UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2017~~March 31, 2024

☐	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

Commission File Number 1-9861

M&T BANK CORPORATION

(Exact name of registrant as specified in its charter)


New York		16-0968385
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One M ~~& T~~&T Plaza Buffalo, New York		14203
(Address of principal executive offices)		(Zip Code)

~~(716) 635-4000~~

(Registrant's telephone number, including area ~~code)~~code:

(716) 635-4000

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbols	Name of Each Exchange on Which Registered
Common Stock, $0.50 par value	MTB	New York Stock Exchange
Perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series H	MTBPrH	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes☐ No

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).☒ ~~Yes~~ ☐ No

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~


Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Number of shares of the registrant's Common Stock, $0.50 par value, outstanding as of the close of business on ~~October 31, 2017: 150,515,367~~May 1, 2024: 166,854,421 shares.

- 1 -

M&T BANK CORPORATION

FORM 10-Q

For the Quarterly Period Ended ~~September 30, 2017~~March 31, 2024


Table of Contents of Information Required in Report		Page
	Glossary of Terms	3
Part I. FINANCIAL INFORMATION

Item 1.	Financial ~~Statements.~~Statements

	CONSOLIDATED BALANCE SHEET ~~- September 30, 2017~~– March 31, 2024 and December 31, ~~2016~~2023	34

	CONSOLIDATED STATEMENT OF INCOME -– Three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~2023	45

	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME -– Three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~2023	56

	CONSOLIDATED STATEMENT OF CASH FLOWS ~~- Nine~~– Three months ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~2023	67

	CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY ~~- Nine~~– Three months ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~2023	78

	NOTES TO FINANCIAL STATEMENTS	89

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of ~~Operations.~~Operations	5339

Item 3.	Quantitative and Qualitative Disclosures About Market ~~Risk.~~Risk	9076

Item 4.	Controls and ~~Procedures.~~Procedures	9076

Part II. OTHER INFORMATION

Item 1.	Legal ~~Proceedings.~~Proceedings	9077

Item 1A.	Risk ~~Factors.~~Factors	9277

Item 2.	Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~Proceeds	9277

Item 3.	Defaults Upon Senior ~~Securities.~~Securities	9277

Item 4.	Mine Safety ~~Disclosures.~~Disclosures	9277

Item 5.	Other ~~Information.~~Information	9278

Item 6.	~~Exhibits.~~Exhibits	9378

SIGNATURES		9379

- 2 -

GLOSSARY OF TERMS

The following listing includes acronyms and terms used throughout the document.


Term	Definition
2023 Annual Report	Form 10-K for the year ended December 31, 2023
Bayview Financial	Bayview Financial Holdings, L.P. together with its affiliates
BLG	Bayview Lending Group, LLC
Capital Rules	Capital adequacy standards established by the federal banking agencies
CET1	Common Equity Tier 1
CIT	Collective Investment Trust
Company	M&T Bank Corporation and its consolidated subsidiaries
DIF	Deposit Insurance Fund
DUS	Delegated Underwriting and Servicing
Executive ALCO Committee	Executive Asset-Liability Liquidity Capital Committee of M&T
FDIC	Federal Deposit Insurance Corporation
FHLB	Federal Home Loan Bank
FOMC	Federal Open Market Committee
FRB	Federal Reserve Bank
GAAP	Accounting principles generally accepted in the U.S.
GDP	Gross Domestic Product
Junior subordinated debentures	Fixed and variable rate junior subordinated deferrable interest debentures
LTV	Loan-to-value
M&T	M&T Bank Corporation
M&T Bank	Manufacturers and Traders Trust Company
People’s United	People’s United Financial, Inc.
RWA	Risk-weighted assets
SCB	Stress capital buffer
SOFR	Secured Overnight Financing Rate
U.S.	United States of America

- 3 -

PART I. ~~FINANCI~~ALFINANCIAL INFORMATION

Item 1. Financial Statements.

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (Unaudited)


	March 31,			December 31,
(Dollars in millions, except per share)	2024			2023
Assets
Cash and due from banks	$	1,695		$	1,731
Interest-bearing deposits at banks		32,144			28,069
Trading account		99			106
Investment securities
Available for sale (cost: $12,397 at March 31, 2024; $10,691 at December 31, 2023)		12,134			10,440
Held to maturity (fair value: $13,865 at March 31, 2024; $14,308 at December 31, 2023)		15,078			15,330
Equity and other securities (cost: $1,279 at March 31, 2024; $1,125 at December 31, 2023)		1,284			1,127
Total investment securities		28,496			26,897
Loans and leases, net of unearned discount of $928 at March 31, 2024 and $868 at December 31, 2023		134,973			134,068
Allowance for credit losses		(2,191	)		(2,129	)
Loans and leases, net		132,782			131,939
Premises and equipment		1,707			1,739
Goodwill		8,465			8,465
Core deposit and other intangible assets		132			147
Accrued interest and other assets		9,617			9,171
Total assets	$	215,137		$	208,264
Liabilities
Noninterest-bearing deposits	$	50,578		$	49,294
Savings and interest-checking deposits		96,339			93,221
Time deposits		20,279			20,759
Total deposits		167,196			163,274
Short-term borrowings		4,795			5,316
Accrued interest and other liabilities		4,527			4,516
Long-term borrowings		11,450			8,201
Total liabilities		187,968			181,307
Shareholders' equity
Preferred stock, $1.00 par, 20,000,000 shares authorized; Issued and outstanding: Liquidation preference of $1,000 per share: 350,000 shares at March 31, 2024 and December 31, 2023; Liquidation preference of $10,000 per share: 140,000 shares at March 31, 2024 and December 31, 2023; Liquidation preference of $25 per share: 10,000,000 shares at March 31, 2024 and December 31, 2023		2,011			2,011
Common stock, $0.50 par, 250,000,000 shares authorized, 179,436,779 shares issued at March 31, 2024 and December 31, 2023		90			90
Common stock issuable, 11,458 shares at March 31, 2024; 12,217 shares at December 31, 2023		1			1
Additional paid-in capital		9,976			10,020
Retained earnings		17,812			17,524
Accumulated other comprehensive income (loss), net		(589	)		(459	)
Treasury stock — common, at cost — 12,724,121 shares at March 31, 2024; 13,300,298 shares at December 31, 2023		(2,132	)		(2,230	)
Total shareholders’ equity		27,169			26,957
Total liabilities and shareholders’ equity	$	215,137		$	208,264

See accompanying notes to financial statements.

September 30,

December 31,

Dollars in thousands, except per share

2017

2016

Assets

Cash and due from banks

$
1,368,252

1,320,549

Interest-bearing deposits at banks

6,306,484

5,000,638

Trading account

170,516

323,867

Investment securities (includes pledged securities that can be sold or repledged of
   $488,200 at September 30, 2017; $1,203,473 at December 31, 2016)

Available for sale (cost: $11,369,815 at September 30, 2017;
   $13,338,301 at December 31, 2016)

11,416,824

13,332,072

Held to maturity (fair value: $3,247,954 at September 30, 2017;
   $2,451,222 at December 31, 2016)

3,242,124

2,457,278

Other (fair value: $414,978 at September 30, 2017;
   $461,118 at December 31, 2016)

414,978

461,118

Total investment securities

15,073,926

16,250,468

Loans and leases

88,171,225

91,101,677

Unearned discount

(246,091
)

(248,261
)

Loans and leases, net of unearned discount

87,925,134

90,853,416

Allowance for credit losses

(1,013,326
)

(988,997
)

Loans and leases, net

86,911,808

89,864,419

Premises and equipment

656,713

675,263

Goodwill

4,593,112

4,593,112

Core deposit and other intangible assets

78,614

97,655

Accrued interest and other assets

5,242,379

5,323,235

Total assets

$
120,401,804

123,449,206

Liabilities

Noninterest-bearing deposits

$
33,111,246

32,813,896

Savings and interest-checking deposits

52,936,615

52,346,207

Time deposits

7,233,518

10,131,846

Deposits at Cayman Islands office

232,014

201,927

Total deposits

93,513,393

95,493,876

Federal funds purchased and agreements to repurchase securities

200,768

163,442

Accrued interest and other liabilities

1,791,946

1,811,431

Long-term borrowings

8,577,645

9,493,835

Total liabilities

104,083,752

106,962,584

Shareholders' equity

Preferred stock, $1.00 par, 1,000,000 shares authorized;
   Issued and outstanding: Liquidation preference of $1,000 per
   share: shares 731,500 at September 30, 2017 and December 31,
   2016; Liquidation preference of $10,000 per share: 50,000
   shares at September 30, 2017 and December 31, 2016

1,231,500

1,231,500

Common stock, $.50 par, 250,000,000 shares authorized,
   159,819,892 shares issued at September 30, 2017;
   159,945,678 shares issued at December 31, 2016

79,910

79,973

Common stock issuable, 27,019 shares at September 30, 2017;
   32,403 shares at December 31, 2016

1,827

2,145

Additional paid-in capital

6,598,048

6,676,948

Retained earnings

9,909,415

9,222,488

Accumulated other comprehensive income (loss), net

(247,915
)

(294,636
)

Treasury stock — common, at cost — 8,555,636 shares at September 30, 2017;
   3,764,742 shares at December 31, 2016

(1,254,733
)

(431,796
)

Total shareholders’ equity

16,318,052

16,486,622

Total liabilities and shareholders’ equity

$
120,401,804

123,449,206

- 4 -

~~- 3 -~~

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME (Unaudited)


	Three Months Ended March 31,
(Dollars in millions, except per share, shares in thousands)	2024		2023
Interest income
Loans and leases, including fees	$	2,097	$	1,850
Investment securities
Fully taxable		212		181
Exempt from federal taxes		16		17
Deposits at banks		419		278
Other		1		1
Total interest income		2,745		2,327
Interest expense
Savings and interest-checking deposits		615		277
Time deposits		225		89
Short-term borrowings		84		58
Long-term borrowings		141		85
Total interest expense		1,065		509
Net interest income		1,680		1,818
Provision for credit losses		200		120
Net interest income after provision for credit losses		1,480		1,698
Other income
Mortgage banking revenues		104		85
Service charges on deposit accounts		124		113
Trust income		160		194
Brokerage services income		29		24
Trading account and other non-hedging derivative gains		9		12
Gain (loss) on bank investment securities		2		—
Other revenues from operations		152		159
Total other income		580		587
Other expense
Salaries and employee benefits		833		808
Equipment and net occupancy		129		127
Outside data processing and software		120		106
Professional and other services		85		125
FDIC assessments		60		30
Advertising and marketing		20		31
Amortization of core deposit and other intangible assets		15		17
Other costs of operations		134		115
Total other expense		1,396		1,359
Income before taxes		664		926
Income taxes		133		224
Net income	$	531	$	702
Net income available to common shareholders
Basic	$	505	$	676
Diluted		505		676
Net income per common share
Basic		3.04		4.03
Diluted		3.02		4.01
Average common shares outstanding
Basic		166,460		167,732
Diluted		167,084		168,410

See accompanying notes to financial statements.

Three Months Ended September 30

Nine Months Ended September 30

In thousands, except per share

2017

2016

2017

2016

Interest income

Loans and leases, including fees

$
953,662

871,345

$
2,776,340

2,602,208

Investment securities

Fully taxable

87,937

84,893

276,057

274,092

Exempt from federal taxes

345

623

1,154

2,081

Deposits at banks

14,970

12,354

39,345

33,684

Other

296

300

760

905

Total interest income

1,057,210

969,515

3,093,656

2,912,970

Interest expense

Savings and interest-checking deposits

37,714

24,067

93,891

60,906

Time deposits

13,992

27,886

49,293

79,075

Deposits at Cayman Islands office

310

204

856

578

Short-term borrowings

554

169

1,148

3,474

Long-term borrowings

47,506

58,849

138,874

174,814

Total interest expense

100,076

111,175

284,062

318,847

Net interest income

957,134

858,340

2,809,594

2,594,123

Provision for credit losses

30,000

47,000

137,000

128,000

Net interest income after provision for credit losses

927,134

811,340

2,672,594

2,466,123

Other income

Mortgage banking revenues

96,737

103,747

267,592

275,193

Service charges on deposit accounts

109,356

107,935

319,589

314,212

Trust income

124,900

118,654

371,712

350,181

Brokerage services income

14,676

15,914

48,677

48,190

Trading account and foreign exchange gains

7,058

12,754

24,833

33,434

Gain (loss) on bank investment securities

—

28,480

(17
)

28,748

Other revenues from operations

106,702

103,866

334,704

310,579

Total other income

459,429

491,350

1,367,090

1,360,537

Other expense

Salaries and employee benefits

399,089

399,786

1,247,851

1,230,246

Equipment and net occupancy

75,558

75,263

223,721

225,165

Outside data processing and software

45,761

42,878

134,637

128,402

FDIC assessments

23,969

28,459

78,149

76,054

Advertising and marketing

17,403

21,996

49,837

66,063

Printing, postage and supplies

8,732

8,972

27,397

30,865

Amortization of core deposit and other intangible assets

7,808

9,787

24,341

33,524

Other costs of operations

227,705

165,251

558,579

488,063

Total other expense

806,025

752,392

2,344,512

2,278,382

Income before taxes

580,538

550,298

1,695,172

1,548,278

Income taxes

224,615

200,314

609,269

563,735

Net income

$
355,923

349,984

$
1,085,903

984,543

Net income available to common shareholders

Basic

$
335,801

326,992

$
1,025,011

915,670

Diluted

335,804

326,998

1,025,023

915,686

Net income per common share

Basic

$
2.22

2.10

$
6.71

5.82

Diluted

2.21

2.10

6.69

5.80

Cash dividends per common share

$
.75

.70

$
2.25

2.10

Average common shares outstanding

Basic

151,347

155,493

152,866

157,336

Diluted

151,691

156,026

153,293

157,843

- 5 -

~~- 4 -~~

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)


	Three Months Ended March 31,
(Dollars in millions)	2024			2023
Net income	$	531		$	702
Other comprehensive income (loss), net of tax and reclassification adjustments:
Net unrealized gains (losses) on investment securities		(10	)		65
Cash flow hedges adjustments		(117	)		81
Defined benefit plans liability adjustments		(1	)		(2	)
Foreign currency translation adjustments		(2	)		1
Total other comprehensive income (loss)		(130	)		145
Total comprehensive income	$	401		$	847

See accompanying notes to financial statements.

Three Months Ended September 30

Nine Months Ended September 30

In thousands

2017

2016

2017

2016

Net income

$
355,923

349,984

$
1,085,903

984,543

Other comprehensive income, net of tax and reclassification adjustments:

Net unrealized gains (losses) on investment securities

18,258

(17,133
)

33,834

127,331

Cash flow hedges adjustments

(1,120
)

(23
)

(2,098
)

(70
)
Foreign currency translation adjustment

863

(229
)

2,489

(1,847
)
Defined benefit plans liability adjustments

4,165

3,847

12,496

11,654

Total other comprehensive income (loss)

22,166

(13,538
)

46,721

137,068

Total comprehensive income

$
378,089

336,446

$
1,132,624

1,121,611

- 6 -

~~- 5 -~~

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)



	Three Months Ended March 31,
(Dollars in millions)	2024			2023
Cash flows from operating activities
Net income	$	531		$	702
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		200			120
Depreciation and amortization of premises and equipment		80			76
Amortization of capitalized servicing rights		35			20
Amortization of core deposit and other intangible assets		15			17
Provision for deferred income taxes		2			11
Asset write-downs		6			1
Net gain on sales of assets		(1	)		(12	)
Net change in accrued interest receivable, payable		27			55
Net change in other accrued income and expense		(74	)		(43	)
Net change in loans originated for sale		(352	)		(274	)
Net change in trading account and other non-hedging derivative assets and liabilities		139			(245	)
Net cash provided by operating activities		608			428
Cash flows from investing activities
Proceeds from sales of investment securities:
Available for sale		4			—
Equity and other securities		110			521
Proceeds from maturities of investment securities:
Available for sale		1,989			141
Held to maturity		257			281
Purchases of investment securities:
Available for sale		(4,145	)		(337	)
Held to maturity		—			(2,948	)
Equity and other securities		(264	)		(792	)
Net increase in loans and leases		(724	)		(1,166	)
Net (increase) decrease in interest-bearing deposits at banks		(4,075	)		2,652
Capital expenditures, net		(35	)		(55	)
Net decrease in loan servicing advances		81			207
Other, net		(280	)		(251	)
Net cash used by investing activities		(7,082	)		(1,747	)
Cash flows from financing activities
Net increase (decrease) in deposits		3,921			(4,441	)
Net increase (decrease) in short-term borrowings		(521	)		3,440
Proceeds from long-term borrowings		3,357			3,486
Payments on long-term borrowings		(49	)		—
Purchases of treasury stock		—			(594	)
Dividends paid — common		(221	)		(221	)
Dividends paid — preferred		(34	)		(34	)
Other, net		(15	)		(19	)
Net cash provided by financing activities		6,438			1,617
Net increase (decrease) in cash, cash equivalents and restricted cash		(36	)		298
Cash, cash equivalents and restricted cash at beginning of period		1,731			1,520
Cash, cash equivalents and restricted cash at end of period	$	1,695		$	1,818
Supplemental disclosure of cash flow information
Interest received during the period	$	2,716		$	2,289
Interest paid during the period		999			410
Income taxes paid during the period		41			22
Supplemental schedule of noncash investing and financing activities
Real estate acquired in settlement of loans		19			7
Additions to right-of-use assets under operating leases		19			31

See accompanying notes to financial statements.

