Earnings call transcript: M&T Bank Q1 2026 earnings beat forecasts, stock dips

M&T Bank Corporation reported stronger-than-expected earnings for the first quarter of 2026, with earnings per share (EPS) of $4.18 surpassing the forecast of $4.01. Revenue also exceeded expectations, coming in at $2.44 billion against a forecast of $2.43 billion. Despite these positive results, the stock fell 2.05% in premarket trading, reflecting investor concerns over sequential declines in net income and earnings.

Key Takeaways

• M&T Bank’s Q1 2026 EPS and revenue surpassed analyst forecasts.
• The stock dropped 2.05% in premarket trading.
• Sequential declines in net income and EPS from Q4 2025 were noted.
• Strong fee income growth and disciplined deposit management were highlighted.
• Future guidance remains optimistic with steady EPS growth projections.

Company Performance

M&T Bank started 2026 with solid performance metrics, despite a sequential decline in earnings from the previous quarter. The bank’s net income for Q1 2026 was $664 million, down 12.5% from Q4 2025. However, the bank maintained strong operational execution and improved credit quality, contributing to its overall positive performance.

Financial Highlights

• Revenue: $2.44 billion, slightly above the forecast.
• Earnings per share: $4.18, beating the forecast of $4.01.
• Net Income: $664 million, down from $759 million in Q4 2025.
• Return on Assets (ROA): 1.26% in Q1 2026.
• Return on Common Equity (ROCE): 9.67% in Q1 2026.

Earnings vs. Forecast

M&T Bank’s Q1 2026 EPS of $4.18 exceeded the forecast of $4.01, resulting in a positive surprise of 4.24%. Revenue also slightly surpassed expectations, coming in at $2.44 billion compared to the forecast of $2.43 billion. This marks a successful quarter in terms of meeting and exceeding market expectations.

Market Reaction

Despite the positive earnings surprise, M&T Bank’s stock experienced a 2.05% decline in premarket trading, closing at $216. The stock’s movement reflects investor caution, possibly due to the sequential decline in net income and earnings from Q4 2025. The stock remains below its 52-week high of $239 but well above its low of $154.98.

Outlook & Guidance

M&T Bank provided optimistic forward guidance, with EPS projections for the upcoming quarters and years showing steady growth. The bank anticipates EPS of $4.69 for Q2 2026 and $18.45 for the full year, indicating confidence in its strategic initiatives and operational efficiency.

Executive Commentary

Executives highlighted the bank’s commitment to community engagement and operational modernization. The successful launch of a new general ledger system was noted as a key achievement, expected to enhance financial reporting and operational efficiency. The bank remains focused on disciplined lending practices and strategic expansion in key markets.

Risks and Challenges

• Sequential declines in earnings and net income may raise concerns about future performance.
• Geopolitical risks, such as tensions in Iran, could impact economic stability and energy prices.
• The bank faces potential challenges in managing interest-bearing deposit costs and maintaining customer deposit growth.
• Macroeconomic pressures and evolving consumer dynamics pose ongoing risks to financial performance.
• Regulatory changes and market volatility could affect capital deployment and liquidity management.

Q&A

During the earnings call, analysts inquired about the bank’s strategies for managing deposit costs and maintaining growth in a challenging economic environment. Executives emphasized their focus on disciplined cost management and strategic initiatives to drive future growth. Concerns about geopolitical risks and their potential impact on the bank’s operations were also addressed, with assurances of robust risk management practices in place.

Full transcript - M&T Bank Corp (MTB) Q1 2026:

Angela, Conference Call Operator: Welcome to the M&T Bank first quarter 2026 earnings conference call. All lines have been placed on listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star, then the number 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. When posing your question, we ask that you please pick up your handset to allow for optimal sound quality. Lastly, if you should require operator assistance, please press star 0. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to Rajiv Ranjan, Head of Investor Relations and Corporate Development. Please go ahead.

Chris McGratty, Analyst, KBW0: Thank you, Angela, and good morning. I would like to thank everyone for participating in M&T’s first quarter 2026 earnings conference call. If you have not read the earnings release we issued this morning, you may access it along with the financial tables and schedules by going to our Investor Relations website at ir.mtb.com. Also, before we start, I would like to mention that today’s presentation may contain forward-looking information. Cautionary statements about this information are included in today’s earnings release materials and in the investor presentation, as well as our SEC filings and other investor materials. The presentation also includes non-GAAP financial measures as identified in the earnings release and investor presentation. The appropriate reconciliations to GAAP are included in the appendix. Joining me on the call this morning is M&T’s Senior Executive Vice President and CFO, Daryl Bible.

Now, I would like to turn the call over to Daryl.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Thank you, Rajiv, and good morning, everybody. As we move into the next earnings season, I want to start with what continues to define M&T. Our purpose is to make a difference in people’s lives. We do this by helping our customers grow, enabling commerce, and supporting our communities. We value building long-term relationships and being a source of strength and stability to our stakeholders through various economic cycles. We are committed to investing in places we serve. In this quarter alone, we recently launched a new Baltimore Ravens College Track Center, a state-of-the-art learning support space for local high school scholars. In New York City, we opened a new full-service branch in the Bronx. Just this week, we announced our work with the Boston Foundation on a multimillion-dollar program with the city of Boston to accelerate the city’s innovation ecosystem. Looking ahead to 2026, our priorities remain clear.

