M&T Bank recorded an increase in second-quarter profit, supported by stronger interest receipts and higher trust income as the business mix responded to a higher-rate environment. Elevated interest rates have continued to help banks expand interest income as borrowers and investors adapt to new market conditions.
Earnings and margins
The bank's net interest income - the spread between interest earned on loans and interest paid on deposits - rose 4.6% year-over-year to $1.79 billion in the quarter. M&T's reported net interest margin widened by 8 basis points, reaching 3.70% for the period.
Non-interest revenue and mortgage activity
Non-interest income increased to $740 million in the second quarter, up from $683 million a year earlier. Within that category, trust income rose to $197 million from $182 million. Mortgage banking revenue declined 2% to $127 million.
Credit metrics and lending
The lender's provision for credit losses decreased slightly, falling to $120 million from $125 million a year earlier. Outstanding loans grew during the quarter, increasing to $141.4 billion from $135.4 billion in the prior-year period.
Bottom line
Net income available to common shareholders for the three months ended June 30 rose to $781 million, or $5.32 per share, compared with $679 million, or $4.24 per share, a year earlier.
This set of quarterly results shows the components behind the bank's earnings trajectory: a combination of wider margins and higher trust income boosted overall revenue, while mortgage banking revenue retreated slightly and provisions for credit losses moved down modestly.