M&T Bank (NYSE:MTB) used its fourth-quarter 2025 earnings call to highlight record full-year profitability, continued improvement in asset quality, and an outlook that assumes modest loan growth alongside broad-based fee income momentum. Senior Executive Vice President and CFO Daryl Bible also detailed the quarter’s moving pieces, including notable expense items, deposit trends, and capital priorities as the bank heads into 2026.
Full-year 2025 highlights: record earnings and improving credit
Management said 2025 produced “consistent and continued growth” while maintaining a disciplined, return-focused approach. The bank reported record net income of $2.85 billion and record earnings per share of $17. M&T also cited a return on tangible assets of over 1.4% and said it remained “top quartile” on that measure.
Credit metrics improved, according to management. Non-accruals decreased 26% for the year, and the non-accrual ratio reached 90 basis points, which the bank said was the lowest since 2007. M&T also said criticized commercial loans declined 27% in 2025.
Fee income was another area of emphasis. M&T reported fee income grew 13% to a record $2.7 billion, and the fee mix increased from 26% to over 28% of revenue. Expenses were described as well controlled, with the efficiency ratio improving from 56.9% to 56% for the year, while the bank continued to make “significant enterprise investments.”
Fourth-quarter results: modest EPS decline with notable items
For the fourth quarter, M&T reported diluted GAAP earnings per share of $4.67, down from $4.82 in the prior quarter. Net income was $759 million compared with $792 million in the linked quarter. The bank reported ROA and ROCE of 1.41% and 10.87%, respectively.
Management flagged two notable expense items in the quarter:
- A $29 million reduction in FDIC expense tied to a lower estimated special assessment, which management said added $0.14 to EPS.
- A $30 million charitable contribution, which management said reduced EPS by $0.15.
On a net operating (tangible) basis, M&T reported net operating income of $767 million versus $798 million in the prior quarter, and net operating EPS of $4.72 compared with $4.87. Net operating results produced an ROTA of 1.49% and ROTCE of 16.24% for the quarter.
Balance sheet trends: NIM steady, loan growth led by commercial and consumer categories
Taxable-equivalent net interest income was $1.79 billion, up $17 million, or 1%, from the prior quarter. Net interest margin was 3.69%, up one basis point. Management attributed the slight improvement to higher asset-liability spread and a favorable funding mix, along with a reduced negative impact from interest rate swaps, partially offset by a lower contribution from net-free funds.
Average loans and leases rose $1.1 billion to $137.6 billion. The bank cited higher commercial, residential mortgage, and consumer loan balances, partially offset by a nominal decline in commercial real estate (CRE). Commercial loans increased $0.5 billion to $62.2 billion, aided by growth in dealer commercial services and additional growth in areas including REIT lending, business banking, and fund banking. CRE loans declined 1% to $24.1 billion, reflecting continued payoffs and paydowns despite higher originations. Residential mortgage loans increased 2% to $24.8 billion and consumer loans grew 1% to $26.5 billion, with management citing growth in recreational finance and home equity lines of credit.
Loan yields decreased 14 basis points to 6%, reflecting lower rates on variable-rate loans, partly offset by fixed-rate repricing and the reduced negative impact from swaps.
Liquidity remained “strong,” management said. At quarter-end, investment securities and cash at the Fed totaled $53.7 billion, or 25% of total assets. M&T purchased $0.9 billion of debt securities in the quarter at an average yield of 4.9%. The yield on the investment portfolio was 4.17%, up four basis points, and portfolio duration ended the quarter at 3.4 years. The bank also disclosed an unrealized pre-tax gain on the available-for-sale portfolio of $208 million. While not subject to liquidity coverage ratio (LCR) requirements, M&T estimated its LCR at 109% as of Dec. 31.
Deposits increased in the quarter. Average total deposits rose $2.4 billion to $165.1 billion, including non-interest-bearing deposits up $0.1 billion to $44.2 billion and interest-bearing deposits up $2.2 billion to $120.9 billion, driven by commercial and business banking growth. Interest-bearing deposit costs declined 19 basis points to 2.17%, aided by lower retail time deposit costs and lower interest checking and savings costs.