Operational excellence that is building simpler, more consistent, and resilient operations, and Teaming for Growth, which is about working more seamlessly to deepen relationships and expand the opportunity in our markets. We enter this season with the same relentless commitment to disciplined execution and long-term performance. To that end, before we get started into the results this quarter, let me start by underscoring some longstanding qualities that have come to characterize M&T’s performance. M&T has always maintained a strong balance sheet, starting with a very high-quality loan portfolio, proven asset quality performance over the long term, strong level and quality of capital, and ample liquidity. Regardless of the business environment, we remain steadfast in our disciplined approach to underwriting, pricing, and risk management. At times, that results in focused growth in some loan categories while remaining vigilant on others, as was the case last year and this quarter.

I would rather say no to a transaction than compromise on structure and pricing. We chose to be selective to be preserving the high quality and low volatility of our revenue and earnings stream. Those tenets serve us well, and I am confident that we will see growth in all loan categories this year, but in a manner that delivers progress while protecting all of our constituents, including customers, communities, and investors. As the industry navigates some new uncertainties from current events, we have chosen to be cautious with our NIM expectations. We remain confident in delivering the performance we expected when we started the year. Our pipelines remain strong, but we chose not to chase growth or yield if a transaction doesn’t fit underwriting and our return standards.

We have one of the highest quality risk-adjusted NIMs in the peer group, and we will maintain that while delivering strong results driven by well-diversified revenue stream. We are starting with a strong year-over-year fee income momentum, and those fee income growth contributors are of high quality and low volatility. Asset quality has been improving notably. Our strong capital levels, as well as our consistent capital generation, gives us flexibility for share repurchases. In combination, these factors will allow us to produce strong pre-tax, pre-provision revenue and earnings in line and with a possibility of exceeding expectations. As we go through the presentation today, I will highlight strengths and diversification of M&T’s balance sheet, capital, asset quality, and revenue, which enables M&T to outperform consistently across cycles. Turn to slide five.

We continue to receive recognition for our performance, including the impact of our charitable team and our engagement with investors, reflecting dedication of our teams across M&T. Now let’s turn to slide seven, which shows the results for the first quarter. Our results represent a strong start to the year with several successes to highlight. Net interest margin expanded two basis points, reflecting continued fixed-rate asset repricing and deposit cost discipline. C&I growth was strong, with average C&I loans growing at $1.5 billion from the fourth quarter, including a pickup in middle-market growth. Fee income remains a bright spot, growing 13% from the first quarter of 2025, with a solid year-over-year growth in each of our fee categories. Credit continues to perform well, with more than $700 million reduction in criticized balances and net charge-offs of 31 basis points.

We brought our capital levels within our operating range and executed $1.25 billion in share repurchases, representing over 3.5% of shares outstanding as of the end of 2025. Diluted GAAP earnings per share were $4.13, down from $4.67 in the prior quarter. Net income was $664 million, compared to $759 million in the linked quarter. M&T’s first quarter results produced an ROA and ROCE of 1.26% and 9.67% respectively. Slide eight includes supplemental reporting of M&T’s results on net operating or tangible basis. M&T’s net operating income was $671 million compared to $767 million in the linked quarter. Diluted net operating earnings per share were $4.18, down from $4.72 in the prior quarter.

Net operating income yielded an ROTA and an ROTCE of 1.33% and 14.51% for the recent quarter. Next, we will look a little deeper into the underlying trends that generated our first quarter results. Please turn to slide nine. Taxable equivalent net interest income was $1.76 billion, a decrease of $27 million or 2% from the linked quarter. Net interest margin was 3.71%, an increase of two basis points from the prior quarter. This improvement was driven by a positive eight basis points from the higher spread, driven by fixed asset repricing, remixing of cash to securities, deposit pricing discipline, and a favorable impact on our swap portfolio.

That was partially offset by a negative six basis points from a lower contribution of free funds, driven by share repurchases and the impact of lower rates on the value of free funds. Turning to Slide 11 to talk about average loans, average loans and leases increased $0.8 billion to $138.4 billion. Higher commercial loans were partially offset by lower CRE and consumer balances. Commercial loans increased one and a half billion to $63.8 billion, aided by growth in Middle Market, Business Banking, and several of our specialty businesses. Higher Middle Market loans reflect an uptick in utilization in the first quarter. CRE loans declined 3% to $23.5 billion, reflecting a somewhat moderating paydowns but softer volume, particularly in January and February. However, we saw strong CRE origination activity in March.

