M&T Bank Corporation Q1 FY2026 earnings call

• M&T's purpose is to make a difference in people's lives by helping customers grow, enabling commerce, and supporting communities. • Priorities for 2026 include operational excellence and teaming for growth. • In the first quarter, launched a new Baltimore Ravens College Track Center, a new full-service branch in the Bronx, and announced a program with the Boston Foundation. • Highlighted strong balance sheet qualities like high-quality loan portfolio, proven asset quality, strong capital, and ample liquidity. • Discussed growth in loan categories with caution on underwriting and pricing. • Mentioned recognition for performance including charitable team and investor engagement. • Talked about various aspects of balance sheet, capital, asset quality, and revenue. • Outlined initiatives like Teaming for Growth and operational excellence using AI and automation.

Net interest margin expanded two basis points. CNI growth was strong with average CNI loans growing at $1.5 billion. Fee income grew 13% from the first quarter of 2025. Credit continued to perform well with more than $700 million reduction in criticized balances and net charge-offs of 31 basis points. Average loans and leases increased 0.8 billion to 138.4 billion. Non-interest income was $689 million compared to $696 million in the linked quarter. Non-interest expense for the quarter were $1.44 billion, increase of $59 million from the prior quarter. Asset quality was strong with lower net charge-offs and continued improvement in non-accruals and criticized loans. M&T's CET1 ratio was an estimated 10.33%, decline of 51 basis points from the fourth quarter.

• Full year expectations unchanged from January's ranges. • NI trending toward the bottom half of 7.2 to 7.35 range. • CNI strength partially offset slower CRE and consumer growth initially but strong CRE origination volume in March. • Fee income and expenses expected to trend toward top of ranges. • Taxable equivalent tax rate expected to be approximately 24%. • CET1 ratio moving to the bottom end of 10%.

Q: Clarify on ERBA adoption and benefit, and normalized CET1 level for M&T.

A: Proposal needs comment and approval process, may opt in if advantageous. CET1 measure could go up 100 basis points with proposal, but rating agencies and RWA measurement need consideration.

Q: Expand on margin coming in below prior expectations.

A: Combination of weaker consumer indirect due to weather and cautious CRE outlook initially, but strong CRE origination in March and DDA account growth challenges.

Q: Discuss overall level of borrowings.

A: Managing short-term ratios and volatility in ICS business deposits, keeping lines open for access.

Q: Share catalyst for NDFI portfolio growth.

A: Mortgage warehouse lending, lending to REITs, and fund banking and capital call lines from acquisition, all safe and profitable businesses.

Q: Expand on CRE lending outlook.

A: Strong CRE platform with multiple business lines, expecting growth in loan balances and fee income, with improvement in criticized loans.

Q: On CRE loan balances growth in 2Q and beyond.

A: Have momentum and growth, confident in growth this year with teams working hard.

Q: Use of excess capital and buyback pace.

A: Widened CET1 range due to asset quality improvement, comfortable with moving to 10% CET1, can accrete capital quickly if needed.

Q: Deposit competition comments.

A: Competitive but M&T grows customer deposits consistently, with businesses incentivized to get operating accounts.

Q: Credit spreads comments.

A: Credit spreads moving with Iran conflict, competitive, net-net about same.

Q: Fee growth and mortgage servicing books.

A: Tremendous fee momentum, additional servicing expected in second half of year with $30 - $40 million annual run rate, good margin.

Q: Deposit growth and balance sheet allocation.

A: Fine-tuning balance sheet, putting more in securities portfolio for less hedging, neutral interest rate risk position.

Q: Selectivity in underwriting.

A: Competitive lending environment, more tilt to structure than pricing, being selective to ensure good earnings streams.

Q: M&A interest.

A: Very selective, consider M&A that fits strategic and financial criteria.

Q: GL update and tech spend.

A: General ledger went live, tech spend reallocated to Teaming for Growth and operational excellence projects.

Q: Capital proposal benefit and deployment.

A: Awaiting comment period results, RWA lift due to conservative lending, will figure out capital deployment later.

Q: Deposit betas and NIM/NII.

A: Deposit beta in mid-50s, likely stay low to mid-50s, beta may shrink if rates drop further but not immediate.