Shares of M&T Bank Corporation MTB rose 1.5% in the pre-market trading session on better-than-expected quarterly results. Its second-quarter 2025 adjusted net operating earnings per share of $4.28 beat the Zacks Consensus Estimate of $4.04. The bottom line compared favorably with earnings of $3.79 per share in the year-ago quarter.
Results were aided by higher non-interest income and lower provisions. Also, a rise in loan balances was another positive. However, a fall in net interest income (NII), rising expenses and lower deposits were headwinds.
Net income available to common shareholders was $679 million, up 8.5% from the prior-year quarter.
M&T Bank’s Quarterly Revenues & Expenses Rise Y/Y
MTB’s quarterly revenues were $2.40 billion, marginally surpassing the Zacks Consensus Estimate of $2.39 billion. Further, the reported figure increased 4.1% year over year.
NII (tax equivalent) declined marginally year over year to $1.72 billion. Our estimate for the metric was $1.76 billion.
Total non-interest income was $683 million, up 17% year over year. The rise was driven by an increase in almost all components. Our estimate for the metric was $632.6 million.
Total non-interest expenses were $1.34 billion, up 3% year over year. The increase was due to higher salaries and employee benefits costs, equipment and net occupancy expenses, and outside data processing and software costs. We projected the metric to be $1.37 billion.
The efficiency ratio was 55.2%, down from 55.3% in the year-earlier quarter. A lower ratio indicates a rise in profitability.
MTB’s Loan Balance Increases, Deposits Decrease
Total loans were $136.1 billion as of June 30, 2025, up 1.1% from the prior quarter. Total deposits fell marginally sequentially to $164.5 billion. Our estimate for loans and leases was $133 billion. Our estimate for deposits was $160.7 billion.
M&T Bank’s Credit Quality Improves
Net charge-offs decreased 21.2% to $108 million from the prior-year quarter. Our estimate for the metric was $143 million.
The company recorded a provision for credit losses of $125 million, down 16.7% from the year-ago quarter. Our estimate for the metric was $125.9 million.
Non-performing assets declined 22.1% year over year to $1.60 billion. Our estimate for the metric was $1.44 billion.
The ratio of non-accrual loans to total net loans was 1.16%, which declined year over year from 1.50%. Our estimate for the metric was pegged at 1.05%.
MTB’s Capital Position Mixed & Profitability Ratios Improve Y/Y
M&T Bank’s estimated Common Equity Tier 1 ratio was 10.98%, down from 11.45% as of second-quarter 2024. The tangible equity per share was $112.48, up from $102.42 in the second quarter of 2024.
The company's return on average tangible assets (annualized) and average tangible common shareholder equity were 1.44% and 15.54% respectively, compared with 1.31% and 15.27% in the prior-year quarter.
M&T Bank’s Capital Distribution Update
MTB repurchased 6.07 million shares of its common stock in accordance with its capital plan for $175.93 million, including the share repurchase excise tax, in the second quarter of 2025.
Our View on MTB
Solid NII and non-interest income will likely continue aiding M&T Bank’s organic growth. Also, decent loan growth and a diversified deposit base will likely aid its financials. However, higher expenses and limited loan portfolio diversification are near-term concerns.
M&T Bank Corporation Price, Consensus and EPS Surprise
M&T Bank Corporation price-consensus-eps-surprise-chart | M&T Bank Corporation Quote
Currently, M&T Bank carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
An Upcoming Bank Release
Fifth Third Bancorp FITB is scheduled to release second-quarter 2025 earnings on July 17. The consensus estimate for FITB’s quarterly earnings has been unchanged at 87 cents per share over the past seven days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Performance of MTB’s Peer Bank
State Street’s STT second-quarter 2025 adjusted earnings of $2.53 per share surpassed the Zacks Consensus Estimate of $2.36. The bottom line also increased 17.7% from the prior-year quarter.
STT’s results were aided by growth in fee revenues. Also, the company witnessed improvements in total assets under custody and administration and assets under management balances. However, higher adjusted expenses, a jump in provisions and lower NII acted as spoilsports.
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This article originally published on Zacks Investment Research (zacks.com).
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