Residential mortgage loans were largely unchanged at $24.8 billion. Consumer loans declined 1% to $26.3 billion from lower recreational finance and auto loans due to poor weather early in the year. Loan yields decreased 14 basis points to 5.86%, reflecting lower rates on variable rate loans, partially offset by fixed rate loan repricing and eliminating a negative carry on our swaps. Turning to slide 12. Our liquidity remains strong. The end of the first quarter investment securities and cash held at the Fed totaled $53.1 billion, representing 25% of total assets. Average investment securities increased $1.1 billion to $37.8 billion. The yield on investment securities increased nine basis points to 4.26%.

The duration of the investment portfolio at the end of the quarter was 3.8 years, and the unrealized pre-tax gain on the available-for-sale portfolio was $9 million. While not subject to the LCR requirements, M&T estimates that its LCR at the quarter end was 107%, exceeding the regulatory minimum standards that would be applicable if we were a Category III institution. Turning to Slide 13. Average total deposits declined $0.8 billion to $164.3 billion. Non-interest-bearing deposits increased $0.4 billion to $44.6 billion, aided by Institutional Services. Interest-bearing deposits decreased $1.2 billion to $119.7 billion, driven by lower brokered deposits. Interest-bearing deposit costs decreased 21 basis points to 1.96%, with lower deposit costs across each of our segments. We have been able to grow customer deposits and maintain deposit cost discipline.

Since the first quarter of 2025, we have more than funded our loan growth, with average customer deposits outpacing loan growth by more than $1 billion. We grew customer deposits while we were maintaining deposit cost discipline, reflected in a 56% interest-bearing deposit beta since the start of the cutting cycle in 2024. Continuing on slide 14. Non-interest income was $689 million, compared to $696 million in the linked quarter. Mortgage banking revenues were $127 million, down from $155 million in the fourth quarter. Residential mortgage revenues decreased $16 million to $89 million, mostly related to the MSR time decay now being recognized as a contra fee item rather than an expense. Commercial mortgage banking decreased $12 million to $38 million, driven by lower volumes compared to the fourth quarter.

Other revenues from operations increased $24 million to $187 million from a $33 million Bayview distribution, partially offset by lower merchant discount. Turning to slide 15. Non-interest expense for the quarter were $1.44 billion, increase of $59 million from the prior quarter. Salary and benefits increased $105 million to $914 million, reflecting approximately $115 million in seasonal compensation. Professional services decreased $12 million to $93 million, reflecting lower legal and review cost. FDIC expense increased $31 million, primarily related to a $29 million reduction of estimated special assessment expense in the fourth quarter. Other costs of operations decreased $50 million to $101 million from the previously mentioned changes related to the accounting for the MSR portfolio and a $50 million charitable contribution in the prior quarter. The efficiency ratio was 58.3% compared to 55.1% in the linked quarter. Next, let’s turn to slide 16 and 17 for credit.

Asset quality was strong, with lower net charge-offs and continued improvement in non-accruals and criticized loans. The level of criticized loans was $6.6 billion, compared to $7.3 billion at the end of December. The improvement from the linked quarter was driven by a $400 million decline in CRE and $306 million decline in C&I criticized. Non-accrual loans decreased slightly to $1.2 billion, and the non-accrual ratio decreased one basis point to 89 basis points. Net charge-offs for the quarter totaled $105 million, or 31 basis points, decreasing from 54 basis points in the linked quarter. Net charge-offs were granular, with no single net charge-off greater than $10 million. In the first quarter, we recorded a provision for credit losses of $140 million compared to charge-offs of $105 million. The allowance for loan losses as a percent of total loans was unchanged at 1.53%.

Slide 18 has a summary of our NBFI portfolio. Our NBFI portfolio remains a smaller percentage of total loans compared to our peer group. Three portfolios, which are longstanding and relatively well understood by the market, comprise over 2/3 of the NBFI loans. Those portfolios include fund banking or subscription lines, residential mortgage warehouse lending, and institutional CRE, which is primarily lending to REITs. We’ve also included additional information on business credit intermediaries on Slide 19. This portion of the NBFI consists of $0.7 billion of wholesale lender finance, $0.6 billion of business leasing, and $0.4 billion of loans to BDCs. Across the NBFI portfolio, advance rates vary but are calibrated to asset quality, historical recovery data, and collateral performance. Visibility into collateral is strong, with frequent reporting, borrowing bases, independent valuations, and field exams. Diversification is a key mitigant, both within the structures and across the broader NBFI portfolio.

For example, software exposure within our BDC portfolio is less than 15%. Turning to slide 20 for capital. M&T’s CET1 ratio was an estimated 10.33%, decline of 51 basis points from the fourth quarter. The lower CET1 ratio reflects $1.25 billion share repurchases and increased risk-weighted assets, partially offset by continued strong capital generation. In March, the Federal Reserve issued regulatory capital framework proposals. Based on our initial estimate, we estimate an approximate 90 basis point benefit to our CET1 related to lower risk-weighted assets under the standardized approach. If we were to opt in to the expanded risk-based approach, we estimate an incremental 10 basis point-20 basis point benefit. The proposal also has a phase-in inclusion of AFS securities and pension-related AOCI in the regulatory capital. At the end of the year, this would be four basis point benefit to the CET1 ratio on a fully phased-in basis.

