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3 Reasons MTB is Risky and 1 Stock to Buy Instead

By Adam Hejl | August 29, 2025, 12:01 AM

MTB Cover Image

Since February 2025, M&T Bank has been in a holding pattern, posting a small return of 4.7% while floating around $200.80.

Is there a buying opportunity in M&T Bank, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.

Why Is M&T Bank Not Exciting?

We don't have much confidence in M&T Bank. Here are three reasons there are better opportunities than MTB and a stock we'd rather own.

1. Revenue Tumbling Downwards

Long-term growth is the most important, but within financials, a stretched historical view may miss recent interest rate changes and market returns. M&T Bank’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 1.8% over the last two years.

M&T Bank Year-On-Year Revenue Growth
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

2. Projected Net Interest Income Growth Is Slim

Forecasted net interest income by Wall Street analysts signals a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect M&T Bank’s net interest income to rise by 5.5%.

3. Net Interest Margin Dropping

Net interest margin (NIM) represents how much a bank earns in relation to its outstanding loans. It's one of the most important metrics to track because it shows how a bank's loans are performing and whether it has the ability to command higher premiums for its services.

Over the past two years, M&T Bank’s net interest margin averaged 3.6%. However, its margin contracted by 24.3 basis points (100 basis points = 1 percentage point) over that period.

This decline was a headwind for its net interest income. While prevailing rates are a major determinant of net interest margin changes over time, the decline could mean M&T Bank either faced competition for loans and deposits or experienced a negative mix shift in its balance sheet composition.

M&T Bank Trailing 12-Month Net Interest Margin

Final Judgment

M&T Bank isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 1.2× forward P/B (or $200.80 per share). This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We're fairly confident there are better stocks to buy right now. We’d recommend looking at one of our all-time favorite software stocks.

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