Nine Months Ended September 30

In thousands

2017

2016

Cash flows from operating
   activities

Net income

$
1,085,903

984,543

Adjustments to reconcile net income to net cash provided by operating activities

Provision for credit losses

137,000

128,000

Depreciation and amortization of premises and equipment

84,631

79,911

Amortization of capitalized servicing rights

41,475

37,979

Amortization of core deposit and other intangible assets

24,341

33,524

Provision for deferred income taxes

9,926

109,274

Asset write-downs

10,878

14,276

Net gain on sales of assets

(27,967
)

(46,732
)

Net change in accrued interest receivable, payable

(23,059
)

(13,833
)

Net change in other accrued income and expense

110,138

113,809

Net change in loans originated for sale

523,895

(285,824
)

Net change in trading account assets and liabilities

88,705

(82,837
)

Net cash provided by operating activities

2,065,866

1,072,090

Cash flows from investing
   activities

Proceeds from sales of investment securities

Available for sale

512,143

61,947

Other

178,244

94,516

Proceeds from maturities of investment securities

Available for sale

1,650,258

1,690,665

Held to maturity

390,278

459,399

Purchases of investment securities

Available for sale

(248,705
)

(1,150,523
)

Held to maturity

(1,175,608
)

(15,806
)

Other

(132,104
)

(1,514
)

Net decrease (increase) in loans and leases

2,259,049

(2,021,004
)

Net increase in interest-bearing deposits at banks

(1,305,846
)

(3,183,286
)

Capital expenditures, net

(62,515
)

(65,277
)

Net decrease in loan servicing advances

47,786

121,226

Other, net

66,357

11,459

Net cash provided (used) by investing activities

2,179,337

(3,998,198
)
Cash flows from financing
   activities

Net increase (decrease) in deposits

(1,976,237
)

6,195,511

Net increase (decrease) in short-term borrowings

37,326

(1,886,701
)

Proceeds from long-term borrowings

2,145,950

—

Payments on long-term borrowings

(3,029,320
)

(427,035
)

Purchases of treasury stock

(981,691
)

(604,000
)

Dividends paid — common

(345,166
)

(333,042
)

Dividends paid — preferred

(53,842
)

(58,003
)

Other, net

5,480

3,540

Net cash provided (used) by financing activities

(4,197,500
)

2,890,270

Net increase (decrease) in cash and cash equivalents

47,703

(35,838
)

Cash and cash equivalents at beginning of period

1,320,549

1,368,040

Cash and cash equivalents at end of period

$
1,368,252

1,332,202

Supplemental disclosure of cash
   flow information

Interest received during the period

$
3,088,042

2,923,278

Interest paid during the period

310,640

387,695

Income taxes paid during the period

462,163

138,375

Supplemental schedule of
   noncash investing and financing
   activities

Real estate acquired in settlement of loans

$
88,551

100,106

Securitization of residential mortgage loans allocated to

Available-for-sale investment securities

22,527

18,685

Capitalized servicing rights

262

193

- 7 -

~~- 6 -~~

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)


													Accumulated
													Other
					Common		Additional						Comprehensive
	Preferred		Common		Stock		Paid-in			Retained			Income			Treasury
(Dollars in millions, except per share)	Stock		Stock		Issuable		Capital			Earnings			(Loss), Net			Stock			Total
Three Months Ended March 31, 2024
Balance — January 1, 2024	$	2,011	$	90	$	1	$	10,020		$	17,524		$	(459	)	$	(2,230	)	$	26,957
Total comprehensive income	—		—		—		—				531			(130	)	—				401
Preferred stock cash dividends (a)	—		—		—		—				(25	)	—			—				(25	)
Stock-based compensation transactions, net	—		—		—			(44	)	—			—				98			54
Common stock cash dividends — $1.30 per share	—		—		—		—				(218	)	—			—				(218	)
Balance — March 31, 2024	$	2,011	$	90	$	1	$	9,976		$	17,812		$	(589	)	$	(2,132	)	$	27,169

Three Months Ended March 31, 2023
Balance — January 1, 2023	$	2,011	$	90	$	1	$	10,002		$	15,754		$	(790	)	$	(1,750	)	$	25,318
Total comprehensive income	—		—		—		—				702			145		—				847
Preferred stock cash dividends (a)	—		—		—		—				(25	)	—			—				(25	)
Purchases of treasury stock	—		—		—		—			—			—				(600	)		(600	)
Stock-based compensation transactions, net	—		—		—			(16	)		(1	)	—				72			55
Common stock cash dividends — $1.30 per share	—		—		—		—				(218	)	—			—				(218	)
Balance — March 31, 2023	$	2,011	$	90	$	1	$	9,986		$	16,212		$	(645	)	$	(2,278	)	$	25,377

Accumulated

Other

Common

Additional

Comprehensive

Preferred

Common

Stock

Paid-in

Retained

Income

Treasury

Dollars in thousands, except per share

Stock

Stock

Issuable

Capital

Earnings

(Loss), Net

Stock

Total

2016

Balance — January 1, 2016

$
1,231,500

79,782

2,364

6,680,768

8,430,502

(251,627
)

—

16,173,289

Total comprehensive income

—

—

—

—

984,543

137,068

—

1,121,611

Preferred stock cash dividends

—

—

—

—

(60,953
)

—

—

(60,953
)
Exercise of 5,320 Series A stock
   warrants into 1,983 shares of
   common stock

—

—

—

(223
)

—

—

223

—

Purchases of treasury stock

—

—

—

—

—

—

(604,000
)

(604,000
)
Stock-based compensation plans:

Compensation expense, net

—

171

—

7,315

—

—

10,890

18,376

Exercises of stock options, net

—

18

—

(183
)

—

—

11,576

11,411

Stock purchase plan

—

—

—

275

—

—

10,319

10,594

Directors’ stock plan

—

2

—

526

—

—

1,047

1,575

Deferred compensation plans, net,
   including dividend equivalents

—

2

(140
)

232

(70
)

—

4

28

Other

—

—

—

1,102

—

—

—

1,102

Common stock cash dividends —
   $2.10 per share

—

—

—

—

(332,057
)

—

—

(332,057
)
Balance — September 30, 2016

$
1,231,500

79,975

2,224

6,689,812

9,021,965

(114,559
)

(569,941
)

16,340,976

2017

Balance — January 1, 2017

$
1,231,500

79,973

2,145

6,676,948

9,222,488

(294,636
)

(431,796
)

16,486,622

Total comprehensive income

—

—

—

—

1,085,903

46,721

—

1,132,624

Preferred stock cash dividends

—

—

—

—

(54,604
)

—

—

(54,604
)
Exercise of 304,436 Series A stock
   warrants into 165,498 shares of
   common stock

—

—

—

(22,992
)

—

—

22,992

—

Purchases of treasury stock

—

—

—

—

—

—

(981,691
)

(981,691
)
Stock-based compensation plans:

Compensation expense, net

—

(63
)

—

(51,606
)

—

—

57,685

6,016

Exercises of stock options, net

—

—

—

(6,722
)

—

—

68,014

61,292

Stock purchase plan

—

—

—

2,563

—

—

8,268

10,831

Directors’ stock plan

—

—

—

225

—

—

1,201

1,426

Deferred compensation plans, net,
   including dividend equivalents

—

—

(318
)

(368
)

(65
)

—

594

(157
)
Common stock cash dividends —
   $2.25 per share

—

—

—

—

(344,307
)

—

—

(344,307
)
Balance — September 30, 2017

$
1,231,500

79,910

1,827

6,598,048

9,909,415

(247,915
)

(1,254,733
)

16,318,052

(a)

For the three-month periods ended March 31, 2024 and 2023, dividends per preferred share were: Preferred Series E - $16.125; Preferred Series F - $128.125; Preferred Series G - $125.00; Preferred Series H - $0.3516; and Preferred Series I - $87.50.

See accompanying notes to financial statements.

- 78 -

NOTES TO FINANCIAL STATEMENTS

1. Significant accounting policies

The consolidated interim financial statements of ~~M&T Bank Corporation (“M&T”) and subsidiaries (“~~the ~~Company”)~~Company were compiled in accordance with ~~generally accepted accounting principles (“GAAP”)~~GAAP using the accounting policies set forth in note 1 of Notes to Financial Statements included in ~~Form 10-K~~the 2023 Annual Report, except as described in the following table. The financial statements contain all adjustments which are, in the opinion of management, necessary for a fair statement of the Company's financial position, results of operations and cash flows for the ~~year ended December 31, 2016 (“2016 Annual Report”), except that effective January 2017~~interim periods presented.

Recent accounting developments


Standard	Description	Required date of adoption	Effect on consolidated financial statements
Standards Adopted in 2024
Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method	The amendments permit an election to account for tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the income tax credits and other income tax benefits received and the net amortization and income tax credits and other income tax benefits are recognized in the income statement as a component of income tax expense (benefit).	January 1, 2024	As described in note 11, the Company adopted the amended guidance effective January 1, 2024 using a modified retrospective transition. The guidance did not have a material impact on the Company’s consolidated financial statements.

2. Divestiture

On April 29, 2023, the Company ~~adopted amended accounting guidance that is discussed in note 16 herein.~~sold its CIT business to a private equity firm. The most significant of those changes related to the accounting for excess tax benefits or deficiencies associated with share-based compensation whereby beginning in 2017 those amounts are recognized in income tax expense. Previously, tax effects resulting from changes in M&T’s share price subsequent to the grant date were recorded through shareholders’ equity. The adoption of this new accounting guidancetransaction resulted in a ~~reduction~~pre-tax gain of $225 million ($157 million after-tax effect) that has been included in “other revenues from operations” in the Consolidated Statement of Income in the second quarter of 2023. Prior to the sale, the CIT business contributed $45 million to trust income ~~tax expense for~~in the three months ended March 31, ~~2017~~2023. After considering expenses, the results of ~~$18 million, or $.12~~operations from the CIT business were not material to the Company's consolidated results of diluted earnings per common share. The impact on income tax expense and diluted earnings per common share in the second and third quarters of 2017 was not significant. In the opinion of management, all adjustments necessary for a fair statement have been made and were all of a normal recurring nature.

~~2. Acquisitions~~

In connection with the acquisition of Hudson City Bancorp, Inc. (“Hudson City”) on November 1, 2015 the Company incurred merger-related expenses related to systems conversions and other costs of integrating and conforming acquired operations with and into the Company. Those expenses consisted largely of professional services and other temporary help fees associated with systems conversions and/or integration of operations; costs related to termination of existing contractual arrangements for various services; initial marketing and promotion expenses designed to introduce the Company to its new customers; severance (for former Hudson City employees); travel costs; and other costs of completing the transaction and commencing operations in ~~new markets and offices.~~that period.

~~A summary of merger-related expenses included in the consolidated statement of income follows:~~

Nine Months Ended September 30, 2016

(In thousands)

Salaries and employee benefits

$
5,334

Equipment and net occupancy

1,278

Outside data processing and software

1,067

Advertising and marketing

10,522

Printing, postage and supplies

1,482

Other costs of operations

16,072

Total

$
35,755

~~There were no merger-related expenses during the three-month or nine-month periods ended September 30, 2017 or during the three-month period ended September 30, 2016.~~

- 89 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

3. Investment securities

The amortized cost and estimated fair value of investment securities were as follows:


(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
March 31, 2024
Investment securities available for sale:
U.S. Treasury and federal agencies	$	7,818	$	—	$	99	$	7,719
Mortgage-backed securities:
Government issued or guaranteed:
Commercial		1,355		1		13		1,343
Residential		3,053		—		143		2,910
Other debt securities		171		—		9		162
		12,397		1		264		12,134
Investment securities held to maturity:
U.S. Treasury and federal agencies		1,007		—		33		974
Obligations of states and political subdivisions		2,466		—		94		2,372
Mortgage-backed securities:
Government issued or guaranteed:
Commercial		2,035		—		154		1,881
Residential		9,527		—		935		8,592
Privately issued		41		9		6		44
Other debt securities		2		—		—		2
		15,078		9		1,222		13,865
Total debt securities	$	27,475	$	10	$	1,486	$	25,999
Equity and other securities:
Readily marketable equity — at fair value	$	351	$	8	$	3	$	356
Other — at cost		928		—		—		928
Total equity and other securities	$	1,279	$	8	$	3	$	1,284

December 31, 2023
Investment securities available for sale:
U.S. Treasury and federal agencies	$	7,818	$	—	$	113	$	7,705
Mortgage-backed securities:
Government issued or guaranteed:
Commercial		425		—		9		416
Residential		2,272		—		118		2,154
Other debt securities		176		—		11		165
		10,691		—		251		10,440
Investment securities held to maturity:
U.S. Treasury and federal agencies		1,005		—		31		974
Obligations of states and political subdivisions		2,501		—		67		2,434
Mortgage-backed securities:
Government issued or guaranteed:
Commercial		2,033		—		130		1,903
Residential		9,747		4		802		8,949
Privately issued		42		9		5		46
Other debt securities		2		—		—		2
		15,330		13		1,035		14,308
Total debt securities	$	26,021	$	13	$	1,286	$	24,748
Equity and other securities:
Readily marketable equity — at fair value	$	266	$	5	$	3	$	268
Other — at cost		859		—		—		859
Total equity and other securities	$	1,125	$	5	$	3	$	1,127

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair Value

(In thousands)

September 30, 2017

Investment securities available for sale:

U.S. Treasury and federal agencies

$
2,017,901

25

10,809

$
2,007,117

Obligations of states and political subdivisions

2,621

59

2

2,678

Mortgage-backed securities:

Government issued or guaranteed

9,155,485

92,915

63,917

9,184,483

Privately issued

30

—

—

30

Other debt securities

136,769

2,739

10,978

128,530

Equity securities

57,009

37,427

450

93,986

11,369,815

133,165

86,156

11,416,824

Investment securities held to maturity:

Obligations of states and political subdivisions

32,445

190

81

32,554

Mortgage-backed securities:

Government issued or guaranteed

3,063,164

41,849

7,147

3,097,866

Privately issued

141,430

1,753

30,734

112,449

Other debt securities

5,085

—

—

5,085

3,242,124

43,792

37,962

3,247,954

Other securities

414,978

—

—

414,978

Total

$
15,026,917

176,957

124,118

$
15,079,756

December 31, 2016

Investment securities available for sale:

U.S. Treasury and federal agencies

$
1,912,110

386

9,952

$
1,902,544

Obligations of states and political subdivisions

3,570

77

6

3,641

Mortgage-backed securities:

Government issued or guaranteed

10,980,507

88,343

113,989

10,954,861

Privately issued

45

—

1

44

Other debt securities

134,105

1,407

16,996

118,516

Equity securities

307,964

45,073

571

352,466

13,338,301

135,286

141,515

13,332,072

Investment securities held to maturity:

Obligations of states and political subdivisions

60,858

267

224

60,901

Mortgage-backed securities:

Government issued or guaranteed

2,233,173

37,498

7,374

2,263,297

Privately issued

157,704

897

37,120

121,481

Other debt securities

5,543

—

—

5,543

2,457,278

38,662

44,718

2,451,222

Other securities

461,118

—

—

461,118

Total

$
16,256,697

173,948

186,233

$
16,244,412

- 910 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

3. Investment securities, continued

There were no significant gross realized gains or losses from sales of investment securities for the three-month ~~and nine-month~~ periods ended ~~September 30, 2017. During the three months ended September 30, 2016, the Company sold substantially all of its collateralized debt obligations held~~March 31, 2024 and 2023. Unrealized losses on equity securities are included in "gain (loss) on bank investment securities" in the ~~available-for-sale investment securities portfolio for a gain~~Consolidated Statement of ~~$28 million. There were no other significant gross realized gains or losses from the sale of investment securities for the three-month and nine-month periods ended September 30, 2016.~~Income.

