- Why it matters: Improving credit quality trends, along with the prospect of continued solid loan growth, allowed Buffalo, New York-based M&T to return more capital to shareholders.
- Supporting data: Charge-offs dropped to $105 million, the lowest level since the first quarter of 2024.
- Expert quote: "Right now we feel really good and we're going to continue to move our ratios down." — M&T Chief Financial Officer Daryl Bible
M&T Bank scaled back its capital position in the first quarter, as improved credit quality gave it the confidence to operate with a smaller cushion.
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Buffalo, New York-based M&T, which disclosed its first-quarter results Wednesday, reported a Common Equity Tier 1 capital ratio of 10.33% on March 31 — more than 50 basis points below the year-end 2025 level, and nearly 120 basis points below the year-ago mark. The decline was driven by a spike in share repurchases, which totaled $1.25 billion in the quarter, up from $507 million during the quarter ending Dec. 31, 2025.
"Right now we feel really good and we're going to continue to move our ratios down," M&T Chief Financial Officer Daryl Bible said Wednesday on a conference call with analysts. "You see that in our share repurchases."
The $214.7 billion-asset M&T reported $105 million of charge-offs during the three months ending March 31, down from $185 million for the fourth quarter of 2025 and the lowest quarterly total in two years. The company also reported declines in nonaccrual loans as well as criticized commercial real estate and commercial and industrial credits.
As a result, Bible said M&T plans to target a Common Equity Tier 1 capital ratio of 10% to 10.5% in 2026, down from its previous guidance of 10.25% to 10.5%.
"We feel comfortable going there now," Bible said of the lower capital target. "We continue to have really good improvement in asset quality."
"We expect [M&T] to continue returning capital to shareholders over the next 12 months with strong levels of stock buybacks," RBC Capital Markets analyst Gerard Cassidy wrote Wednesday in a research note.
M&T reported first-quarter net income of $664 million, up 14% from the same period in 2025. Earnings per share totaled $4.13, beating the consensus estimate of $4.00, according to S&P Capital IQ. Revenue of $2.4 billion was up 5.7% from the first quarter of 2025.
"Overall, a better-than-expected first quarter," Piper Sandler analyst Scott Siefers wrote in a research note.
Loans totaled $139.9 billion on March 31, up 4% from a year ago. The uptick reflected growth in commercial and business banking, along with the company's specialty lending verticals. Business banking — which includes M&T's Small Business Administration lending operation — "is probably performing as well as I've ever seen it," Bible said, citing strong pipelines and robust deposit levels.
Through nearly seven months of the SBA's fiscal year, which began Oct. 1, 2025, M&T originated loans totaling $166 million under the agency's flagship 7(a) loan guarantee program. The result keeps M&T on pace to match its fiscal 2025 7(a) total of $294 million. M&T originated $208 million of 7(a) loans in fiscal 2024.
Overall, commercial-and-industrial loans totaled $65.4 billion on March 31, up 8% year over year. And though commercial real estate lending declined from the first-quarter 2025 level, activity picked up in March, according to Bible.
"We have a lot of momentum," the M&T CFO said. "I know [the CRE portfolio] is going to grow this year. We have everything headed in the right direction."
Period-end deposits of $163.7 billion declined 1% from a year ago, but still provided more than enough cash to fund loans, Bible said.
The biggest headwind in M&T's first-quarter numbers centered around operating expenses, which totaled $1.44 billion, up 2% from the same period last year. Most of the increase was driven by higher compensation costs. The higher expenses helped push M&T's efficiency ratio from 55.1% at the end of 2025 to 58.3% at the end of the first quarter, though it was still below the March 31, 2025, mark of 60.5%.
Siefers said that M&T's increased expenses "could cause a little weakness in the shares," and that prediction appeared to hit the mark. The stock was trading down about 1% on Wednesday afternoon at $217.60.
