M&T Bank quarterly profit rises on higher fees, lower rainy day funds
Shares of the Buffalo, New York-based regional bank, which also set aside lower buffers in the quarter for potential losses on loans, were up 1.4% in premarket trading.
U.S. consumers have remained healthy despite heightened uncertainty from tariffs and geopolitical turmoil.
Executives across industries have noted that sentiment is improving, with businesses seeking further clarity on trade and monetary policy before making investments. Dealmaking has also picked up, anchored by tech-heavy initial public offerings and multi-billion dollar buyouts.
M&T's total noninterest income rose to $683 million in the second quarter from $584 million in the year ago. This reflected a 23% increase in mortgage banking revenues, helped by higher residential mortgage loan servicing income.
Trust income rose to $182 million from $170 million.
The lender's provision for credit losses fell to $125 million from $150 million a year ago.
M&T has historically had greater exposure to commercial real estate (CRE) loans compare with other regional banking peers.
The lender has been trying to reduce the concentration of CRE loans on its balance sheet as the sector continues to struggle amid elevated interest rates and a dour macroeconomic outlook.
Analysts believe the bank's loan growth will increasingly start pulling ahead of peers as CRE headwinds fade. The company recently said CRE forms about 19% of its balance sheet.
M&T's average CRE loans fell 19.5% to $25.33 billion in the quarter, while average consumer loans rose to $25.35 billion from $21.97 billion in the year-ago period.
Its net income rose to $679 million, or $4.24 per share, in the three months ended June 30 from $626 million, or $3.73 per share, a year ago.
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