M&T Bank Q1 Earnings Call Highlights

Key Points

• Q1 results: M&T reported diluted GAAP EPS of $4.13 and net income of $664 million, down from the prior quarter, though net interest margin ticked up to 3.71% and taxable-equivalent net interest income was $1.76 billion.
• Credit and loan trends: Average loans rose to $138.4 billion with commercial loans up $1.5 billion, while criticized balances fell by more than $700 million, net charge-offs declined to 31 bps, and the allowance for loan losses remained 1.53%.
• Capital and regulatory outlook: Estimated CET1 was 10.33% after $1.25 billion of share repurchases (over 3.5% of shares), the bank widened its CET1 operating range to 10.0–10.5%, and expects the Fed’s proposed capital changes could boost CET1 by roughly 90 bps (plus 10–20 bps if it opts into ERBA).

M&T Bank NYSE: MTB opened 2026 with what management called a “strong start to the year,” pointing to modest net interest margin expansion, solid commercial and industrial loan growth, broad-based year-over-year fee income gains, and continued improvement in credit metrics. On the bank’s first-quarter 2026 earnings call, Senior Executive Vice President and CFO Daryl Bible also emphasized capital flexibility following a large share repurchase during the quarter and discussed how recently proposed regulatory capital changes could affect M&T’s capital ratios over time.

Quarterly results and profitability

Bible said first-quarter results included “several successes to highlight,” including margin expansion and fee income momentum. M&T reported diluted GAAP earnings per share of $4.13, down from $4.67 in the prior quarter. Net income was $664 million, compared with $759 million in the linked quarter. The quarter produced a return on assets of 1.26% and a return on common equity of 9.67%, according to Bible.

On a net operating basis, M&T reported net operating income of $671 million versus $767 million in the fourth quarter. Diluted net operating EPS was $4.18, down from $4.72. Net operating metrics included return on tangible assets of 1.33% and return on tangible common equity of 14.51%.

Net interest income, margin, and balance sheet trends

Taxable-equivalent net interest income was $1.76 billion, down $27 million, or 2%, from the prior quarter. Net interest margin was 3.71%, up two basis points. Bible attributed the improvement to “continued fixed-rate asset repricing and deposit cost discipline,” and later detailed an eight-basis-point benefit from higher spread driven by fixed asset repricing, remixing cash into securities, deposit pricing discipline, and a favorable swap portfolio impact. Those factors were partially offset by a six-basis-point headwind from a lower contribution of free funds, which Bible tied to share repurchases and the impact of lower rates on free-fund values.

Average loans and leases increased $0.8 billion to $138.4 billion. Commercial loans rose $1.5 billion to $63.8 billion, aided by middle-market, business banking, and specialty business growth, with Bible noting an “uptick in utilization” in the quarter. Commercial real estate (CRE) loans declined 3% to $23.5 billion due to softer volume early in the quarter, though Bible said CRE origination activity was strong in March. Residential mortgage loans were largely unchanged at $24.8 billion, while consumer loans fell 1% to $26.3 billion, which Bible said reflected lower recreational finance and auto loans tied to poor early-year weather.

Loan yields decreased 14 basis points to 5.86%, reflecting lower rates on variable-rate loans, partially offset by fixed-rate loan repricing and eliminating negative swap carry, according to the CFO.

On liquidity, Bible said investment securities and cash held at the Federal Reserve totaled $53.1 billion at quarter-end, representing 25% of total assets. Average investment securities increased $1.1 billion to $37.8 billion, and the yield on the securities portfolio rose nine basis points to 4.26%. M&T estimated its liquidity coverage ratio at 107% at quarter-end, exceeding minimum standards that would apply if the bank were a Category III institution.

Deposits, fees, and expenses

Average total deposits declined $0.8 billion to $164.3 billion. Non-interest-bearing deposits increased $0.4 billion to $44.6 billion, helped by Institutional Services, while interest-bearing deposits declined $1.2 billion to $119.7 billion due to lower brokered deposits. Interest-bearing deposit costs fell 21 basis points to 1.96%, with Bible citing lower costs across each segment. He added that since the first quarter of 2025, average customer deposits have outpaced loan growth by more than $1 billion and referenced a 56% interest-bearing deposit beta since the start of the 2024 cutting cycle.