At ~~September 30, 2017,~~March 31, 2024, the amortized cost and estimated fair value of debt securities by contractual maturity were as follows:


(Dollars in millions)	Amortized Cost		Estimated Fair Value
Debt securities available for sale:
Due in one year or less	$	3,248	$	3,209
Due after one year through five years		4,691		4,628
Due after five years through ten years		50		44
Due after ten years		—		—
		7,989		7,881
Mortgage-backed securities		4,408		4,253
	$	12,397	$	12,134
Debt securities held to maturity:
Due in one year or less	$	588	$	575
Due after one year through five years		635		611
Due after five years through ten years		1,369		1,333
Due after ten years		883		829
		3,475		3,348
Mortgage-backed securities		11,603		10,517
	$	15,078	$	13,865

Amortized
Cost

Estimated
Fair Value

(In thousands)

Debt securities available for sale:

Due in one year or less

$
393,453

392,506

Due after one year through five years

1,632,143

1,622,447

Due after five years through ten years

72,508

72,854

Due after ten years

59,187

50,518

2,157,291

2,138,325

Mortgage-backed securities available for sale

9,155,515

9,184,513

$
11,312,806

11,322,838

Debt securities held to maturity:

Due in one year or less

$
18,640

18,738

Due after one year through five years

13,612

13,619

Due after five years through ten years

193

197

Due after ten years

5,085

5,085

37,530

37,639

Mortgage-backed securities held to maturity

3,204,594

3,210,315

$
3,242,124

3,247,954

- 1011 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

3. Investment securities, continued

A summary of investment securities that as of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016~~2023 had been in a continuous unrealized loss position for less than twelve months and those that had been in a continuous unrealized loss position for twelve months or longer follows:


	Less Than 12 Months				12 Months or More
(Dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2024
Investment securities available for sale:
U.S. Treasury and federal agencies	$	2,242	$	10	$	5,177	$	89
Mortgage-backed securities:
Government issued or guaranteed:
Commercial		765		6		393		7
Residential		813		6		1,964		137
Other debt securities		—		—		156		9
		3,820		22		7,690		242
Investment securities held to maturity:
U.S. Treasury and federal agencies		49		1		925		32
Obligations of states and political subdivisions		43		—		2,284		94
Mortgage-backed securities:
Government issued or guaranteed:
Commercial		172		9		1,709		145
Residential		1,133		12		7,459		923
Privately issued		—		—		33		6
		1,397		22		12,410		1,200
Total	$	5,217	$	44	$	20,100	$	1,442

December 31, 2023
Investment securities available for sale:
U.S. Treasury and federal agencies	$	229	$	1	$	7,474	$	112
Mortgage-backed securities:
Government issued or guaranteed:
Commercial		74		1		330		8
Residential		151		2		1,959		116
Other debt securities		6		—		154		11
		460		4		9,917		247
Investment securities held to maturity:
U.S. Treasury and federal agencies		50		—		924		31
Obligations of states and political subdivisions		218		3		2,172		64
Mortgage-backed securities:
Government issued or guaranteed:
Commercial		328		9		1,575		121
Residential		955		11		7,139		791
Privately issued		—		—		34		5
		1,551		23		11,844		1,012
Total	$	2,011	$	27	$	21,761	$	1,259

- 12 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

Less Than 12 Months

12 Months or More

Fair
Value

Unrealized
Losses

Fair
Value

Unrealized
Losses

(In thousands)

September 30, 2017

Investment securities available for sale:

U.S. Treasury and federal agencies

$
1,576,717

(8,002
)

373,852

(2,807
)
Obligations of states and political subdivisions

—

—

474

(2
)
Mortgage-backed securities:

Government issued or guaranteed

2,854,982

(32,123
)

1,298,054

(31,794
)
Other debt securities

1,500

(3
)

60,518

(10,975
)
Equity securities

18,185

(303
)

153

(147
)

4,451,384

(40,431
)

1,733,051

(45,725
)

Investment securities held to maturity:

Obligations of states and political subdivisions

4,932

(31
)

7,093

(50
)
Mortgage-backed securities:

Government issued or guaranteed

638,863

(2,832
)

157,923

(4,315
)
Privately issued

—

—

53,631

(30,734
)

643,795

(2,863
)

218,647

(35,099
)
Total

$
5,095,179

(43,294
)

1,951,698

(80,824
)

December 31, 2016

Investment securities available for sale:

U.S. Treasury and federal agencies

$
1,710,241

(9,950
)

2,295

(2
)
Obligations of states and political subdivisions

—

—

593

(6
)
Mortgage-backed securities:

Government issued or guaranteed

6,730,829

(113,374
)

81,003

(615
)
Privately issued

—

—

27

(1
)
Other debt securities

100

(1
)

85,400

(16,995
)
Equity securities

17,776

(422
)

151

(149
)

8,458,946

(123,747
)

169,469

(17,768
)

Investment securities held to maturity:

Obligations of states and political subdivisions

17,988

(126
)

11,891

(98
)
Mortgage-backed securities:

Government issued or guaranteed

618,832

(6,842
)

17,481

(532
)
Privately issued

17,911

(1,222
)

57,016

(35,898
)

654,731

(8,190
)

86,388

(36,528
)
Total

$
9,113,677

(131,937
)

255,857

(54,296
)

3. Investment securities, continued

The Company owned ~~939~~4,088 individual ~~investment~~debt securities with aggregate gross unrealized losses of ~~$124 million~~$1.5 billion at ~~September 30, 2017.~~March 31, 2024. Based on a review of each of the securities in the investment securities portfolio at ~~September 30, 2017,~~March 31, 2024, the Company concluded that it expected to recover the amortized cost basis of its investment. As of ~~September 30,~~ ~~2017,~~March 31, 2024, the Company does not intend to sell, nor is it anticipated that it would be required to sell, any of its impaired investment securities at a loss. At ~~September 30, 2017,~~March 31, 2024, the Company has not identified

~~- 11 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~3. Investment securities, continued~~

events or changes in circumstances which may have a significant adverse effect on the ~~carrying~~fair value of the ~~$415~~$928 million of cost method equity securities.

The Company estimated no material allowance for credit losses for its investment ~~securities.~~securities classified as held-to-maturity at March 31, 2024 or December 31, 2023.

At March 31, 2024 and December 31, 2023, investment securities with carrying values of $9.6 billion (including $357 million related to repurchase transactions) and $8.2 billion (including $393 million related to repurchase transactions), respectively, were pledged to secure borrowings, lines of credit and governmental deposits.

4. Loans and leases and the allowance for credit losses

A summary of current, past due and nonaccrual loans as of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016~~2023 follows:


(Dollars in millions)	Current		30-89 Days Past Due		Accruing Loans Past Due 90 Days or More		Nonaccrual		Total
March 31, 2024
Commercial and industrial	$	56,803	$	219	$	11	$	864	$	57,897
Real estate:
Commercial (a)		24,119		163		31		855		25,168
Residential builder and developer		984		48		—		3		1,035
Other commercial construction		5,915		155		2		141		6,213
Residential (b)		21,118		627		245		202		22,192
Residential — limited documentation		801		30		—		53		884
Consumer:
Home equity lines and loans		4,437		34		—		87		4,558
Recreational finance		10,553		71		—		30		10,654
Automobile		4,252		43		—		13		4,308
Other		1,982		20		8		54		2,064
Total	$	130,964	$	1,410	$	297	$	2,302	$	134,973

December 31, 2023
Commercial and industrial	$	56,091	$	238	$	11	$	670	$	57,010
Real estate:
Commercial (a)		24,072		311		25		869		25,277
Residential builder and developer		1,065		5		—		3		1,073
Other commercial construction		6,322		159		1		171		6,653
Residential (b)		21,080		763		295		215		22,353
Residential — limited documentation		825		31		—		55		911
Consumer:
Home equity lines and loans		4,528		40		—		81		4,649
Recreational finance		9,935		87		—		36		10,058
Automobile		3,918		60		—		14		3,992
Other		2,003		30		7		52		2,092
Total	$	129,839	$	1,724	$	339	$	2,166	$	134,068

Current

30-89 Days
Past Due

Accruing
Loans Past
Due 90
Days or
More (a)

Accruing
Loans
Acquired at
a Discount
Past Due
90 days
or More (b)

Purchased
Impaired (c)

Nonaccrual

Total

(In thousands)

September 30, 2017

Commercial, financial, leasing, etc.

$
21,486,942

48,159

3,710

369

75

203,996

$
21,743,251

Real estate:

Commercial

24,724,768

273,539

1,710

7,523

20,509

200,193

25,228,242

Residential builder and developer

1,604,095

26,182

—

4,413

10,717

2,416

1,647,823

Other commercial construction

5,952,636

51,132

1,220

—

13,972

19,263

6,038,223

Residential

15,868,656

458,066

249,983

10,025

307,529

236,363

17,130,622

Residential — limited documentation

2,829,667

88,814

—

—

114,141

101,918

3,134,540

Consumer:

Home equity lines and loans

5,275,572

34,878

772

9,856

—

75,584

5,396,662

Automobile

3,327,148

67,280

—

1

—

21,267

3,415,696

Other

4,120,712

33,070

3,893

24,038

—

8,362

4,190,075

Total

$
85,190,196

1,081,120

261,288

56,225

466,943

869,362

$
87,925,134

December 31, 2016

Commercial, financial, leasing, etc.

$
22,287,857

53,503

6,195

417

641

261,434

$
22,610,047

Real estate:

Commercial

25,076,684

183,531

7,054

12,870

31,404

176,201

25,487,744

Residential builder and developer

1,884,989

4,667

5

1,952

14,006

16,707

1,922,326

Other commercial construction

5,985,118

77,701

922

198

14,274

18,111

6,096,324

Residential

17,631,377

485,468

281,298

11,537

378,549

229,242

19,017,471

Residential — limited documentation

3,239,344

88,366

—

—

139,158

106,573

3,573,441

Consumer:

Home equity lines and loans

5,502,091

44,565

—

12,678

—

81,815

5,641,149

Automobile

2,869,232

56,158

—

1

—

18,674

2,944,065

Other

3,491,629

31,286

5,185

21,491

—

11,258

3,560,849

Total

$
87,968,321

1,025,245

300,659

61,144

578,032

920,015

$
90,853,416

(a)

Commercial real estate loans held for sale were $563 million at March 31, 2024 and $189 million at December 31, 2023.

(b)

One-to-four family residential mortgage loans held for sale were $165 million at March 31, 2024 and $190 million at December 31, 2023.

~~(a)~~

~~Excludes loans acquired at a discount.~~

~~(b)~~

~~Loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.~~

~~(c)~~

~~Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.~~

- 1213 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

One-to-four family residential mortgage loans held for sale were $347 million and $414 million at September 30, 2017 and December 31, 2016, respectively. Commercial real estate loans held for sale were $224 million at September 30, 2017 and $643 million at December 31, 2016.Credit quality indicators

The outstanding principal balance and the carrying amount of loans acquired at a discount that were recorded at fair value at the acquisition date and included in the consolidated balance sheet were as follows:

September 30,

December 31,

2017

2016

(In thousands)

Outstanding principal balance

$
1,584,126

2,311,699

Carrying amount:

Commercial, financial, leasing, etc.

42,878

59,928

Commercial real estate

308,426

456,820

Residential real estate

665,278

799,802

Consumer

127,919

487,721

$
1,144,501

1,804,271

Purchased impaired loans included in the table above totaled $467 million at September 30, 2017 and $578 million at December 31, 2016, representing less than 1% of the Company’s assets as of each date. A summary of changes in the accretable yield for loans acquired at a discount for the three months and nine months ended September 30, 2017 and 2016 follows:

Three Months Ended September 30

2017

2016

Purchased

Other

Purchased

Other

Impaired

Acquired

Impaired

Acquired

(In thousands)

Balance at beginning of period

$
133,532

163,099

$
162,023

245,195

Interest income

(10,815
)

(20,064
)

(12,784
)

(26,540
)
Reclassifications from nonaccretable balance

30,799

6,041

2,256

12,050

Other (a)

—

1,545

—

(818
)
Balance at end of period

$
153,516

150,621

$
151,495

229,887

Nine Months Ended September 30

2017

2016

Purchased

Other

Purchased

Other

Impaired

Acquired

Impaired

Acquired

(In thousands)

Balance at beginning of period

$
154,233

201,153

$
184,618

296,434

Interest income

(32,546
)

(66,505
)

(40,906
)

(97,300
)
Reclassifications from nonaccretable balance

31,829

11,076

7,783

20,647

Other (a)

—

4,897

—

10,106

Balance at end of period

$
153,516

150,621

$
151,495

229,887

~~(a)~~

~~Other changes in expected cash flows including changes in interest rates and prepayment assumptions.~~

~~- 13 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~4. Loans and leases and the allowance for credit losses, continued~~

~~Changes in the allowance for credit losses for the three months ended September 30, 2017 were as follows:~~

Commercial,
Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Unallocated

Total

(In thousands)

Beginning balance

$
339,314

366,229

66,006

158,559

78,117

$
1,008,225

Provision for credit losses

2,451

(7,699
)

1,267

33,886

95

30,000

Net charge-offs

Charge-offs

(9,714
)

(258
)

(4,206
)

(32,874
)

—

(47,052
)
Recoveries

4,423

5,895

2,028

9,807

—

22,153

Net (charge-offs) recoveries

(5,291
)

5,637

(2,178
)

(23,067
)

—

(24,899
)
Ending balance

$
336,474

364,167

65,095

169,378

78,212

$
1,013,326

~~Changes in the allowance for credit losses for the three months ended September 30, 2016 were as follows:~~

Commercial,
Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Unallocated

Total

(In thousands)

Beginning balance

$
316,079

349,674

69,660

157,361

77,722

$
970,496

Provision for credit losses

26,222

9,963

(6,232
)

16,539

508

47,000

Net charge-offs

Charge-offs

(21,075
)

(1,564
)

(6,754
)

(29,882
)

—

(59,275
)
Recoveries

6,958

1,704

1,919

7,319

—

17,900

Net (charge-offs) recoveries

(14,117
)

140

(4,835
)

(22,563
)

—

(41,375
)
Ending balance

$
328,184

359,777

58,593

151,337

78,230

$
976,121

~~Changes in the allowance for credit losses for the nine months ended September 30, 2017 were as follows:~~

Commercial, Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Unallocated

Total

(In thousands)

Beginning balance

$
330,833

362,719

61,127

156,288

78,030

$
988,997

Provision for credit losses

44,642

1,201

14,067

76,908

182

137,000

Net charge-offs

Charge-offs

(51,318
)

(7,556
)

(16,364
)

(96,060
)

—

(171,298
)
Recoveries

12,317

7,803

6,265

32,242

—

58,627

Net (charge-offs) recoveries

(39,001
)

247

(10,099
)

(63,818
)

—

(112,671
)
Ending balance

$
336,474

364,167

65,095

169,378

78,212

$
1,013,326

~~- 14 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~4. Loans and leases and the allowance for credit losses, continued~~

~~Changes in the allowance for credit losses for the nine months ended September 30, 2016 were as follows:~~

Commercial, Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Unallocated

Total

(In thousands)

Beginning balance

$
300,404

326,831

72,238

178,320

78,199

$
955,992

Provision for credit losses

39,667

29,799

(610
)

59,113

31

128,000

Net charge-offs

Charge-offs

(34,711
)

(3,569
)

(18,816
)

(107,761
)

—

(164,857
)
Recoveries

22,824

6,716

5,781

21,665

—

56,986

Net (charge-offs) recoveries

(11,887
)

3,147

(13,035
)

(86,096
)

—

(107,871
)
Ending balance

$
328,184

359,777

58,593

151,337

78,230

$
976,121

~~Despite the allocation in the preceding tables, the allowance for credit losses is general in nature and is available to absorb losses from any loan or lease type.~~

In establishing the allowance for credit losses, the Company estimates losses attributable to specific troubled credits identified through both normal and detailed or intensified credit review processes and also estimates losses inherent in other loans and leases on a collective basis. For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by loan type. The amounts of loss components in the Company’s loan and lease portfolios are determined through a loan-by-loan analysis of larger balance commercial loans and commercial real estate loans that are in nonaccrual status and by applying loss factors to groups of loan balances based on loan type and management’s classification of such loans under the Company’s loan grading system. Measurement of the specific loss components is typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to pay. In determining the allowance for credit losses, the Company utilizes a loan grading system ~~which is applied~~ to differentiate risk amongst its commercial and commercial real estate credits on an individual loan basis. Loan officers are responsible for continually assigning grades to these loans based on standards outlined in the Company’s Credit Policy. Internal loan grades are also monitored by the Company’s credit review department to ensure consistency and strict adherence to the prescribed standards. Loan grades are assigned loss component factors that reflect the Company’s loss estimate for each group of loans and leases. Factors considered in assigning loan grades and loss component factors include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information; levels of and trends in portfolio charge-offs and recoveries; levels of and trends in portfolio delinquencies and impaired loans; changes in the risk profile of specific portfolios; trends in volume and terms of loans; effects of changes in credit concentrations; and observed trends and practices in the banking industry. As updated appraisals are obtained on individual loans or other events in the market place indicate that collateral values have significantly changed, individual loan grades are adjusted as appropriate. Changes in other factors cited may also lead to loan grade changes at any time. Except for consumer loans and residential real estate loans that are considered smaller balance homogenous loans and acquired loans that are evaluated on an aggregated basis, the Company considers a loan to be impaired for purposes of applying GAAP when, based on current information and events, it is probable that the Company will be unable to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days. Regardless of loan type, the Company considers a loan to be impaired if it qualifies as a troubled debt restructuring. Modified loans, including smaller balance homogenous loans, that are considered to be troubled debt restructurings are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows.

~~- 15 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~4. Loans and leases and the allowance for credit losses, continued~~

The following tables provide information with respect to loans and leases that were considered impaired as of September 30, 2017 and December 31, 2016 and for the three-month and nine-month periods ended September 30, 2017 and 2016.

September 30, 2017

December 31, 2016

Recorded
Investment

Unpaid
Principal
Balance

Related
Allowance

Recorded
Investment

Unpaid
Principal
Balance

Related
Allowance

(In thousands)

With an allowance recorded:

Commercial, financial, leasing, etc.

$
148,747

179,120

49,447

168,072

184,432

48,480

Real estate:

Commercial

73,144

81,244

10,200

71,862

86,666

11,620

Residential builder and developer

6,537

6,842

288

7,396

8,361

506

Other commercial construction

1,626

1,785

292

2,475

2,731

448

Residential

97,483

118,030

3,475

86,680

105,944

3,457

Residential — limited documentation

79,030

94,194

4,600

82,547

97,718

6,000

Consumer:

Home equity lines and loans

48,231

52,975

8,711

44,693

48,965

8,027

Automobile

14,225

16,743

3,011

16,982

18,272

3,740

Other

3,176

5,633

650

3,791

5,296

776

472,199

556,566

80,674

484,498

558,385

83,054

With no related allowance recorded:

Commercial, financial, leasing, etc.

80,952

97,073

—

100,805

124,786

—

Real estate:

Commercial

148,733

158,815

—

113,276

121,846

—

Residential builder and developer

1,174

1,174

—

14,368

21,124

—

Other commercial construction

17,850

37,237

—

15,933

35,281

—

Residential

17,312

23,291

—

16,823

24,161

—

Residential — limited documentation

11,091

18,480

—

15,429

24,590

—

277,112

336,070

—

276,634

351,788

—

Total:

Commercial, financial, leasing, etc.

