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    MTB
    Earnings call· Jun 2026(Q2 FY26)

    M&T BANK Q2 FY26 earnings call MTB

    Jul 15, 2026 Source

    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

    5

    • 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

    2

    • 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

    9
    CategoryTargetConfidence
    Full-year Net Interest Income (NII)
    lower half of $7.2 billion to $7.35 billion range
    high materiality
    Medium
    Full-year Net Interest Margin (NIM)
    high 3.60s
    high materiality
    Medium
    Full-year Average Loans
    $141 billion to $143 billion
    high materiality
    Medium
    Full-year Deposit Outlook
    $165 million to $167 billion range
    high materiality
    Medium
    Full-year Cumulative Interest-Bearing Deposit Beta
    low to mid-50% range
    medium materiality
    Medium
    Full-year Fee Income
    $2.8 billion to $2.85 billion
    high materiality
    Medium
    Full-year Expenses
    end of $5.5 billion to $5.6 billion range
    high materiality
    Medium
    Full-year Net Charge-offs
    37 basis points
    high materiality
    Medium
    CET1 Ratio Operating Range
    lower part of the 10% to 10.5% range
    high materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    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)
    		————

    Operational metrics

    28
    Return on Assets (ROA)
    1.51%
    Q2 FY26

    GAAP ROA for the quarter.

    Return on Common Equity (ROCE)
    12.3%
    Q2 FY26

    GAAP ROCE for the quarter.

    Net Operating Income
    $823 millionup from $671 million in the linked quarter
    Q2 FY26

    Non-GAAP measure.

    Diluted Operating Earnings Per Share
    $5.35compared to $4.18 in the prior quarter
    Q2 FY26

    Non-GAAP measure.

    Operating Return on Assets (ROA)
    1.59%
    Q2 FY26

    Non-GAAP measure.

    Earning Asset Yield
    5.89%increased 4 basis points
    Q2 FY26

    Mostly reflecting higher CRE yields, including a benefit from higher nonaccrual related interest.

    Investment Securities Yield
    4.29%increased 7 basis points
    Q2 FY26

    Yield on the investment securities portfolio.

    Purchased Debt Securities Yield
    5.02%
    Q2 FY26

    Yield on $1.1 billion in debt securities purchased in the quarter.

    Investment Portfolio Duration
    3.6 years
    Q2 FY26 end

    Duration of the investment portfolio at quarter end.

    Estimated LCR
    106%
    Q2 FY26 end

    M&T estimates its LCR, exceeding regulatory minimums applicable to a Category 3 bank, though not subject to LCR requirements.

    Mortgage Banking Revenues
    $127 millionunchanged
    Q2 FY26

    Total mortgage banking revenues.

    Residential Mortgage Revenues
    $96 millionincreased $7 million
    Q2 FY26

    From higher servicing fee income.

    Commercial Mortgage Revenues
    $31 milliondecreased $7 million
    Q2 FY26

    Primarily from lower origination volume in the first quarter.

    Service Charges
    $144 millionincreased $5 million
    Q2 FY26

    Reflecting higher consumer service charges mostly from higher transaction volume.

    Trust Income
    $197 millionincreased $14 million
    Q2 FY26

    From seasonal tax prep fees and growth in Institutional Services and Wealth fee income.

    Derivatives and Trading Revenue
    $22 millionincreased $8 million
    Q2 FY26

    From revenues from interest rate swap transactions with commercial customers.

    Other Revenues from Operations
    $213 millionincreased $26 million
    Q2 FY26

    Reflecting a higher Bayview distribution and higher credit card and merchant discount.

    Bayview Distribution
    $47 millioncompared to $33 million in the prior quarter
    Q2 FY26

    Investment remains a meaningful and recurring contributor to annual earnings profile.

    Noninterest Expense
    $1.35 billiondecrease of $89 million from the prior quarter
    Q2 FY26

    Total noninterest expense for the quarter.

    Salaries and Benefits
    $826 milliondecreased $88 million
    Q2 FY26

    From lower seasonal compensation and staffing levels, partially offset by additional working day and full quarter impact of annual merit increases.

    Outside Data Processing and Software Costs
    $10 millionincreased
    Q2 FY26

    Reflecting continued investments in technology, infrastructure, and cybersecurity.

    Tangible Book Value Per Share Growth
    1%from the first quarter
    Q2 FY26

    Quarter-over-quarter growth in tangible book value per share.

    Sub-servicing Loans Added
    214,000
    Q2 FY26

    New sub-servicing loans closed, contributing to future revenue.

    Sub-servicing Additional Revenue
    $35 million
    H2 FY26

    Expected additional revenue from newly added sub-servicing loans in the second half of the year.

    Bayview Revenue
    ~$300 million
    Since 2020

    Total revenue received from Bayview since 2020, indicating strong growth in their businesses.

    Investment Securities and Cash Held at Fed
    $53.9 billion
    Q2 FY26 end

    Total liquidity resources at the end of the second quarter.

    Average Investment Securities
    $38.7 billionincreased $0.9 billion
    Q2 FY26 average

    Average balance of investment securities.

    Sub-servicing Portfolio
    $184 billionup nicely from the prior quarter
    Q2 FY26 end

    The total sub-servicing number disclosed at June 30.

    Industry KPIs

    14
    MetricValueDetails
    Loans$141.4 billionUSD
    Deposits$163.5 billionUSD
    Rotce ROE18.57%%
    Cet1 ratio10.9%%
    Capital returns$465 millionUSD
    Fee income lines$740 millionUSD
    Allowance reserves1.52%%
    Net interest income$1.8 billionUSD
    Net interest margin3.70%%
    Net charge offs npls23 bpsbps
    Aoci securities marks$125 millionUSD
    Provision for credit losses$120 millionUSD
    Private credit nbfi exposure—
    Efficiency ratio operating leverage52.8%%

    Risks & headwinds

    3
    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

    8

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.