Even though the interest-rate environment isn't really cooperating, Buffalo-based M&T Bank (NYSE:MTB) still gets the job done.

For the second quarter, M&T reported that net interest income grew 3%, non-interest income rose 6%, and net income increased 7%. Since ongoing share buybacks have actually taken a chunk out of the outstanding share count, EPS growth for the quarter came in at 10%.

Strong banking performance comes from multiple factors -- good loan growth and quality, efficient operations, and a cooperative interest-rate environment.

For M&T, outstanding commercial loans and commercial real estate loans both grew at rates in the low teens, while consumer loans posted a slight decline. Quality, though, remained quite high; the company saw the lowest level of charge-offs in about five years. In terms of its operations, M&T's efficiency ratio, which looks at the relationship between operating expenses and revenues, worsened modestly from 50.4% in the prior year to 52.6% in this quarter. However, the annualized return on equity and return on assets both ticked up from year-ago levels.

Continuing an ongoing theme for most banks, the net interest margin declined yet again for this quarter, moving from 3.92% to 3.78%. M&T continues to be hampered by the flattening yield curve. Unless the yield curve becomes steeper again, it's unlikely that interest margins will improve much, if at all.

Putting away the numbers, I think this is a regional bank that many Fools would do well to study. Unlike many banks, M&T is not highly dependent upon mortgage business. In fact, consumer real estate loans were less than 10% of the company's loan balance at quarter's end. Rather, M&T focuses largely on commercial lending -- a business category that seems to be picking up around the country.

At present, I have only two real concerns about the company. First, the company's history of deposit growth isn't quite as good as I'd like to see; in the past, the company has sometimes turned to more expensive sources of capital. Second, the company has gained a new CEO and CFO within the last three months. That said, the changes are more evolutionary than revolutionary -- both executives have been with the bank for some time.

Last but not least, I'd be remiss not to point out two significant investors in M&T Bank. Allied Irish Bank (NYSE:AIB) owns nearly one-quarter of the shares, and both banks have representation on each other's boards. BerkshireHathaway (NYSE:BRKA) owns nearly 6% of the shares, the second-largest owner behind Allied Irish.

It may seem strange to buy into a bank when the yield curve is flat and the mortgage market appears on the verge of decline, but I see those as opportunities -- particularly since M&T has little exposure to residential mortgages. While the present price isn't a screaming bargain, Fools may want to start their due diligence and be ready in case the shares go on sale.

Bank on this added Foolishness:

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).