Company: MTB-PJ
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0000036270-25-000011
Chunk: 237

Company: M&T BANK CORP
Filing Date: 2025-08-04
Form: 10-Q
Item: Part I, Item 2
Chunk 237
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 brokered deposits. For the first six months of 2025 and 2024, net interest spread was 2.80% and 2.52%, respectively. Reductions to the rates paid on interest-bearing liabilities outpaced lower yields received on earning assets. Contributing to those decreases in the first half of 2025 as compared with the corresponding 2024 period was a reduction by the FOMC of its federal funds target interest rate by a total of 1.00% in the last four months of 2024. 

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 $58.0 billion in the second quarter of 2025, down from $59.2 billion in the first quarter of 2025. Net interest-free funds averaged $58.6 billion and $61.6 billion for the six months ended June 30, 2025 and 2024, respectively. Noninterest-bearing deposits averaged $45.2 billion and $45.4 billion in the second and first quarters of 2025, respectively, and $45.3 billion and $48.2 billion in the first half of 2025 and 2024, respectively. The decline in average noninterest-bearing deposits in the first six months of 2025 as compared with the similar 2024 period 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 .82% in the second quarter of 2025, compared with .84% in the first quarter of 2025. For the first six months of 2025 and 2024, the contribution of net interest-free funds was .84% and 1.04%, respectively. The decreased contribution of net interest-free funds to net interest margin in the first six months of 2025 as compared with the first six months of 2024 reflects lower rates paid, in the most recent six months, 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 3.62% in the second quarter of 2025, compared with 3.66% in the first quarter of 2025. During the first six