Company: MTB-PJ
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001628280-25-022036
Chunk: 180

Company: M&T BANK CORP
Filing Date: 2025-05-05
Form: 10-Q
Item: Part I, Item 8
Chunk 180
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Additional information regarding borrowings is provided in notes 4 and 11 of Notes to Financial Statements.

Net interest margin

Taxable-equivalent net interest income can be impacted by changes in the composition of the Company's earning assets and interest-bearing liabilities, as discussed herein, as well as changes in interest rates and spreads. Net interest spread, or the difference between the yield on earning assets and the rate paid on interest-bearing liabilities, was 2.82% in the recent quarter, up from 2.66% and 2.48% in the fourth and first quarters of 2024, respectively. Those increases in the net interest spread reflect a decrease in the rates paid on the Company's interest-bearing liabilities, partially offset by a decline in the yield on earning assets. The yield on earning assets during the first quarter of 2025 was 5.52%, down 8 and 22 basis points from the fourth and first quarters of 2024, respectively, reflecting lower yields on interest-bearing deposits at the FRB of New York and loans and leases. That decrease was partially offset by a rise in yields received on investment securities which reflected purchases of investment securities since the beginning of 2024, inclusive of the recent quarter, with a higher yield than those that matured during those same periods. The rate paid on interest-bearing liabilities was 2.70%, down 24 and 56 basis points from the fourth and first quarters of 2024, respectively, reflecting a reduction in the cost of interest-bearing deposits and funding from short-term borrowings during each of those comparative periods. That reduction in the cost of interest-bearing liabilities reflects a lower FOMC federal funds target interest rate which was reduced 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 $59.2 billion in the first quarter of 2025, down from $60.8 billion and $61.7 billion in the fourth and first quarters of 2024, respectively. Noninterest-bearing deposits averaged $45.4 billion in the first quarter of 2025, compared with $46.6 billion in the fourth quarter of 2024, and $48.6 billion in 2024's initial quarter. The decline in average noninterest-bearing deposits