MTB - NYSE
M&T Bank Corporation
MTB·NYSE
$214.03
-1.5%Financial ServicesBanks - Regional
M&T Bank Corporation operates as a bank holding company that provides commercial and retail banking services. The company's Business Banking segment offers deposit, lending, cash management, and other financial services to small businesses and professionals. Its Commercial Banking segment provides deposit products, commercial lending and leasing, letters of credit, and cash management services for middle-market and large commercial customers. The company's Commercial Real Estate segment originates, sells, and services commercial real estate loans; and offers deposit services. Its Discretionary Portfolio segment provides deposits; securities, residential real estate loans, and other assets; and short and long term borrowed funds, as well as foreign exchange services. The company's Residential Mortgage Banking segment offers residential real estate loans for consumers and sells those loans in the secondary market; and purchases servicing rights to loans originated by other entities. Its Retail Banking segment offers demand, savings, and time accounts; consumer installment loans, automobile and recreational finance loans, home equity loans and lines of credit, and credit cards; mutual funds and annuities; and other services. The company also provides trust and wealth management; fiduciary and custodial; insurance agency; institutional brokerage and securities; and investment management services. It offers its services through banking offices, business banking centers, telephone and internet banking, and automated teller machines. As of December 31, 2021, the company operates 688 domestic banking offices in New York State, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Virginia, West Virginia, and the District of Columbia; and a full-service commercial banking office in Ontario, Canada. M&T Bank Corporation was founded in 1856 and is headquartered in Buffalo, New York.
At a Glance
Live SnapshotMarket Cap$31.34B
EPS17.1000
P/E Ratio12.52
Earnings Date07/15/2026
Earnings Call Transcript
MTB • 2025 • Q4
Operator
Thank you for your continued patience. The meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you.
Rajeev Ranjan
Please stand by. Your meeting is about to begin. Morning, everyone. Welcome to today's M&T Bank Corporation Fourth Quarter and Full Year 2025 Earnings Conference Call. All lines have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question, you may remove yourself from the queue by pressing star 2. When posing your question, we ask that you please pick up your handset to allow for optimal sound quality. Lastly, if you should require operator assistance today, please press star 0. And please be advised that today's conference is being recorded. I would now like to hand the conference over to Rajeev Ranjan, Head of Investor Relations and Corporate Development. Please go ahead, sir.
Rajeev Ranjan
Thank you, Bo, and good morning. I would like to thank everyone for participating in M&T Bank Corporation's fourth quarter 2025 earnings conference call. If you have not read the earnings release we issued this morning, you may access it along with the financial tables and schedules by going to our investor relations website at ir.ngb.com. Also, before we start, I would like to mention that today's presentation may contain forward-looking information. Cautionary statements about this information are included in today's earnings release materials, and in the investor presentation as well as our SEC filings and other investor materials. The presentation also includes non-GAAP financial measures, as identified in the earnings release and investor presentation. The appropriate reconciliations to GAAP are included in the appendix. Joining me on the call this morning is M&T Bank Corporation's Senior Executive Vice President and CFO, Daryl Bible. Now I would like to turn the call over to Daryl.
Daryl Bible
Thank you, Rajeev, and good morning, everyone. I'm excited to share our full year 2025 results. M&T Bank Corporation has continued to deepen our presence in key markets, expand access in new communities, and build innovative offerings that empower our customers and businesses alike. In the last quarter alone, we delivered on our commitment to expand access to banking in Bridgeport, Connecticut's East End, opening our new full-service Honey Locust branch, the community's first new bank branch in decades. We partnered with the Baltimore Ravens and wide receiver
Operator
Certainly, Mr. Bible. Thank you very much. Ladies and gentlemen, at this time, if you do have any questions, again, please press 1. If you find your question has been addressed, you may remove yourself from the queue by pressing 2. Additionally, we do ask that you please limit yourself to one question and one follow-up. We'll go first to Gerard Cassidy of RBC Capital.
Gerard Cassidy
Hi, Daryl.
Daryl Bible
Hey, Gerard.
Gerard Cassidy
Circling back to the capital ratios, obviously, we're going to get the Basel III endgame proposal, hopefully, sometime in the first quarter, as well as, you know, another stress test. Assuming those are favorable to you and your peers, and bring down your required regulatory capital CET1 ratio. How do you then approach where you are today with the CET1 around 10.25% to 10.5%? Is that something you guys would look to maybe bring down if your required number fell with what's coming with those two, the stress test and Basel III endgame?
