M&T Bank Corp Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: R. Scott Siefers - Piper Jaffray Inc - Analyst : Daryl, thank you for taking the question. I wanted to -- wanted to ask first on loan growth. So really good traction in a few components of the loan portfolio, but CRE is still moderating, albeit at a slower pace. Maybe just sort of a thought on where we stand with the actual inflection of the CRE book, sort of timing and magnitude, stuff like that?

Question: R. Scott Siefers - Piper Jaffray Inc - Analyst : Perfect. Okay. Thank you. And then maybe just if you could expand upon your thoughts on sort of M&T's position in the now consolidating large regional environment, just kind of given all the events in the last few weeks. So I think you all have been quite transparent about what you'd be interested in and have such a history of discipline. But just curious now that we're actually seeing activity. How do you sort of balance the -- maybe finite regulatory window, need to have willing sellers? Does that cause you at all to sort of expand your geographic base a little to increase the number of possibilities? Or will you simply kind of stay close to your [knitting]?

Question: R. Scott Siefers - Piper Jaffray Inc - Analyst : Perfect. All right, thank you very much, Daryl.

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Just to follow up on what you just said about the approvals on commercial real estate. I think you said they're double from what they were prior. Can you share with us a little deeper, how did that happen or what's changed to have more approvals?

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Very good. And then just a broader picture. If we step back for a moment, you've had in the past some very good insights on what's going on in Washington with the regulators, and we saw the notice of proposed rule-making on matters that require attention MRAs. Can you give us your view of how the regulatory environment is changing? And how that may help your profitability going forward, as well as maybe the industry?

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : And just to stick with this for a second. Obviously, the Basel III end game is coming up soon, maybe by the end of the year, first of next year. Many investors have identified the benefits to the money center banks. But in terms of regional banks, what do you see the potential benefits for you from the Basel III end game being a lot less onerous than what it was proposed in July of '23? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 16, 2025 / 3:00PM, MTB.N - Q3 2025 M&T Bank Corp Earnings Call

Question: Gerard Cassidy - RBC Capital Markets Inc - Analyst : Thank you. Appreciate the insights.

Question: Erika Najarian - UBS AG - Analyst : Thank you for taking my question. Just wanted to follow up on Scott's line of questioning. Daryl, you mentioned production picking up the approval rate that you just talked about with Gerard, but rates are, in theory, supposed to trend lower from here. How should we think about the push-pull between some of these loans getting [re-fied] away from you and the production? In other words, is the fourth quarter still a good inflection point for when CRE balances at bottom? When do we -- can we start seeing period-end balances start to tick upward in a more consistent way?

Question: Erika Najarian - UBS AG - Analyst : Got it. And maybe the second question, Daryl, is M&T has been known to be -- to have a conservative culture, and there has been a lot of credit noise recently, whether it's related to [NDFI] or credit pre-announcements, which always makes the market nervous. So you're in the first management team to sort of call out NDFI and additionally, the RWA treatment of NDFI via SSFA. So maybe my question is this, maybe walk us through what the NDFI exposure is for M&T? You did mention that loans to financial and insurance companies was the driver for C&I growth? And maybe help investors figure -- like what questions do we ask in order to really properly assess the REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 16, 2025 / 3:00PM, MTB.N - Q3 2025 M&T Bank Corp Earnings Call credit risk from a go-forward perspective? Because all we're getting from other banks is that, don't worry about it, this is way less frequency and weigh narrower severity than a direct C&I loan.

Question: John Pancari - Evercore Inc - Analyst : On the capital front, I know you're at 10.99 CET1, and you -- net of the $409 million in buybacks. As you look out, I know you have your 10.75% to 11% target. Can you provide us your updated thoughts around that target? What is keeping you from moving that lower and as you get clarity on the regulatory front? And once you do have that confidence and the ability to move it lower, is the way to help us frame where you think a bank of your size and your regulatory considerations where you really could be operating at? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 16, 2025 / 3:00PM, MTB.N - Q3 2025 M&T Bank Corp Earnings Call

Question: John Pancari - Evercore Inc - Analyst : And in terms of your CET1 target, the 10.75% to 11% range. What would you need to see to move that lower?

