 is estimated.

Financial Highlights

Net interest margin widened to 3.66% in the recent quarter as compared with 3.58% in the fourth quarter of 2024 reflecting lower levels of average earning assets. Lower funding costs associated with interest-bearing deposits and short-term borrowings were partially offset by a decline in the yields received on average interest-bearing deposits at banks and average loans and leases.

Average loans and leases in the recent quarter reflect a lower average balance of commercial real estate loans, partially offset by modest increases in the average balances of commercial and industrial, residential real estate and consumer loans.

First quarter average deposits reflect maturities of brokered time deposits and a seasonal decline in commercial customer deposits.

The recent quarter decline in noninterest income reflects a distribution from M&T's investment in Bayview Lending Group, LLC ("BLG") and net gains on bank investment securities each in the final quarter of 2024.

Noninterest expenses in the first quarter of 2025 reflect seasonal salaries and employee benefits expense of $110 million and higher outside data processing and software costs, partially offset by lower other costs of operations, which in the fourth quarter of 2024 included the redemption of certain of M&T's trust preferred obligations and vacated facility write-downs, partially offset by a pension-related distribution benefit.

The level of nonaccrual loans improved to 1.14% of loans outstanding at March 31, 2025 from 1.25% at December 31, 2024.

M&T repurchased 3,415,303 shares of its common stock for a total cost of $662 million, including the share repurchase excise tax, in the first quarter of 2025. Reflecting repurchases, M&T's CET1 capital ratio declined to an estimated 11.50% at March 31, 2025, representing an 18 basis-point decrease from 11.68% at December 31, 2024.

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

Contact:

Investor Relations:

Steve Wendelboe

716.842.5138

Media Relations:

Frank Lentini

929.651.0447

Non-GAAP Measures (1)

Change1Q25 vs.

Change1Q25 vs.

(Dollars in millions, except per share data)

1Q25

4Q24

4Q24

1Q24

1Q24

Net operating income

$            594

$            691

-14 %

$            543

9 %

Diluted net operating earnings per common share

3.38

3.92

-14

3.09

9

Annualized return on average tangible assets

1.21 %

1.35 %

1.08 %

Annualized return on average tangible common equity

12.53

14.66

12.67

Efficiency ratio

60.5

56.8

60.8

Tangible equity per common share

$       111.13

$       109.36

2

$         99.54

12

______________

(1)

A reconciliation of non-GAAP measures is included in the tables that accompany this release.

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

Change1Q25 vs.

Change1Q25 vs.

(Dollars in millions)

1Q25

4Q24

4Q24

1Q24

1Q24

Average earning assets

$     189,116

$     193,106

-2 %

$     193,135

-2 %

Average interest-bearing liabilities

129,938

132,313

-2

131,451

-1

Net interest income - taxable-equivalent

1,707

1,740

-2

1,692

1

Yield on average earning assets

5.52 %

5.60 %

5.74 %

Cost of interest-bearing liabilities

2.70

2.94

3.26

Net interest spread

2.82

2.66

2.48

Net interest margin

3.66

3.58

3.52

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

Change1Q25 vs.

Change1Q25 vs.

(Dollars in millions)

1Q25

4Q24

4Q24

1Q24

1Q24

Interest-bearing deposits at banks

$      19,695

$      23,602

-17 %

$      30,647

-36 %

Trading account

97

102

-4

105

-8

Investment securities

34,480

33,679

2

28,587

21

Loans and leases

Commercial and industrial

61,056

60,704

1

56,821

7

Real estate - commercial

26,259

27,896

-6

32,696

-20

Real estate - consumer

23,176

23,088

—

23,136

—

Consumer

24,353

24,035

1

21,143

15

Total loans and leases

134,844

135,723

-1

133,796

1

Total earning assets

$    189,116

$    193,106

-2

$    193,135

-2

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

Change1Q25 vs.

Change1Q25 vs.

(Dollars in millions)

1Q25

4Q24

4Q24

1Q24

1Q24

Interest-bearing deposits

Savings and interest-checking deposits

$        101,564

$        102,127

-1 %

$          94,867

7 %

Time deposits

14,220

15,958

-11

20,583

-31

Total interest-bearing deposits

115,784

118,085

-2

115,450

—

Short-term borrowings

2,869

2,563

12

6,228

-54

Long-term borrowings

11,285

11,665

-3

9,773

15

Total interest-bearing liabilities

$        129,938

$        132,313

-2

$        131,451

-1

Brokered savings and interest-checking    deposits

$            9,991

$            9,690

3 %

$            8,030

24 %

Brokered time deposits

777

1,740

-55

5,193

-85

Total brokered deposits

$          10,768

$          11,430

-6

$          13,223

-19

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

Change

1Q25 vs.

Change

1Q25 vs.

(Dollars in millions)

1Q25

4Q24

4Q24

1Q24

1Q24

At end of quarter

Nonaccrual loans

$         1,540

$         1,690

-9 %

$         2,302

-33 %

Real estate and other foreclosed assets

34

35

-3

38

-12

Total nonperforming assets

1,574

1,725

-9

2,340

-33

Accruing loans past due 90 days or more (1)

384

338

13

297

29

Nonaccrual loans as % of loans outstanding

1.14 %

1.25 %

1.71 %

Allowance for credit losses

$         2,200

$         2,184

1

$         2,191

—

Allowance for credit losses as % of loans outstanding

1.63 %

1.61 %

1.62 %

For the period

Provision for credit losses

$            130

$            140

-7

$            200

-35

Net charge-offs

114

160

-29

138

-18

Net charge-offs as % of average loans (annualized)

.34 %

.47 %

.42 %

______________

(1)

Predominantly government-guaranteed residential real estate loans.

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

Change1Q25 vs.

Change1Q25 vs.

(Dollars in millions)

1Q25

4Q24

4Q24

1Q24

1Q24

Mortgage banking revenues

$          118

$          117

— %

$          104

13 %

Service charges on deposit accounts

133

131

1

124

7

Trust income

177

175

1

160

11

Brokerage services income

32

30

3

29

10

Trading account and other non-hedging derivative gains

9

10

4

9

3

Gain (loss) on bank investment securities

—

18

-100

2

-97

Other revenues from operations

142

176

-19

152

-6

Total

$          611

$          657

-7

$          580

5

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

Change1Q25 vs.

Change1Q25 vs.

(Dollars in millions)

1Q25

4Q24

4Q24

1Q24

1Q24

Salaries and employee benefits

$          887

$          790

12 %

$          833

7 %

Equipment and net occupancy

132

133

-1

129

3

Outside data processing and software

136

125

10

120

14

Professional and other services

84

80

3

85

-3

FDIC assessments

23

24

-2

60

-61

Advertising and marketing

22

30

-27

20

9

Amortization of core deposit and other intangible assets

13

13

3

15

-12

Other costs of operations

118

168

-30

134

-12

Total

$       1,415

$       1,363

4

$       1,396

1

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 ...