Research Update: M&T Bank Corp. Long-Term Rating Lowered To 'BBB+' From 'A-' On Weakening Asset Quality; Outlook Stable

M&T Bank Corp.'s asset quality has deteriorated, as evidenced by an increase in criticized loans and nonperforming assets (NPAs) in recent quarters. We think CRE loans are largely responsible for the weakness, including in the New York City area. We think M&T's various loan and geographic concentrations are more economically sensitive to pandemic-related disruptions, and we think its historically strong track record of low loan losses may weaken somewhat. We lowered our long-term rating on M&T Bank Corp. to 'BBB+' from 'A-' and our ratings on Manufacturers&Traders Trust Co., its primary bank subsidiary, to 'A-/A-2' from 'A/A-1'. The outlooks on the long-term ratings are stable. The stable outlook incorporates our view that M&T's asset quality will gradually improve

...- M&T Bank Corp.'s asset quality has deteriorated, as evidenced by an increase in criticized loans and nonperforming assets (NPAs) in recent quarters. We think CRE loans are largely responsible for the weakness, including in the New York City area. - We think M&T's various loan and geographic concentrations are more economically sensitive to pandemic-related disruptions, and we think its historically strong track record of low loan losses may weaken somewhat. - We lowered our long-term rating on M&T Bank Corp. to '###+' from 'A-' and our ratings on Manufacturers & Traders Trust Co., its primary bank subsidiary, to 'A-/A-2' from 'A/A-1'. The outlooks on the long-term ratings are stable. - The stable outlook incorporates our view that M&T's asset quality will gradually improve over the next two years as the economy recovers, but we expect it to remain worse than many large U.S. regional bank peers' over the outlook horizon....

Research Update