Non-interest income was $689 million versus $696 million in the prior quarter. Mortgage banking revenue decreased to $127 million from $155 million, with Bible pointing to lower commercial mortgage banking volumes and explaining that residential mortgage revenues were affected by mortgage servicing rights (MSR) time decay being recognized as a contra fee item rather than an expense. Other revenues from operations increased $24 million to $187 million, driven by a $33 million Bayview distribution, partially offset by lower merchant discount revenue.

Non-interest expense was $1.44 billion, up $59 million from the fourth quarter. Salary and benefits rose $105 million to $914 million, reflecting about $115 million of seasonal compensation. FDIC expense increased $31 million, which Bible tied primarily to a $29 million reduction of estimated special assessment expense recorded in the fourth quarter. The efficiency ratio was 58.3%, compared with 55.1% in the linked quarter.

Credit quality, capital, and outlook

Credit performance improved during the quarter. Bible reported more than $700 million reduction in criticized balances, with criticized loans falling to $6.6 billion from $7.3 billion at the end of December. He said the improvement was driven by a $400 million decline in CRE criticized loans and a $306 million decline in C&I criticized loans. Non-accrual loans decreased slightly to $1.2 billion, and the non-accrual ratio fell one basis point to 89 basis points.

Net charge-offs totaled $105 million, or 31 basis points, down from 54 basis points in the prior quarter. Bible said the net charge-offs were “granular,” with no single charge-off greater than $10 million. The provision for credit losses was $140 million, and the allowance for loan losses remained 1.53% of total loans.

On capital, Bible said M&T’s estimated CET1 ratio was 10.33%, down 51 basis points from the fourth quarter, reflecting $1.25 billion of share repurchases and higher risk-weighted assets, partially offset by capital generation. The bank repurchased more than 3.5% of shares outstanding as of the end of 2025, he said.

Bible also discussed Federal Reserve regulatory capital framework proposals issued in March. Based on M&T’s initial estimate, he said the bank expects an “approximate 90 basis point benefit” to CET1 from lower risk-weighted assets under the standardized approach, and an incremental 10 to 20 basis points if it opts into the expanded risk-based approach (ERBA). In response to questions, Bible said M&T could not yet commit to adopting ERBA, noting the proposal still must go through comment and approval processes, but added that “if there’s an advantage… it’s up to us to make good decisions for our shareholders, which means we would opt in probably.”

Looking ahead, Bible said full-year expectations were unchanged from ranges discussed in January, but noted that net interest income was “trending toward the bottom half” of the $7.2 billion to $7.35 billion outlook range, implying a net interest margin in the “high three sixties.” He attributed the shift to slower-than-expected CRE and consumer growth early in the year, partially offset by stronger C&I performance. He said fee income and expenses were expected to trend toward the top of their respective ranges, citing strength across fee categories and additional sub-servicing balances expected in the second half of the year. M&T’s taxable-equivalent tax rate is expected to be about 24%.

On capital deployment, Bible said the bank widened its CET1 operating range to 10.0% to 10.5% from 10.25% to 10.5% and expects to move toward the bottom end of its CET1 range given asset quality improvement and performance. He also said the bank would pause buybacks if it saw signs of stress, adding that if it does not repurchase shares net of dividends in a given quarter, it can “accrete back about 25 basis points” of capital.

About M&T Bank NYSE: MTB

M&T Bank Corporation is a bank holding company headquartered in Buffalo, New York, that provides a broad range of banking and financial services to individuals, businesses and institutions. The company operates a commercial and retail banking franchise that includes deposit-taking, lending, and payment services delivered through branch networks, digital channels and commercial banking teams. M&T serves customers across the northeastern and mid‑Atlantic United States and has expanded its geographic footprint through strategic acquisitions.

Its core businesses include commercial banking for middle‑market and community businesses, consumer and retail banking, mortgage origination and servicing, treasury and cash management, and wealth management and trust services.

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