M&T Bank reported an increase in fourth-quarter profit, boosted by higher interest income and improved mortgage banking performance. The Federal Reserve’s interest rate adjustments have stimulated borrowing among households and businesses, leading to increased loan volumes across numerous banks. Simultaneously, lenders have reduced deposit costs, which has helped bolster interest income despite the overall decrease in rates. M&T Bank is a financial holding company that provides banking services. It operates through a network of community-based branches and offices.
The bank’s net interest income (NII), representing the difference between customer deposit payments and loan interest earnings, increased by approximately 3% to $1.78 billion in the fourth quarter compared to the previous year. Net interest margins also expanded to 3.69% from 3.58%. Looking ahead, M&T Bank anticipates NII to range between $7.2 billion and $7.35 billion in 2026. This forecast midpoint aligns closely with the average analyst expectation of $7.27 billion, based on estimates compiled by LSEG.
Additionally, non-interest income saw an approximate 6% increase to $696 million during the quarter. This was supported by growth in mortgage banking revenues, service charges on deposit accounts, and trust income. Specifically, mortgage banking revenue surged by 32%, propelled by higher residential mortgage loan servicing income and increased gains on sales of commercial mortgage loans. The bank allocated $125 million for credit loss provisions, which are reserves held to cover potential loan defaults. This compares favourably to the $140 million set aside in the previous year.
Net income available to common shareholders increased to $718 million, or $4.67 per share, from $644 million, or $3.86 per share, a year earlier. This metric is closely monitored by investors and analysts, as it serves as an indicator of the financial health of consumers, businesses, and the broader economy.
