Asked about the trade-off between maintaining deposit pricing discipline and funding loan growth, and if deposit pricing could constrain future loan growth.

M&T prioritizes acquiring operating accounts as the foundation of customer relationships. While competitive, they expect loan demand to be modest in 2027 and aim to fund it primarily with deposit growth. They also have access to capital markets for term funding if needed. “first and foremost, we're going to try to fund our loan growth with our deposit growth.”

Asked for updated thoughts on CRE growth given the higher rate environment, balancing strong pull-through this quarter with future challenges.

M&T is optimistic about continued CRE growth, potentially in the mid-single digits, despite higher rates making projects more challenging. They emphasize their expertise in CRE and ability to serve customers through on-balance sheet and off-balance sheet alternatives. “even in a more challenging environment, we still feel confident we're going to be able to grow probably maybe mid-single digit plus or minus in that neighborhood is kind of our expectations.”

Inquired about the auto leasing credit flagged in criticized loans, asking if it was idiosyncratic or macro-driven, and if M&T had prior visibility.

The credit was idiosyncratic, related to an auto leasing/vehicle remarketing platform in their NDF portfolio, and management had prior visibility. They expect nonaccruals to be flat to slightly up next quarter but generally bouncing along cyclical lows. “We believe it was idiosyncratic. It was in our NDF portfolio. This company was an auto leasing, vehicle remarketing and used car platform. We knew this was coming down the path.”

MTB

M&T Bank (MTB) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Sep 2026 (Q3 FY26)· Financials· Oct 16, 2026

Source: earnings call transcript

Executive summary

M&T Bank Q3 FY26 — Solid Loan and Deposit Growth, Strong Capital Generation

M&T Bank delivered solid Q3 FY26 results, marked by continued loan and deposit growth, which helped reduce reliance on short-term borrowings. While net interest margin saw a slight compression and nonaccrual loans increased, the bank maintained strong capital generation and improved its year-to-date efficiency. Management remains focused on operational excellence, technology investments, and disciplined execution to drive long-term value.

Highlights

Diluted GAAP earnings per share were $5.04, with net operating EPS at $5.08.
Average loans increased $2.6 billion or 2% to $143.3 billion.
Average total deposits rose $3.3 billion to $166.8 billion, reducing reliance on borrowings.
Year-to-date efficiency ratio improved to 55.1% from 56.3% last year.
Estimated CET1 ratio remained strong at 10.16%, reflecting robust capital generation.

Concerns

Net interest margin decreased 5 basis points from the prior quarter to 3.65%.
Noninterest expenses increased $44 million from the prior quarter to $1.39 billion.
Nonaccrual loans increased $90 million to $1.3 billion, driven by higher commercial nonaccrual loans, mostly related to office and assisted living credits.
Credit cited loans increased $245 million to $6.1 billion, with C&I up $213 million and CRE up $32 million.

Guidance & targets

Category	Target	Timeline	Confidence
Taxable equivalent NII	$1.83 billion to $1.85 billion high materiality	Q4 · FY26	High
Net interest margin	mid-360s high materiality	Q4 · FY26	High
Average loans	$145 million to $146 million medium materiality	Q4 · FY26	High
Average deposits	$169 million to $170 billion medium materiality	Q4 · FY26	High
Noninterest income	$710 million to $730 million medium materiality	Q4 · FY26	Medium
Noninterest expenses	$1.39 billion to $1.41 billion medium materiality	Q4 · FY26	Medium
Net charge-offs	35 to 40 basis points medium materiality	Q4 · FY26	Medium
CET1 ratio	10% to 10.25% high materiality	Q4 · FY26	High
Net operating ROTCE	17% high materiality	FY27	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Commercial Real Estate (CRE) Average CRE loans increased $1.6 billion, reflecting a continuation of origination strength and relatively stable payoffs and paydowns. Average loans: $24.9 billion	—	—	7%	—
Commercial & Industrial (C&I) C&I loans were largely unchanged, with growth in institutional CRE offset by lower dealer commercial services and owner-occupied loans. Average loans: $65.9 billionGrowth in institutional CRE offset by lower dealer commercial services	—	—	largely unchanged	—
Residential Mortgage Average residential mortgage loans increased $0.4 billion. Average loans: $25.2 billion	—	—	1%	—
Consumer Consumer loans increased $0.6 billion, driven by growth in recreational finance and HELOC portfolios. Average loans: $27.3 billionGrowth in recreational finance and HELOC portfolios	—	—	2%	—

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	Jun 2026 Q2 FY26	This call 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

Net interest margin compression Q3 FY26

NIM down 5 bps to 3.65% in Q3 FY26.