229,699

276,193

49,447

268,877

309,218

48,480

Real estate:

Commercial

221,877

240,059

10,200

185,138

208,512

11,620

Residential builder and developer

7,711

8,016

288

21,764

29,485

506

Other commercial construction

19,476

39,022

292

18,408

38,012

448

Residential

114,795

141,321

3,475

103,503

130,105

3,457

Residential — limited documentation

90,121

112,674

4,600

97,976

122,308

6,000

Consumer:

Home equity lines and loans

48,231

52,975

8,711

44,693

48,965

8,027

Automobile

14,225

16,743

3,011

16,982

18,272

3,740

Other

3,176

5,633

650

3,791

5,296

776

Total

$
749,311

892,636

80,674

761,132

910,173

83,054

~~- 16 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~4. Loans and leases and the allowance for credit losses, continued~~

Three Months Ended September 30, 2017

Three Months Ended September 30, 2016

Interest Income
Recognized

Interest Income
Recognized

Average
Recorded
Investment

Total

Cash
Basis

Average
Recorded
Investment

Total

Cash
Basis

(In thousands)

Commercial, financial, leasing, etc.

$
224,526

391

391

262,796

744

744

Real estate:

Commercial

233,572

1,425

1,425

175,256

1,806

1,806

Residential builder and developer

8,550

895

895

26,996

405

405

Other commercial construction

16,578

25

25

21,500

190

190

Residential

113,892

1,903

905

96,961

1,572

570

Residential — limited documentation

91,974

1,624

569

101,877

1,501

378

Consumer:

Home equity lines and loans

47,831

419

99

41,740

368

112

Automobile

14,588

251

22

18,571

303

19

Other

3,269

80

2

4,077

72

11

Total

$
754,780

7,013

4,333

749,774

6,961

4,235

Nine Months Ended September 30, 2017

Nine Months Ended September 30, 2016

Interest Income
Recognized

Interest Income
Recognized

Average
Recorded
Investment

Total

Cash
Basis

Average
Recorded
Investment

Total

Cash
Basis

(In thousands)

Commercial, financial, leasing, etc.

$
242,410

1,674

1,674

283,783

7,055

7,055

Real estate:

Commercial

205,814

3,213

3,213

177,579

3,891

3,891

Residential builder and developer

14,551

1,791

1,791

30,832

488

488

Other commercial construction

15,474

958

958

19,774

563

563

Residential

108,741

5,004

2,285

97,229

4,778

2,591

Residential — limited documentation

94,680

4,573

1,292

104,382

4,580

1,648

Consumer:

Home equity lines and loans

46,829

1,240

290

33,998

937

295

Automobile

15,483

788

62

20,358

964

83

Other

3,430

227

8

10,987

371

74

Total

$
747,412

19,468

11,573

778,922

23,627

16,688

~~- 17 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~4. Loans and leases and the allowance for credit losses, continued~~

~~In accordance with the previously described policies, the Company utilizes a loan grading system that is applied to all commercial~~industrial loans and commercial real estate loans. ~~Loan grades are utilized to differentiate risk within the portfolio and consider the expectations of default for each loan. Commercial loans and commercial real estate loans~~Loans with a lower expectation of default are assigned one of ten possible “pass” loan grades and are generally ascribed lower loss factors when determining the allowance for credit losses. Loans with an elevated level of credit risk are classified as “criticized” and are ascribed a higher loss factor when determining the allowance for credit losses. Criticized loans may be classified as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more. ~~All larger- balance~~

Line of business personnel in different geographic locations with support from and review by the Company’s credit risk personnel review and reassign loan grades based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. Factors considered in assigning loan grades include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information. The Company’s policy is that at least annually, updated financial information be obtained from commercial borrowers associated with pass grade loans and additional analysis performed. On a quarterly basis, the Company’s credit personnel review all criticized commercial and industrial loans and commercial real estate loans ~~are individually reviewed by centralized credit personnel each quarter~~greater than $5 million to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing. Smaller-balance criticized loans are analyzed by business line risk management areas to ensure proper loan grade classification. Furthermore, criticized nonaccrual commercial loans and commercial real estate loans are considered impaired and, as a result, specific loss allowances on such loans are established within the allowance for credit losses to the extent appropriate in each individual instance.

The following table summarizes the loan grades applied at March 31, 2024 to the various classes of the Company’s commercial and industrial loans and commercial real estate ~~loans.~~loans and gross charge-offs for those types of loans for the three-month period ended March 31, 2024 by origination year.


	Term Loans by Origination Year												Revolving		Revolving Loans Converted to Term
(Dollars in millions)	2024		2023		2022		2021		2020		Prior		Loans		Loans		Total
Commercial and industrial:
Pass	$	2,012	$	8,129	$	7,567	$	4,441	$	2,099	$	6,456	$	22,719	$	74	$	53,497
Criticized accrual		32		306		422		277		117		602		1,745		35		3,536
Criticized nonaccrual		2		54		89		62		71		206		364		16		864
Total commercial and industrial	$	2,046	$	8,489	$	8,078	$	4,780	$	2,287	$	7,264	$	24,828	$	125	$	57,897
Gross charge-offs	$	—	$	7	$	9	$	4	$	3	$	5	$	50	$	—	$	78
Real estate:
Commercial:
Pass	$	696	$	1,783	$	1,652	$	1,331	$	2,013	$	11,278	$	435	$	—	$	19,188
Criticized accrual		—		273		815		464		558		3,008		7		—		5,125
Criticized nonaccrual		—		—		46		11		101		695		2		—		855
Total commercial real estate	$	696	$	2,056	$	2,513	$	1,806	$	2,672	$	14,981	$	444	$	—	$	25,168
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	13	$	—	$	—	$	13
Residential builder and developer:
Pass	$	89	$	509	$	187	$	34	$	5	$	14	$	102	$	—	$	940
Criticized accrual		—		2		21		21		—		46		2		—		92
Criticized nonaccrual		—		—		—		2		—		1		—		—		3
Total residential builder and developer	$	89	$	511	$	208	$	57	$	5	$	61	$	104	$	—	$	1,035
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	—	$	1
Other commercial construction:
Pass	$	27	$	990	$	1,231	$	590	$	273	$	589	$	45	$	—	$	3,745
Criticized accrual		—		75		538		460		567		687		—		—		2,327
Criticized nonaccrual		—		—		11		10		45		75		—		—		141
Total other commercial construction	$	27	$	1,065	$	1,780	$	1,060	$	885	$	1,351	$	45	$	—	$	6,213
Gross charge-offs	$	—	$	—	$	2	$	—	$	—	$	7	$	2	$	—	$	11

Real Estate

Commercial,

Residential

Other

Financial,

Builder and

Commercial

Leasing, etc.

Commercial

Developer

Construction

(In thousands)

September 30, 2017

Pass

$
20,561,077

24,309,923

1,580,763

5,830,122

Criticized accrual

978,178

718,126

64,644

188,838

Criticized nonaccrual

203,996

200,193

2,416

19,263

Total

$
21,743,251

25,228,242

1,647,823

6,038,223

December 31, 2016

Pass

$
21,398,581

24,570,269

1,789,071

5,912,351

Criticized accrual

950,032

741,274

116,548

165,862

Criticized nonaccrual

261,434

176,201

16,707

18,111

Total

$
22,610,047

25,487,744

1,922,326

6,096,324

- 1814 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

~~In determining~~The Company considers repayment performance a significant indicator of credit quality for its residential real estate loan and consumer loan portfolios. A summary of loans in accrual and nonaccrual status at March 31, 2024 for the ~~allowance for credit losses,~~various classes of the Company’s residential real estate loans and consumer loans ~~are generally evaluated collectively after considering such factors as payment performance~~ and ~~recent loss experience and trends, which are mainly driven by current collateral values in the market place as well as the amount~~gross charge-offs for those types of ~~loan defaults. Loss rates on such~~ loans are determined by reference to recent charge-off history and are evaluated (and adjusted if deemed appropriate) through consideration of other factors including near-term forecasted loss estimates developed by the Company’s credit department. In arriving at such forecasts, the Company considers the current estimated fair value of its collateral based on geographical adjustments for home price depreciation/appreciation and overall borrower repayment performance. With regard to collateral values, the realizability of such values by the Company contemplates repayment of any first lien position prior to recovering amounts on a second lien position. However, residential real estate loans and outstanding balances of home equity loans and lines of credit that are more than 150 days past due are generally evaluated for collectability on a loan-by-loan basis giving consideration to estimated collateral values. The carrying value of residential real estate loans and home equity loans and lines of credit for which a partial charge-off has been recognized totaled $39 million and $27 million, respectively, at September 30, 2017 and $44 million and $32 million, respectively, at December 31, 2016. Residential real estate loans and home equity loans and lines of credit that were more than 150 days past due but did not require a partial charge-off because the net realizable value of the collateral exceeded the outstanding customer balance were $19 million and $33 million, respectively, at September 30, 2017 and $16 million and $39 million, respectively, at December 31, 2016.

The Company also measures additional losses for purchased impaired loans when it is probable that the Company will be unable to collect all cash flows expected at acquisition plus additional cash flows expected to be collected arising from changes in estimates after acquisition. The determination of the allocated portion of the allowance for credit losses is very subjective. Given that inherent subjectivity and potential imprecision involved in determining the allocated portion of the allowance for credit losses, the Company also provides an inherent unallocated portion of the allowance. The unallocated portion of the allowance is intended to recognize probable losses that are not otherwise identifiable and includes management’s subjective determination of amounts necessary to provide for the possible use of imprecise estimates in determining the allocated portion of the allowance. Therefore, the level of the unallocated portion of the allowance is primarily reflective of the inherent imprecision in the various calculations used in determining the allocated portion of the allowance for credit losses. Other factors that could also lead to changes in the unallocated portion include the effects of expansion into new markets for which the Company does not have the same degree of familiarity and experience regarding portfolio performance in changing market conditions, the introduction of new loan and lease product types, and other risks associated with the Company’s loan portfolio that may not be specifically identifiable.three-month period ended March 31, 2024 by origination year follows:


	Term Loans by Origination Year												Revolving		Revolving Loans Converted to Term
(Dollars in millions)	2024		2023		2022		2021		2020		Prior		Loans		Loans		Total
Residential:
Current	$	478	$	1,499	$	4,667	$	3,717	$	2,533	$	8,131	$	93	$	—	$	21,118
30-89 days past due		—		6		107		62		30		422		—		—		627
Accruing loans past due 90 days or more		—		2		21		19		15		188		—		—		245
Nonaccrual		—		1		15		10		2		173		1		—		202
Total residential	$	478	$	1,508	$	4,810	$	3,808	$	2,580	$	8,914	$	94	$	—	$	22,192
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	—	$	1
Residential - limited documentation:
Current	$	—	$	—	$	—	$	—	$	—	$	801	$	—	$	—	$	801
30-89 days past due		—		—		—		—		—		30		—		—		30
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		53		—		—		53
Total residential - limited documentation	$	—	$	—	$	—	$	—	$	—	$	884	$	—	$	—	$	884
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer:
Home equity lines and loans:
Current	$	—	$	—	$	—	$	2	$	2	$	105	$	2,972	$	1,356	$	4,437
30-89 days past due		—		—		—		—		—		3		—		31		34
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		5		1		81		87
Total home equity lines and loans	$	—	$	—	$	—	$	2	$	2	$	113	$	2,973	$	1,468	$	4,558
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1	$	1
Recreational finance:
Current	$	1,028	$	2,531	$	2,252	$	1,790	$	1,233	$	1,719	$	—	$	—	$	10,553
30-89 days past due		1		11		12		14		13		20		—		—		71
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		—		4		6		6		4		10		—		—		30
Total recreational finance	$	1,029	$	2,546	$	2,270	$	1,810	$	1,250	$	1,749	$	—	$	—	$	10,654
Gross charge-offs	$	—	$	3	$	5	$	6	$	4	$	7	$	—	$	—	$	25
Automobile:
Current	$	684	$	1,026	$	1,004	$	942	$	371	$	225	$	—	$	—	$	4,252
30-89 days past due		1		7		11		11		6		7		—		—		43
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		—		2		2		3		2		4		—		—		13
Total automobile	$	685	$	1,035	$	1,017	$	956	$	379	$	236	$	—	$	—	$	4,308
Gross charge-offs	$	—	$	2	$	2	$	2	$	1	$	1	$	—	$	—	$	8
Other:
Current	$	69	$	219	$	155	$	105	$	28	$	27	$	1,378	$	1	$	1,982
30-89 days past due		1		1		3		1		—		1		12		1		20
Accruing loans past due 90 days or more		—		—		—		—		—		—		8		—		8
Nonaccrual		1		1		1		—		—		—		51		—		54
Total other	$	71	$	221	$	159	$	106	$	28	$	28	$	1,449	$	2	$	2,064
Gross charge-offs	$	1	$	3	$	3	$	1	$	1	$	—	$	16	$	—	$	25
Total loans and leases at March 31, 2024	$	5,121	$	17,431	$	20,835	$	14,385	$	10,088	$	35,581	$	29,937	$	1,595	$	134,973
Total gross charge-offs for the three months ended March 31, 2024	$	1	$	15	$	21	$	13	$	9	$	35	$	68	$	1	$	163

- 1915 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

The following table summarizes the loan grades applied at December 31, 2023 to the various classes of the Company’s commercial and industrial loans and commercial real estate loans by origination year.


	Term Loans by Origination Year												Revolving		Revolving Loans Converted to Term
(Dollars in millions)	2023		2022		2021		2020		2019		Prior		Loans		Loans		Total
Commercial and industrial:
Pass	$	8,689	$	8,087	$	4,800	$	2,248	$	2,169	$	4,843	$	22,345	$	70	$	53,251
Criticized accrual		292		279		277		142		127		481		1,460		31		3,089
Criticized nonaccrual		29		68		56		75		36		150		243		13		670
Total commercial and industrial	$	9,010	$	8,434	$	5,133	$	2,465	$	2,332	$	5,474	$	24,048	$	114	$	57,010
Real estate:
Commercial:
Pass	$	2,048	$	1,742	$	1,367	$	2,011	$	3,059	$	8,491	$	440	$	—	$	19,158
Criticized accrual		227		891		465		456		966		2,238		7		—		5,250
Criticized nonaccrual		—		46		3		113		93		611		3		—		869
Total commercial real estate	$	2,275	$	2,679	$	1,835	$	2,580	$	4,118	$	11,340	$	450	$	—	$	25,277
Residential builder and developer:
Pass	$	530	$	252	$	41	$	6	$	2	$	12	$	116	$	—	$	959
Criticized accrual		1		18		30		—		59		—		3		—		111
Criticized nonaccrual		—		—		3		—		—		—		—		—		3
Total residential builder and developer	$	531	$	270	$	74	$	6	$	61	$	12	$	119	$	—	$	1,073
Other commercial construction:
Pass	$	813	$	1,366	$	651	$	373	$	646	$	187	$	30	$	—	$	4,066
Criticized accrual		53		391		390		691		565		326		—		—		2,416
Criticized nonaccrual		—		14		10		46		50		49		2		—		171
Total other commercial construction	$	866	$	1,771	$	1,051	$	1,110	$	1,261	$	562	$	32	$	—	$	6,653

- 16 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

~~The allocation~~

4. Loans and leases and the allowance for credit losses, continued

A summary of loans in accrual and nonaccrual status at December 31, 2023 for the various classes of the Company’s residential real estate loans and consumer loans by origination year follows:


	Term Loans by Origination Year												Revolving		Revolving Loans Converted to Term
(Dollars in millions)	2023		2022		2021		2020		2019		Prior		Loans		Loans		Total
Residential:
Current	$	1,726	$	4,709	$	3,732	$	2,543	$	1,215	$	7,060	$	95	$	—	$	21,080
30-89 days past due		18		120		88		52		28		457		—		—		763
Accruing loans past due 90 days or more		1		30		28		17		14		205		—		—		295
Nonaccrual		1		17		10		3		4		179		1		—		215
Total residential	$	1,746	$	4,876	$	3,858	$	2,615	$	1,261	$	7,901	$	96	$	—	$	22,353
Residential - limited documentation:
Current	$	—	$	—	$	—	$	—	$	—	$	825	$	—	$	—	$	825
30-89 days past due		—		—		—		—		—		31		—		—		31
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		55		—		—		55
Total residential - limited documentation	$	—	$	—	$	—	$	—	$	—	$	911	$	—	$	—	$	911
Consumer:
Home equity lines and loans:
Current	$	—	$	—	$	2	$	2	$	13	$	98	$	3,022	$	1,391	$	4,528
30-89 days past due		—		—		—		—		—		3		—		37		40
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		5		3		73		81
Total home equity lines and loans	$	—	$	—	$	2	$	2	$	13	$	106	$	3,025	$	1,501	$	4,649
Recreational finance:
Current	$	2,653	$	2,338	$	1,857	$	1,286	$	781	$	1,020	$	—	$	—	$	9,935
30-89 days past due		11		16		19		14		11		16		—		—		87
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		3		5		8		6		5		9		—		—		36
Total recreational finance	$	2,667	$	2,359	$	1,884	$	1,306	$	797	$	1,045	$	—	$	—	$	10,058
Automobile:
Current	$	1,063	$	1,096	$	1,047	$	427	$	198	$	87	$	—	$	—	$	3,918
30-89 days past due		8		15		17		9		6		5		—		—		60
Accruing loans past due 90 days or more		—		—		—		—		—		—		—		—		—
Nonaccrual		2		3		3		2		2		2		—		—		14
Total automobile	$	1,073	$	1,114	$	1,067	$	438	$	206	$	94	$	—	$	—	$	3,992
Other:
Current	$	250	$	176	$	118	$	33	$	13	$	18	$	1,392	$	3	$	2,003
30-89 days past due		3		3		2		—		—		1		20		1		30
Accruing loans past due 90 days or more		—		—		—		—		—		—		7		—		7
Nonaccrual		2		1		1		—		—		—		48		—		52
Total other	$	255	$	180	$	121	$	33	$	13	$	19	$	1,467	$	4	$	2,092
Total loans and leases at December 31, 2023	$	18,423	$	21,683	$	15,025	$	10,555	$	10,062	$	27,464	$	29,237	$	1,619	$	134,068

