Jan 16 (Reuters) – M&T Bank posted a rise in fourth-quarter profit on Friday, driven by higher interest income and stronger mortgage banking results.
The Federal Reserve’s rate cuts have revived borrowing by households and businesses, lifting loan volumes at many banks. At the same time, lenders have pared back deposit costs, helping support interest income even as rates fall.
M&T’s net interest income, the difference between what banks pay customers on deposits and earn as interest on loans, rose nearly 3% to $1.78 billion in the fourth quarter from a year earlier. Its net interest margins expanded to 3.69% versus 3.58%.
The bank expects NII to come in between $7.2 billion and $7.35 billion in 2026. The midpoint of the forecast is largely in line with analysts’ average expectation of $7.27 billion, according to estimates compiled by LSEG.
Non-interest income rose roughly 6% to $696 million in the quarter, helped by growth in mortgage banking revenues, services charge on deposit accounts and trust income.
Mortgage banking revenue rose 32%, driven by a rise in residential mortgage loan servicing income and higher gains on sales of commercial mortgage loans.
The bank set aside $125 million in provisions for credit losses, the reserves banks hold to cover potential loan defaults, compared with $140 million a year earlier.
The metric is closely watched by investors and analysts as a gauge of the health of consumers, businesses and the broader economy. Higher provisions typically signal that a bank is preparing for a possible downturn that could leave more borrowers unable to repay their debts.
Net income available to common shareholders rose to $718 million, or $4.67 per share, from $644 million, or $3.86 per share, a year earlier.
(Reporting by Pragyan Kalita and Manya Saini in Bengaluru; Editing by Tasim Zahid)
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