We are well-positioned for these proposals given the current capital levels, AOCI, loan mix, disciplined credit underwriting, and relatively straightforward business model. Now turning to outlook on 2021. First, let’s begin with the economic backdrop. The economy continues to hold up well despite the ongoing concerns and uncertainty regarding tariffs and other policies. The situation in Iran poses new risks to the U.S. and global economies through energy prices and uncertainty. Consumer spending has slowed but continues to grow in aggregate. However, there is a growing divide between higher and lower income households, often called the K-shaped economy. The higher-end consumer continues to be stronger and is spending, while the lower-end consumer has not declined but maintained and is vulnerable to the risks in the environment. U.S. GDP growth has slowed, reflecting slower consumer spending among the impacts.

Encouragingly, the underlying details for the first quarter shows continued strength in equipment investment by firms. The weak labor market in 2025 is showing possible signs of bottoming out, but we remain attuned to the risks from the geopolitical conflict. We remain well-positioned for a dynamic economic environment. Now turning to outlook. Our full year expectations are unchanged from the ranges we discussed in January’s earnings call, but I’ll discuss some of the current trends we are seeing. NI is trending toward the bottom half of NI outlook of seven point two to seven point three five, which translates into a NIM into the high three sixties. We started the year with slower CRE and consumer growth than our initial expectations, though this has been partially offset by strength in CNI. We saw stronger CRE origination volume in March.

NII will continue to be dependent on the shape of the curve and loan and deposit balances. We expect both fee income and expenses to trend toward the top of their respective ranges. This reflects strength in both fee income categories and additional sub-servicing balances, which expect to bring in the second half of the year. We continue to manage PPNR well within the range implied by our January guidance. Our taxable equivalent tax rate is expected to be approximately twenty-four percent compared to the prior outlook of twenty-four to twenty-four point five percent. We are also moving to the bottom end of the CET1 ratio of ten percent, given continued asset quality improvement and our strong performance. Overall performance remains on track with our initial expectations. To conclude on slide twenty-two, our results underscore an optimistic investment thesis.

M&T has always been a purpose-driven organization with successful business model that benefits all stakeholders, including shareholders. We have a long track record of credit outperforming through all economic cycles while growing within the markets we serve. We remain focused on shareholder returns and consistent dividend growth. Finally, we’re a disciplined acquirer and prudent steward of shareholder capital. As we close, I want to thank my M&T colleagues who work tirelessly each day to make a difference in people’s lives. Because of you, M&T is able to support all of our communities. Thank you. Now, let me turn the call over to questions.

Angela, Conference Call Operator: Thank you. If you’d like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question. Our first question today comes from Manan Gosalia with Morgan Stanley. Your line is open. Please go ahead.

Manan Gosalia, Analyst, Morgan Stanley: Hi. Good morning, Daryl.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Good morning.

Manan Gosalia, Analyst, Morgan Stanley: really appreciate all the detail on the capital side. Maybe I’ll start there. First, you’re saying ERBA is a positive. I just wanted to clarify that you’re saying that you will be adopting that, or is it still something you’re deciding on and maybe there’s a higher expense impact from opting in or anything else that we might not be considering? Just second on ERBA is what is driving that benefit? How are you thinking about credit risk and op risk?

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Manan, thank you for the question. This proposal just came out. It has to go through, obviously, the comment process, and then it has to go through the approval process. I can’t really commit to you that we will adopt the ERBA. What I can tell you is if there’s an advantage that we see here today, if that doesn’t change, I think it’s up to us to make good decisions for our shareholders, which means we would opt in probably. I mean, let’s see how things play out. If you’re going to get that much of an advantage, we can put processes in place that should more than be able to pay for that.

Manan Gosalia, Analyst, Morgan Stanley: Got it. All right, perfect. You did a pretty significant buyback this quarter, and you’re bringing down the CET1 guide. Now that we have the new capital proposals and assuming they go through as they’re written, what would the right normalized CET1 level be for M&T over the longer term after the RWA benefit? What’s going to determine how quickly you get there?

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: If it goes as the proposal, you use round numbers. If we adopt it, our CET1 measure goes up 100 basis points. Keep it simple. We’d have to really see what other constituencies, primarily the rating agencies, to see what they would think about that because there is actually capital coming out of the system. They also use RWA in a lot of their calculations and how they measure that. I think we need to have more measurement there. My guess is, whether you get the full benefit or not, you probably will trend down lower and you probably see that easily in the tangible equity ratio.

Manan Gosalia, Analyst, Morgan Stanley: Got it. Thank you.

Angela, Conference Call Operator: Thank you. Our next question comes from Scott Siefers with Piper Sandler. Your line is now open.

