12:48 PM EDT, 04/15/2024 (MT Newswires) -- M&T Bank ( MTB ) on Monday lifted its net interest income outlook for the full year in anticipation of the Federal Reserve executing fewer interest rate cuts, while the lender's first-quarter results declined year over year.

The bank now expects net interest income on a taxable-equivalent basis to come in above $6.8 billion for 2024, compared with the forecast range it provided in January for $6.7 billion to $6.8 billion. The lender's stock gained 6.6% in midday trading.

M&T Bank's ( MTB ) prior guidance assumed the Fed may cut interest rates three to six times during the year, Chief Financial Officer Daryl Bible said during a conference call to discuss first-quarter results, according to a Capital IQ transcript. As "the forward curve" is now settling closer to two cuts, net interest income is expected to be $6.8 billion with upside potential, Bible said.

Boston Fed President Susan Collins said last week that recent stronger-than-expected jobs and inflation data has reduced the urgency to lower interest rates. Markets widely expect the central bank's Federal Open Market Committee to keep its rates unchanged on May 1, according to the CME FedWatch Tool. The odds for a 25-basis-point cut in June were at 19% on Monday, down from 27% on Monday and from 51% a week ago.

"We now expect only one rate cut this year at the December FOMC meeting followed by modest further reductions in 2025," Deutsche Bank said in a note emailed Monday.

For the quarter ended March 31, M&T Bank's ( MTB ) adjusted earnings dropped 24% to $3.09 a share. Revenue, expressed as the sum of net interest and noninterest income, came in at $2.26 billion, down from $2.41 billion but largely in line with the Capital IQ-polled consensus.

Net interest income declined to $1.68 billion from $1.82 billion, according to the lender. Noninterest income slipped 1% to $580 million. Mortgage banking revenue climbed 23%, while service charges on deposit accounts rose 9%. Trust income slid 17%.

"We are off to a solid start in 2024 as we were able to grow certain sectors of our commercial and consumer loan portfolios, while continuing to shrink our commercial real estate exposure," Bible said in a statement. The bank "prudently managed" its expenses while its liquidity and capital position "strengthened" during the quarter, according to the CFO.

Provision for credit losses amounted to $200 million versus $120 million the year before, the bank said. Noninterest expenses rose to $1.4 billion from $1.36 billion a year earlier, including an estimated $29 million increase to the Federal Deposit Insurance Corp.'s special assessment fee tied to bank failures last year.