M&T Bank Net Interest Income Rises on Loan Growth
Taxable-equivalent net interest income increased 2% quarter-over-quarter to $1,804 million
Net interest income at M&T Bank (MTB), a regional commercial lender, rose $41 million or 2% from the prior quarter to $1,804 million. The result reflects a 5% increase on a year-over-year basis, driven by favorable repricing and growth in investment securities and average loans.
Net interest margin remained flat at 3.70% for the second quarter of 2026, though it expanded 8 bps from the 3.62% reported in the prior-year period. Average loan balances grew $3.0 billion quarter-over-quarter to $141.4 billion, supported by a $2.3 billion increase in commercial and industrial loans. This represents a 4% increase in average loans year-over-year.
Average interest-bearing deposits fell $670 million from the first quarter to $119.6 billion, despite rising $1.5 billion over the past year. Noninterest income rose 8% both sequentially and year-over-year to $740 million, aided by trust income, interest rate swap revenues, and higher distributions from Bayview Lending Group LLC.
Operating leverage improved as the efficiency ratio fell to 52.8% in the second quarter, compared to 58.3% in the first quarter and 55.2% a year ago. Noninterest expense declined 6% quarter-over-quarter to $1,349 million, due to seasonally higher salaries and benefits in the first quarter.
Credit quality metrics trended toward improvement. Annualized net charge-offs as a percentage of average loans fell to 0.23%, down from 0.31% in the first quarter and 0.32% in the second quarter of 2025. The provision for credit losses decreased $20 million sequentially to $120 million.
The allowance for loan losses as a percent of total loans declined 1 bp quarter-over-quarter to 1.52%, a 9 bp improvement from the 1.61% reported a year ago.
Capital levels declined as the estimated CET1 ratio fell to 10.19% at June 30, 2026, from 10.33% in the first quarter and 10.99% in the second quarter of 2025. The bank decelerated its capital return, repurchasing 2.1 million shares for $465 million in the second quarter, compared to $1.25 billion in the first quarter and $1.08 billion in the prior-year quarter.