Financials
Banks - Regional
$30.89B
22.2K
M&T Bank Corporation is a financial holding company that provides a wide range of retail and commercial banking, trust and wealth management, and investment services. The company operates primarily in the Northeastern and Mid-Atlantic U.S., and has a full-service commercial banking office in Ontario, Canada. M&T's core business model focuses on lending to consumers and small-to-medium sized businesses, while also offering trust and fiduciary services through its subsidiary, Wilmington Trust Company.
Key insights and themes extracted from this filing
Net interest income decreased by 4% year-over-year, from $7.115 billion to $6.852 billion, as higher deposit and borrowing costs outpaced increased yields received on earning assets. The net interest margin narrowed by 25 basis points to 3.58%.
Noninterest income decreased by 4% year-over-year, from $2.528 billion to $2.427 billion, primarily due to the sale of the CIT business. This was partially offset by higher service charges on deposit accounts and increased income from other sources.
The Company's effective tax rate was 21.8% in 2024, compared with 24.3% in 2023. The 2024 income tax expense reflects a $14 million discrete tax benefit related to certain tax credits claimed on a prior year income tax return and a $17 million net discrete tax benefit related to the resolution of an income tax matter inherited from the acquisition of People's United.
The acquisition of People's United on April 1, 2022, continues to impact M&T's financial results, with acquired assets, liabilities, and goodwill being integrated. The company recorded $3.9 billion of goodwill and $261 million of core deposit and other intangible assets.
M&T repurchased 2,148,042 shares of its common stock in 2024 for a total cost of $400 million. On January 22, 2025, the Board authorized a new $4.0 billion share repurchase program, replacing the previous authorization.
The sale of that business resulted in a pre-tax gain of $225 million ($157 million after-tax effect) in the 2023 results of operations. The divestiture of the CIT business is expected to allow M&T to focus on its core banking operations.
M&T and its subsidiary banks continue to meet applicable capital requirements. M&T's CET1 capital to RWA ratio was 11.68% and the Tier 1 capital to RWA ratio was 13.21%.
The Company utilizes interest rate swap agreements to modify the repricing characteristics of certain portions of its earning assets and interest-bearing liabilities. The notional amount of interest rate swap agreements entered into for interest rate risk management purposes that were currently in effect was $22.8 billion.
Noninterest expense decreased slightly, reflecting lower FDIC special assessments and lower professional and other services expense. Management continues to focus on expense management to improve efficiency.
Poor business and economic conditions in general or specifically in markets served by the Company could have adverse effects on the Company's business including decreased demand for loans and other products and services offered by the Company.
The Company is subject to extensive government regulation and supervision and this regulatory environment can be and has been significantly impacted by financial regulatory reform initiatives.
The Company's information systems may experience interruptions or breaches in security, including due to events beyond the Company's control. The Company could incur higher costs, experience lower revenue, and suffer reputational damage in the event of the theft, loss or misuse of information, including due to a cyber attack.
The Company faces extensive and intensive competition in the products and services it offers. The Company competes in offering commercial and personal financial and wealth services with other banking institutions and thrifts and with firms in a number of other industries.
Financial technology providers, who invest substantial resources in developing and designing new technology (in particular digital and mobile technology) are beginning to offer more traditional banking products (either directly or through bank partnerships) and may in the future be able to provide additional services by obtaining a bank-like charter.
Competition for qualified and diverse candidates in the activities in which the Company engages and markets that the Company serves is significant, and the Company may not be able to hire candidates and retain them.
Noninterest expense decreased slightly, reflecting lower FDIC special assessments and lower professional and other services expense. Management continues to focus on expense management to improve efficiency.
The Company is constantly the target of cyber attacks and other attempts to disrupt its operations. While the Company has policies and procedures designed to prevent or limit the effect of these possible events, there can be no assurance that any failure, disruption, interruption or security breach will not occur or, if any does occur, that it can be sufficiently or timely remediated.
Like all businesses, the Company is subject to operational risk, which represents the risk of loss resulting from human error or misconduct, inadequate or failed internal processes and systems, and external events, including the risk of loss resulting from fraud by employees or persons outside the Company, and breaches in data security.
Like other U.S. financial services companies, the Company is constantly the target of cyber attacks and other attempts to disrupt its operations. While the Company has policies and procedures designed to prevent or limit the effect of these possible events, there can be no assurance that any failure, disruption, interruption or security breach will not occur or, if any does occur, that it can be sufficiently or timely remediated.
The development and use of AI, including by third parties, presents risks and challenges that may adversely impact M&T. The legal and regulatory environment relating to AI is uncertain and rapidly evolving, and includes regulation targeted specifically at AI as well as provisions in intellectual property, privacy, consumer protection, employment and other laws applicable to the use of AI.
Technological change is influencing how individuals and firms conduct their financial affairs and is changing the delivery channels for financial services. Financial technology providers, who invest substantial resources in developing and designing new technology (in particular digital and mobile technology) are beginning to offer more traditional banking products (either directly or through bank partnerships) and may in the future be able to provide additional services by obtaining a bank-like charter, such as the OCC's financial technology company charter.
On August 15, 2024, M&T redeemed all 350,000 outstanding shares of its Perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series E, for $350 million. This simplifies the capital structure.
On May 13, 2024, M&T issued 75,000 shares of Perpetual Fixed Rate Non-Cumulative Preferred Stock, Series J, with a liquidation preference of $10,000 per share. This increases the company's capital base.
M&T repurchased 2,148,042 shares of its common stock in 2024 for a total cost of $400 million. On January 22, 2025, the Board authorized a new $4.0 billion share repurchase program, replacing the previous authorization.
The Company's assets, communities, operations, reputation and customers could be adversely affected by the impacts of climate risk. This includes the physical risks resulting from chronic shifts in climate, such as rising average global temperatures, rising sea levels, and acute climate events, such as an increase in the frequency and severity of extreme weather events and natural disasters, including floods, wildfires, hurricanes and tornados.
The Company is also subject to laws and regulations relating to the privacy of the information of customers, clients, employees or others, and any failure to comply with these laws and regulations could expose the Company to liability and/or reputational damage.
The Company also encourages engagement with communities through the allotment of 40 hours of paid volunteer time each year. In 2024, M&T employees volunteered approximately 246,000 hours and served on the boards of over 1,000 not-for-profit organizations.
Weakness in the economy has adversely affected the Company in the past and may adversely affect the Company in the future. Poor business and economic conditions in general or specifically in markets served by the Company could have adverse effects on the Company's business.
The Company's business and financial performance is impacted significantly by market interest rates and movements in those rates. The monetary and other related policies of governmental agencies, including the Federal Reserve, have a significant impact on interest rates and overall financial market performance over which the Company has no control and which the Company may not be able to anticipate adequately.
The Company is subject to extensive government regulation and supervision and this regulatory environment can be and has been significantly impacted by financial regulatory reform initiatives.