Company: MTB-PJ
Filing Date: 2025-10-27
Form Type: 10-Q
Source: 0000036270-25-000024
Chunk: 98

Company: M&T BANK CORP
Filing Date: 2025-10-27
Form: 10-Q
Item: Part I, Item 1
Chunk 98
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SENSITIVITY OF NET INTEREST INCOME TO CHANGES IN INTEREST RATES

Calculated Increase (Decrease) in Projected Net Interest Income(Dollars in millions)September 30, 2025December 31, 2024Changes in interest rates+200 basis points$(78)$(4)+100 basis points(19)16 -100 basis points17 (36)-200 basis points— (81)

The Company utilized many assumptions to calculate the impact that changes in interest rates may have on net interest income. The more significant of those assumptions included the rate of prepayments of mortgage-related assets, cash flows from derivative and other financial instruments, loan and deposit volumes, mix and pricing, and deposit maturities. Variations in amounts presented since December 31, 2024 reflect changes in the composition of the Company's earning assets and interest-bearing liabilities, as well as the level of market-implied forward interest rates and hedging actions taken by the Company. M&T's cumulative upward deposit pricing beta, which is the change in deposit pricing in response to a change in market interest rates, approximated 55% amidst a rising interest rate environment from the first quarter of 2022 through the second quarter of 2024. Reflecting the first cuts of the federal funds target interest rate since March 2020, the FOMC decreased that rate by 50 basis points in September 2024 followed by additional reductions of 25 basis points in each of November and December 2024 and September 2025. M&T's cumulative downward deposit pricing beta beginning in the third quarter of 2024 through the third quarter of 2025 approximated 52%. The assumptions used in interest rate sensitivity modeling are inherently uncertain and, as a result, the Company cannot precisely predict the impact of changes in interest rates on net interest income. Actual results may differ significantly from those presented due to the timing, magnitude and frequency of changes in interest rates and changes in market conditions and interest rate differentials (spreads) between maturity/repricing categories, as well as any actions, such as those previously described, which management may take to counter such changes. 

Management also uses an EVE model to supplement the modeling technique described above and provide a long-term interest rate risk metric. EVE is a point-in-time analysis of the economic sensitivity of assets, liabilities and off-balance sheet positions that incorporates all cash flows over their estimated remaining lives. The EVE reflects the present value of cash flows from existing assets, liabilities and