M&T Bank’s stress capital buffer requirement reduced to 2.7%

Published 01/07/2025, 21:56
M&T Bank’s stress capital buffer requirement reduced to 2.7%

NEW YORK - M&T Bank Corporation (NYSE:MTB) announced Tuesday that the Federal Reserve Board has set its preliminary stress capital buffer (SCB) at 2.7%, effective October 1, 2025, down from the previous 3.8%.

The lower buffer requirement reduces M&T’s regulatory minimum Common Equity Tier 1 (CET1) ratio to 7.2% from 8.3%. The company reported a CET1 ratio of 11.50% as of March 31, 2025, and expects to reach 11.0% by the end of 2025.

"Our decision to participate in the 2025 Supervisory Stress Test was based on the strength of the company’s earnings power and continued risk management efforts, including a reduction in our commercial real estate concentration and improved asset quality," said René Jones, M&T’s Chairman and Chief Executive Officer, in a press release statement.

The Buffalo, New York-based financial holding company noted that the new SCB represents a 2.0% improvement compared to the 4.7% requirement from the 2022 Supervisory Stress Test.

The Federal Reserve Board will provide M&T’s final SCB requirement on or before August 31, 2025.

M&T Bank provides banking products and services through a branch and ATM network spanning the eastern U.S. from Maine to Virginia and Washington, D.C.

In other recent news, M&T Bank has reported its first-quarter earnings for 2025, with earnings per share (EPS) of $3.32, slightly below both Piper Sandler’s estimate of $3.35 and the consensus estimate of $3.40. Despite this, Piper Sandler maintained an Overweight rating, adjusting the price target to $210. RBC Capital Markets also made adjustments, reducing the price target to $200 while retaining an Outperform rating, emphasizing M&T Bank’s consistent performance and strong business model. Jefferies initiated coverage with a Buy rating and a $225 price target, highlighting the bank’s financial stability and growth prospects. Deutsche Bank upgraded M&T Bank from Hold to Buy, setting a price target of $210, citing the bank’s strong capital position as a primary factor. Citi raised its price target to $200 from $195, maintaining a Neutral rating, and noted the bank’s steady improvement in criticized assets. These developments reflect a mixed but generally positive outlook for M&T Bank, with analysts recognizing the bank’s robust balance sheet, strategic capital deployment, and disciplined business approach.

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