- 17 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

Allowance for credit losses

For purposes of determining the level of the allowance for credit losses, ~~summarized~~the Company evaluates its loan and lease portfolio by type. Changes in the allowance for credit losses for the three months ended March 31, 2024 and 2023 were as follows:


	Commercial and			Real Estate
(Dollars in millions)	industrial			Commercial			Residential			Consumer			Total
Three Months Ended March 31, 2024
Beginning balance	$	620		$	764		$	116		$	629		$	2,129
Provision for credit losses		137			9			2			52			200
Net charge-offs:
Charge-offs		(78	)		(25	)		(1	)		(59	)		(163	)
Recoveries		5			6			1			13			25
Net charge-offs		(73	)		(19	)		—			(46	)		(138	)
Ending balance	$	684		$	754		$	118		$	635		$	2,191


Three Months Ended March 31, 2023
Beginning balance	$	568		$	611		$	115		$	631		$	1,925
Provision for credit losses		21			86			(1	)		14			120
Net charge-offs:
Charge-offs		(20	)		(29	)		(2	)		(44	)		(95	)
Recoveries		10			1			1			13			25
Net charge-offs		(10	)		(28	)		(1	)		(31	)		(70	)
Ending balance	$	579		$	669		$	113		$	614		$	1,975

Despite the allocation in the preceding tables, the allowance for credit losses is general in nature and is available to absorb losses from any loan or lease type. In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. The Company utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators, including loan grade and borrower repayment performance, can inform the models, which have been statistically developed based on historical correlations of credit losses with prevailing economic metrics, including unemployment, GDP and real estate prices. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. At each of March 31, 2024 and December 31, 2023, the Company utilized a reasonable and supportable forecast period of two years. Subsequent to this forecast period the Company reverted, ratably over a one-year period, to historical loss experience to inform its estimate of losses for the remaining contractual life of each portfolio.

- 18 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

The Company also estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes. The amounts of specific loss components in the Company’s loan and lease portfolios are determined through a loan-by-loan analysis of larger balance commercial and industrial loans and commercial real estate loans that are in nonaccrual status. Such loss estimates are typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to pay. To the extent that those loans are collateral-dependent, they are evaluated based on the ~~basis~~fair value of the loan’s collateral as estimated at or near the financial statement date. As the quality of a loan deteriorates to the point of classifying the loan as “criticized,” the process of obtaining updated collateral valuation information is usually initiated, unless it is not considered warranted given factors such as the relative size of the loan, the characteristics of the collateral or the age of the last valuation. In those cases where current appraisals may not yet be available, prior appraisals are utilized with adjustments, as deemed necessary, for estimates of subsequent declines in values as determined by line of business and/or loan workout personnel. Those adjustments are reviewed and assessed for reasonableness by the Company’s ~~impairment methodology~~credit risk personnel. Accordingly, for real estate collateral securing larger nonaccrual commercial and industrial loans and commercial real estate loans, estimated collateral values are based on current appraisals and estimates of value. For non-real estate loans, collateral is assigned a discounted estimated liquidation value and, depending on the nature of the collateral, is verified through field exams or other procedures. In assessing collateral, real estate and non-real estate values are reduced by an estimate of selling costs.

For residential real estate loans, including home equity loans and lines of credit, the excess of the loan balance over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. That charge-off is based on recent indications of value from external parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that file for bankruptcy are generally charged-off to estimated net collateral value shortly after the Company is notified of such filings. When evaluating individual home equity loans and lines of credit for charge-off and for purposes of estimating losses in determining the allowance for credit losses, the Company gives consideration to the required repayment of any first lien positions related to collateral property.

Changes in the amount of the allowance for credit losses reflect the outcome of the procedures described herein, including the impact of changes in macroeconomic forecasts as compared with previous forecasts, as well as the impact of portfolio concentrations, imprecision in economic forecasts, geopolitical conditions and other risk factors that might influence the loss estimation process.

The Company’s reserve for off-balance sheet credit exposures was ~~as follows:~~not material at March 31, 2024 and December 31, 2023.

Commercial,
Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Total

(In thousands)

September 30, 2017

Individually evaluated for impairment

$
49,447

10,780

8,075

12,372

$
80,674

Collectively evaluated for impairment

287,027

353,387

47,674

157,006

845,094

Purchased impaired

—

—

9,346

—

9,346

Allocated

$
336,474

364,167

65,095

169,378

935,114

Unallocated

78,212

Total

$
1,013,326

December 31, 2016

Individually evaluated for impairment

$
48,480

12,500

9,457

12,543

$
82,980

Collectively evaluated for impairment

282,353

348,301

47,993

143,745

822,392

Purchased impaired

—

1,918

3,677

—

5,595

Allocated

$
330,833

362,719

61,127

156,288

910,967

Unallocated

78,030

Total

$
988,997

- 19 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

~~The recorded investment in~~Information with respect to loans and leases ~~summarized on~~that were considered nonaccrual at the ~~basis~~beginning and end of the ~~Company’s impairment methodology was as~~reporting period and the interest income recognized on such loans for the three-month periods ended March 31, 2024 and 2023 follows:


	Amortized Cost with Allowance		Amortized Cost without Allowance		Total		Amortized Cost			Interest Income Recognized
(Dollars in millions)	March 31, 2024							January 1, 2024		Three Months Ended March 31, 2024
Commercial and industrial	$	590	$	274	$	864		$	670	$	2
Real estate:
Commercial		379		476		855			869		6
Residential builder and developer		3		—		3			3		—
Other commercial construction		33		108		141			171		—
Residential		82		120		202			215		3
Residential — limited documentation		18		35		53			55		1
Consumer:
Home equity lines and loans		48		39		87			81		1
Recreational finance		18		12		30			36		—
Automobile		7		6		13			14		—
Other		54		—		54			52		—
Total	$	1,232	$	1,070	$	2,302		$	2,166	$	13

(Dollars in millions)	March 31, 2023							January 1, 2023		Three Months Ended March 31, 2023
Commercial and industrial	$	227	$	342	$	569		$	504	$	3
Real estate:
Commercial		364		966		1,330			1,240		5
Residential builder and developer		3		—		3			1		—
Other commercial construction		94		49		143			125		2
Residential		125		129		254			272		5
Residential — limited documentation		40		29		69			78		—
Consumer:
Home equity lines and loans		39		42		81			85		2
Recreational finance		24		10		34			45		—
Automobile		23		4		27			40		—
Other		47		—		47			49		—
Total	$	986	$	1,571	$	2,557		$	2,439	$	17

- 20 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

Commercial,
Financial,

Real Estate

Leasing, etc.

Commercial

Residential

Consumer

Total

(In thousands)

September 30, 2017

Individually evaluated for impairment

$
229,699

249,064

204,916

65,632

$
749,311

Collectively evaluated for impairment

21,513,477

32,620,026

19,638,576

12,936,801

86,708,880

Purchased impaired

75

45,198

421,670

—

466,943

Total

$
21,743,251

32,914,288

20,265,162

13,002,433

$
87,925,134

December 31, 2016

Individually evaluated for impairment

$
268,877

224,630

201,479

65,466

$
760,452

Collectively evaluated for impairment

22,340,529

33,222,080

21,871,726

12,080,597

89,514,932

Purchased impaired

641

59,684

517,707

—

578,032

Total

$
22,610,047

33,506,394

22,590,912

12,146,063

$
90,853,416

4. Loans and leases and the allowance for credit losses, continued

Loan modifications

During the normal course of business, the Company modifies loans to maximize recovery ~~efforts. If the borrower is~~efforts from borrowers experiencing financial ~~difficulty and a concession is granted, the Company considers such~~difficulty. Such loan modifications ~~as troubled debt restructurings and classifies those loans as either nonaccrual loans or renegotiated loans. The types of concessions that the Company grants~~ typically include ~~principal~~payment deferrals and interest rate ~~concessions,~~reductions but may also include other ~~types~~modified terms. Those modified loans may be considered nonaccrual if the Company does not expect to collect the contractual cash flows owed under the loan agreement. The table that follows summarizes the Company’s loan modification activities to borrowers experiencing financial difficulty for the three-month periods ended March 31, 2024 and 2023:


	Amortized cost at March 31, 2024
(Dollars in millions)	Payment Deferral		Interest Rate Reduction		Other		Combination of Modification Types (a)		Total (b) (c)		Percent of Total Loan Class
Three Months Ended March 31, 2024
Commercial and industrial	$	184	$	—	$	—	$	—	$	184		.32	%
Real estate:
Commercial		267		—		—		3		270	1.07
Residential builder and developer		2		—		—		—		2		.18
Other commercial construction		131		—		—		—		131	2.11
Residential		48		—		—		1		49		.22
Residential — limited documentation		2		—		—		—		2		.17
Consumer:
Home equity lines and loans		—		—		—		—		—		—
Recreational finance		—		—		—		—		—		—
Automobile		—		—		—		—		—		—
Other		—		—		—		—		—		—
Total	$	634	$	—	$	—	$	4	$	638		.47	%


	Amortized cost at March 31, 2023
(Dollars in millions)	Payment Deferral		Interest Rate Reduction		Other		Combination of Modification Types (a)		Total (b) (c)		Percent of Total Loan Class
Three Months Ended March 31, 2023
Commercial and industrial	$	70	$	—	$	—	$	—	$	70		.13	%
Real estate:
Commercial		94		—		—		—		94		.35
Residential builder and developer		8		—		—		—		8		.64
Other commercial construction		92		—		—		—		92	1.39
Residential		33		—		—		2		35		.15
Residential — limited documentation		5		—		—		—		5		.51
Consumer:
Home equity lines and loans		—		—		—		—		—		—
Recreational finance		—		—		—		—		—		—
Automobile		—		—		—		—		—		—
Other		—		—		—		—		—		—
Total	$	302	$	—	$	—	$	2	$	304		.23	%

(a)

Predominantly payment deferrals combined with interest rate reductions.

(b)

Includes approximately $44 million and $23 million of ~~concessions.~~

loans guaranteed by government-related entities (predominantly first lien residential mortgage loans) for the three-month periods ended March 31, 2024 and 2023, respectively.

(c)

Excludes unfunded commitments to extend credit totaling $29 million and $11 million for the three-month periods ended March 31, 2024 and 2023, respectively.

- 2021 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

The ~~tables that follow summarize~~financial effects of the ~~Company’s loan modification activities that were considered troubled debt restructurings~~modifications for the three-month ~~and nine-month~~ periods ended ~~September 30, 2017~~March 31, 2024 and ~~2016:~~2023 include an increase in the weighted-average remaining term for commercial and industrial loans of 0.7 years and 1.2 years, respectively, for commercial real estate loans, inclusive of residential builder and development loans and other commercial construction loans of 0.8 years and 1.2 years, respectively, and for residential real estate loans of 11.4 years and 9.1 years, respectively.

Post-modification (a)

Number

Pre-
modification recorded investment

Principal Deferral

Other

Combination of
Concession Types

Total

Three Months Ended September 30, 2017

(Dollars in thousands)

Commercial, financial, leasing, etc.

49

$
15,812

$
5,888

$
97

$
9,251

$
15,236

Real estate:

Commercial

17

5,861

1,420

868

3,450

5,738

Residential

34

5,123

3,033

—

2,716

5,749

Residential — limited documentation

4

515

383

—

167

550

Consumer:

Home equity lines and loans

25

2,154

461

—

1,776

2,237

Automobile

17

342

326

—

16

342

Other

1

5

5

—

—

5

Total

147

$
29,812

$
11,516

$
965

$
17,376

$
29,857

Three Months Ended September 30, 2016

Commercial, financial, leasing, etc.

43

$
69,486

$
40,183

$
—

$
19,802

$
59,985

Real estate:

Commercial

18

14,925

11,644

—

2,614

14,258

Residential

30

5,638

4,714

—

1,214

5,928

Residential — limited documentation

6

827

470

—

493

963

Consumer:

Home equity lines and loans

26

2,552

251

—

2,301

2,552

Automobile

10

186

186

—

—

186

Other

1

26

26

—

—

26

Total

134

$
93,640

$
57,474

$
—

$
26,424

$
83,898

~~- 21 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~4. Loans and leases and~~Modified loans to borrowers experiencing financial difficulty are subject to the allowance for credit losses ~~continued~~

Post-modification (a)

Number

Pre-
modification recorded investment

Principal Deferral

Other

Combination of
Concession Types

Total

Nine Months Ended September 30, 2017

(Dollars in thousands)

Commercial, financial, leasing, etc.

162

$
93,346

$
18,449

$
6,459

$
47,211

$
72,119

Real estate:

Commercial

67

38,608

16,193

868

21,332

38,393

Residential builder and developer

3

12,291

—

—

10,879

10,879

Other commercial construction

2

168

168

—

—

168

Residential

105

22,459

11,608

—

12,557

24,165

Residential — limited documentation

17

3,724

618

—

3,352

3,970

Consumer:

Home equity lines and loans

85

7,885

1,040

491

6,442

7,973

Automobile

59

1,160

1,089

—

71

1,160

Other

6

85

85

—

—

85

Total

506

$
179,726

$
49,250

$
7,818

$
101,844

$
158,912

Nine Months Ended September 30, 2016

Commercial, financial, leasing, etc.

112

$
148,204

$
98,561

$
—

$
39,971

$
138,532

Real estate:

Commercial

55

36,984

17,802

4,576

13,546

35,924

Residential builder and developer

3

23,905

22,958

—

—

22,958

Other commercial construction

2

374

250

—

124

374

Residential

73

11,946

7,945

—

4,705

12,650

Residential — limited documentation

14

2,415

803

—

1,872

2,675

Consumer:

Home equity lines and loans

84

9,189

655

—

8,534

9,189

Automobile

148

1,005

865

55

85

1,005

Other

78

1,192

951

45

196

1,192

Total

569

$
235,214

$
150,790

$
4,676

$
69,033

$
224,499

~~(a)~~

Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages. The present value of interest rate concessions, discounted at the effective rate of the original loan, was not material.

~~Troubled debt restructurings are considered~~methodology described herein, including the use of models to ~~be impaired~~inform credit loss estimates and, to the extent larger balance commercial and industrial loans and ~~for purposes~~commercial real estate loans are in nonaccrual status, a loan-by-loan analysis of ~~establishing the allowance for~~expected credit losses ~~are evaluated for impairment giving consideration~~on those individual loans. Loans to the impact of the modified loan terms on the present value of the loan’s expected cash flows. Impairment of troubled debt restructurings that have subsequently defaulted may also be measured based on the loan’s observable market price or the fair value of collateral if the loan is collateral-dependent. Charge-offs may also be recognized on troubled debt restructurings that have subsequently defaulted. Loansborrowers experiencing financial difficulty that were modified ~~as troubled debt restructurings~~ during the ~~twelve~~three months ended ~~September 30, 2017 and 2016~~March 31, 2023 and for which there was a subsequent payment default during ~~the nine-month periods ended September 30, 2017 and 2016, respectively,~~that period were not material.The following table summarizes the payment status, at March 31, 2024, of loans that were modified during the twelve-month period ended March 31, 2024.


	Payment status at March 31, 2024 (amortized cost)
(Dollars in millions)	Current		30-89 Days Past Due		Past Due 90 Days or More (a)		Total
Twelve Months Ended March 31, 2024
Commercial and industrial	$	310	$	7	$	10	$	327
Real estate:
Commercial		715		33		24		772
Residential builder and developer		14		39		—		53
Other commercial construction		534		5		—		539
Residential (b)		112		35		30		177
Residential — limited documentation		6		2		—		8
Consumer:
Home equity lines and loans		2		—		—		2
Recreational finance		—		—		—		—
Automobile		—		—		—		—
Other		—		—		—		—
Total	$	1,693	$	121	$	64	$	1,878

~~- 22 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~(a) Predominantly loan modifications with payment deferrals.

~~4. Loans~~(b) Includes loans guaranteed by government-related entities classified as 30 to 89 days past due of $30 million and ~~leases and the allowance for credit losses, continued~~as past due 90 days or more of $27 million.

The amount of foreclosed ~~residential real estate~~ property held by the Company, ~~totaled $106~~predominantly consisting of residential real estate, was $38 million and ~~$129~~$39 million at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016,~~2023, respectively. There were ~~$545~~$165 million and ~~$506~~$170 million at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016,~~2023, respectively, inof loans secured by residential real estate that were in the process of foreclosure. Of all loans in the process of foreclosure at ~~September 30, 2017,~~March 31, 2024, approximately ~~48% were classified as purchased impaired and 20%~~35% were government guaranteed.