Daryl Bible
Yeah. Thanks for the question, Gerard. I would just tell you that, you know, we are always looking at, you know, what position we have on our balance sheet and what's going on in the economy. You know? And we feel good about bringing it down to 10.25% right now, and potentially, we could go lower. I don't view the regulatory capital limits of where they are now as a binding constraint right now. We can go a lot lower with where we are today, and we may actually improve that. But, you know, I think it really depends on what other things are going on in the marketplace. But could we go below 10% at some point? Possibly. And we will evaluate it and consider that with everything else we do as we move forward.
Gerard Cassidy
And you mentioned binding constraint. What would you point to as your binding constraint if you don't look at it as the CET1 ratio?
Daryl Bible
We have other constituencies out there that have other limitations, including rating agencies and, you know, working with the rating agencies and getting them comfortable with how we're performing. I mean, when I look at our asset quality now, it's probably been the best it's been in the last couple of decades. So we are in really strong condition. Our capital generation is probably the best we've been. So we're really strong there. So we have a lot of positives going forward. You know, I love the page when I started out with the statistics. We grew dividends 11%. You know, we retired 9% of shareholders. We grew tangible book 7%. We had record income, net income, EPS, our ROTA is over 1.4. And our efficiency ratio went down from 56.9 to 56. I mean, we are performing at a very high level. And the risk that we're taking on our balance sheet is the right risk for us, and we feel really good with it, and we're getting great returns on that.
Gerard Cassidy
Great. And then just as a follow-up question, regarding the loan growth, you gave us some clarity on where you are today. And where you hope to be moving forward. On the commercial real estate side, I think you pointed out that you think it will start to inflect in '26. Are there regions of the franchise or property types you're anticipating will be the driver behind this inflection?
Daryl Bible
Yeah. I would say when you look at our teams and the CRA team run by Tim Gallagher and all the credit folks in Rich Berry's area. They've been working all 2025 to get us back on track. And if you look at the fourth quarter, our production levels are the strongest they've been for a very long time. December, we closed over $900 million loans in CRE. So we are performing on all cylinders. If you look at our three sectors, we have a large regional CRE portfolio. That is hitting all cylinders. We have a strong M&T RCC business that is also hitting record returns and record outstandings. We have an institutional CRE that is also performing very well. So our CRE businesses are really strong and productive, and we will have growth, you know, as we said, starting in the second quarter on an average to average basis. So we're going to have four of our loan portfolios. All of our four loan portfolios should have point-to-point loan growth for us in 2026, which would be really, really strong and gives us a lot of confidence with our earnings power.
Gerard Cassidy
Great. And Brian, good luck in the enhanced role. Thank you, Daryl.
Daryl Bible
Thanks, Gerard.
Operator
Thank you. We'll go next now to Scott Siefers with Piper Sandler.
Scott Siefers
Good morning, guys. Thanks for taking the question. Daryl, actually, just hoping you can expand upon just what you said about some of those non-CRE drivers. As we look at CRE having come down the last couple of years, you've had pretty good momentum in some of those other main categories. Where do you see the best demand and sort of your willingness to lend in those kind of non-CRE categories as we look out into the course of the year?
Daryl Bible
So, Scott, when you look at where we've had growth for the last couple of years, it's been in our C&I but mainly in our specialty businesses, fund banking, mortgage warehouse, and other portfolios like corporate institutional. And that will continue to grow and do really nicely. But when we talked about our new priorities that we have for 2026, one of them is called teaming for growth. Teaming for growth simply is basically bringing the whole bank together in the regions that we operate in. We operate in 27 regions where we have regional presidents. Regional presidents have the local knowledge to how we go to market in those markets. We're trying to combine the regional presence local knowledge with the scale and how we deliver our products and services of a larger company together. And we're really focused on growing our regional regions this year. And then do that. We are planning to grow in that area and think we'll be very successful there.
Scott Siefers
Perfect. Okay. Thank you. And then, you know, you all have been just, you know, quite transparent about sort of M&A aspirations. Just curious to hear any updated thoughts you might have about how you're thinking about the landscape this year.