Mitigation:Focus on optimizing overall returns, disciplined evaluation of NII vs. NIM trade-offs.

Increased nonaccrual loans Q3 FY26

Increased $90 million to $1.3 billion; nonaccrual ratio up 5 bps to 90 bps.

Mitigation:Management expects nonaccruals to bounce along the bottom, with some credits curing.

Higher interest rates impacting loan demand and credit quality 2027 and beyond

Higher rates make it more challenging for projects to pencil out financially. Potential for some creep in criticized assets.

Mitigation:Stress testing customers under higher interest rates, focus on strong loan structure, and ability to manage funding effectively. Not concerned about losses due to stress testing.

Softening economy due to higher rates 2027

Management anticipates a 'little bit softer economy' due to higher rates.

Mitigation:M&T's businesses are performing well, strong client relationships, competitive positioning to outperform.

Potential regulatory framework changes (Basel III Endgame) Future

AFS related AOCI would have decreased CET1 ratio by 29 bps if included in regulatory capital.

Mitigation:Transferred $8.3 billion RMBS from AFS to HTM to protect tangible capital; awaiting final rules and evaluating impact, including rating agency interpretations.

What to watch in Q4 FY26

Net Interest Income (NII)

Q4 FY26

Current $1.8 billion

Target $1.83 billion to $1.85 billion

Why it matters

NII is a primary driver of bank profitability, and achieving this guidance will indicate effective balance sheet management in a changing rate environment.

With 3 quarters of the year complete, we expect taxable equivalent NII to be $1.83 billion to $1.85 billion

Find out whether MTB delivers this. Inve re-checks your case every morning.

Q&A highlights

Inquired about remaining benefits from the mix shift from borrowings to deposits and the drivers of the 10 bps increase in deposit costs, specifically how much was due to competition vs. the September rate hike.

Daryl Bible explained that 4 bps of the increase was from time deposits (12-18 month CDs at 4.05%) used to pay down borrowings, which are now stable. The remaining 6 bps was normal repricing. He noted continued efforts to optimize the balance sheet and expressed optimism for NII and NIM performance.

“4 basis points of that increase was really attributable to time deposits that we put on towards the end of the second quarter and early third quarter... With the rate increase that we saw late in the third quarter, we're now close to the overnight rate with this term money. We think that's acting really well, and that will stay stable.”

asked by Daniel Tamayo · answered by Brian Klock

2 min read 6 chapters

Detailed narrative

Strategic Priorities and AI Adoption

M&T Bank continues to prioritize 'teaming for growth and operational excellence,' driving investments in technology and process simplification. The bank is actively integrating AI across its operations, with over 100 use cases identified to enhance productivity, risk management, and customer experience. These efforts are aimed at improving efficiency and scalability, reflecting a commitment to innovation and disciplined execution.

Balance Sheet Growth and Funding Optimization

The third quarter saw solid average loan growth of $2.6 billion, primarily fueled by commercial real estate and consumer portfolios, while C&I loans remained stable. This loan expansion was effectively funded by a $3.3 billion increase in average total deposits, enabling M&T to reduce its reliance on short-term borrowings.

Management highlighted the strategic focus on growing customer deposits at a reasonable cost to optimize overall funding.

Net Interest Income and Margin Trends

Taxable equivalent net interest income remained largely unchanged at $1.8 billion, with the net interest margin declining 5 basis points to 3.65%. This compression was attributed to lower nonaccrual interest and increased funding costs, partially offset by earning asset growth and fixed asset repricing. The bank emphasized its disciplined approach to balancing NII and NIM to optimize overall returns.

Asset Quality and Credit Trends

Asset quality remained relatively stable, with net charge-offs below initial expectations. However, criticized loans increased by $245 million to $6.1 billion, and nonaccrual loans rose by $90 million to $1.3 billion. The increase in nonaccruals was primarily driven by commercial credits in the office and assisted living sectors, though management expects nonaccrual levels to generally bounce along cyclical lows.

Capital Management and Regulatory Positioning

M&T's estimated CET1 ratio stood at 10.16%. In a proactive move, the bank transferred $8.3 billion of residential mortgage-backed securities from available-for-sale to held-to-maturity. This action aims to protect tangible capital and strategically position the bank for potential regulatory changes, particularly those related to the inclusion of AFS-related AOCI in regulatory capital under future frameworks like Basel III Endgame.

Fee Income and Expense Management

Noninterest income was stable at $743 million, with higher residential servicing fees largely offsetting declines in capital markets and advisory revenues. Noninterest expenses increased to $1.39 billion, driven by investments in technology infrastructure and Visa-related litigation obligations. Despite the quarterly increase, the year-to-date efficiency ratio improved, reflecting ongoing efforts in expense management.

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