Company: MTB-PJ
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001628280-25-006267
Chunk: 129

Company: M&T BANK CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7
Chunk 129
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 spread in 2024 as compared with 2023 reflects the impact of higher rates paid on interest-bearing deposits and borrowings that outpaced higher yields earned on investment securities, loans and other earning assets. The yield received on earning assets during 2024 was 5.74%, up from 5.50% in 2023. The yield received on investment securities increased 55 basis points to 3.64% in 2024 reflecting purchases of investment securities in 2024 and 2023 with higher yields than maturing securities. The yield received on loans rose 24 basis points to 6.31% in 2024 primarily reflecting the benefit of variable interest rate resets and loan originations at generally higher yields than offsetting loan maturities. The rate paid on interest-bearing liabilities was 3.17%, up 57 basis points from 2023 reflecting an increase in the rate paid on interest-bearing deposits of 57 basis points as customers sought higher yields in an elevated interest rate environment and an increase in average long-term borrowings which are generally higher-cost funding sources. 

Net interest-free funds consist largely of noninterest-bearing demand deposits and other liabilities and shareholders’ equity, partially offset by bank owned life insurance and non-earning assets, including goodwill and core deposit and other intangible assets. Net interest-free funds averaged $61.1 billion in 2024 and $67.3 billion in 2023. Noninterest-bearing deposits averaged $47.3 billion in 2024 and $55.5 billion in 2023. The decline in average noninterest-bearing deposits in 2024 as compared with 2023 reflects a shift in deposits to interest-bearing accounts in an elevated interest rate environment. The contribution of net interest-free funds to net interest margin was 1.01% in 2024 and .93% in 2023. The increased contribution of net-interest free funds in 2024 as compared with 2023 reflects the higher rates paid on interest-bearing liabilities used to value net interest-free funds.

Reflecting the changes to the net interest spread and the contribution of net interest-free funds as described herein, the Company’s net interest margin was 3.58% in 2024 and 3.83% in 2023. That 25 basis-point narrowing of the net interest margin reflects an increase in the rates paid on the Company's sources of funding which outpaced the rise in yields on earning assets. Future changes in market interest rates or spreads, as well as