M&T Bank Corp.

We expect the company's net interest margin (NIM) to remain solid and above most regional bank peers', but to trend lower given increasing deposit pricing and funding pressures. For example, the NIM declined to 3.91% in second-quarter 2023, down from 4.06% in fourth-quarter 2022. The proportion of CRE loans is substantial at roughly one-third of total loans. However, construction loan exposures--which were among the highest of rated regional banks--have declined substantially over the past two years. M&T's nonaccrual loans have eased only slightly over the past two years; however, loan losses have remained low and comparable to similarly rated regional bank peers'. We project the company's risk-adjusted capital (RAC) ratio, which was 10.4% as of Dec. 31, 2022, to decline

...We expect M&T Bank Corp.'s funding and liquidity to weaken modestly--consistent with industry trends. We expect M&T to experience further modest deposit outflows over the next few quarters, consistent with industry trends, but think the bank is well positioned given its diversified customer base. We think M&T's liquidity is satisfactory, and liquidity sources meaningfully exceed adjusted uninsured deposits. We view M&T's solid market position in the mid-Atlantic region and good earnings generation favorably. We have a favorable view of M&T's larger market position following its acquisition of People's United Financial Inc. M&T's earnings generation and consistency are good, in our view, aided by its historically low loan losses and satisfactory proportion of noninterest revenue. We expect the company's net interest margin (NIM) to remain solid and above most regional bank peers', but to trend...

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