At March 31, 2024, approximately $14.9 billion of commercial and industrial loans, including leases, $16.2 billion of commercial real estate loans, $18.6 billion of one-to-four family residential real estate loans, $2.6 billion of home equity loans and lines of credit and $10.9 billion of other consumer loans were pledged to secure outstanding borrowings and available lines of credit from FHLB and the FRB of New York. At December 31, 2023, approximately $13.4 billion of commercial and industrial loans, including leases, $16.4 billion of commercial real estate loans, $18.8 billion of one-to-four family residential real estate loans, $2.6 billion of home equity loans and lines of credit and $11.0 billion of other consumer loans were pledged to secure outstanding borrowings and available lines of credit from the FHLB and the FRB of New York as described in note 5.

- 22 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

5. Borrowings


(Dollars in millions)	March 31, 2024		December 31, 2023
Short-term borrowings
Federal funds purchased and repurchase agreements	$	295	$	316
FHLB advances		4,500		5,000
Total short-term borrowings	$	4,795	$	5,316

Long-term borrowings
Senior notes - M&T	$	3,276	$	2,482
Senior notes - M&T Bank		3,743		3,741
FHLB advances		2,005		5
Subordinated notes - M&T		75		76
Subordinated notes - M&T Bank		866		873
Junior subordinated debentures - M&T		541		540
Asset-backed notes		934		474
Other		10		10
Total long-term borrowings	$	11,450	$	8,201

~~During May 2017,~~In February 2024, M&T Bank advanced $2.0 billion from the ~~principal bank subsidiary~~FHLB of New York which matures in February 2025 at a variable rate of SOFR plus 25 basis points payable quarterly until maturity. In March 2024, M&T issued ~~$900~~$850 million of senior notes that mature in ~~May 2022 pursuant to~~March 2032 and pay a ~~Bank Note Program, of~~6.082% fixed rate semi-annually until March 2031 after which ~~$650 million have a 2.50% fixed interest rate and $250 million have a variable rate~~SOFR plus 2.26% will be paid quarterly ~~at rates that are indexed to the three-month London Interbank Offered Rate (“LIBOR”). During June 2017,~~until maturity. Also in March 2024, M&T Bank ~~redeemed $750~~issued asset-backed notes secured by automobile loans. A total of $511 million of ~~1.40% fixed rate senior notes. The~~such notes were purchased by third parties. Those asset-backed notes had a ~~maturity date~~weighted-average estimated life of ~~July 25, 2017~~approximately two years and ~~were redeemable on or after~~a weighted-average interest rate of 5.29% at the 30^th ~~day prior to the maturity date. During August 2017,~~ time of securitization. Further information about this financing transaction is provided in note 11.

M&T Bank ~~issued $750 million of three-year 2.05% fixed rate senior notes due August 2020 and $500 million of ten-year 3.40% fixed rate subordinated notes due August 2027.~~

~~M&T~~ had $519 million of fixed and variable rate junior subordinated deferrable interest debentures ("Junior Subordinated Debentures") outstanding at September 30, 2017 that are held by various trusts that were issued in connectionsecured borrowing facilities available with the ~~issuance by those trusts~~FHLB of ~~preferred capital securities ("Capital Securities") and common securities ("Common Securities"). The proceeds from the issuances of the Capital Securities~~New York and the ~~Common Securities were used by~~FRB of New York totaling approximately $14.6 billion and $18.4 billion, respectively, at March 31, 2024. M&T Bank is required to pledge loans and investment securities as collateral for these borrowing facilities and could increase the trusts to purchase the Junior Subordinated Debentures. The Common Securities of each of those trusts are wholly owned by M&T and are the only class of each trust's securities possessing general voting powers. The Capital Securities represent preferred undivided interests in the assets of the corresponding trust. Under the Federal Reserve Board’s risk-based capital guidelines, the securities are includable in M&T’s Tier 2 regulatory capital.

Holders of the Capital Securities receive preferential cumulative cash distributions unless M&T exercises its right to extend the payment of interest on the Junior Subordinated Debentures as allowed by the terms of each such debenture, in which case payment of distributions on the respective Capital Securities will be deferred for comparable periods. During an extended interest period, M&T may not pay dividends or distributions on, or repurchase, redeem or acquire any shares of its capital stock. In general, the agreements governing the Capital Securities, in the aggregate, provide a full, irrevocable and unconditional guarantee by M&T of the payment of distributions on, the redemption of, and any liquidation distribution with respect to the Capital Securities. The obligationsavailability under such ~~guarantee and the Capital Securities are subordinate and junior in right of payment to all senior indebtedness of M&T.~~facilities by pledging additional assets.

The Capital Securities will remain outstanding until the Junior Subordinated Debentures are repaid at maturity, are redeemed prior to maturity or are distributed in liquidation to the trusts. The Capital Securities are mandatorily redeemable in whole, but not in part, upon repayment at the stated maturity dates (ranging from 2027 to 2033) of the Junior Subordinated Debentures or the earlier redemption of the Junior Subordinated Debentures in whole upon the occurrence of one or more events set forth in the indentures relating to the Capital Securities, and in whole or in part at any time after an optional redemption prior to contractual maturity contemporaneously with the optional redemption of the related Junior Subordinated Debentures in whole or in part, subject to possible regulatory approval.

- 23 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

6. Revenue from contracts with customers

~~5. Borrowings, continued~~

~~Also included in long-term borrowings~~The Company generally charges customer accounts or otherwise bills customers upon completion of its services. Typically, the Company’s contracts with customers have a duration of one year or less and payment for services is received at least annually, but oftentimes more frequently as services are ~~agreements to repurchase securities of $425 million and $1.1 billion at September 30, 2017~~provided. At March 31, 2024 and December 31, ~~2016, respectively.~~ 2023, the Company had $63 million and $68 million, respectively, of amounts receivable related to recognized revenue from the sources in the accompanying tables. Such amounts are classified in "accrued interest and other assets" in the Company’s Consolidated Balance Sheet. In certain situations, the Company is paid in advance of providing services and defers the recognition of revenue until its service obligation is satisfied. At March 31, 2024 and December 31, 2023, the Company had deferred revenue of $52 million and $54 million, respectively, related to the sources in the accompanying tables recorded in "accrued interest and other liabilities" in the Consolidated Balance Sheet.

The ~~agreements reflect various repurchase dates through 2020, however, the contractual maturities~~following tables summarize sources of the ~~underlying investment securities extend beyond such repurchase dates. The agreements~~Company’s noninterest income during the three-month periods ended March 31, 2024 and 2023 that are subject to ~~legally enforceable master netting arrangements, however,~~ the Company has not offset any amounts related to these agreements in its consolidated financial statements. The Company posted collateral consisting primarily of government guaranteed mortgage-backed securities of $445 million and $1.1 billion at September 30, 2017 and December 31, 2016, respectively.revenue recognition accounting guidance.


(Dollars in millions)	Commercial Bank		Retail Bank		Institutional Services and Wealth Management		Total
Three Months Ended March 31, 2024
Classification in Consolidated Statement of Income
Service charges on deposit accounts	$	40	$	84	$	—	$	124
Trust income		1		—		159		160
Brokerage services income		2		—		27		29
Other revenues from operations:
Merchant discount and credit card interchange fees		17		20		—		37
Other		8		7		2		17
	$	68	$	111	$	188	$	367

Three Months Ended March 31, 2023
Classification in Consolidated Statement of Income
Service charges on deposit accounts	$	34	$	79	$	—	$	113
Trust income		—		—		194		194
Brokerage services income		2		—		22		24
Other revenues from operations:
Merchant discount and credit card interchange fees		17		20		—		37
Other		6		8		1		15
	$	59	$	107	$	217	$	383

~~6. Shareholders' equity~~

M&T is authorized to issue 1,000,000 shares of preferred stock with a $1.00 par value per share. Preferred shares outstanding rank senior to common shares both as to dividends and liquidation preference, but have no general voting rights.

~~Issued and outstanding preferred stock of M&T as of September 30, 2017 and December 31, 2016 is presented below:~~

Shares
Issued and
Outstanding

Carrying Value

(Dollars in thousands)

Series A (a)

Fixed Rate Cumulative Perpetual Preferred Stock, $1,000
    liquidation preference per share

230,000

$
230,000

Series C (a)

Fixed Rate Cumulative Perpetual Preferred Stock, $1,000
    liquidation preference per share

151,500

$
151,500

Series E (b)

Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock,
    $1,000 liquidation preference per share

350,000

$
350,000

Series F (c)

Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock,
    $10,000 liquidation preference per share

50,000

$
500,000

~~(a)~~

Dividends, if declared, are paid at 6.375%. Warrants to purchase M&T common stock at $73.79 per share issued in connection with the Series A preferred stock expire in 2018 and totaled 327,358 at September 30, 2017.

~~(b)~~

Dividends, if declared, are paid semi-annually at a rate of 6.45% through February 14, 2024 and thereafter will be paid quarterly at a rate of the three-month LIBOR plus 361 basis points (hundredths of one percent). The shares are redeemable in whole or in part on or after February 15, 2024. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 90 days following that occurrence.

~~(c)~~

Dividends, if declared, are paid semi-annually at a rate of 5.125% through October 31, 2026 and thereafter will be paid quarterly at a rate of the three-month LIBOR plus 352 basis points. The shares are redeemable in whole or in part on or after November 1, 2026. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 90 days following that occurrence.

In addition to the Series A warrants mentioned in (a) above, a warrant to purchase 95,472 shares of M&T common stock at $518.47 per share was outstanding at September 30, 2017. The obligation under that warrant was assumed by M&T in an acquisition and expires in 2018.

~~- 24 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

7. Pension plans and other postretirement benefits

The Company provides defined ~~benefit~~ pension and other postretirement benefits (including health care and life insurance benefits) to qualified retired employees. Net periodic ~~defined~~ benefit ~~cost~~ for defined benefit plans consisted of the following:

	Pension Benefits						Other Postretirement Benefits
	Three Months Ended September 30												Pension Benefits						Other Postretirement Benefits
	2017			2016			2017			2016			Three Months Ended March 31,
	(In thousands)

(Dollars in millions)													2024			2023			2024			2023
Service cost	$	5,048			6,259			293		399			$	2		$	3		$	—		$	—
Interest cost on projected benefit obligation		19,818			20,853			929			1,242			29			29			1			1
Expected return on plan assets		(27,131	)		(27,118	)		—			—			(51	)		(51	)		—			—
Amortization of prior service cost (credit)		139			(807	)		(340	)		(339	)
Amortization of net actuarial loss (gain)		7,316			7,536			(247	)		15
Net periodic benefit cost	$	5,190			6,723			635			1,317
Amortization of net actuarial gain														—			(1	)		(1	)		(1	)
Net periodic benefit													$	(20	)	$	(20	)	$	—		$	—

Pension
Benefits

Other
Postretirement
Benefits

Nine Months Ended September 30

2017

2016

2017

2016

(In thousands)

Service cost

$
15,145

18,778

878

1,197

Interest cost on projected benefit obligation

59,452

62,558

2,787

3,728

Expected return on plan assets

(81,393
)

(81,355
)

—

—

Amortization of prior service cost (credit)

418

(2,421
)

(1,019
)

(1,019
)
Amortization of net actuarial loss (gain)

21,947

22,609

(741
)

45

Net periodic benefit cost

$
15,569

20,169

1,905

3,951

~~Expense~~Service cost is reflected in "salaries and employee benefits" and the other components of net periodic benefit cost are reflected in "other costs of operations" in the Consolidated Statement of Income. Expenses incurred in connection with the Company's defined contribution pension and retirement savings plans totaled ~~$16,085,000~~$45 million and ~~$14,783,000~~$44 million for the three months ended ~~September 30, 2017~~March 31, 2024 and ~~2016, respectively, and $53,127,000 and $47,747,000 for the nine months ended September 30, 2017 and 2016,~~2023, respectively.

- 2524 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

8. Earnings per common share

The computations of basic earnings per common share follow:


	Three Months Ended March 31,
(Dollars in millions, except per share, shares in thousands)	2024			2023
Income available to common shareholders:
Net income	$	531		$	702
Less: Preferred stock dividends		(25	)		(25	)
Net income available to common equity		506			677
Less: Income attributable to unvested stock-based compensation awards		(1	)		(1	)
Net income available to common shareholders	$	505		$	676
Weighted-average shares outstanding:
Common shares outstanding (including common stock issuable) and unvested stock-based compensation awards		166,738			168,010
Less: Unvested stock-based compensation awards		(278	)		(278	)
Weighted-average shares outstanding		166,460			167,732

Basic earnings per common share	$	3.04		$	4.03

Three Months Ended September 30

Nine Months Ended September 30

2017

2016

2017

2016

(In thousands, except per share)

Income available to common shareholders:

Net income

$
355,923

349,984

1,085,903

984,543

Less: Preferred stock dividends (a)

(18,130
)

(20,318
)

(54,604
)

(60,953
)
Net income available to common equity

337,793

329,666

1,031,299

923,590

Less: Income attributable to unvested stock-based
compensation awards

(1,992
)

(2,674
)

(6,288
)

(7,920
)
Net income available to common shareholders

$
335,801

326,992

1,025,011

915,670

Weighted-average shares outstanding:

Common shares outstanding (including common stock
issuable) and unvested stock-based compensation awards

152,245

156,767

153,814

158,710

Less: Unvested stock-based compensation awards

(898
)

(1,274
)

(948
)

(1,374
)
Weighted-average shares outstanding

151,347

155,493

152,866

157,336

Basic earnings per common share

$
2.22

2.10

6.71

5.82

~~(a)Including impact of not as yet declared cumulative dividends.~~

The computations of diluted earnings per common share follow:

	Three Months Ended September 30						Nine Months Ended September 30
	2017			2016			2017			2016			Three Months Ended March 31,
	(In thousands, except per share)

(Dollars in millions, except per share, shares in thousands)													2024			2023
Net income available to common equity	$	337,793			329,666			1,031,299			923,590		$	506		$	677
Less: Income attributable to unvested stock-based compensation awards		(1,989	)		(2,668	)		(6,276	)		(7,904	)		(1	)		(1	)
Net income available to common shareholders	$	335,804			326,998			1,025,023			915,686		$	505		$	676
Adjusted weighted-average shares outstanding:
Common and unvested stock-based compensation awards		152,245			156,767			153,814			158,710
Common shares outstanding (including common stock issuable) and unvested stock-based compensation awards														166,738			168,010
Less: Unvested stock-based compensation awards		(898	)		(1,274	)		(948	)		(1,374	)		(278	)		(278	)
Plus: Incremental shares from assumed conversion of stock-based compensation awards and warrants to purchase common stock		344			533			427			507
Plus: Incremental shares from assumed conversion of stock-based compensation awards														624			678
Adjusted weighted-average shares outstanding		151,691			156,026			153,293			157,843			167,084			168,410

Diluted earnings per common share	$	2.21			2.10			6.69			5.80		$	3.02		$	4.01

GAAP defines unvested share-based awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities that shall be included in the computation of earnings per common share pursuant to the two-class method. The Company has issued stock-based compensation awards in the form of restricted stock and restricted stock units which, in accordance with GAAP, are considered participating securities.

Stock-based compensation awards ~~and warrants~~ to purchase common stock of M&T representing ~~408,657~~1,328,190 common shares and ~~2,015,870~~1,367,054 common shares during the ~~three-month periods~~three months ended ~~September 30, 2017~~March 31, 2024 and ~~2016, respectively, and 404,487 and 2,513,288 common shares during the nine-month periods ended September 30, 2017 and 2016,~~2023, respectively, were not included in the computations of diluted earnings per common share because the effect on those periods would have been antidilutive.

