Shares of M&T Bank Corporation MTB rallied 1.2% in the pre-market trading session on better-than-expected second-quarter 2026 results. The company reported second-quarter net operating earnings per share of $5.35, which beat the Zacks Consensus Estimate of $4.66. The bottom line compared favorably with earnings of $4.28 in the year-ago quarter.
Results were aided by higher net interest income (NII) and a rise in non-interest income on a year-over-year basis, along with loan growth. However, higher expenses acted as headwinds.
Net income available to common shareholders was $781 million, up 15% from the prior-year quarter.
M&T Bank’s Revenues & Expenses Rise Y/Y
MTB’s quarterly revenues were $2.53 billion, surpassing the Zacks Consensus Estimate of $2.48 billion. The reported figure increased 5.7% year over year.
NII (tax-equivalent) rose 4.8% year over year to $1.80 billion. The increase reflected growth in average loans and investment securities, along with favorable repricing of earning assets and interest-bearing liabilities, including an improved contribution from interest-rate swap agreements.
Total non-interest income was $740 million, up 8.3% year over year. The rise was driven by higher service charges on deposit accounts, trust income, brokerage services income, trading account, and other non-hedging derivative gains, and other revenues from operations.
Total non-interest expenses were $1.35 billion, up 1% year over year. The increase was due to higher salaries and employee benefits costs, outside data processing and software costs, professional and other services costs, and advertising and marketing expenses.
The efficiency ratio was 52.8%, down from 55.2% in the year-earlier quarter. A lower ratio indicates a rise in profitability.
MTB’s Loan & Deposit Balances Increase
Total loans were $143.2 billion as of June 30, 2026, up 2.3% from the prior quarter. Total deposits increased 3.1% sequentially to $168.9 billion.
M&T Bank’s Credit Quality Improves
Net charge-offs decreased 25.9% to $80 million from the prior-year quarter.
The company recorded a provision for credit losses of $120 million, down 4% from the year-ago quarter.
Non-performing assets declined 23.2% year over year to $1.23 billion.
The ratio of non-accrual loans to total loans was 0.84%, which declined year over year from 1.16%.
MTB’s Capital Position Mixed & Profitability Ratios Improve Y/Y
M&T Bank’s estimated Common Equity Tier 1 ratio was 10.19%, down from 10.99% as of second-quarter 2025. The tangible equity per share was $117.41, up from $112.48 in the second quarter of 2025.
The company's return on average tangible assets (annualized) and average tangible common shareholder equity were 1.59% and 18.57%, respectively, compared with 1.44% and 15.54% in the prior-year quarter.
M&T Bank’s Capital Distribution Update
MTB repurchased 2.1 million shares of its common stock for $465 million in the second quarter of 2026.
MTB’s 2026 Outlook
For 2026, M&T Bank expects taxable-equivalent NII of $7.2-$7.35 billion. Fee income is projected between $2.8 billion and $2.85 billion.
GAAP expenses, including intangible amortization, are anticipated between $5.5 billion and $5.6 billion, with management expecting results toward the higher end of the range. Net charge-offs are projected at nearly 37 basis points of average loans, while the taxable-equivalent tax rate is expected to be 24%.
Average loans are expected between $141 billion and $143 billion, supported by continued commercial loan momentum, stabilizing commercial real estate balances, and consumer loan growth. Average deposits are anticipated between $165 billion and $167 billion.
The CET1 capital ratio is expected to be 10-10.5%.
Our View on MTB
Sustained growth in NII and non-interest income is expected to continue supporting M&T Bank’s organic growth. Loan and deposit growth, improving asset quality metrics, and a lower efficiency ratio will likely support its overall performance. However, higher expenses are 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 Release Dates of Other Banks
Citizens Financial Group CFG is scheduled to release second-quarter 2026 earnings on July 16.
The Zacks Consensus Estimate for CFG’s quarterly earnings has been unchanged at $1.25 per share over the past seven days. This indicates a 35.9% rise from the prior-year reported number.
Huntington Bancshares Inc. HBAN is also slated to report second-quarter 2026 results on July 23.
Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 39 cents per share. This implies a 2.6% rise from the prior-year reported number.
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M&T Bank Corporation (MTB): Free Stock Analysis Report
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Citizens Financial Group, Inc. (CFG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).