M&T Bank Corporation Q4 FY2025 earnings call

• Opened new full-service Honey Locust branch in Bridgeport, Connecticut's East End. - Partnered with Baltimore Ravens and Zay Flowers to launch Financial Fitness Academy. - Launched Banking Made for Business suite of business banking solutions. - In 2025, earned record net income and EPS, maintained top quartile return on tangible assets, increased dividend by 11%, repurchased 9% of shares, grew tangible book value per share by 7%, improved asset quality, grew fee income to $2.7 billion. - Fourth quarter results: Diluted GAAP earnings per share $4.67, net income $759 million, ROA 1.41% and ROCE 10.87%. - Taxable equivalent net interest income increased $17 million, net interest margin increased one basis point. - Average loans and leases increased, with commercial, residential mortgage, and consumer loans growing partially offset by CRE decline. - Liquidity remained strong with investment securities and cash held at the Fed totaling $53.7 billion. - Non-interest income and expenses detailed, including mortgage banking revenues, trust income, and expense components. - Credit metrics: Net charge-offs, non-accrual loans, provision for credit losses, and criticized loans discussed. - 2026 priorities: Operational excellence (building scalable, efficient operations) and teaming for growth (unified enterprise-wide approach to growth).

In 2025, M&T Bank Corporation realized record net income of $2.85 billion and record EPS of $17. Taxable equivalent net interest income was $1.79 billion, with a net interest margin of 3.69%. Average loans and leases increased $1.1 billion to $137.6 billion. Commercial loans increased $500 million to $62.2 billion, CRE loans declined 1% to $24.1 billion, residential mortgage loans increased 2% to $24.8 billion, and consumer loans grew 1% to $26.5 billion. Non-interest income was $696 million in the fourth quarter, and non-interest expenses were $1.38 billion. Net charge-offs totaled $185 million, non-accrual loans decreased, and the CET1 ratio was an estimate of 10.84%. Revenue contribution % isn't explicitly broken down by product segment in a way that's easily quantifiable in absolute terms for each segment, but key areas like net interest income, non-interest income, loans by category are detailed.

• Expect taxable equivalent net interest income to be $7.2735 billion with net interest margin in the low 370s, expecting 50 basis points of rate cuts in 2026. - Full-year average loans expected to be $140 billion to $142 billion, average deposits $165 billion to $167 billion. - Expect non-interest income to be $2.675 billion to $2.775 billion, broad-based growth expected. - Total non-interest expense including intangible amortization expected to be $5.5 billion to $5.6 billion, including seasonal salary and benefit increase and intangible amortization. - Expect charge-offs for the full year again to be near 40 basis points, taxable equivalent tax rate 24% to 25%. - Expect to operate with a CET1 ratio of 10.25% to 10.5% in 2026, with flexibility to support lending, pursue inorganic growth, and return excess capital to shareholders.

• Economic slowdown risk due to weakening labor market. - Regulatory risks, including potential impact of Basel III endgame proposal and stress tests. - Asset quality risks, such as potential issues with CRE loans and consumer delinquencies if not managed properly.

Q: Circling back to the capital ratios, how would M&T approach bringing down CET1 ratio if regulatory requirements change?

A: Daryl Bible said they are always looking at their balance sheet and economy, feel good about bringing it down to 10.25% now and could go lower, not viewing current regulatory capital limits as a binding constraint currently, but will evaluate with other market factors.

Q: On loan growth, any regions or property types anticipating inflection in CRE?

A: Daryl Bible said CRE teams have been working, December closed over $900 million loans in CRE, with large regional, M&T RCC, and institutional CRE businesses strong, expecting growth starting in Q2 2026 on an average-to-average basis.

Q: Thoughts on deposit environment, net checking account growth and brand strategy?

A: Daryl Bible said they want to grow both loans and customer deposits, focused on growing net new checking accounts, competition is competitive, teams good at going to market, and focused on operating accounts in all business areas.

Q: Impact of MSR fair value and hedge on fees and expenses guidance?

A: Daryl Bible said the accounting change of MSR fair value and hedge is part of it, $75 million normally in amortization expense now netted against revenues, expecting about 4% fee growth, broad-based, and positive operating leverage in 2026.

Q: Trajectory for ROTCE over next twelve to eighteen months?

A: Daryl Bible said expecting ROTCE in the 16% range in 2026 and aiming for 17% by 2027.

Q: Deposit beta on next 50 basis points of cuts and competitiveness on deposit cost with loan growth?

A: Daryl Bible said deposit beta has been holding in the low 50s and feels confident to stay in low 50s with another 50 basis points cut, and their mindset is to grow operating accounts and offer competitive rates, feeling deposit growth will stay intact with loan growth.