Fees, expenses, and credit: fee decline tied to prior-quarter items, charge-offs driven by resolutions
Non-interest income was $696 million, down from $752 million in the linked quarter. Mortgage banking revenue increased to $155 million from $147 million, with commercial mortgage banking revenue rising to $50 million on higher gains from sales of commercial mortgage loans. Trust income increased to $184 million. Other revenues from operations fell $67 million to $163 million, which management attributed primarily to prior-quarter items including an earn-out distribution, a debit distribution, and a gain on the sale of equipment leases.
Non-interest expense rose $16 million to $1.38 billion. Salary and benefits decreased $24 million due to lower severance and benefit-related expenses, while professional services increased $24 million on higher legal and review costs. FDIC expense fell $21 million, largely due to the special assessment estimate. Other costs of operations rose $15 million, reflecting the charitable contribution partially offset by other items. The efficiency ratio was 55.1% compared with 53.6% in the linked quarter.
Credit costs rose during the quarter. Net charge-offs were $185 million, or 54 basis points, up from 42 basis points in the prior quarter. Management said the increase reflected the resolution of three previously identified credits totaling more than $100 million. Non-accrual loans decreased 17% to $1.3 billion, and the non-accrual ratio declined to 90 basis points. The provision for credit losses was $125 million, below net charge-offs, and the allowance for loan losses declined to 1.53% of total loans.
Capital and 2026 outlook: loan growth targeted, fee momentum expected, CET1 flexibility discussed
M&T’s estimated CET1 ratio was 10.84% at quarter-end, down 15 basis points from the third quarter. Management attributed the decline to $507 million of share repurchases and an increase in risk-weighted assets, partly offset by capital generation.
For 2026, management outlined two priorities: “operational excellence,” focused on simplified operations, automation, and enterprise controls; and “teaming for growth,” intended to deliver a more unified go-to-market approach across regions and business lines.
In its 2026 outlook, M&T guided taxable-equivalent net interest income to $7.2 billion to $7.35 billion, with net interest margin in the low 3.70s. The outlook assumes 50 basis points of rate cuts in 2026, with management describing sensitivity to the short end of the curve as “relatively neutral,” while noting that changes in the shape of the curve could affect results.
The bank expects full-year average loans of $140 billion to $142 billion and average deposits of $165 billion to $167 billion. Management said it expects point-to-point growth across each of the four main loan portfolios, though full-year CRE balances are expected to be lower than the 2025 average.
Non-interest income is expected to be $2.675 billion to $2.775 billion, and total non-interest expense (including intangible amortization) is expected to be $5.5 billion to $5.6 billion. Management said guidance includes continued investment in enterprise initiatives and a usual first-quarter seasonal salary and benefit increase estimated at $110 million, plus approximately $31 million of intangible amortization.
M&T also disclosed an accounting change for residential mortgage servicing rights (MSRs), electing to carry certain MSRs at fair value and beginning to hedge fair value changes. Management said this change shifts roughly $75 million that previously would have been amortization expense into netted mortgage banking revenue impacts, with “minimal” effect on net income or pre-provision net revenue. The MSR fair value election was said to add $197 million in regulatory capital, benefiting CET1 by about eight basis points.
For credit, M&T expects full-year charge-offs again to be near 40 basis points. The bank guided to an effective tax rate of 24% to 25% and said it expects to operate with a CET1 ratio of 10.25% to 10.5% in 2026. In Q&A, Bible said the bank could potentially go below 10% over time depending on conditions, while noting that considerations include “other constituencies,” including rating agencies.
Management reiterated its approach to capital deployment as supporting lending, maintaining dividend growth, pursuing opportunistic inorganic growth, and returning excess capital through repurchases, while remaining attentive to the economic backdrop and asset quality trends.
About M&T Bank (NYSE:MTB)
M&T Bank Corporation is a bank holding company headquartered in Buffalo, New York, that provides a broad range of banking and financial services to individuals, businesses and institutions. The company operates a commercial and retail banking franchise that includes deposit-taking, lending, and payment services delivered through branch networks, digital channels and commercial banking teams. M&T serves customers across the northeastern and mid‑Atlantic United States and has expanded its geographic footprint through strategic acquisitions.
Its core businesses include commercial banking for middle‑market and community businesses, consumer and retail banking, mortgage origination and servicing, treasury and cash management, and wealth management and trust services.