Chris McGratty, Analyst, KBW1: Morning. Thanks for taking the question. Daryl, I was just hoping you could sort of expand on what’s causing the margin to come in a little below your prior expectations. I think you mentioned in your prepared remarks that you were just sort of choosing to be a little cautious on the guide, simply trying to figure out if anything has changed or if it is indeed sort of approaching with an abundance of caution.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yeah. It’s a combination of two things. Obviously, we didn’t come out of the blocks really strong in the consumer indirect. That’s an important portfolio to us because it has higher yields and it just was really more of a weather event from that perspective. We believe that we’re going to be able to catch that up and make progress on that, but until that happens or whatever, I think we’re just being cautious from that standpoint. From a CRE perspective, seasonally, it always kind of drops off in the first quarter. We had over $1 billion in originations in March, really, really strong. We’re off to a great start in the second quarter. We have a lot of confidence that CRE is going to get on track and start to grow this year and do really well.

Just a matter of when that happens, and that would be a benefit. The only other thing I would weigh in is, with higher rates, it’s harder to get growth in our DDA accounts. That’s something that we were hoping to grow a little bit more than what we thought. We’ll see if rates actually stay flat or actually go down, or who knows right now. We’re just being cautious from what we’re seeing out there. We don’t want to overcommit.

Chris McGratty, Analyst, KBW1: Okay, perfect. Thank you. One sort of tick-tack one, maybe if you could discuss the overall level of borrowings. I think mostly as I look at it, sort of the end-of-period short-term borrowings, it’s about as high as I can remember in some time, and it didn’t look like it was obviously seasonality-related or anything like that. Just curious if there’s anything going on there we should be aware of.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yeah, I think we’re just trying to manage to our short-term ratios, and we also have a lot of volatility in deposits within our ICS business. We have it for a while, then it goes away, and we have to try to replace it. We just have that volatility and we’re really good at keeping our lines open in a lot of multiple places so we can always have access. Big believer in leaving lines in place, and then if we need to draw upon them and increase them more, we can do it immediately, same day. It’s just how we manage our balance sheet to try to minimize the size of it. We don’t want it to be too large or whatever. We want to operate at an optimal balance sheet size.

Chris McGratty, Analyst, KBW1: Got it. All right, perfect. Thank you very much.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: You’re welcome.

Angela, Conference Call Operator: Thank you. Our next question comes from Gerard Cassidy with RBC Capital Markets. Your line is now open.

Gerard Cassidy, Analyst, RBC Capital Markets: Hi, Daryl.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Hey, Gerard.

Gerard Cassidy, Analyst, RBC Capital Markets: Daryl, circling back to the NBFI portfolio, which you give us obviously very good detail. Based upon M&T’s history as being one of the better credit underwriters, your institution, similar to your peers, have all grown these portfolios quite rapidly over the last five years. Can you share with us what the catalyst, when you turn back the clock, and just why has there been such material growth for you folks in this category of lending versus other categories within the loan portfolio? Are there one or two reasons that you can identify whether it’s better capital treatment of the loans or something else that’s driven the growth here?

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: When I look at the bulk of our NBFI portfolio, it’s three primary businesses. Mortgage warehouse lending is a core business for us. It’s a really safe credit business. You have to make sure you do really good from an operations perspective and perfection of collateral. We run it and it’s a very efficient and very profitable business. Lending to REITs, I think we’ve done that for a long period of time. That is also another very sound way of growing. As we have opportunities there, that is a portfolio that’s been growing nicely from that perspective. Our fund banking and capital call lines, that’s a business we acquired from Webster. We like the business from a credit perspective and believe it’s a good fit for us.

We’ve been growing it to right size for the size of our company rather than People’s United size, what they had when we first got it. Those three are really our core ones that we have. Everything else is relatively small, but we feel very comfortable in growing what we have.

Gerard Cassidy, Analyst, RBC Capital Markets: Very good. Speaking of growth, I think you touched on, in your comments, that commercial real estate mortgages in March started to pick up, or if I heard that correctly. Can you expand upon what you’re thinking for commercial real estate lending? C&I lending, of course, many investors anticipate that will continue to do well as capital expenditures hopefully continue to grow this year. On the CRE side, what are you guys seeing there and what’s kind of the outlook there?

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yeah. When you look at our CRE business, Gerard, we have a really great platform. We have one of the best, I believe, in the industry. We have five distinct business lines that we have in CRE. Our first one is kind of core to us. It’s our regional portfolio, from a CRE perspective, and that’s been shrinking for a while. We are now very active in the markets, in those regions, generating more production there and seeing a lot of really nice things happen. We believe our regional businesses will continue to grow from that perspective. Several years ago, we got into the originate-and-sell business with RCC. RCC is a great other way of serving our clients. You have to remember, we do a business with clients on balance sheet and off balance sheet.

Last year, we had the same amount of originations in 2025 in RCC as we had on balance sheet. We’re serving a lot of clients, just some of it doesn’t go on the balance sheet, but we still get paid for it in fee income. That business continues to perform very well. Last year, it had record performance. We also have the institutional CRE business that we talked about in REITs. That’s been growing very nicely for us. That will continue to grow. Some of the new ones that we have formed is we’ve gotten really serious and have a whole business line dedicated to affordable housing. Affordable housing tends to be a more complicated type underwriting. We thought putting everything together there, we’ll be able to generate more consistent volume and build good relationships with many customers throughout our footprint.

