M & T Bank (MTB -1.57%), a regional banking institution with a core footprint in the Northeast and Mid‑Atlantic, reported its second quarter earnings on July 16, 2025. The company announced earnings per share (EPS) of $4.28, beating consensus expectations of $3.99. Revenue reached $2,405 million, exceeding the analyst forecast by almost $16 million. The quarter's results featured higher-than-expected profits, an ongoing increase in fee-based revenues, and notable improvements in credit quality, despite ongoing pressure on net interest income and a declining capital buffer. Overall, the period showed solid profitability and expense controls, with both headline EPS and revenue surpassing Wall Street estimates.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $4.28 | $3.99 | $3.79 | 12.9 % |
| Revenue (Non-GAAP) | $2,405 million | $2,388.78 million | $2,323 million | 3.5 % |
| Net Interest Income (taxable-equivalent) | $1,722 million | $1,731 million | (0.5 %) | |
| Noninterest Income | $683 million | $584 million | 17.0 % | |
| Net Charge-Offs to Average Loans (annualized) | 0.32 % | 0.41 % | (0.09) pp | |
| Efficiency Ratio | 55.2 % | 55.3 % | (0.1) pp |
Source: Analyst estimates for the quarter provided by FactSet.
About M & T Bank and Its Focus Areas
M & T Bank is a diversified regional bank operating across multiple states, with a leading presence in community commercial and retail banking services. Its business spans traditional banking, including mortgage loans, commercial and industrial lending, and consumer finance. The bank also provides a suite of fee-driven products such as trust, wealth management, and mortgage banking services.
Recent strategic focus points include strict regulatory compliance, careful capital and liquidity management, risk controls, and pursuit of fee-based income diversification. The company’s ongoing priorities are to maintain strong asset quality, optimize its capital allocation, and differentiate itself through community banking and personalized service. Sustained success depends on the ability to manage compliance demands, balance sheet stability, risk exposure, growth of customer relationships, and a responsive approach to economic trends.
Quarterly Performance: Earnings, Revenue, and Business Drivers
The quarter’s EPS and revenue results exceeded consensus forecasts, driven by rising noninterest income and disciplined cost controls. EPS reached $4.28, with revenue surpassing $2.4 billion -- both showing notable improvement from the prior year. Fee-driven business lines were a highlight. Noninterest income rose to $683 million, up 17.0 %, buoyed by a 23 % annual increase in residential mortgage banking (revenue of $130 million) and 7 % growth in trust income (revenue of $182 million). Service charges also moved up 8 %, to $137 million. These gains were aided by one-time events, including a $15 million gain on a loan portfolio sale and $10 million from the sale of an institutional services business. While supportive of the top line, these asset sales are not expected to repeat in future quarters.
Net interest income—the largest revenue contributor for most banks—was $1,722 million, a slight dip of 0.5 % from the prior year, reflecting ongoing pressures on loan growth and deposit costs. Net interest margin, which measures the difference between interest earned on loans and paid on deposits, held steady at 3.62 %. Commercial and industrial (C&I) loans grew 5 % year over year, and consumer loans climbed 15 %, but commercial real estate loans continued to decline, shrinking 19 %. Management indicated this reduction was a result of consciously exiting lower-yielding positions rather than increased borrower defaults, as well as competitive pricing pressures in the marketplace.
Credit quality and risk management remained steady. Net charge-offs—loans written off as unlikely to be collected—decreased to 0.32 % of average loans, down from 0.41 % a year ago. Nonaccrual loans, which are loans no longer accruing interest because of payment uncertainty, dropped 22 % compared to the prior year. The allowance for loan losses as a percentage of total loans was stable at 1.61 %, indicating a consistent reserve cushion for potential losses.
On the expense side, noninterest expenses totaled $1,336 million, up 3 % from the prior year but down 6 % sequentially due to seasonal compensation factors. The efficiency ratio, an important measure of expense control, improved slightly to 55.2 % versus 55.3 % in the prior year, signifying continued discipline in operating costs.
Capital management actions were another major feature in the quarter. M & T Bank repurchased 6.1 million shares for $1.1 billion, more than in the prior quarter. While this reduced the common equity tier 1 (CET1) capital ratio to 10.98 %—a 52 basis point decrease from the previous quarter—the ratio remains above regulatory minimums. Management also noted the stress capital buffer (SCB) will be lowered from 3.8 % to 2.7 % starting October 1, 2025, reflecting regulatory confidence in the bank’s risk profile.
Mortgage banking, a product type involving the origination and servicing of home loans, saw revenues benefit from both new sub-servicing mandates and expanded servicing fees. The trust and wealth advisory businesses, which provide estate planning, asset management, and fiduciary services, continued their upward trend with broad-based fee gains.
Deposit growth remained muted, with average deposits essentially flat at $163.4 billion. Brokered deposits, which are wholesale deposits sourced from third parties rather than individual customers, fell 13 % year over year to $10.5 billion, indicating a shift toward more stable core deposit funding.
The quarter did not include any new, large-scale regulatory or economic shocks, but management reported modestly higher stress scenario weights in credit reserve models to account for potential risk. There were no significant draws on business credit lines and utilization remained consistent, signaling steady commercial demand and risk posture.
The bank’s quarterly dividend held steady at $1.35 per share, continuing an established payout trend with no announced change this period.
Looking Ahead: Guidance and Key Areas to Watch
Looking ahead, M & T Bank’s management affirmed earlier guidance for net interest income between $7.05 and $7.15 billion for fiscal 2025 and an average loan balance in the range of $135–$137 billion. The net interest margin is projected to remain in the mid-to-high 3.60 % range. Management stated that the stress capital buffer reduction will provide some flexibility around capital allocation, but future share repurchases may be adjusted if economic or credit conditions worsen. Expected net charge-offs for the year remain near 40 basis points, and noninterest income is anticipated to reach the high end of the $2.5–2.6 billion range, supported primarily by ongoing strengths in mortgage banking, trust, and service fees.
While no major new quantitative expense guidance was provided, management reaffirmed its goal of keeping full-year expense growth slightly under revenue growth, aiming for positive operating leverage. Key areas to monitor in coming quarters include the trajectory for core loan growth, the sustainability of recent fee income gains as one-time asset sales abate, further changes in capital management, and ongoing regulatory developments. The quarterly dividend was maintained at $1.35 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