Question: John Pancari - Evercore Inc - Analyst : Got it. Okay. And then if I could just throw in one more. On the -- just on the loan front, I appreciate the color you gave around the appetite around CRE and some of the loan growth dynamics. Can you maybe talk about competition a bit? Are you seeing -- what are you seeing in terms of loan spreads? We're hearing a little bit more that competition is starting to bear down again and the larger banks are becoming even more of a formidable competitor to the regionals on the lending front. What are you seeing there in terms of front-end loan spreads on the commercial book?

Question: John Pancari - Evercore Inc - Analyst : Got it. All right. Thanks, Daryl. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 16, 2025 / 3:00PM, MTB.N - Q3 2025 M&T Bank Corp Earnings Call

Question: Christopher McGratty - Keefe Bruyette & Woods Inc - Analyst : Daryl, if you think about operating leverage going into 2026, or the medium term, can you just speak to how you think this plays out in terms of widening, narrowing, and then the drivers between revenues and expenses?

Question: Christopher McGratty - Keefe Bruyette & Woods Inc - Analyst : Just operating leverage. Is it going to widen or narrow?

Question: Christopher McGratty - Keefe Bruyette & Woods Inc - Analyst : Thanks for that. And then I guess a quick follow up kind of two parts. One, I guess, the visibility into the improvement in the criticized that you've noted in the [crewbook]. I presume that will continue. And then secondly, I just noticed a nuance in kind of your geography question about M&A. I think you said adjacent markets. Just if you could unpack that for a minute, that would be great.

Question: Christopher McGratty - Keefe Bruyette & Woods Inc - Analyst : Perfect. Thank you. Appreciate it.

Question: Manan Gosalia - Morgan Stanley - Analyst : You noted in your credit comments, if you have one-timers in C&I NCOs that was embedded in the overall 42 basis point NCO number. And then I guess your guide for next quarter is $40 million to $50 million. Are there more lumpy items that you're expecting next quarter? And I guess the bigger picture question is, how do you expect that to trend into 2026 and what's a good, normalized NCO run rate for M&T?

Question: Manan Gosalia - Morgan Stanley - Analyst : Got it. And then separately, you spoke about more room on the operating leverage side. Some of your peers have spoken about accelerating investments in AI and tech. Can you talk a little bit about what M&T is doing there? And if you will need to spend more next year as you invest there?

Question: Manan Gosalia - Morgan Stanley - Analyst : Got it. Thank you.

Question: Matt O-Connor - Deutsche Bank AG - Analyst : Just a bigger picture question on credit, which is obviously driving (inaudible) today. We're seeing some of these kind of one-offs in commercial that, according to the media, are fraud related. But what are your thoughts in terms of like why we're seeing these events now with rates kind of coming down? I thought maybe that would have taken the pressure off. But just any big picture thoughts as you guys kind of sit around and think about the credit environment. I'm sure you have talked about some of these kind of positions out there if you don't have any -- just any thoughts on that?

Question: Matt O-Connor - Deutsche Bank AG - Analyst : That's helpful. And then I'm sure it's a lot easier to kind of get comfortable with your book. You originally (inaudible) evaluate it kind of on an ongoing basis. And I guess, hypothetically, if you were kind of looking at an external book, do you still feel like there's enough visibility where you could evaluate it or are there enough red flags, again, just kind of generally in credit, these headlines that you're seeing that, that might give you a little pause? All hypothetical, obviously.

Question: Matt O-Connor - Deutsche Bank AG - Analyst : Okay, that's helpful. Thank you.

Question: Ken Usdin - Autonomous Research - Analyst : Daryl, just one quick one. You mentioned in the slides that the fourth-quarter expense stuff up, you pointed out professional services. I know you guys typically do have higher expenses, third to fourth. But I'm just wondering, is that a specific nuance that you're just finishing some projects or something like that? And just obviously, we'll hear more in January about what next year's expenses look like, but I just want to know if that's atypical, or more kind of the normal ramp that we typically see towards year end?

Question: Ken Usdin - Autonomous Research - Analyst : Okay. All right. Got it. Thanks for that clarification.