Daryl Bible
You know, M&A will come our way when it happens, Scott. You know, we aren't aware of anybody and, you know, we want scale and dense in the markets we serve. We serve we're in 12 states plus the District of Columbia. That's where we want to continue to get more density. We are not aware if anybody wants to sell in those markets. We will continue to reach out and have good relationships with them. Renee knows all the appropriate people and all that. And we'll happen when it happens. We aren't gonna force anything from that perspective. And you know, it will happen at some point down the road. But right now, we have a lot of capital. We want to deploy that capital to our markets, to our customers, first and foremost, continue to pay a great strong dividend, and we're going to buy back a ton of stock.
Scott Siefers
Perfect. Okay. Great. Thank you very much. And, yeah, Brian, good luck in the new role as well.
Operator
Thank you. We'll go next now to Matt O'Connor with Deutsche Bank.
Matt O'Connor
Good morning. I was hoping you could elaborate on the deposit environment. Obviously, you've been kind of running off in CDs and growing other deposits. But maybe some color in terms of net checking account growth, what you're seeing from a competitive landscape and, you know, any changes in the brand strategy as you think about driving organic growth? Thanks.
Daryl Bible
Yeah. Definitions are really key. One of my famous sayings that I have, Matt, is that we want to have both oars in the water. So, you know, as we grow loans, we also want to grow our customer deposit base. We've done a good job the last couple of years growing that and retiring a lot of non-core funding in the wholesale book. I think we will continue to do that. As far as, you know, competitive-wise, you know, all of our businesses have their plans to grow customer deposits. And we're really focused on doing that so we complete and really manage both sides of the balance sheet very well. As far as competition goes, I would say the competition is the same as it's been for the last couple of years. Not any worse or any easier. What it is, it's competitive. We have different pricing strategies depending on the scale and density market share that we have in those markets, and it seems to be successful. Our teams are really good at going to market. But first and foremost, you know, we really focus on getting the operating account, the checking account, you know, whether you're in the consumer bank, business banking, commercial, wealth, that is really critical to us. And from that, other revenues and products and services come off of that. And we've always done that, and we will continue to do that. Really focused on growing net new checking accounts, which is really important.
Matt O'Connor
Okay. That's helpful. And then just separately, I know it's not a big category for you, but the trading revenues have stepped up each of the last two quarters to $18 to $19 million. Remind me, like, has there been a change in kind of the efforts there or any small deal that would reset this level higher versus just kind of quarter-to-quarter volatility?
Daryl Bible
Yeah. No. I appreciate you breaking that out. I mean, that specifically is our customer swap book. You know, but what you see there is really just a precursor of something that's greater overall. We have Hugh Giorgio who runs our 2026. We will actually once we get through our general ledger conversion, shortly, we're gonna break out actually show our capital markets and investment banking so you can see it together. It's growing really nicely. And our teams are executing really well. And I think it's been a really strong business, and we'll continue to grow well for our fee income categories.
Matt O'Connor
Okay. Thank you very much.
Operator
Thank you. We go next now to Manan Gosalia at Morgan Stanley.
Manan Gosalia
Hey. Good morning, Daryl.
Daryl Bible
Morning.
Manan Gosalia
When I look at the guide for 2026 for both fees and expenses relative to what you did in 2025 and even the 4Q run rate, it feels like, you know, both growth rates are significantly slower. I know you called out the impact of the MSR. Oh, well, you called out the MSR fair value and hedge will impact those two lines. Is that a big driver for both lines? And what is the core growth rate that you expect for both fees and expenses next year?
Daryl Bible
Yeah. I know. Thank you for the question. I would say that the accounting change is part of it. It's $75 million that would normally be in amortization expense is gonna be now netted against revenues. So that's basically just a shrink of both expenses and revenues by adopting this mark-to-market accounting on the residential MSR. When you look at kind of our projections for fee income and you kind of back out notable items, we should be about 4% in fee growth. That's kind of what we're looking at there. And it's pretty broad-based when you look at the fee growth. You know, we're growing our treasury management. That was up double-digit year over year. We expect to be close to that again in '26. We're growing trust revenues. We're growing in the mortgage area. Potentially, our commercial mortgages are off to a good start. So they're doing really well. Residential mortgages, if rates come down on the long run, we'll be able to do well there. Could have potential more subservicing growth there. Then what I just talked about in our capital markets investment banking. So we have momentum on the fee side and feel good about hitting the full. We have. If you look at put it all together, we are generating positive operating leverage in '26, you know, probably 150 basis points plus or minus. So we feel good about that like we did this past year.
