With new capital proposals (Basel III), what opportunities exist for M&T to engage in risk transfer deals, and how might this impact capital and over what timeframe?

Daryl Bible noted that Basel III proposals for SSFA-type transactions limit downside risk, making them more attractive. He mentioned launching new products in CRE to take advantage of this, expecting slow but steady growth in these transactions, starting from a very low base. “So the Basel III proposal for SSFA-type transaction, specifically, limit the downside risk that was there before... So we have some products that we have out there. We're launching new products in CRE that will take advantage of that.”

If loan growth continues to outpace deposit growth, how will M&T manage its liability mix, balancing core funding with wholesale market options, and what are the expectations for deposit costs?

Daryl Bible stated the company-wide focus on growing core deposits through various business lines and promotions. He also mentioned alternatives like securitizations, debt issuance, and FHLB advances if core deposits are insufficient, prioritizing core deposits to meet core loan demand. “But the most important thing is to really focus and serve our clients and communities and really try to do it with core deposits to meet the core loan demand.”

If the Fed keeps rates stable, do deposit costs drift higher, and what is the impact of a 25 basis point rate hike on the NIM, considering M&T's asset sensitivity?

Daryl Bible explained that interest-bearing deposits are growing faster than noninterest-bearing, putting some pressure on NIM, but he views trading a few basis points for NII growth as a "fair trade." He stated the bank is "neutral" on short-end rate changes, with current curve steepness already factored into forecasts. “I don't think our net interest margin is going to collapse by any reason, but I think it's a good trade-off from what we see.”

MTB

M&T Bank (MTB) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Financials· Jul 15, 2026

Source: earnings call transcript

Executive summary

M&T Bank Corporation Q2 FY26 — Record EPS and Strong Loan Growth

M&T Bank delivered record quarterly diluted EPS in Q2 FY26, driven by robust loan growth across commercial and consumer portfolios and record fee income. The bank maintained a stable net interest margin and saw continued improvement in asset quality, while actively managing its deposit base and capital returns. Management anticipates continued loan and deposit growth in the second half of the year, with a focus on core funding.

Highlights

Diluted GAAP EPS reached a record $5.32, up from $4.13 in the prior quarter.
Net interest income was the highest since 2023, supported by the strongest quarterly loan growth since 2012 (excluding acquisitions/PPP).
Commercial real estate (CRE) loans returned to growth, with average balances increasing for the first time since 2021 (excluding acquisitions).
Asset quality continued to improve, with net charge-offs at 23 basis points and commercial criticized loans declining by $0.7 billion.
Efficiency ratio improved significantly to 52.8% from 58.3% in the linked quarter.

Concerns

Average total deposits declined by $0.7 billion to $163.5 billion, with noninterest-bearing deposits decreasing by $0.6 billion.
The CET1 ratio declined by 14 basis points to 10.9% due to $465 million in share repurchases and higher risk-weighted assets from loan growth.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year Net Interest Income (NII)	lower half of $7.2 billion to $7.35 billion range high materiality	FY26	Medium
Full-year Net Interest Margin (NIM)	high 3.60s high materiality	FY26	Medium
Full-year Average Loans	$141 billion to $143 billion high materiality	FY26	Medium
Full-year Deposit Outlook	$165 million to $167 billion range high materiality	FY26	Medium
Full-year Cumulative Interest-Bearing Deposit Beta	low to mid-50% range medium materiality	FY26	Medium
Full-year Fee Income	$2.8 billion to $2.85 billion high materiality	FY26	Medium
Full-year Expenses	end of $5.5 billion to $5.6 billion range high materiality	FY26	Medium
Full-year Net Charge-offs	37 basis points high materiality	FY26	Medium
CET1 Ratio Operating Range	lower part of the 10% to 10.5% range high materiality	Ongoing	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Commercial Loans Growth was broad-based across middle market, business banking, and several specialty businesses, with middle market benefiting from higher utilization rates. Average balance: $66 billionQoQ growth: $2.3 billionMiddle market regional growth: $800 millionMortgage warehouse growth: $350 millionInstitutional CRE growth: $335 millionCorporate & Institutional growth: $309 million	—	—	—	—
Commercial Real Estate (CRE) Loans Reflects strong origination volume, primarily driven by growth in multifamily and industrial. The portfolio returned to growth for the first time since 2021 (excluding acquisitions). Average balance: $23.6 billionQoQ growth: $57 millionEnd-of-period balance: $24.5 billionEnd-of-period growth since March: $1.1 billion	—	—	—	—
Residential Mortgage Loans Grew nicely in the quarter. Average balance: $25.1 billion	—	—	1%	—
Consumer Loans Growth in recreational finance and HELOC portfolios. Average balance: $26.7 billion	—	—	2%	—
Deposits Noninterest-bearing deposits decreased due to lower institutional services and commercial, partially offset by consumer and business banking growth. Interest-bearing deposits remixed by shedding high-cost money market deposits for lower-cost time deposits. Encouraging trends late in the quarter. Average total deposits: $163.5 billionQoQ decline: $0.7 billionNoninterest-bearing deposits: $43.9 billionNoninterest-bearing QoQ decrease: $0.6 billionInterest-bearing deposits: $119.6 billion (largely unchanged)End-of-period deposits: $168.9 billion (up $3.4 billion from Q2 average)	—	—	—	—

