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Higher Fee Income and NII to Aid M&T Bank's Q2 Earnings
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Key Takeaways
MTB is expected to post higher Q2 earnings and revenues despite NII pressure and expense concerns.
Mortgage and deposit fees are likely to have aided revenues, though total non-interest income may have fallen.
Management projects lower Q2 expenses driven by a drop in seasonal compensation costs.
M&T Bank Corporation (MTB - Free Report) is slated to report second-quarter 2025 results on July 16, before the opening bell. The company is expected to have registered year-over-year increases in quarterly revenues and earnings.
In the last reported quarter, M&T Bank’s results were affected by a fall in loan balance and a rise in expenses. Nonetheless, a rise in net interest income (NII), higher non-interest income and lower provision for credit losses supported its financial performance.
Quarterly earnings surpassed the consensus estimate in three of the trailing four quarters and missed once, with the average negative earnings surprise being 6.67%.
Let us discuss the factors that are likely to have impacted the company’s second-quarter performance.
Factors to Influence M&T Bank’s Q2 Results
Loans & NII: An uncertain macroeconomic backdrop because of Trump’s tariff plans is likely to have led to a decent lending scenario. Per the Fed’s latest data, the demand for commercial and industrial and real estate loans was strong, while consumer loans were stable sequentially during the quarter.
Further, MTB's management expects second-quarter 2025 average loans to rise modestly. The increase in loans is likely to have benefited average interest-earning assets growth in the second quarter. The Zacks Consensus Estimate for average interest-earning assets is pegged at $191.8 billion, indicating a 1.4% increase from the prior-quarter reported figure. Our model estimate is pegged at $195.7 billion.
The Federal Reserve kept interest rates unchanged at 4.25-4.5% in the second quarter. As such, MTB’s NII is not likely to have improved significantly amid higher funding cost pressures, partially offset by modest loan growth.
Management projects a slightly higher NII for the second quarter of 2025. The Zacks Consensus Estimate for NII (on a tax-equivalent basis) is pegged at 1.75 billion, indicating a 3.1% increase from the prior quarter’s reported number. Our estimate is in line with the consensus estimate.
Fee Income: Management expects to register a higher average total deposit in the second quarter of 2025, driven by a rise in customer deposits. This is likely to have aided revenues from service charges on deposit accounts to some extent. The consensus estimate for the metric is pegged at $135.9 million, indicating a 2.2% rise from the prior quarter’s reported figure. Our estimate for the metric is $134.8 million.
Despite interest rate cuts by the central bank in 2024, mortgage rates did not come down significantly. The second quarter saw rates fluctuate, but they remained in the mid-to-upper 6% range. Hence, refinancing activities and origination volume were decent. Thus, mortgage banking fees are likely to have witnessed some improvement. This might have supported the company’s mortgage banking revenue growth in the quarter to be reported.
The Zacks Consensus Estimate for mortgage banking is pegged at $128 million, indicating an 8.5% rise from the prior quarter’s reported level. We expect the metric to be $115.9 million.
The consensus estimate for brokerage services income of $32.8 million indicates a rise of 2.4% from that reported in the first quarter of 2025. We expect the metric to be $32 million.
The Zacks Consensus Estimate for trust income of $182.7 million indicates an increase of 3.2% sequentially. Our model predicts the metric to be $178.3 million.
The Zacks Consensus Estimate for total non-interest income is pegged at $641 million, indicating a 4.9% decline from the prior-quarter’s actual. Our model projects the metric to be $632.6 million.
Expenses: Management expects the second-quarter expenses to decline sequentially primarily due to lower seasonal compensation. Our model projects total expenses to be $1.37 billion for the second quarter of 2025, indicating a sequential decline of 3.4%.
What Our Quantitative Model Predicts for MTB
Per our proven model, the chances of M&T Bank beating estimates this time are high. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for M&T Bank is +0.12%.
Zacks Rank: M&T Bank currently carries a Zacks Rank of 3.
The Zacks Consensus Estimate for MTB’s second-quarter earnings of $4.03 per share has remained unchanged over the past seven days. The figure indicates an increase of 6.3% from the year-ago number. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The consensus estimate for revenues is pegged at $2.39 billion, implying a rise of 3.6% from the prior-year reported level.
Other Stocks That Warrant a Look
Here are some other bank stocks, which, according to our model, have the right combination of elements to post an earnings beat this time around.
Over the past seven days, the Zacks Consensus Estimate for Texas Capital Bancshares quarterly earnings has remained unchanged, indicating a jump of 60% from the year-ago reported figure.
Cullen/Frost Bankers, Inc. (CFR - Free Report) has an Earnings ESP of +4.45% and a Zacks Rank of 2 at present. CFR is expected to release its second-quarter 2025 earnings on July 31.
Quarterly earnings estimates for Cullen/Frost have been revised upward in the past seven days, indicating an increase of 3.2% from the year-ago reported figure.
