What M&T Bank (MTB) Said on Its Q3 Earnings Call

Key Points

• Third-quarter earnings declined sequentially: GAAP net income fell to $775 million, or $5.04 per diluted share, from $818 million, while year-to-date operating EPS increased 17% year over year.
• Loans and deposits continued to grow: Average loans rose 2% to $143.3 billion and deposits increased to $166.8 billion, allowing M&T to reduce short-term borrowings. The bank expects modest loan growth and deposits of $169 billion to $170 billion in the fourth quarter.
• Margins and credit metrics faced pressure: Net interest margin narrowed to 3.65% as funding costs increased, while non-accrual loans and criticized loans rose. M&T projects fourth-quarter net charge-offs of 35–40 basis points and plans to maintain a CET1 ratio between 10% and 10.25%.

M&T Bank NYSE: MTB reported third-quarter 2026 net income of $775 million, or $5.04 per diluted share on a GAAP basis, compared with $818 million, or $5.32 per share, in the prior quarter. Net operating income totaled $780 million, or $5.08 per diluted share, versus $823 million, or $5.35 per share, in the linked quarter.

Chief Financial Officer Daryl Bible said the bank’s results reflected loan and deposit growth, stable net interest income and continued capital generation. The company reported a return on assets of 1.4% and return on common equity of 11.44%. On a net operating basis, return on tangible assets was 1.47% and return on tangible common equity was 17.29%.

Year-to-date net operating earnings per share rose 17% from the comparable 2025 period, Bible said.

Loans and Deposits Rise

Average loans held for investment increased $2.6 billion, or 2%, from the second quarter to $143.3 billion. Commercial real estate lending was a major contributor, with average CRE loans rising $1.6 billion, or 7%, to $24.9 billion. Consumer loans increased $600 million, or 2%, to $27.3 billion, driven by recreational finance and home-equity line-of-credit portfolios.

Average residential mortgage loans rose $400 million to $25.2 billion. Commercial and industrial loans were essentially unchanged at $65.9 billion, as growth in institutional CRE lending was offset by lower dealer commercial services balances.

Bible said the bank expects modest fourth-quarter loan growth, with average loans projected to reach $145 billion to $146 billion. The outlook calls for growth across C&I, CRE and consumer portfolios.

Average deposits increased $3.3 billion to $166.8 billion during the quarter. Interest-bearing deposits rose $3.5 billion to $123.1 billion, led by commercial mortgage, business banking and time deposits. Noninterest-bearing deposits declined $256 million to $43.7 billion, primarily because of lower trust demand deposits.

The deposit growth allowed M&T to reduce average short-term borrowings by $2.8 billion to $5.2 billion. Bible told analysts that the bank remains focused on obtaining operating accounts and funding loan growth primarily through deposits, while retaining access to term funding if needed.

Margin Holds as Funding Costs Increase

Taxable-equivalent net interest income was largely unchanged from the prior quarter at $1.8 billion. Net interest margin declined 5 basis points sequentially to 3.65%, reflecting lower non-accrual interest income and higher funding costs, partly offset by earning-asset growth and fixed-asset repricing.

Loan yields declined 3 basis points to 5.86%. Third-quarter results included a $15 million reduction in interest income on commercial loans that had previously been in non-accrual status.

Interest-bearing deposit costs rose 10 basis points to 2.05%. Bible said four basis points of the increase came from time deposits added through a promotional offering late in the second quarter and early in the third quarter. Two basis points were tied to the September rate increase, while the remainder reflected repricing and growth in other interest-bearing deposit categories.

For the fourth quarter, M&T expects taxable-equivalent net interest income of $1.83 billion to $1.85 billion and a net interest margin in the mid-3.60% range. The forecast assumes one rate increase in December.

Fee Income, Expenses and Credit Trends

Noninterest income increased to $743 million from $740 million in the second quarter. Mortgage banking revenue rose $25 million to $152 million, driven largely by a $23 million increase in residential mortgage revenue tied to higher servicing-fee income. The bank added $63 billion of sub-servicing balances in June.

Trust and investment services revenue declined $5 million to $230 million, largely due to seasonal tax-preparation fees recognized in the second quarter. Capital markets and advisory revenue fell $9 million to $32 million because of lower commercial customer interest-rate swap transactions and lower loan syndication activity.

Noninterest expenses rose $44 million sequentially to $1.39 billion. The increase included higher data processing, software and professional-services costs related to software maintenance, technology infrastructure enhancements and enterprise initiatives. The efficiency ratio rose to 54.4% from 52.8% in the prior quarter, though the year-to-date ratio improved to 55.1% from 56.3% a year earlier.

Asset quality remained relatively stable, according to Bible. Criticized loans increased $245 million to $6.1 billion, led by C&I balances. Non-accrual loans increased $90 million to $1.3 billion, with the non-accrual ratio rising 5 basis points to 0.90%. The increase was mostly related to commercial office and assisted-living credits.

Net charge-offs totaled $127 million, or 35 basis points, and the provision for credit losses was $135 million. The allowance for loan losses declined 2 basis points to 1.51% of total loans. M&T expects fourth-quarter net charge-offs of 35 to 40 basis points.

Capital and Fourth-Quarter Outlook

M&T’s estimated common equity tier 1 ratio was 10.16% at quarter-end, down 3 basis points from the second quarter. The decline reflected $323 million of share repurchases and higher risk-weighted assets associated with loan growth, partly offset by capital generation.

The bank transferred $8.3 billion of residential mortgage-backed securities from available for sale to held to maturity, an action Bible said was intended to protect tangible capital amid potential regulatory treatment of accumulated other comprehensive income.

For the fourth quarter, M&T expects average deposits of $169 billion to $170 billion, noninterest income of $710 million to $730 million and expenses, including intangible amortization, of $1.39 billion to $1.41 billion. The bank plans to operate with a CET1 ratio between 10% and 10.25% through the remainder of the year.

About M&T Bank (NYSE:MTB)

M&T Bank Corporation is a regional financial services company headquartered in Buffalo, New York. Founded in 1856, the company operates primarily through its M&T Bank subsidiary and serves consumers, businesses, institutions and government entities.

M&T Bank provides a range of banking products and services, including checking and savings accounts, consumer lending, residential mortgages, credit cards, commercial loans, treasury management and investment services. Through its wealth management and institutional businesses, the company also offers trust, investment management, custody and related financial services.

The bank serves customers across a footprint concentrated in the Mid-Atlantic and Northeastern United States, including New York, Pennsylvania, Maryland, New Jersey, Delaware, Virginia, West Virginia and Washington, DC Its businesses also include Wilmington Trust, which provides wealth management, corporate and institutional trust, and related services.

John R.

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