MTB operating KPIs by quarter

MTB operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Sep 2026 Q3 FY26	Change vs prior quarter
Common equity tier 1 ratio (CET1)	—	—	10.99% M&T's CET1 ratio was an estimated 10.99%, unchanged from the second quarter. Source: earnings call transcript	10.84% M&T's CET1 ratio was an estimate of 10.84%, a decline of 15 basis points from the third quarter. Source: earnings call transcript	10.33% M&T's CET1 ratio was an estimated 10.33%, decline of 51 basis points from the fourth quarter. Source: earnings call transcript	10.9% M&T's estimated CET1 ratio was 10.9%, a decline of 14 basis points from the first quarter. Source: earnings call transcript	10.16% M&T's estimated CET1 ratio was 10.16%, a decline of 3 basis points in the second quarter. Source: earnings call transcript	-0.7 pt
Return on tangible common equity (ROTCE)	14.66% Net operating income yielded an ROTA and ROTCE of 1.35% and 14.66% for the recent quarter. Source: earnings call transcript	12.53% Net operating income yielded an ROTA and ROTCE of 1.21% and 12.53%. Source: earnings call transcript	17.13% We produced strong returns with operating ROTA and ROTCE of 1.56% and 17.13%. Source: earnings call transcript	16.24% Net operating income yielded an ROTA and an ROTCE of 1.49% and 16.24% for the recent quarter. Source: earnings call transcript	14.51% Net operating income yielded an ROTA and an ROTCE of 1.33% and 14.51% for the recent quarter. Source: earnings call transcript	18.57% Net operating income yielded an ROA and ROTCE of 1.59% and 18.57%. Source: earnings call transcript	17.29% Third quarter net operating ROTA and ROTCE were 1.47% and and 17.29%, both exceeding the targets established for our long-term incentive structure. Source: earnings call transcript	-1.3 pt
Net interest margin	3.58% The net interest margin was 3.58%, a decrease of 4 basis points from the prior quarter. Source: earnings call transcript	3.66% Net interest margin was 3.66%, an increase of 8 basis points from the prior quarter. Source: earnings call transcript	—	3.69% The net interest margin was 3.69%, an increase of 1 basis point from the prior quarter. Source: earnings call transcript	3.71% Net interest margin was 3.71%, an increase of 2 basis points from the prior quarter. Source: earnings call transcript	—	3.65% In line with the outlook we provided in July and September, net interest margin was 3.65%, down 5 basis points from the prior quarter, mostly reflecting those same factors that impacted NII. Source: earnings call transcript	—
Efficiency ratio	—	60.5% The efficiency ratio was 60.5% compared to 56.8% in the linked quarter. Source: earnings call transcript	53.6% Revenues grew more than expenses, resulting in our third quarter efficiency ratio of 53.6%. Source: earnings call transcript	55.1% The efficiency ratio was 55.1% compared to 53.6% in the linked quarter. Source: earnings call transcript	58.3% The efficiency ratio was 58.3%, compared to 55.1% in the linked quarter. Source: earnings call transcript	—	54.4% Our efficiency ratio was 54.4% in the third quarter, up from 52.8% in the linked quarter. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Risks & headwinds

Economic Caution

Increase in gasoline prices challenging for households

Mitigation:Households reducing spending in other areas, aided by boost in tax refunds.

Geopolitical Conflict

Not fully resolved

Mitigation:Cautiously optimistic with an outlook of continued growth.

Technology and Cybersecurity Expense Increases

Real and happening

Q&A highlights

Given the NII guide and increased loan growth, how does M&T anticipate NIM compression, and what are the underlying assumptions for deposit and loan pricing?

Daryl Bible explained the broad-based loan momentum across commercial, CRE, and consumer portfolios, noting strong finishes in Q2 for CRE and overall deposit growth. He emphasized the focus on growing core deposits to fund loans, expecting short-term borrowings to decrease as deposit momentum continues.

“We have a lot of deposit momentum going forward. And I know that we had a little bit elevated in short-term borrowings. That short-term borrowings number is going to come back down now.”

asked by Manan Gosalia · answered by Daryl Bible

2 min read 5 chapters

Detailed narrative

Technology and Innovation

M&T Bank highlighted its continued investment in technology, including new initiatives to strengthen Boston's innovation ecosystem and the fifth anniversary of its tech hub in Buffalo. These efforts aim to scale relationships, local knowledge, and disciplined execution through technology, improving customer service and operational efficiency.

The tech hub serves as a center for technologists, designers, and business leaders working together to enhance customer service and company operations.

Balance Sheet Management

The bank is actively managing its balance sheet, with a strong focus on growing core deposits to support robust loan growth. While short-term borrowings were elevated, management expects them to normalize as deposit growth continues, particularly with encouraging trends seen late in Q2 and expected in the second half of the year.

The strategy involves shedding high-cost money market deposits and replacing them with lower-cost time deposits, alongside broad efforts across consumer, business banking, commercial, and wealth segments to attract deposits.

Commercial Real Estate Strategy

M&T's CRE business has transformed significantly over the last 4-5 years, moving beyond a balance sheet-only lender to include origination and sale capabilities (RCC), institutional CRE, and affordability businesses. This diversified approach allows the bank to serve a broader range of customer needs and is expected to be a strong contributor to earning asset growth.

The bank is originating in nearly all segments except office, with strong growth in multifamily and industrial.

Sub-servicing Business Expansion

M&T recently closed on an additional 214,000 sub-servicing loans, which is expected to generate $35 million in new revenue in the second half of the year. This business, specializing in hard-to-service FHA-type lending, is a key fee income driver with costs already largely absorbed. The company's expertise in this niche attracts clients seeking specialized servicing solutions.

Capital Allocation Philosophy

The bank aims to operate its CET1 ratio in the low 10% range, with share buybacks serving as the 'tail on the dog' to manage capital levels relative to risk-weighted asset growth. This disciplined approach ensures strong capital generation while supporting strategic growth and shareholder returns.

Management indicated that the pace of buybacks will be adjusted based on the amount of RWA growth from lending activities.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.