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Higher Fee Income and NII to Aid M&T Bank's Q2 Earnings
Key Takeaways
M&T Bank Corporation (MTB - Free Report) is slated to report second-quarter 2025 results on July 16, before the opening bell. The company is expected to have registered year-over-year increases in quarterly revenues and earnings.
In the last reported quarter, M&T Bank’s results were affected by a fall in loan balance and a rise in expenses. Nonetheless, a rise in net interest income (NII), higher non-interest income and lower provision for credit losses supported its financial performance.
Quarterly earnings surpassed the consensus estimate in three of the trailing four quarters and missed once, with the average negative earnings surprise being 6.67%.
M&T Bank Corporation Price and EPS Surprise
M&T Bank Corporation price-eps-surprise | M&T Bank Corporation Quote
Let us discuss the factors that are likely to have impacted the company’s second-quarter performance.
Factors to Influence M&T Bank’s Q2 Results
Loans & NII: An uncertain macroeconomic backdrop because of Trump’s tariff plans is likely to have led to a decent lending scenario. Per the Fed’s latest data, the demand for commercial and industrial and real estate loans was strong, while consumer loans were stable sequentially during the quarter.
Further, MTB's management expects second-quarter 2025 average loans to rise modestly. The increase in loans is likely to have benefited average interest-earning assets growth in the second quarter. The Zacks Consensus Estimate for average interest-earning assets is pegged at $191.8 billion, indicating a 1.4% increase from the prior-quarter reported figure. Our model estimate is pegged at $195.7 billion.
The Federal Reserve kept interest rates unchanged at 4.25-4.5% in the second quarter. As such, MTB’s NII is not likely to have improved significantly amid higher funding cost pressures, partially offset by modest loan growth.
Management projects a slightly higher NII for the second quarter of 2025. The Zacks Consensus Estimate for NII (on a tax-equivalent basis) is pegged at 1.75 billion, indicating a 3.1% increase from the prior quarter’s reported number. Our estimate is in line with the consensus estimate.
Fee Income: Management expects to register a higher average total deposit in the second quarter of 2025, driven by a rise in customer deposits. This is likely to have aided revenues from service charges on deposit accounts to some extent. The consensus estimate for the metric is pegged at $135.9 million, indicating a 2.2% rise from the prior quarter’s reported figure. Our estimate for the metric is $134.8 million.
Despite interest rate cuts by the central bank in 2024, mortgage rates did not come down significantly. The second quarter saw rates fluctuate, but they remained in the mid-to-upper 6% range. Hence, refinancing activities and origination volume were decent. Thus, mortgage banking fees are likely to have witnessed some improvement. This might have supported the company’s mortgage banking revenue growth in the quarter to be reported.
The Zacks Consensus Estimate for mortgage banking is pegged at $128 million, indicating an 8.5% rise from the prior quarter’s reported level. We expect the metric to be $115.9 million.
The consensus estimate for brokerage services income of $32.8 million indicates a rise of 2.4% from that reported in the first quarter of 2025. We expect the metric to be $32 million.
The Zacks Consensus Estimate for trust income of $182.7 million indicates an increase of 3.2% sequentially. Our model predicts the metric to be $178.3 million.
The Zacks Consensus Estimate for total non-interest income is pegged at $641 million, indicating a 4.9% decline from the prior-quarter’s actual. Our model projects the metric to be $632.6 million.
Expenses: Management expects the second-quarter expenses to decline sequentially primarily due to lower seasonal compensation. Our model projects total expenses to be $1.37 billion for the second quarter of 2025, indicating a sequential decline of 3.4%.
What Our Quantitative Model Predicts for MTB
Per our proven model, the chances of M&T Bank beating estimates this time are high. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for M&T Bank is +0.12%.
Zacks Rank: M&T Bank currently carries a Zacks Rank of 3.
The Zacks Consensus Estimate for MTB’s second-quarter earnings of $4.03 per share has remained unchanged over the past seven days. The figure indicates an increase of 6.3% from the year-ago number. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The consensus estimate for revenues is pegged at $2.39 billion, implying a rise of 3.6% from the prior-year reported level.
Other Stocks That Warrant a Look
Here are some other bank stocks, which, according to our model, have the right combination of elements to post an earnings beat this time around.
The Earnings ESP for Texas Capital Bancshares, Inc. (TCBI - Free Report) is +2.23% and it carries a Zacks Rank of 3 at present. TCBI is slated to report its second-quarter 2025 results on July 17. You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past seven days, the Zacks Consensus Estimate for Texas Capital Bancshares quarterly earnings has remained unchanged, indicating a jump of 60% from the year-ago reported figure.
Cullen/Frost Bankers, Inc. (CFR - Free Report) has an Earnings ESP of +4.45% and a Zacks Rank of 2 at present. CFR is expected to release its second-quarter 2025 earnings on July 31.
Quarterly earnings estimates for Cullen/Frost have been revised upward in the past seven days, indicating an increase of 3.2% from the year-ago reported figure.