M&T Bank Q4 Earnings Beat Estimates on Fee Income Growth, Stock Up

M&T Bank Corporation’s MTB fourth-quarter 2024 adjusted net operating earnings per share of $3.92 beat the Zacks Consensus Estimate of $3.70. The bottom line compared favorably with earnings of $2.81 per share in the year-ago quarter.

Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.

For 2024, adjusted net operating earnings per share was $14.64, which beat the Zacks Consensus Estimate of $14.58. This compares unfavorably with $15.79 reported in the year-ago quarter.

MTB shares moved up 2.1% in pre-market trading on better-than-anticipated earnings. A full day’s trading will depict a better picture.   
 
Results have benefited from a rise in loans and leases and non-interest income. A decline in expenses and provision for credit losses were other positives. However, a fall in deposit balance was a headwind.

Net income available to common shareholders was $644 million, up 40.9% from the prior-year quarter.

For 2024, the company reported net income available to common shareholders of $2.44 billion, which declined 7.1% year over year.

MTB’s Quarterly Revenues Rise & Expenses Drop Y/Y

M&T Bank’s quarterly revenues were $2.39 billion, which surpassed the Zacks Consensus Estimate of $2.3 billion. Also, the reported figure increased 3.7% year over year.

Full-year revenues aggregated to $9.3 billion, down 3.8% year over year. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $9.2 billion.

NII (tax equivalent) rose marginally year over year to $1.74 billion. The figure matched our estimate.
 
Total non-interest income was $657 million, up 13.7% year over year. An increase in trust income, service charges on deposit accounts, mortgage banking revenues and other revenues from operations mainly caused the uptick. Our estimate for the metric was $596 million.

Total non-interest expenses were $1.36 billion, down 6% year over year. The fall was primarily due to lower FDIC assessment charges and a fall in professional and other services fees. We projected the metric to be $1.32 billion.

The efficiency ratio was 56.8%, down from 62.1% in the year-earlier quarter. A lower ratio indicates a rise in profitability.

MTB’s Loans Increase, Deposits Decrease

Loans and leases, net of unearned discount, were $135.7 billion as of Dec. 31, 2024, up nearly 1% from the prior quarter. Total deposits fell 2.1% sequentially to $161.1 billion. Our estimate for the loans and leases was $140.1 billion. Our estimate for deposits was $165.3 billion.

M&T Bank’s Credit Quality: Mixed Bag

Net charge-offs increased 8.1% to $160 million from the prior-year quarter. Our estimate for the metric was $136.2 million.

The company recorded a provision for credit losses of $140 million, down 37.8% from the year-ago quarter.

Non-performing assets declined 21.8% year over year to $1.73 billion. Our estimate for the metric was $1.88 billion.

The ratio of non-accrual loans to total net loans was 1.25%, which declined from 1.62% year over year. Our estimate for the metric was pegged at 1.29%.

MTB’s Capital Position & Profitability Ratios Improve Y/Y

M&T Bank’s estimated Common Equity Tier 1 ratio was 11.67%, up from 10.98% as of fourth-quarter 2023. The tangible equity per share was $109.4, up from $98.5 in the fourth quarter of 2023.

The company's return on average tangible assets (annualized) and average tangible common shareholder equity were 1.35% and 14.66% compared with 0.98% and 11.70%, respectively, in the prior-year quarter.

M&T Bank’s Capital Distribution Update

MTB repurchased 957,988 shares of its common stock in accordance with its capital plan for $200 million, including the share repurchase excise tax, in the fourth quarter of 2024.

Our View on M&T Bank

The rising loan balance and non-interest income will likely continue aiding M&T Bank’s organic growth. Strengthening capital position will support its financials in the long run. However, a declining deposit balance and an increase in net charge-offs pose near-term concerns.

M&T Bank Corporation Price, Consensus and EPS Surprise

M&T Bank Corporation price-consensus-eps-surprise-chart | M&T Bank Corporation Quote

Currently, M&T Bank carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates & Expectations of Banks

Citizens Financial Group, Inc. CFG is slated to report fourth-quarter 2024 results on Jan. 17. It has a Zacks Rank #3 at present.

Over the past seven days, the Zacks Consensus Estimate for CFG’s quarterly earnings per share has remained unchanged at 83 cents.

Fifth Third Bancorp FITB is scheduled to release fourth-quarter 2024 earnings on Jan. 21. The company carries a Zacks Rank #3 at present.

The consensus estimate for FITB’s quarterly earnings has remained unchanged at 87 cents per share over the past seven days.

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