M&T Bank Corp.

We also think the company's 3.8% preliminary stress capital buffer (SCB), generated in the Federal Reserve's recent stress test, suggests greater loan risk than for several similarly rated U.S. regional bank peers. In addition, loan losses have risen meaningfully from low levels and are now roughly comparable to many large regional bank peers. However, M&T has been reducing its CRE loan portfolio in recent years. M&T's earnings generation and consistency are good, and it benefits from historically low loan losses and a satisfactory proportion of noninterest revenue. We expect the company's net interest margin (NIM) to remain solid and above most peers', but trend somewhat lower amid continued deposit pricing pressures. The NIM declined to 3.52% in first-quarter 2024, from

...We view M&T Bank Corp.'s (M&T's) asset quality and commercial real estate (CRE) exposures somewhat cautiously. The bank's nonperforming and criticized loan balances are a higher proportion of loans than at many other large regional bank peers, largely due to higher-than-peer proportion of CRE loans and a geographic concentration in the New York City area. More specifically, the proportion of CRE loans is substantial, roughly one-fourth of total loans, including a meaningful proportion of construction and office loan exposures--which we view somewhat cautiously. We also think the company's 3.8% preliminary stress capital buffer (SCB), generated in the Federal Reserve's recent stress test, suggests greater loan risk than for several similarly rated U.S. regional bank peers. In addition, loan losses have risen meaningfully from low levels and are now roughly comparable to many large regional bank peers. However, M&T has been reducing its CRE loan portfolio in recent years....

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