Lastly, we have the warehouse business, which is also a nice business to have. I would say that our platform that we have in CRE and how we perform, our leaders that we have there are the best in the business, and we feel really positive that that’s going to continue to grow, and you’re going to see loan growth net out of that. Also remember, we’re making a lot of fee income, too. It’s a much bigger business than just the balance sheet. It’s a combination of both of that.

Gerard Cassidy, Analyst, RBC Capital Markets: That’s very helpful. Just lastly, you’ve done a very good job in bringing down those criticized loans in CRE from a year ago. You showed that in your slides, of course. What were the factors of the success? Is it the customers are paying down their balances? Cash flows have improved? What have been some of the drivers of this nice decline in CRE criticized loans?

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: It’s broad-based. We’ve definitely seen improvement in operating. Some people are paying off and going elsewhere as well. It’s a combination thereof. It’s nice to see good progress there, and we’re making more and more customers and having more capacity. For us, the improvement in credit quality has a nice driver for us that we feel comfortable that we can continue to bring down our capital levels, and you see that in our share repurchases.

Gerard Cassidy, Analyst, RBC Capital Markets: Great. Thank you again.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yep.

Angela, Conference Call Operator: Thank you. Our next question comes from Matt O’Connor with Deutsche Bank. Your line is now open.

Nate Stein, Analyst (on behalf of Matt O’Connor), Deutsche Bank: Hey, everyone, this is Nate Stein on behalf of Matt O’Connor. I wanted to drill down on the CRE comments. We heard you say that commercial real estate originations picked up in March, but is it fair to say that CRE loan balances can grow in 2Q and beyond?

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: I’ve been saying that for a couple of quarters, Nate. You probably don’t believe me anymore. I’m not going to really commit to that. What I will tell you is we have a lot of momentum. We are growing. We’re getting more customers. Whether we grow average or point-to-point second quarter, I’m not concerned about that. I know it’s going to grow this year. We got everything going in the right direction. Our teams are working hard, but they’re having fun. I mean, they’re actually fun out there working with customers and working on developing on these projects. We will have a very successful, great business, and it’ll be very positive from a revenue perspective, both fees and balances.

Nate Stein, Analyst (on behalf of Matt O’Connor), Deutsche Bank: Okay. Thank you. Quick question on maybe just the use of excess capital. 1Q buybacks were really strong, more than double the quarterly pace in the second half of last year. We heard your comments that the rules proposals are directionally supportive of capital. How could this translate to the pace of buybacks for the rest of the year?

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: What we did is we widened the range. We went from 10 and a half to 10 and a quarter to 10 and a half to 10. And the reason we widened the range is that we continue to have really good improvement in asset quality. So we feel comfortable our long-term CET1 ratio, that the board approved for the company is 10%. We feel comfortable going there at that point now. The reason we left 10 and a half out there is there was a lot of risk in the system, a lot of geopolitical risk. We have no idea what’s going to happen and all that. If we see signs of stress out in the marketplace or whatever, we’ll just stop buyback and accrete capital. On any given quarter, if we don’t do share repurchases net of dividend, we’ll still accrete back about 25 basis points.

We can accrete it back very quickly. Right now, we feel very good, and we’re going to continue to move our ratios down. If we see something that we don’t like, we will stop and pause and start accreting capital back.

Chris McGratty, Analyst, KBW2: Thank you.

Angela, Conference Call Operator: Thank you. We’ll go next to Chris McGratty with KBW. Your line is now open.

Chris McGratty, Analyst, KBW: Good morning.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Morning.

Chris McGratty, Analyst, KBW: How you doing? I’m interested in your comments on deposit competition. I don’t think you’ve touched on it yet, but maybe any specific geographies or markets given the industry’s putting up a little bit better loan growth? Thanks.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yeah. Chris, we have a lot of ability to grow customer deposits. We’ve been growing customer deposits pretty consistently for many, many years. We always want to pay competitive rates to our customers. We aren’t usually the highest in the market, definitely not the lowest in the market. We definitely get our fair share and all that. I wouldn’t view the competition any worse than what it’s been in any other environment, to be honest with you. It’s always competitive. We get our fair share of those deposits. We had nice growth this past quarter. I think that’s going to continue throughout the whole year. Net, in my prepared remarks, we actually have grown customer deposits more than we’ve grown loans the last couple of years. We will continue to do that if we have to and continue to shrink non-core funding.

I would say, we’re competitive and we’re growing and doing a nice thing. One of the things about M&T that’s really important and really what we’re true to is all of our businesses want to get the operating account, get the checking account, and work really, really hard to do that. Once we get that operating account, then that opens the door for other businesses and increases the wallet of what we can do with that customer. Everybody is fully incented to get that. One of our businesses, Business Banking, has a ratio of three times more deposits than loans. Of the deposits they have, 80% of them are operating, which is really, really strong. They’re having a tremendous business. They’re growing their deposits. They have huge loan pipelines as well right now.

Business Banking is probably performing as good as I’ve ever seen it, to be honest with you.