- 2625 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

9. Comprehensive income

The following tables display the components of other comprehensive income (loss) and amounts reclassified from accumulated other comprehensive income (loss) to net income:


	Investment			Cash Flow			Defined Benefit						Total Amount				Income
(Dollars in millions)	Securities			Hedges			Plans			Other			Before Tax				Tax			Net
Balance — January 1, 2024	$	(251	)	$	(203	)	$	(155	)	$	(7	)	$	(616	)		$	157		$	(459	)
Other comprehensive income (loss) before reclassifications:
Unrealized holding losses, net		(13	)		—			—			—			(13	)			2			(11	)
Foreign currency translation adjustment		—			—			—			(2	)		(2	)			—			(2	)
Unrealized losses on cash flow hedges		—			(243	)		—			—			(243	)			60			(183	)
Total other comprehensive income (loss) before reclassifications		(13	)		(243	)		—			(2	)		(258	)			62			(196	)
Amounts reclassified from accumulated other comprehensive income (loss) that (increase) decrease net income:
Losses realized in net income		1			—			—			—			1				—			1
Net yield adjustment from cash flow hedges currently in effect		—			87			—			—			87		(a)		(21	)		66
Amortization of actuarial losses		—			—			(1	)		—			(1	)	(b)		—			(1	)
Total other comprehensive income (loss)		(12	)		(156	)		(1	)		(2	)		(171	)			41			(130	)
Balance — March 31, 2024	$	(263	)	$	(359	)	$	(156	)	$	(9	)	$	(787	)		$	198		$	(589	)


Balance — January 1, 2023	$	(444	)	$	(336	)	$	(273	)	$	(13	)	$	(1,066	)		$	276		$	(790	)
Other comprehensive income (loss) before reclassifications:
Unrealized holding gains, net		89			—			—			—			89				(24	)		65
Foreign currency translation adjustment		—			—			—			2			2				(1	)		1
Unrealized losses on cash flow hedges		—			51			—			—			51				(13	)		38
Total other comprehensive income (loss) before reclassifications		89			51			—			2			142				(38	)		104
Amounts reclassified from accumulated other comprehensive income (loss) that (increase) decrease net income:
Net yield adjustment from cash flow hedges currently in effect		—			59			—			—			59		(a)		(16	)		43
Amortization of actuarial losses		—			—			(2	)		—			(2	)	(b)		—			(2	)
Total other comprehensive income (loss)		89			110			(2	)		2			199				(54	)		145
Balance — March 31, 2023	$	(355	)	$	(226	)	$	(275	)	$	(11	)	$	(867	)		$	222		$	(645	)

Investment Securities

Defined
Benefit

Total
Amount

Income

With OTTI (a)

All Other

Plans

Other

Before Tax

Tax

Net

(In thousands)

Balance — January 1, 2017

$
46,725

(73,785
)

(449,917
)

(8,268
)

$
(485,245
)

190,609

$
(294,636
)
Other comprehensive income before reclassifications:

Unrealized holding gains (losses), net

(7,365
)

60,586

—

—

53,221

(20,934
)

32,287

Foreign currency translation adjustment

—

—

—

3,829

3,829

(1,340
)

2,489

Unrealized losses on cash flow hedges

—

—

—

(1,076
)

(1,076
)

424

(652
)
Total other comprehensive income (loss) before
   reclassifications

(7,365
)

60,586

—

2,753

55,974

(21,850
)

34,124

Amounts reclassified from accumulated other
   comprehensive income that (increase) decrease
   net income:

Amortization of unrealized holding losses on
   held-to-maturity (“HTM”) securities

—

2,535

—

—

2,535

(b)

(998
)

1,537

(Gains) losses realized in net income

(50
)

67

—

—

17

(c)

(7
)

10

Accretion of net gain on terminated cash flow
   hedges

—

—

—

(109
)

(109
)
(d)

43

(66
)
Net yield adjustment from cash flow hedges currently in
   effect

—

—

—

(2,275
)

(2,275
)
(b)

895

(1,380
)
Amortization of prior service credit

—

—

(601
)

—

(601
)
(e)

236

(365
)
Amortization of actuarial losses

—

—

21,206

—

21,206

(e)

(8,345
)

12,861

Total reclassifications

(50
)

2,602

20,605

(2,384
)

20,773

(8,176
)

12,597

Total gain (loss) during the period

(7,415
)

63,188

20,605

369

76,747

(30,026
)

46,721

Balance — September 30, 2017

$
39,310

(10,597
)

(429,312
)

(7,899
)

$
(408,498
)

160,583

$
(247,915
)

Balance — January 1, 2016

$
16,359

62,849

(489,660
)

(4,093
)

$
(414,545
)

162,918

$
(251,627
)
Other comprehensive income before reclassifications:

Unrealized holding gains, net

1,228

234,438

—

—

235,666

(92,714
)

142,952

Foreign currency translation adjustment

—

—

—

(2,836
)

(2,836
)

989

(1,847
)
Total other comprehensive income (loss) before
   reclassifications

1,228

234,438

—

(2,836
)

232,830

(91,725
)

141,105

Amounts reclassified from accumulated other
   comprehensive income that (increase) decrease
   net income:

Amortization of unrealized holding losses on
   HTM securities

—

2,998

—

—

2,998

(b)

(1,180
)

1,818

Gains realized in net income

—

(28,748
)

—

—

(28,748
)
(c)

11,309

(17,439
)
Accretion of net gain on terminated cash flow
   hedges

—

—

—

(116
)

(116
)
(d)

46

(70
)
Amortization of prior service credit

—

—

(3,440
)

—

(3,440
)
(e)

1,354

(2,086
)
Amortization of actuarial losses

—

—

22,654

—

22,654

(e)

(8,914
)

13,740

Total reclassifications

—

(25,750
)

19,214

(116
)

(6,652
)

2,615

(4,037
)
Total gain (loss) during the period

1,228

208,688

19,214

(2,952
)

226,178

(89,110
)

137,068

Balance — September 30, 2016

$
17,587

271,537

(470,446
)

(7,045
)

$
(188,367
)

73,808

$
(114,559
)

(a)

Included in "interest income" in the Consolidated Statement of Income.

~~(a)~~

~~Other-than-temporary impairment~~

~~(b)~~

~~Included in interest income~~

(b)

Included in "other costs of operations" in the Consolidated Statement of Income.

~~(c)~~

~~Included in gain (loss) on bank investment securities~~

~~(d)~~

~~Included in interest expense~~

~~(e)~~

~~Included in salaries and employee benefits expense~~

~~- 27 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~9. Comprehensive income, continued~~

Accumulated other comprehensive income (loss), net consisted of the following:


							Defined
	Investment			Cash Flow			Benefit
(Dollars in millions)	Securities			Hedges			Plans			Other			Total
Balance — December 31, 2023	$	(187	)	$	(151	)	$	(115	)	$	(6	)	$	(459	)
Net loss during period		(10	)		(117	)		(1	)		(2	)		(130	)
Balance — March 31, 2024	$	(197	)	$	(268	)	$	(116	)	$	(8	)	$	(589	)

- 26 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

Investment Securities

Defined
Benefit

With OTTI

All Other

Plans

Other

Total

(In thousands)

Balance — December 31, 2016

$
28,338

(44,657
)

(272,874
)

(5,443
)

$
(294,636
)
Net gain (loss) during period

(4,496
)

38,330

12,496

391

46,721

Balance — September 30, 2017

$
23,842

(6,327
)

(260,378
)

(5,052
)

$
(247,915
)

10. Derivative financial instruments

As part of managing interest rate risk, the Company enters into interest rate swap agreements to modify the repricing characteristics of certain portions of the Company’s portfolios of earning assets and interest-bearing liabilities. The Company designates interest rate swap agreements utilized in the management of interest rate risk as either fair value hedges or cash flow hedges. Interest rate swap agreements are generally entered into with counterparties that meet established credit standards and most contain master netting, collateral and/or settlement provisions protecting the at-risk party. Based on adherence to the Company’s credit standards and the presence of the netting, collateral or settlement provisions, the Company believes that the credit risk inherent in these contracts was not ~~significant~~material as of ~~September 30, 2017.~~March 31, 2024.

The net effect of interest rate swap agreements was to ~~increase~~decrease net interest income by $7$100 million and $9$69 million ~~for~~during the three-month periods ended ~~September 30, 2017~~March 31, 2024 and ~~2016, respectively, and $18 million and $30 million for the nine-month periods ended September 30, 2017 and 2016,~~2023, respectively.

Information about interest rate swap agreements entered into for interest rate risk management purposes summarized by type of financial instrument the swap agreements were intended to hedge follows:


			Average		Weighted-						Estimated
	Notional		Maturity		Average Rate						Fair Value
(Dollars in millions)	Amount		(In years)		Fixed			Variable			Gain (Loss) (a)
March 31, 2024
Fair value hedges:
Fixed rate long-term borrowings (b) (c)	$	3,850		5.9		3.48	%		5.51	%	$	—
Cash flow hedges:
Interest payments on variable rate commercial real estate loans (b) (d)		23,427		1.7	3.38			5.33				2
Total	$	27,277		2.3							$	2
December 31, 2023
Fair value hedges:
Fixed rate long-term borrowings (b) (e)	$	3,000		5.8		3.45	%		5.62	%	$	(1	)
Cash flow hedges:
Interest payments on variable rate commercial real estate loans (b) (f)		23,977		1.7	3.45			5.36				11
Total	$	26,977		2.2							$	10

Weighted-
Average Rate

Notional Amount

Average Maturity

Fixed

Variable

Estimated Fair Value Gain (a)

(In thousands)

(In years)

(In thousands)

September 30, 2017

Fair value hedges:

Fixed rate long-term borrowings (b)

$
4,950,000

2.9

2.63
%

2.04
%

$
697

Cash flow hedges:

Variable rate commercial real estate loans (b)

2,000,000

1.6

1.46
%

1.24
%

—

Total

$
6,950,000

2.5

$
697

December 31, 2016

Fair value hedges:

Fixed rate long-term borrowings (b)

$
900,000

1.1

3.75
%

2.08
%

$
11,892

(a)

Certain clearinghouse exchanges consider payments by counterparties for variation margin on derivative instruments to be settlements of those positions. The impact of such payments for interest rate swap agreements designated as fair value hedges was a net settlement of losses of $104 million at March 31, 2024 and $43 million at December 31, 2023. The impact of such payments on interest rate swap agreements designated as cash flow hedges was a net settlement of losses of $361 million at March 31, 2024 and $214 million at December 31, 2023.

(b)

Under the terms of these agreements, the Company receives settlement amounts at a fixed rate and pays at a variable rate.

(c)

Includes notional amount and terms of $1.8 billion of forward-starting interest rate swap agreements that become effective in 2025.

(d)

Includes notional amount and terms of $6.0 billion of forward-starting interest rate swap agreements that become effective in 2024 and 2025.

(e)

Includes notional amount and terms of $1.0 billion of forward-starting interest rate swap agreements that become effective in 2025.

(f)

Includes notional amount and terms of $9.0 billion of forward-starting interest rate swap agreements that become effective in 2024.

~~(a)~~

Effective January 2017 certain clearinghouse exchanges revised their rules such that certain required payments by counterparties for variation margin on derivative instruments that had been treated as collateral are now treated as settlements of those positions. The impact of such rule changes at September 30, 2017 was a reduction of the estimated fair value losses on interest rate swaps designated as fair value hedges of $12.2 million and on interest rate swaps designated as cash flow hedges of $3.4 million.

~~(b)~~

~~Under the terms of these agreements, the Company receives settlement amounts at a fixed rate and pays at a variable rate.~~

~~- 28 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~10. Derivative financial instruments, continued~~

The Company utilizes commitments to sell residential and commercial real estate loans to hedge the exposure to changes in the fair value of real estate loans held for sale. Such commitments have generally been designated as fair value hedges. The Company also utilizes commitments to sell real estate loans to offset the exposure to changes in ~~fair value of certain commitments to originate real estate loans for sale.~~

Derivative financial instruments used for trading account purposes included interest rate contracts, foreign exchange and other option contracts, foreign exchange forward and spot contracts, and financial futures. Interest rate contracts entered into for trading account purposes had notional values of $15.5 billion and $21.6 billion at September 30, 2017 and December 31, 2016, respectively. The notional amounts of foreign currency and other option and futures contracts entered into for trading account purposes aggregated $545 million and $471 million at September 30, 2017 and December 31, 2016, respectively.

~~Information about the fair values of derivative instruments in the Company’s consolidated balance sheet and consolidated statement of income follows:~~

Asset Derivatives

Liability Derivatives

Fair Value

Fair Value

September 30, 2017

December 31, 2016

September 30, 2017

December 31, 2016

(In thousands)

Derivatives designated and qualifying as hedging instruments

Fair value hedges:

Interest rate swap agreements (a)

$
2,048

$
11,892

$
1,351

$
—

Commitments to sell real estate loans (a)

1,667

33,189

1,551

1,347

Cash flow hedges:

Interest rate swap agreements (a)

—

—

—

—

3,715

45,081

2,902

1,347

Derivatives not designated and qualifying as hedging instruments

Mortgage-related commitments to originate real estate loans for sale (a)

13,962

8,060

240

735

Commitments to sell real estate loans (a)

3,153

5,210

936

399

Trading:

Interest rate contracts (b)

104,178

228,810

103,825

167,737

Foreign exchange and other option and futures contracts (b)

6,823

7,908

5,905

6,639

128,116

249,988

110,906

175,510

Total derivatives

$
131,831

$
295,069

$
113,808

$
176,857

~~(a)~~

~~Asset derivatives are reported in other assets and liability derivatives are reported in other liabilities.~~

~~(b)~~

Asset derivatives are reported in trading account assets and liability derivatives are reported in other liabilities. The impact of the variation margin rule change at September 30, 2017 was a reduction of the estimated fair value of interest rate swaps in an asset position of $89.3 million and of those in a liability position of $29.2 million.

~~- 29 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~10. Derivative financial instruments, continued~~

Amount of Gain (Loss) Recognized

Three Months Ended September 30, 2017

Three Months Ended September 30, 2016

Derivative

Hedged Item

Derivative

Hedged Item

(In thousands)

Derivatives in fair value hedging relationships

Interest rate swap agreements:

Fixed rate long-term borrowings (a)

$
(13,509
)

14,026

$
(12,588
)

12,587

Derivatives not designated as hedging instruments

Trading:

Interest rate contracts (b)

$
(418
)

$
4,822

Foreign exchange and other option and futures contracts (b)

1,362

1,746

Total

$
944

$
6,568

Amount of Gain (Loss) Recognized

Nine Months Ended September 30, 2017

Nine Months Ended September 30, 2016

Derivative

Hedged Item

Derivative

Hedged Item

(In thousands)

Derivatives in fair value hedging relationships

Interest rate swap agreements:

Fixed rate long-term borrowings (a)

$
(23,423
)

23,049

$
(22,832
)

21,603

Derivatives not designated as hedging instruments

Trading:

Interest rate contracts (b)

$
2,363

$
11,578

Foreign exchange and other option and futures contracts (b)

4,766

5,415

Total

$
7,129

$
16,993

~~(a)~~

~~Reported as other revenues from operations.~~

~~(b)~~

~~Reported as trading account and foreign exchange gains.~~

The amount of gain (loss) recognized in the consolidated statement of income associated with derivatives designated as cash flow hedges was not material for the three and nine months ended September 30, 2017.

The Company also has commitments to sell and commitments to originate residential and commercial real estate loans that are considered derivatives. The Company designates certain of the commitments to sell real estate loans as fair value hedges of real estate loans held for sale. The Company also utilizes commitments to sell real estate loans to offset the exposure to changes in the fair value of certain commitments to originate real estate loans for sale. ~~As a result~~

Other derivative financial instruments not designated as hedging instruments included interest rate contracts, foreign exchange and other option and futures contracts. Interest rate contracts not designated as hedging instruments had notional values of ~~these activities, net unrealized pre-tax gains related to hedged loans held for sale, commitments to originate loans for sale~~$43.4 billion and ~~commitments to sell loans were approximately $27 million and $28 million~~$44.4 billion at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016,~~2023, respectively. ~~Changes~~The notional amounts of foreign exchange and other option and futures contracts not designated as hedging instruments aggregated $1.7 billion and $1.5 billion at March 31, 2024 and December 31, 2023, respectively.

- 27 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

10. Derivative financial instruments, continued

Information about the fair values of derivative instruments in ~~unrealized gains~~the Company’s Consolidated Balance Sheet and ~~losses~~Consolidated Statement of Income follows:


	Asset Derivatives				Liability Derivatives
	Fair Value				Fair Value
	March 31,		December 31,		March 31,		December 31,
(Dollars in millions)	2024		2023		2024		2023
Derivatives designated and qualifying as hedging instruments (a)
Interest rate swap agreements	$	3	$	12	$	1	$	2
Commitments to sell real estate loans		11		6		1		8
		14		18		2		10
Derivatives not designated and qualifying as hedging instruments (a)
Mortgage banking:
Commitments to originate real estate loans for sale		6		15		36		32
Commitments to sell real estate loans		40		35		2		3
		46		50		38		35
Other:
Interest rate contracts (b)		243		237		1,019		879
Foreign exchange and other option and futures contracts		15		19		13		19
		258		256		1,032		898
Total derivatives	$	318	$	324	$	1,072	$	943

(a)

Asset derivatives are ~~included~~reported in ~~mortgage banking revenues~~"accrued interest and other assets" and liability derivatives are reported in "accrued interest and other liabilities" in the Consolidated Balance Sheet.

(b)

The impact of variation margin payments at March 31, 2024 and December 31, 2023 was a reduction of the estimated fair value of interest rate contracts not designated as hedging instruments in an asset position of $893 million and $783 million, respectively, as of each period end, and in ~~general, are realized~~a liability position of $16 million and $32 million, respectively.


	Amount of Gain (Loss) Recognized
	Three Months Ended March 31,
	2024					2023
(Dollars in millions)	Derivative			Hedged Item		Derivative		Hedged Item
Derivatives in fair value hedging relationships
Interest rate swap agreements:
Fixed rate long-term borrowings (a)	$	(60	)	$	60	$	12	$	(12	)
Derivatives not designated as hedging instruments
Interest rate contracts (b)	$	3				$	8
Foreign exchange and other option and futures contracts (b)		4					4
Total	$	7				$	12

(a)

Reported as an adjustment to "interest expense" in ~~subsequent periods~~the Consolidated Statement of Income.

(b)

Reported as "trading account and other non-hedging derivative gains" in the Consolidated Statement of Income.


	Carrying Amount of the Hedged Item				Cumulative Amount of Fair Value Hedging Adjustment Increasing (Decreasing) the Carrying Amount of the Hedged Item
(Dollars in millions)	March 31, 2024		December 31, 2023		March 31, 2024			December 31, 2023
Location in the Consolidated Balance Sheet of the Hedged Items in Fair Value Hedges
Long-term borrowings	$	3,742	$	2,954	$	(104	)	$	(44	)

The amount of interest income recognized in the Consolidated Statement of Income associated with derivatives designated as cash flow hedges was a decrease of $87 million and $59 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the unrealized net loss recognized in other comprehensive income related ~~loans are sold~~to cash flow hedges was $359 million, of which losses of $1 million, $227 million, $129 million and ~~commitments satisfied.~~$2 million relate to interest rate swap agreements maturing in 2024, 2025, 2026 and 2027, respectively.

