Company: MTB-PJ
Filing Date: 2025-10-27
Form Type: 10-Q
Source: 0000036270-25-000024
Chunk: 193

Company: M&T BANK CORP
Filing Date: 2025-10-27
Form: 10-Q
Item: Part I, Item 8
Chunk 193
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 That increase reflects an 8 basis-point widening of the net interest margin driven by a decrease of 53 basis points in the cost of interest-bearing liabilities, partially offset by a 25 basis-point decline in the yield received on earning assets and a 20 basis-point reduction in the contribution of net interest-free funds. Contributing to lower yields on earning assets and rates paid on interest-bearing liabilities in the first nine months of 2025 as compared with the similar 2024 period was the impact of the FOMC's cumulative 100 basis-point reduction in its federal funds target interest rate during the last four months of 2024. Partially offsetting the decline in yields received on earning assets was an increase in the yields received on investment securities from the deployment of liquidity into fixed rate investment securities from early 2024 through September 2025 that yielded higher rates than maturing investment securities.

Future changes in market interest rates or spreads, as well as changes in the composition of the Company’s portfolios of earning assets and interest-bearing liabilities that result in changes to spreads, could impact the Company’s net interest income and net interest margin. Future changes in the levels of net interest-free funds and the interest rates used to value such funds could also impact the Company's net interest margin.

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Interest rate swap agreements

Management assesses the potential impact of future changes in interest rates and spreads by projecting net interest income under several interest rate scenarios. In managing interest rate risk, the Company has utilized interest rate swap agreements to modify the repricing characteristics of certain portions of its earning assets and interest-bearing liabilities. Under the terms of those interest rate swap agreements, the Company generally received payments based on the outstanding notional amount at fixed rates and made payments at variable rates. Periodic settlement amounts arising from these agreements are reflected in either the yields received on earning assets or the rates paid on interest-bearing liabilities. The Company enters into forward-starting interest rate swap agreements predominantly to hedge interest rate exposures expected in future periods. The following table summarizes information about interest rate swap agreements entered into for interest rate risk management purposes at September 30, 2025 and December 31, 2024.

INTEREST RATE SWAP AGREEMENTS - DESIGNATED AS HEDGES

Notional AmountWeighted-AverageMaturity(In years)Weighted-Average Rate (Dollars in millions)Fixed Variable September 30, 2025Fair value hedges:Fixed rate long-term borrowings — active$3,350 4.5 3.