M&T Bank Q1 Earnings Miss Estimates on Rise in Non-Interest Expenses

M&T Bank Corporation’s MTB first-quarter 2025 adjusted net operating earnings per share of $3.38 missed the Zacks Consensus Estimate of $3.41. The bottom line compared favorably with earnings of $3.09 per share in the year-ago quarter.

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Results have been adversely affected by a fall in loan balance and a rise in expenses. Nonetheless, a rise in net interest income (NII) and non-interest income supported its financial performance. A decline in provision for credit losses was another positive. 

Net income available to common shareholders was $547 million, up 8.3% from the prior-year quarter.

M&T Bank’s Quarterly Revenues & Expenses Rise Y/Y

MTB’s quarterly revenues were $2.31 billion, which missed the Zacks Consensus Estimate by 1.6%. However, the reported figure increased 2.2% year over year.

NII (tax equivalent) rose nearly 1% year over year to $1.71 billion. Our estimate for the metric was $1.75 billion.

Total non-interest income was $611 million, up 5.3% year over year. An increase in trust income, service charges on deposit accounts and mortgage banking revenues mainly caused the uptick. Our estimate for the metric was $606.2 million.

Total non-interest expenses were $1.42 billion, up 1.4% year over year. We projected the metric to be $1.39 billion.

The efficiency ratio was 60.5%, down from 60.8% in the year-earlier quarter. A lower ratio indicates a rise in profitability.

MTB’s Loan Balance Decreases, Deposits Increase

Loans and leases, net of unearned discount, were $134.6 billion as of March 31, 2025, down marginally from the prior quarter. Total deposits rose 2.7% sequentially to $165.4 billion. Our estimate for the loans and leases was $135.6 billion. Our estimate for deposits was $160.9 billion.

M&T Bank’s Credit Quality Improves

Net charge-offs decreased 17.4% to $114 million from the prior-year quarter. Our estimate for the metric was $151.2 million.

The company recorded a provision for credit losses of $130 million, down 35% from the year-ago quarter. Our estimate for the metric was $149.7 million.

Non-performing assets declined 33% year over year to $1.57 billion. Our estimate for the metric was $1.64 billion.

The ratio of non-accrual loans to total net loans was 1.14%, which declined year over year from 1.71%. Our estimate for the metric was pegged at 1.17%.

MTB’s Capital Position & Profitability Ratios Improve Y/Y

M&T Bank’s estimated Common Equity Tier 1 ratio was 11.50%, up from 11.08% as of first-quarter 2024. The tangible equity per share was $111.13, up from $99.54 in the first quarter of 2024.

The company's return on average tangible assets (annualized) and average tangible common shareholder equity were 1.21% and 12.53% compared with 1.08% and 12.67%, respectively, in the prior-year quarter.

M&T Bank’s Capital Distribution Update

MTB repurchased 3,415,303 shares of its common stock in accordance with its capital plan for $192.06 million, including the share repurchase excise tax, in the first quarter of 2025.

Our View on MTB

The rising NII and non-interest income will likely continue aiding M&T Bank’s organic growth. Strengthening capital position and improving credit quality will support its financials in the long run. However, a declining loan balance pose 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.

Earnings Dates & Expectations of Other Banks

Citizens Financial Group, Inc. CFG is slated to report first-quarter 2025 results on April 16.  Over the past seven days, the Zacks Consensus Estimate for CFG’s quarterly earnings per share has been unchanged at 75 cents.

Fifth Third Bancorp FITB is scheduled to release first-quarter 2025 earnings on April 17. The consensus estimate for FITB’s quarterly earnings has been unchanged at 70 cents per share over the past seven days.

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This article originally published on Zacks Investment Research (zacks.com).

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