A month has gone by since the last earnings report for M&T Bank Corporation (MTB). Shares have lost about 0.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is M&T Bank due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for M&T Bank Corporation before we dive into how investors and analysts have reacted as of late.
M&T Bank Q2 Earnings Top Estimates on Higher Non-Interest Income
M&T Bank's 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, rising expenses and lower deposits were headwinds.
Net income available to common shareholders was $679 million, up 8.5% from the prior-year quarter.
Quarterly Revenues & Expenses Rise Y/Y
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.
Total non-interest income was $683 million, up 17% year over year. The rise was driven by an increase in almost all components.
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.
The efficiency ratio was 55.2%, down from 55.3% in the year-earlier quarter. A lower ratio indicates a rise in profitability.
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.
Credit Quality Improves
Net charge-offs decreased 21.2% to $108 million from the prior-year quarter.
The company recorded a provision for credit losses of $125 million, down 16.7% from the year-ago quarter.
Non-performing assets declined 22.1% year over year to $1.60 billion.
The ratio of non-accrual loans to total net loans was 1.16%, which declined year over year from 1.50%.
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.
Capital Distribution Update
The company 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.
Outlook
2025
Management projects NII (tax equivalent basis) to be $7.05-$7.15 billion. The company expects NIM to be in the mid to high 3.60%.
Non-interest income is anticipated between $2.5 billion and $2.6 billion.
Expenses (GAAP), including intangible amortization, are expected to be $5.4-$5.5 billion.
The company expects average loan and lease balances to be $135 billion to $137 billion. Average total deposit balances are anticipated to be $162-$164 billion.
The NCO rate is projected to be 40 bps.
CET 1 ratio is expected to be 10.75% to 11%.
The tax rate is anticipated to be 24.5% for 2025.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
VGM Scores
Currently, M&T Bank has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, M&T Bank has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
M&T Bank belongs to the Zacks Banks - Major Regional industry. Another stock from the same industry, The Bank of New York Mellon Corporation (BK), has gained 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.
The Bank of New York Mellon reported revenues of $5.03 billion in the last reported quarter, representing a year-over-year change of +9.4%. EPS of $1.94 for the same period compares with $1.51 a year ago.
The Bank of New York Mellon is expected to post earnings of $1.73 per share for the current quarter, representing a year-over-year change of +13.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.9%.
The Bank of New York Mellon has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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M&T Bank Corporation (MTB): Free Stock Analysis Report The Bank of New York Mellon Corporation (BK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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