M&T Bank (MTB)

Regional banking company M&T Bank (NYSE:MTB) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 8.3% year on year to $2.53 billion. Its GAAP profit of $4.82 per share was 8.9% above analysts’ consensus estimates.

Company Overview

Tracing its roots back to 1856 when it was founded as Manufacturers and Traders Bank in Buffalo, New York, M&T Bank (NYSE:MTB) is a regional bank holding company that provides retail and commercial banking, trust, wealth management, and investment services to consumers and businesses.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

M&T Bank competes with other regional banks like PNC Financial Services (NYSE:PNC), KeyCorp (NYSE:KEY), and Citizens Financial Group (NYSE:CFG), as well as larger national institutions including JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), and Wells Fargo (NYSE:WFC).

Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities. Luckily, M&T Bank’s revenue grew at an impressive 10.1% compounded annual growth rate over the last five years. Its growth beat the average banking company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. M&T Bank’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 1.2% over the last two years. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, M&T Bank reported year-on-year revenue growth of 8.3%, and its $2.53 billion of revenue exceeded Wall Street’s estimates by 3.7%.

Net interest income made up 70.4% of the company’s total revenue during the last five years, meaning lending operations are M&T Bank’s largest source of revenue.

While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.

The underlying profitability of top-line growth determines the actual bottom-line impact. Banking institutions measure this dynamic using the efficiency ratio, which is calculated by dividing non-interest expenses like personnel, facilities, technology, and marketing by total revenue.

Markets understand that a bank’s expense base depends on its revenue mix and what mostly drives share price performance is the change in this ratio, rather than its absolute value. It’s somewhat counterintuitive, but a lower efficiency ratio is better.

Over the last five years, M&T Bank’s efficiency ratio couldn’t build momentum, hanging around 56.4%.

In Q3, M&T Bank’s efficiency ratio was 53.6%, beating analysts’ expectations by 79.4 basis points (100 basis points = 1 percentage point). This result was 1.4 percentage points better than the same quarter last year.

For the next 12 months, Wall Street expects M&T Bank to rein in some of its expenses as it anticipates an efficiency ratio of 55.3%.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

M&T Bank’s astounding 10.1% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For M&T Bank, its two-year annual EPS declines of 3.2% mark a reversal from its (seemingly) healthy five-year trend. We hope M&T Bank can return to earnings growth in the future.

In Q3, M&T Bank reported EPS of $4.82, up from $4.02 in the same quarter last year. This print beat analysts’ estimates by 8.9%. Over the next 12 months, Wall Street expects M&T Bank’s full-year EPS of $16.24 to grow 12.5%.

Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.

This explains why tangible book value per share (TBVPS) stands as the premier banking metric. TBVPS strips away questionable intangible assets, revealing concrete per-share net worth that investors can trust. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.

M&T Bank’s TBVPS grew at an impressive 7.6% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 10.9% annually over the last two years from $93.75 to $115.31 per share.

Over the next 12 months, Consensus estimates call for M&T Bank’s TBVPS to grow by 4% to $119.97, paltry growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, M&T Bank has averaged a Tier 1 capital ratio of 11.3%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.

Over the last five years, M&T Bank has averaged an ROE of 9.9%, healthy for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This is a bright spot for M&T Bank.

We enjoyed seeing M&T Bank beat analysts’ revenue expectations this quarter. We were also happy its tangible book value per share narrowly outperformed Wall Street’s estimates. On the other hand, its net interest income was in line. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 1.4% to $187.66 immediately after reporting.

Updated: December 4, 2025 at 11:42 PM EST

Before deciding whether to buy M&T Bank or pass, we urge investors to consider business quality, valuation, and the latest quarterly results.

M&T Bank’s business quality ultimately falls short of our standards. To kick things off, its revenue growth was mediocre over the last five years, and analysts expect its demand to deteriorate over the next 12 months. And while its TBVPS growth was impressive over the last five years, the downside is its declining net interest margin shows its loan book is becoming less profitable. On top of that, its estimated sales for the next 12 months are weak.

M&T Bank’s P/B ratio based on the next 12 months is 1.1x. While this valuation is fair, the upside isn’t great compared to the potential downside. We're pretty confident there are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $218.88 on the company (compared to the current share price of $195.56).