Manan Gosalia
Got it. And then in the deck, you spoke about operational excellence and teaming for growth and how the outcome of that should drive better revenues and profitability. You know, when you think about the environment, loan growth is improving. Fee income is growing, capital is normalizing. How do you think about the trajectory for ROTCE over the next twelve to eighteen months and, you know, what's a good end goal for Roxy as we look out, you know, in the medium term?
Daryl Bible
Yeah. Thank you for the question. So we had a really strong finish in 2025 with our returns approaching 16%. We think that will kind of continue in 2026. Be in the 16% range. And our goal is to get it to 17% by 2027. So I think we're on a great trajectory, and I think we can get there.
Manan Gosalia
Got it. Thanks so much. And, Brian, we will miss you all the very best. And, Rajeev, looking forward to working with you.
Operator
Thank you. We go next now to John Pancari of Evercore.
John Pancari
Thanks, Rajeev. Welcome. I look forward to working with you and Brian. Best of luck in your role. It's gonna feel kinda weird now seeing you bouncing around at the conferences and cracking some jokes. I guess, on the loan growth front, Daryl, I wanted to see I know Scott asked you a question just a little bit around the other areas. Could you elaborate a little bit more on what you're seeing in underlying commercial C&I growth more specifically? Are you seeing you mentioned CapEx in your prepared remarks. Are you seeing some drawdowns tied to CapEx? Are you seeing line utilization tied to that? You could just give us a little bit more color on what's actually beginning to take shape and influencing your growth expectations?
Daryl Bible
In the fourth quarter, our middle market commercial actually had an increase in utilization. So that was a positive. So I think that was something really good to see that dormant for a while from that perspective. I think net net overall, we're seeing good growth. It's competitive, obviously, in the commercial space. But feel that we're gonna have good growth overall. Both in specialty and in our regions as we kinda launch with our new priorities. From that perspective. So I think we're confident we're gonna have good loan growth. I mean, if you look at loan growth, you know, for the whole company, it's, you know, in total, probably be in the 3% to 5% range. You know, and C&I will be kinda right in that same similar range. But we got CRE still shrinking year over year, but starting to grow point to point. We got commercial real estate. We ended up sort of just talked about. And then real estate, consumer real estate and consumer growth also growing nicely. Consumer actually in the indirect space and HELOCs, you know, will approach high single digit. So we have good overall broad-based growth in all portfolios.
John Pancari
Got it. Alright. Thanks, Daryl. And then separately, on the credit side, I know you indicated you the charge-offs related to this resolution of the charge-offs of some of the previously identified credits. But your non-negate past dues jumped about 30% in the quarter. Can you give us a little bit of color what drove that? And if that could influence non-performers and losses in coming quarters at all?
Daryl Bible
Yep. So on the consumer delinquencies, that's really just a result of more Ginnie Mae repurchases going on the balance sheet. Which is an attractive trade for us, and we actually make more fee income doing that. On the commercial side, it was more administrative delays. People basically missed payments in the first week or so. If you just if you move from year-end, go back, you know, forward seven days, you know, we had $250 million more come in in payments and all that that wouldn't have been delinquent. So I think there's nothing there to say in the delinquency per se. I think we feel good about our credit quality and performance there. It's just kind of one administrative on the commercial side and consumer is just on the Ginnie Mae growth side.
John Pancari
Got it. Alright. Thanks, Daryl. Very helpful.
Operator
Thank you. We'll go next now to David Gevirini of Jefferies.
David Gevirini
Hi. Thanks for taking the question. I wanted to ask about your deposit beta on the next 50 basis points of cuts. What's your assumption there?
Daryl Bible
We've been holding pretty good to the low 50s, David. So far. And, you know, we feel really good in the down 50 that you asked for. Still staying in the low fifties. I think that that's definitely doable. I think at some point, if you continue to go down more, you're going to start heading forwards on the consumer portfolios. But definitely feel confident we can stay in low 50s going down another 50 basis points.
