Company: MTB-PJ
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001628280-25-022036
Chunk: 167

Company: M&T BANK CORP
Filing Date: 2025-05-05
Form: 10-Q
Item: Part I, Item 8
Chunk 167
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 which is a non-GAAP measure. The taxable-equivalent adjustment represents additional income taxes that would be due if all interest income were subject to income taxes. This adjustment, which is related to interest received on qualified municipal securities, industrial revenue financings and preferred equity securities, is based on a composite income tax rate of approximately 25%.

The decrease in net income in the recent quarter as compared with the fourth quarter of 2024 resulted from the following:

•Net interest income on a taxable-equivalent basis declined $33 million, largely reflective of two less calendar days in the recent quarter. The Company's net interest margin widened 8 basis points reflecting a reduction in the rates paid on interest-bearing liabilities that outpaced a decline in yields received on earning assets. That increase in net interest spread was partially offset by a decrease in the contribution of interest-free funds.

•Provision for credit losses declined $10 million reflecting lower levels of commercial real estate loans, including such loans that were designated as criticized, partially offset by a modest deterioration in macroeconomic forecasts. Macroeconomic forecasts have been and are expected to continue to be influenced by geopolitical uncertainties such as potential changes to international trade policies, including tariffs.

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•Noninterest income declined $46 million reflecting a distribution from M&T's investment in BLG and net gains on bank investment securities each in the fourth quarter of 2024.

•Noninterest expense increased $52 million reflecting seasonal salaries and employee benefits expense in the recent quarter and higher outside data processing and software costs, partially offset by a decline in other costs of operations. That decline reflects lower costs associated with the Company's supplemental executive retirement savings plan and activity in the fourth quarter of 2024 including losses resulting from the redemption of certain of M&T's trust preferred obligations and vacated facility write-downs, partially offset by a pension-related distribution benefit.

The increase in net income in the first quarter of 2025 as compared with 2024's initial quarter reflects the following:

•Net interest income on a taxable-equivalent basis increased $15 million reflecting a widening of the net interest margin by 14 basis points as reductions in deposit and borrowing costs outpaced a decline in the yield received on average interest-bearing deposits at banks and average loans and leases.

•Provision for credit losses declined $70 million reflecting a lower provision associated with commercial and industrial loans in the recent quarter. Contributing to the higher provision in the first quarter of 2024 was a $641 million increase in the balance of criticized commercial and industrial loans from