Chris McGratty, Analyst, KBW: Okay. Great commentary. Thank you. On credit spreads, obviously, different asset classes, but any comments about incremental credit spreads, whether it be CRE and your increased originations or C&I spreads? Thanks.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Credit spreads are moving around a little bit. With the conflict in Iran, they probably widened out a touch a little from that perspective. It’s also very competitive. Sometimes it’s a little wider, sometimes a little narrower. It’s probably net about the same would be my take right now. We try to be competitive and want to make sure we get paid for the risk that we’re taking at the end of the day.

Chris McGratty, Analyst, KBW: Great. Thank you.

Angela, Conference Call Operator: Thank you. Our next question comes from Ken Usdin with Autonomous Research. Your line is now open.

Ken Usdin, Analyst, Autonomous Research: Thanks. Hey, Daryl. Just as you talk about the fee growth and the high end of the year, I know the first quarter had the BLG benefit, but can you just flesh out a little bit more about your thoughts about the magnitude of those mortgage servicing books that you think you can bring on? How big of an opportunity is that? Just give it a little more color on where you expect fees to grow. Thanks.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yeah. We have tremendous momentum in our fee businesses, Ken, and we have a really good, great specialized sub-servicing business that really specializes in more FHA because we get paid a little bit more because it’s higher to service from that perspective. We think that other additional servicing will start to come back onto our run rate in the second half of the year with an annual run rate in the $30 million-$40 million range from a revenue perspective. It operates with about a 50% margin. It’s a really good piece of business for us, something that we like to do and have there. We’re also seeing really good growth in our trust businesses, both wealth and corporate trust. Corporate trust also brings in nice deposits. That’s going on really well.

If you look in our commercial area, treasury management is performing really well, high single-digit growth in that space. If you look at our capital markets, though we’re at a very low base, capital market fees are continuing to increase. Now that we have our general ledger converted over this past weekend, our accounting team, finance folks will work on getting that broken out. You guys will see that in the next quarter or two from that perspective. I really feel that our fees are going to continue to outperform. My guess, Ken, to be honest with you, is we may actually exceed our range that we have there and all that. We’ve got a lot of good things going on.

Ken Usdin, Analyst, Autonomous Research: Got it. Okay. You mentioned that your avenues for deposit growth are really strong and you’ve been kind of outstripping the loans. I guess with that, your decision tree between, especially in a higher for longer environment, leaving some of that money in cash or putting it into the securities book, it looks like you’re biased towards a securities book. Can you kind of just remind us where you want that to live and how you expect that to go? Thanks.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yeah. It was just more of a little bit more fine-tuning of the balance sheet. We thought we had a little bit ability to have a little bit less cash at the Fed and that we put a little bit more in the securities portfolio. Just means we’ll do a little bit less hedging because we have more fixed rate assets on our balance sheet. It’s pretty much still a real neutral interest rate risk position. I think we’re positioned pretty well. Rates go in either direction. We will continue to do what we do from that perspective.

Chris McGratty, Analyst, KBW1: Okay, right. Thanks, Daryl.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yep.

Angela, Conference Call Operator: Thank you. Our next question comes from John Pancari with Evercore ISI. Your line is now open.

John Pancari, Analyst, Evercore ISI: Morning, Daryl.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Morning.

John Pancari, Analyst, Evercore ISI: I know you indicated in your prepared remarks some selectivity in underwriting in certain areas. What are you seeing right now that’s making you say that? Is it on pricing? Is it terms? What areas are you seeing returns pressured in a certain asset class, certain lending product where you’ve decided to be more selective?

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yeah. It’s really competitive on the lending side, both commercial, consumer, CRE. It’s competitive across the board over there. As we talk to our leaders out there and our people are out there talking to customers and whatever, I probably leaned a little bit more to structure than to pricing, but maybe 60/40, a little bit more tilt to structure. Structure is not something you really want to give on, to be honest with you. Maybe for good customers, you’ll stretch on a pricing perspective from that perspective. It’s just competitive out there, and we aren’t in any hurry to put a lot of loans on our books. We’re going to do it the right way, and we’re going to make sure we get paid back and have good earnings streams.

I mean, if you look at our performance, we’re performing really well, and we’re generating a lot of capital and returning a lot of that back to you and the other investors out there. We aren’t really under any pressure. We’re trying to do the right things in the marketplace and continue to be in here for the long term, which is what you’d expect out of M&T.

John Pancari, Analyst, Evercore ISI: Got it. All right, thanks. I appreciate all the capital color and the commentary around the CET1 range in the buyback side. I guess on the M&A side, can you maybe just give us updated thoughts there? Just given the backdrop, given the activity we’re seeing out there, maybe you can just update us on where you stand in terms of M&A interest, both bank and non-bank.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yeah. I think the nice thing to know is that M&T is very consistent. We have a long history and track record on M&A and shareholder returns. You can judge that for yourself. On an M&A front, we’ve always been very selective. Anything we consider that you know will meet both our strategic, which means it’s in footprint, as well as our financial criteria. We will continue to focus and run the company really well within the market conditions that we have. If something fits from an M&A perspective, we will consider doing that. We aren’t going to stretch or do anything from that perspective. There’s no need to.