David Gevirini
And as you inflect higher on loan growth, do you expect increased competitiveness on the deposit cost front?
Daryl Bible
You know, our mindset first is to grow operating accounts. We're also, I believe, in, like, always on strategy where we always will offer competitive rates for our customers. We won't be the highest. We won't be the lowest. But we'll get our market share. I think that's what you're seeing come through from the business lines. We grew $2.2 billion this past quarter. Was in business banking and commercial. So I feel that we're pretty much hitting stride there and doing really well. So I feel that our deposit growth will stay intact with our loan growth. Don't think you're gonna have any disconnect there.
David Gevirini
Great. Thank you. And, Brian, thank you, and good luck in the new role.
Operator
We'll go next now to Erika Najarian with UBS.
Erika Najarian
Hi. Good morning. Just wanted to take a step back, Daryl, as we think about how longer-term shareholders should sort of frame the M&T Bank Corporation investment case. As we think about your capital position and as we think about, you know, some of these initiatives and, you know, sort of the, you know, the CRE optimization strategy. You know, as you think about 2026 and maybe the next three years, what is more important to this management team and board? Optimizing ROTCE or optimizing growth?
Daryl Bible
That sounds like a familiar question.
Erika Najarian
It was a good discussion.
Daryl Bible
It was a good discussion. You know, Erika, you know, believe it's really a combination of both of that, to be honest with you. You know, we really have capital out there, and we want to use it for our customers and make sure we get good returns on that. So we're pretty disciplined in the returns we're getting when we're putting loans on the books and getting those returns. You know, we also will distribute capital to our shareholders and think you're seeing us do that. I think we're probably the only large bank that basically retired 9% of their shares this past year. They're probably due amount most of that this next year, maybe a little bit lower because of higher stock price, but we are, you know, giving back lots of capital to our investors and shareholders. So, I think we feel good. We're a balancing act. We generate a lot of capital, do a lot of good for this community, which is really important for us and our customers who make their meet their financial needs. So our company is, I think, doing well on all cylinders right now, and, you know, our new two new priorities are tweaking us to get even better in the things that we do and how we execute. Which is really exciting from the teaming for growth and operational excellence. We just try to keep notching it up and keep setting the standard as we kind of improving it better.
Erika Najarian
Got it. And just a more localized question on the net interest income guide, Daryl. Daryl, you mentioned neutrality on the short end. How much of those three components that you mentioned that would be telling of where you are in the range. How much is the shape of the curve important versus the gross trends? And, additionally, thanks for giving us the average balances. I'm wondering, you know, if you could give us a sense of the size of your overall balance sheet in terms of earning asset growth embedded in that NII number?
Daryl Bible
Yes. So I'll start with the shape of the curve. Obviously, the shape of the curve will have an impact because we still are getting benefit from kind of our fixed rate loans, our investment securities, and sometimes our swap book all that so that if the curve flattens out, we will definitely have less NII. If it stays steeper, we'll have a little bit of a benefit there. It's really hard to hedge the yield curve, and it keeps moving back and forth. So I don't recommend trying to do that on a regular basis, to be honest with you. But feel pretty good, though, that we're pretty neutral on the short end. Which is really good. Because, yeah, as you know, we're really asset sensitive without the hedges that we have right now. I mean, if we didn't hedge right now, if we stop hedging now and you go a year forward, we'd be much more asset sensitive just by what's rolling off. So we have to hedge to stay relatively neutral. Growth will be a good key component. It's gonna be a good value add for us. This year. Having more growth consistently across all of our portfolios. You know, being able to grow deposits and loans in sync is really good. As far as, yeah, earning assets, it's growing about 3% if you look at it on a point-to-point basis.
Erika Najarian
Great. And welcome, Rajeev, and congratulations, Brian. On your new role. We'll always have Denver.
Daryl Bible
Thanks, Erika.
Operator
Thank you. We'll go next now to Chris McGratty at KBW.
Chris McGratty
And, Mr. McGratty, your line is open, sir. You might be on mute.
Chris McGratty
Yep. Sorry about that. Earlier in your remarks there, you talked about checking account growth. As a priority in terms of mix shift within the deposit. Can you put a little meat on, like, checking account traction, you know, whether maybe accounts opened in 2025, outlook for non-interest bearing, anything you could provide there would be great.