John Pancari, Analyst, Evercore ISI: Got it. All right. Thank you, Daryl.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yep.

Angela, Conference Call Operator: Thank you. We’ll go next to Ebrahim Poonawala with Bank of America Securities. Your line is now open.

Ebrahim Poonawala, Analyst, Bank of America Securities: Hey, good morning, Daryl.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Good morning.

Ebrahim Poonawala, Analyst, Bank of America Securities: I guess maybe this first question, you talked about the GL update. I think it gets completed this year. Just give us a sense of what the tech spend and what projects are upcoming over the next year or two after this as we think about just infrastructure upgrade at the bank.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yeah. Ibrahim, you give me an opportunity to call out. We actually went live on our general ledger this past weekend. It’s performing really well, and that’s pretty much behind us. But hats off to the team that actually put that together. We had hundreds of people working on that with technology, business people, and finance folks and all that. And we had a great partner with EY that was with us for the three years and did a great job getting us to where we needed to be from that perspective. As far as tech spend goes, tech spend just gets reallocated to another priority project. Our priority projects that we have right now for this year is Teaming for Growth, which is more getting deeper wallet from our customers and our regions.

Operational excellence is really working on all the operational areas that we have and trying to simplify and automate it using AI and other automation tools and all that, and we’re off to a good start. We plan to continue to invest in that. That’s going to be a multi-year project. As things fall off, like our general ledger, we have other things that just kind of fill in the space. We have a really good process of how we do our planning. We kind of know what we want to spend and how we allocate it, and it seems to be working really well and balancing our returns, which are still good for the investors, as well as still getting a lot done in the company. It’s a good balance there, and we’re having a lot of success.

Ebrahim Poonawala, Analyst, Bank of America Securities: Got it. That’s helpful, Daryl. Just a follow-up on the capital. It’s not unique to M&T, but the roughly 100 basis points benefit that you could get from these proposals if more or less they get firmed up this way, how do you think about if these rules go effective, I’m not sure, is it first January 2027 or first January 2028? How do you think about that 100 basis points in a world where your CET1 target ratio remains the same? Because I know you mentioned the rating agencies, but do you start getting more active on buybacks? I’m just wondering how should we think about the deployment of that 100 basis points where you would have the green signal to start thinking about that as truly excess capital?

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: I think we just have to wait till we get there. I know it’s kind of dodging the question, Ebrahim, but I think we just have to see what the actual results are after we go through the comment period and what gets passed. It’s definitely in the right direction, the RWAs with the LTVs. We’re a really conservative lender. We have a huge lift because of our LTVs. Take advantage of that. That will continue to be core to us from that. It’s too early to really say how we’re going to deploy that capital and all. We want to serve all constituencies, and we’ll try to figure that out as we know more down the road.

Ebrahim Poonawala, Analyst, Bank of America Securities: Anything in there in the comment period, Daryl, that you expect to advocate where you think either technically or something that may not quite truly reflect the risk of the balance sheet in the way the Fed proposed these rules?

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: No, I think it’s a fair assessment of what they went through. They went through with data-driven and came up with RWAs or standardized that directionally seem in the right direction. From the other approach that’s out there, the enhanced approach, there’s definitely a good advantage to move forward for us because of our LTVs that we have. The other thing we have, if you look at our fee businesses, if those fee businesses stay to be favored, our Wilmington Trust businesses basically benefit from that as well. From our perspective, we seem to have a good business mix to actually really benefit from what we’re seeing right now.

Ebrahim Poonawala, Analyst, Bank of America Securities: Got it. Thank you.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Thank you.

Angela, Conference Call Operator: Thank you. We’ll go next to David Chiaverini with Jefferies. Your line is now open.

Brooks, Analyst, Jefferies: Hey, guys. Brooks stepping on for Dave today. I just wanted to touch on deposit betas going forward. You guys reported a 56% beta through the cycle so far. How much additional beta do you guys expect if rates stay higher for longer? If you guys could please touch on a modest curve steepening or lower short-term rates and how that would translate through NIM and NII, given your current balance sheet positioning. Thank you.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yeah. The way I try to simplify this is when rates were going up, we had a deposit beta in the low- to mid-50s. Rates are coming down. Right now, we’re in the mid-50s coming down. We’ll probably stay in the low- to mid-50s coming down. At some point, if you go down maybe 50-100 basis points more, the consumer portfolio basically hits a floor, and then that beta starts to shrink. We’re still a ways away from that. It’s not rocket science. It should go up as much as it goes down if you’re really disciplined in how you price these deposits.

Brooks, Analyst, Jefferies: Great. Thank you very much.

Daryl Bible, Senior Executive Vice President and Chief Financial Officer, M&T Bank Corporation: Yeah.

Angela, Conference Call Operator: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to our presenters for any additional or closing remarks.

Chris McGratty, Analyst, KBW0: Again, thank you all for participating today. As always, if any clarification is needed, please contact our Investor Relations department at 716-842-5138. Thank you all.

Angela, Conference Call Operator: Thank you. This brings us to the end of today’s meeting. We appreciate your time and participation. You may now disconnect.

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