Daryl Bible
You know, I'd probably start with my favorite business that I have is business banking. When you look at business banking, we have three times more deposits than loans. You know, their go-to-market strategy is always to get the checking account first and foremost. In the consumer bank, you know, we definitely, you know, we try to grow and we monitor those statistics every month to try to get to that account growth. From that perspective. And then commercial and wealth, you know, it's definitely important from that. You know, and we are investing heavily in our treasury management products and services. Are helping the growth in business banking as well as commercial. You know, as far as specific numbers of account growth, I'll probably be able to give you that maybe at the next conference and all that. I don't have that handy with me right now, Chris. But we'll share that information in our next investor deck for the first quarter. That's okay.
Chris McGratty
That'd be great. Thank you. And as my follow-up, I'm looking at slide 24 in the ranges that you've provided. If you take a step back, is there a piece of the P&L where you're, I guess, most optimistic about? Within the ranges? You talked about loan growth by each category, point-to-point growing. Any kind of elaboration there would be great.
Daryl Bible
You know, we've had a lot of strong momentum in the fee area in the last couple of years. So we still have momentum there. So that would be one that I'd probably be most bullish on. You know, NII, I think we're going to do well in that space. You know, expenses, you know, we have a very disciplined company. One of the favorite things I like being part of M&T Bank Corporation is once we set our plan and move forward, you know, people follow the plan and move get the job done. So I have all the confidence that we'll get our operating leverage that we have and move forward. So I feel good about it. I mean, I feel more positive entering '26 than I have the first couple of years I've been here. I think we're moving together, and working together much better as a team. Renee, I think, has probably the strongest management team he's had, you know, under his tenure running the company. And are starting to perform like that as well. I feel really good about that.
Chris McGratty
Alright. Great. Thank you very much.
Operator
Thank you. We'll go next now to Ken Usdin with Autonomous Research.
Ken Usdin
Hey, Daryl. Just two quick ones. On the deposit side, growth allowed you to remix a little bit on the wholesale borrowings. Just wondering how much more room you might have there? And if do you believe we've seen the bottom here of the DDA balances?
Daryl Bible
So on the first question, we can probably still shrink, you know, whether it's broker or some of our funds or other areas, maybe a couple billion more so we can, you know, if we, a, get cheaper core deposits and don't can't deploy it in the lending side, we'll be able to shrink and still optimize there. Definitely want to continue to run as efficient optimal balance sheet as possible. That's really important to us. Your second question, what was that again?
Ken Usdin
Just about the DDA balances. And do you think we've hit an absolute bottom in do you expect any growth from here?
Daryl Bible
We think when we hit around 3% DDA, should bottom out and start to actually grow. So we aren't that far away from that. If we hit those two more down 50 basis points, we think at that point, it should start to level off and start to grow again. From that perspective is our opinion. That and, you know, we're investing heavily in treasury management services. We have a great leader there that's doing a great job, and, you know, and our businesses are really good going to market with all that. So we're launching with good products and services, and will also benefit. But I think down about 50 more points, and I think you're gonna start to see it bottom out and grow.
Ken Usdin
Okay. And one on the loan side, I haven't done the calc this morning, but, you know, I see a rebottom just can you just remind us where CRE is as a percentage of your equity today? And as you start to grow it again, where would you be comfortable taking that back to? If in fact you, you know, you kinda you know, the reduction ended up being any different than where you would comfort level would be.
Daryl Bible
Yeah. So we're at 124%. Our limit is, I think, 160%. So we have a ton of room to grow. And, you know, we'll grow, you know, serving our clients, getting the right returns on the growth that we're getting. We really have a large amount of capacity to just be able to grow and add to that portfolio. As needed. And I think the teams are excited. Tim Gallagher, who runs that group, is, you know, really excited. He said, you know, he had all three businesses performing at top levels and at an unbelievably strong finish to the end of the year, and that's gonna carry us really well. One of the things that I always watch for, you know, going into a new year is start point issues and all that. And when we put our plan together in the third quarter, you know, we didn't know if we'd have any start point problems or issues. And lo and behold, as we the year of fourth quarter played out, all of our loan portfolios performed really well, we have no start point problems. So we're starting where we thought we would be and we aren't behind that gives us a lot of momentum to actually lift off and grow. From that perspective.
Ken Usdin
Got it. Thanks, Daryl.
Operator
We'll go next now to Steven Chubak of Wolfe Research.
Steven Chubak
Hi. Good morning, and thanks for taking my questions. Sure. Hey, Daryl. So wanted to ask just on consumer deposit growth. Just within the guidance that you offered up for 2026, how you're thinking about the growth in consumer versus wholesale, I know we don't have the explicit disclosure within the supplement by the last quarter year on year retail deposit growth. It was beginning to recover back towards that flat year on year level. As you continue to build density in some of these markets like New England and Long Island, are you nearing a sustainable inflection in retail deposits as we look out to the coming year?
Daryl Bible
Yes. We are really focused on growing our consumer deposits and believe that is kind of the real value that you have by having a strong consumer threshold. All the businesses that we plan for, whether it's consumer, business banking, commercial wealth, all plan for their deposits to grow, both their operating and total deposits. Which is really positive. If we did shrink some of our time deposits this past year. Was intentional because we didn't have a use for a higher cost. We can get that back very easily by just going out and doing that. That was a conscious decision. But net net, overall, we feel good about the growth and what we can achieve in the consumer side. As far as commercial goes, they're a machine. They're important when we go and serve our clients. You know, it's not just loans, deposits, treasury management, other fee income services. They deliver and bring the whole bank to them and all that. So we're really good about getting the right wallet share on the commercial side.
Steven Chubak
And for my follow-up, just on mortgage banking, revenues continue to grow at a healthy clip. I know that's primarily been driven by the extension in the subservicing business. Do you believe the tailwinds from 2025 could persist into '26? What's a reasonable expectation for growth within that subservicing business at the current clip?
Daryl Bible
So there's going to be a couple of changes in '26 in subservicing. Early on, I think we're going to lose a smaller portfolio. Then we're gonna get something back the next quarter and potentially even get more back in the second half of the year. So Mike Drury, who is in charge of that business and many other businesses out there, you know, feels really good about his mortgage business, his subservicing. You know, we are really good subservicers in the hard to service. So the FHA stuff is kind of our sweet spot. That we do. And, you know, people come to us to have us service those loans, and that's a niche that we have, and we feel really good about it. So, you know, net net, you know, might bounce around a little bit throughout the year, but I think we're gonna finish the year strong overall in that space.
Steven Chubak
Very helpful color. Thanks for taking my questions.
Operator
And we'll go next now to Ebrahim Poonawala of Bank of America.
Ebrahim Poonawala
Hey, Ebrahim. Good morning, Daryl. Just one question. As we think about your growing core deposits organically, as we think about the incremental balance sheet growth that's coming on, would you say that's dilutive to the net interest margin where it is today around 3.70? And what is there a ton of upside? Like, is there an upside scenario where this margin could be closer to 3.80? If you could sort of give us a framework around those two, appreciate that.
Daryl Bible
Yeah. So yeah. That's a good question. You know, when we, you know, put on customer relationships, we look at the returns for the overall relationship. We just don't look at one side of the fence, whether it's deposits or loans. It's the whole relationship. You know, there are scenarios that we're, you know, if we grow loans, grow deposits, maybe you put a little lower net interest margin on the books. But net net, it still returns a good return on capital. And which is something I think we can do. I mean, I think our net interest margin is either first or second in the peer group. So we have room for it to go down, you know, if we need it to go down to be competitive. But right now, you know, we're trying to continue to keep our mix there and grow the DDA. In conjunction with interest-bearing deposits as well as, you know, good attractive spread loans and getting good fee income overall. So it's really getting the whole balance there. So but, you know, the guide that we have is what we're giving you is what we think is gonna happen. You know, from what's we're going to earn, and we'll keep you updated as that plays out. But right now, we feel really good about operating in the low 3.70s in 2026.
Ebrahim Poonawala
Got it. Thanks.
Operator
Thank you. Gentlemen, it appears we have no further questions this morning. Mr. Ranjan, I'd like to turn things back to you, sir, for any closing comments.
Rajeev Ranjan
Thank you. Again, thank you all for participating today. And as always, if any clarification is needed, please contact our investor relations department at (716) 842-5138. And I look forward to working with all of you.
Transcript from January 16, 2026
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