- 28 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

10. Derivative financial instruments, continued

The Company does not offset derivative asset and liability positions in its consolidated financial statements. The Company’s exposure to credit risk by entering into derivative contracts is mitigated through master netting agreements and collateral posting or settlement requirements. Master netting agreements covering interest rate and foreign exchange contracts with the same party include a right to set-off that becomes enforceable in the event of default, early termination or under other specific conditions.

~~- 30 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~10. Derivative financial instruments, continued~~

The aggregate fair value of derivative financial instruments in a liability position, which are subject to enforceable master netting arrangements and the related collateral posted, was ~~$17 million and $34 million~~not material at ~~September 30, 2017~~each of March 31, 2024 and December 31, 2016, respectively. After consideration of such netting arrangements for purposes of posting collateral, the net liability positions with counterparties aggregated $17 million and $30 million at September 30, 2017 and December 31, 2016, respectively. The Company was required to post collateral relating to those positions of $18 million and $27 million at September 30, 2017 and December 31, 2016, respectively.2023. Certain of the Company’s derivative financial instruments contain provisions that require the Company to maintain specific credit ratings from credit rating agencies to avoid higher collateral posting requirements. If the Company’s debt ~~rating~~ratings were to fall below specified ratings, the counterparties of the derivative financial instruments could demand immediate incremental collateralization on those instruments in a net liability position. The aggregate fair value of all derivative financial instruments with such credit risk-related contingent features in a net liability position on ~~September 30, 2017 was less than $1 million, for which the Company~~March 31, 2024 was not required to post collateral in the normal course of business. If the credit risk-related contingent features had been triggered on September 30, 2017, the Company would not have been required to post any collateral to counterparties.material.

The aggregate fair value of derivative financial instruments in an asset position with counterparties, which are subject to enforceable master netting arrangements, was ~~$7 million and $15~~$232 million at ~~September 30, 2017~~March 31, 2024 and $179 million at December 31, 2016, respectively. After consideration of such netting arrangements for purposes of posting collateral, the net asset positions with counterparties aggregated $7 million and $11 million at September 30, 2017 and December 31, 2016, respectively.2023. Counterparties posted collateral relating to those positions of ~~$5 million and $9~~$231 million at ~~September 30, 2017~~March 31, 2024 and $179 million at December 31, ~~2016,~~2023, respectively. ~~Trading account interest~~Interest rate swap agreements entered into with customers are subject to the Company’s credit risk standards and often contain collateral provisions.

In addition to the derivative contracts noted above, the Company clears certain derivative transactions through a clearinghouse, rather than directly with counterparties. Those transactions cleared through a clearinghouse require initial margin collateral and variation margin payments depending on the contracts being in a net asset or liability position. The amount of initial margin collateral posted by the Company was ~~$49~~$146 million and ~~$111~~$129 million at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016,~~2023, respectively. The fair value asset and liability amounts of derivative contracts ~~at September 30, 2017~~ have been reduced by variation margin payments treated as settlements ~~of $89 million and $45 million, respectively.~~as described herein. Variation margin on derivative contracts not treated as settlements continues to represent collateral posted or received by the Company. For those contracts, the net fair values of derivative financial instruments cleared through clearinghouses for which variation margin is required was a net asset position of $1 million and $63 million at September 30, 2017 and December 31, 2016, respectively. Collateral posted by the clearinghouses associated with that net asset position was $1 million and $81 million at September 30, 2017 and December 31, 2016, respectively.

11. Variable interest entities and asset securitizations

The Company’s securitization activity includes securitizing loans originated for sale into government issued or guaranteed mortgage-backed securities. The Company has not recognized any material losses as a result of having securitized assets.

In March 2024, M&T Bank issued asset-backed notes secured by automobile loans. Approximately $526 million of such loans were sold into a special purpose trust which in turn issued asset-backed notes to investors. The loans continue to be serviced by the Company. A total of $511 million of such notes, representing the senior-most notes in the securitization, were purchased by third parties. Those asset-backed notes had a weighted-average estimated life of approximately two years and a weighted-average interest rate of 5.29% at the time of securitization. Additionally, $15 million of certificates representing the residual interests of the trust were retained by the Company. As ~~described~~a result of the retention of the residual interests and its continued role as servicer of the loans, the Company is considered to be the primary beneficiary of the securitization trust and, accordingly, the trust has been included in ~~note 5,~~ the Company's consolidated financial statements.

- 29 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

11. Variable interest entities and asset securitizations, continued

M&T has issued junior subordinated debentures payable to various trusts that have issued ~~Capital Securities.~~preferred capital securities. M&T owns the common securities of those trust entities. The Company is not considered to be the primary beneficiary of those entities and, accordingly, the trusts are not included in the Company’s consolidated financial statements. At ~~September 30, 2017~~each of March 31, 2024 and December 31, ~~2016,~~2023, the Company included the junior subordinated debentures as “long-term borrowings” in its ~~consolidated balance sheet~~Consolidated Balance Sheet and recognized ~~$24~~$22 million in other assets for its “investment” in the common securities of the trusts that will be concomitantly repaid to M&T by the respective trust from the proceeds of M&T’s repayment of the junior subordinated debentures associated with preferred capital ~~securities described in note 5.~~securities.

~~- 31 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~11. Variable interest entities and asset securitizations, continued~~

The Company has invested as a limited partner in various partnerships that collectively had total assets of approximately ~~$1.0~~$9.8 billion at ~~September 30, 2017~~each of March 31, 2024 and December 31, ~~2016.~~2023. Those partnerships generally construct or acquire properties, including properties and facilities that produce renewable energy, for which the investing partners are eligible to receive certain federal income tax credits in accordance with government guidelines. Such investments may also provide tax deductible losses to the partners. The partnership investments also assist the Company in achieving its community reinvestment initiatives. The Company, in its position as limited partner, does not direct the activities that most significantly impact the economic performance of the partnerships and, therefore, the partnership entities are not included in the Company's consolidated financial statements. The Company's investments in qualified affordable housing projects are accounted for using the proportional amortization method whereby those investments are amortized to "income taxes" in the Consolidated Statement of Income as tax credits and other tax benefits resulting from deductible losses associated with the projects are received. Effective January 1, 2024, the Company adopted amended guidance which permits an election to account for other tax equity investments using the proportional amortization method if certain conditions are met. The Company has elected to apply the proportional amortization method to eligible renewable energy and certain other tax credit investments in addition to the low income housing tax credit investments for which the proportional amortization method had previously been applied. Information on the Company’s carrying amount of its investments in tax equity partnerships and its related future funding commitments are presented in the following table:


(Dollars in millions)	March 31, 2024		December 31, 2023
Affordable housing projects:
Carrying amount (a)	$	1,323	$	1,340
Amount of future funding commitments included in carrying amount (b)		379		410
Contingent commitments		55		55
Renewable energy:
Carrying amount (a)		79		80
Amount of future funding commitments included in carrying amount (b)		49		31
Other:
Carrying amount (a)		40		41
Amount of future funding commitments included in carrying amount (b)		—		—

(a)

Included in "accrued interest and other assets" in the Consolidated Balance Sheet.

(b)

Included in "accrued interest and other liabilities" in the Consolidated Balance Sheet.

- 30 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

11. Variable interest entities and asset securitizations, continued

The reduction to income tax expense recognized from the Company's investments in partnerships accounted for using the proportional amortization method was $7 million (net of $43 million of investment amortization) and $6 million (net of $41 million of investment amortization) for the three months ended March 31, 2024 and 2023, respectively. The net reduction to income tax expense has been reported in "net change in other accrued income and expense" in the Consolidated Statement of Cash Flows. While the Company has elected to apply the proportional amortization method for renewable energy credit investments, at March 31, 2024 no such investments met the eligibility criteria for application of that method. The reduction to income tax expense recognized from renewable energy credit investments was $11 million and $8 million for the three months ended March 31, 2024 and 2023, respectively. As a limited partner, there is no recourse to the Company by creditors of the partnerships. However, the tax credits that result from the Company’s investments in such partnerships are generally subject to recapture should a partnership fail to comply with the respective government regulations. The Company’s maximum exposure to loss of its investments in such partnerships was $329 million, including $118 million of unfunded commitments, at September 30, 2017 and $294 million, including $102 million of unfunded commitments, at December 31, 2016. Contingent commitments to provide additional capital contributions to these partnerships were not material at September 30, 2017. The Company has not provided financial or other support to the partnerships that was not contractually required. ~~Management~~Although the Company currently estimates that no material losses are probable, ~~as a result of the Company’s involvement with such entities. The Company, in~~ its position as limited partner, does not direct the activities that most significantly impact the economic performance of the partnerships and, therefore, in accordance with the accounting provisions for variable interest entities, the partnership entities are not included in the Company’s consolidated financial statements. The Company’s investment cost is amortizedmaximum exposure to ~~income taxes in the consolidated statement of income as tax credits and other tax benefits resulting~~loss from ~~deductible losses associated with the projects are received. The Company amortized $11 million and $35 million of~~ its investments in ~~qualified affordable housing projects to income~~such partnerships as of March 31, 2024 was $2.2 billion, including possible recapture of certain tax expense during the three-month and nine-month periods ended September 30, 2017, respectively, and recognized $16 million and $47 million of tax credits and other tax benefits during those respective periods. Similarly, for the three-month and nine-month periods ended September 30, 2016, the Company amortized $13 million and $34 million, respectively, of its investments in qualified affordable housing projects to income tax expense and recognized $18 million and $46 million of tax credits and other tax benefits during those respective periods.credits.

The Company serves as investment advisor for certain registered money-market funds. The Company has no explicit arrangement to provide support to those funds, but may waive portions of its allowable management fees as a result of market ~~conditions~~.conditions.

12. Fair value measurements

GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has not made any fair value elections at ~~September 30, 2017.~~March 31, 2024.

Pursuant to GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy exists in GAAP for fair value measurements based upon the inputs to the valuation of an asset or liability.

•

Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities.

•

Level 2 — Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.

•

Level 3 — Valuation is derived from model-based and other techniques in which at least one significant input is unobservable and which may be based on the Company's own estimates about the assumptions that market participants would use to value the asset or liability.

When available, the Company attempts to use quoted market prices in active markets to determine fair value and classifies such items as Level 1 or Level 2. If quoted market prices in active markets are not available, fair value

~~- 32 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

is often determined using model-based techniques incorporating various assumptions including interest rates, prepayment speeds and credit losses. Assets and liabilities valued using model-based techniques are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation. The following is a description of the valuation methodologies used for the Company's assets and liabilities that are measured on a recurring basis at estimated fair value.

- 31 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

12. Fair value measurements, continued

Trading account ~~assets and liabilities~~

Trading account assets and liabilities consist primarily of interest rate swap agreements and foreign exchange contracts with customers who require such services with offsetting positions with third parties to minimize the Company's risk with respect to such transactions. The Company generally determines the fair value of its derivative trading account assets and liabilities using externally developed pricing models based on market observable inputs and, therefore, classifies such valuations as Level 2. Mutual funds held in connection with deferred compensation and other arrangements have been classified as Level 1 valuations. Valuations of investments in ~~municipal and other bonds~~debt securities can generally be obtained through reference to quoted prices in less active markets for the same or similar securities or through model-based techniques in which all significant inputs are observable and, therefore, such valuations have been classified as Level 2.

~~Investment~~Available-for-sale investment securities ~~available for sale~~and equity securities

The majority of the Company's available-for-sale investment securities have been valued by reference to prices for similar securities or through model-based techniques in which all significant inputs are observable and, therefore, such valuations have been classified as Level 2. Certain investments in mutual funds and equity securities are actively traded and, therefore, have been classified as Level 1 valuations.

Real estate loans held for sale

The Company utilizes commitments to sell real estate loans to hedge the exposure to changes in fair value of real estate loans held for sale. The carrying value of hedged real estate loans held for sale includes changes in estimated fair value during the hedge period. Typically, the Company attempts to hedge real estate loans held for sale from the date of close through the sale date. The fair value of hedged real estate loans held for sale is generally calculated by reference to quoted prices in secondary markets for commitments to sell real estate loans with similar characteristics and, accordingly, such loans have been classified as a Level 2 valuation.

Commitments to originate real estate loans for sale and commitments to sell real estate loans

The Company enters into various commitments to originate real estate loans for sale and commitments to sell real estate loans. Such commitments are ~~considered to be~~accounted for as derivative financial instruments and, therefore, are carried at estimated fair value on the ~~consolidated balance sheet.~~Consolidated Balance Sheet. The estimated fair values of such commitments were generally calculated by reference to quoted prices in secondary markets for commitments to sell real estate loans to certain government-sponsored entities and other parties. The fair valuations of commitments to sell real estate loans generally result in a Level 2 classification. The estimated fair value of commitments to originate real estate loans for sale are adjusted to reflect the Company's anticipated commitment expirations. The estimated commitment expirations are considered significant unobservable inputs contributing to the Level 3 classification of commitments to originate real estate loans for sale. Significant unobservable inputs used in the determination of estimated fair value of commitments to originate real estate loans for sale are included in the accompanying table of significant unobservable inputs to Level 3 measurements.

Interest rate swap agreements used for interest rate risk management

The Company utilizes interest rate swap agreements as part of the management of interest rate risk to modify the repricing characteristics of certain portions of its portfolios of earning assets and interest-bearing liabilities. The Company generally determines the fair value of its interest rate swap agreements using externally developed pricing

~~- 33 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

models based on market observable inputs and, therefore, classifies such valuations as Level 2. The Company has considered counterparty credit risk in the valuation of its interest rate swap agreement assets and has considered its own credit risk in the valuation of its interest rate swap agreement liabilities.

Other non-hedging derivatives

Other non-hedging derivatives consist primarily of interest rate contracts and foreign exchange contracts with customers who require such services with offsetting positions with third parties to minimize the Company's risk with respect to such transactions. The Company generally determines the fair value of its other non-hedging derivative assets and liabilities using externally developed pricing models based on market observable inputs and, therefore, classifies such valuations as Level 2.

- 32 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

12. Fair value measurements, continued

The following tables present assets and liabilities at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016~~2023 measured at estimated fair value on a recurring basis:


(Dollars in millions)	Fair Value Measurements		Level 1		Level 2		Level 3 (a)
March 31, 2024
Trading account	$	99	$	99	$	—	$	—
Investment securities available for sale:
U.S. Treasury and federal agencies		7,719		—		7,719		—
Mortgage-backed securities:
Government issued or guaranteed
Commercial		1,343		—		1,343		—
Residential		2,910		—		2,910		—
Other debt securities		162		—		162		—
		12,134		—		12,134		—
Equity securities		356		343		13		—
Real estate loans held for sale		728		—		728		—
Other assets (b)		318		—		312		6
Total assets	$	13,635	$	442	$	13,187	$	6
Other liabilities (b)	$	1,072	$	—	$	1,036	$	36
Total liabilities	$	1,072	$	—	$	1,036	$	36

December 31, 2023
Trading account	$	106	$	101	$	5	$	—
Investment securities available for sale:
U.S. Treasury and federal agencies		7,705		—		7,705		—
Mortgage-backed securities:
Government issued or guaranteed
Commercial		416		—		416		—
Residential		2,154		—		2,154		—
Other debt securities		165		—		165		—
		10,440		—		10,440		—
Equity securities		268		258		10		—
Real estate loans held for sale		379		—		379		—
Other assets (b)		324		—		309		15
Total assets	$	11,517	$	359	$	11,143	$	15
Other liabilities (b)	$	943	$	—	$	911	$	32
Total liabilities	$	943	$	—	$	911	$	32

Fair Value Measurements

Level 1 (a)

Level 2 (a)

Level 3

(In thousands)

September 30, 2017

Trading account assets

$
170,516

47,927

122,589

—

Investment securities available for sale:

U.S. Treasury and federal agencies

2,007,117

—

2,007,117

—

Obligations of states and political subdivisions

2,678

—

2,678

—

Mortgage-backed securities:

Government issued or guaranteed

9,184,483

—

9,184,483

—

Privately issued

30

—

—

30

Other debt securities

128,530

—

128,530

—

Equity securities

93,986

50,917

43,069

—

11,416,824

50,917

11,365,877

30

Real estate loans held for sale

571,199

—

571,199

—

Other assets (b)

20,830

—

6,868

13,962

Total assets

$
12,179,369

98,844

12,066,533

13,992

Trading account liabilities

$
109,730

—

109,730

—

Other liabilities (b)

4,078

—

3,838

240

Total liabilities

$
113,808

—

113,568

240

December 31, 2016

Trading account assets

$
323,867

46,135

277,732

—

Investment securities available for sale:

U.S. Treasury and federal agencies

1,902,544

—

1,902,544

—

Obligations of states and political subdivisions

3,641

—

3,641

—

Mortgage-backed securities:

Government issued or guaranteed

10,954,861

—

10,954,861

—

Privately issued

44

—

—

44

Other debt securities

118,516

—

118,516

—

Equity securities

352,466

301,711

50,755

—

13,332,072

301,711

13,030,317

44

Real estate loans held for sale

1,056,180

—

1,056,180

—

Other assets (b)

58,351

—

50,291

8,060

Total assets

$
14,770,470

347,846

14,414,520

8,104

Trading account liabilities

$
174,376

—

174,376

—

Other liabilities (b)

2,481

—

1,746

735

Total liabilities

$
176,857

—

176,122

735

(a)

Significant unobservable inputs used in the fair value measurement of commitments to originate real estate loans held for sale included weighted-average commitment expirations of 8% at March 31, 2024 and 5% at December 31, 2023. An increase (decrease) in the estimate of expirations for commitments to originate real estate loans would generally result in a lower (higher) fair value measurement. Estimated commitment expirations are derived considering loan type, changes in interest rates and remaining length of time until closing.

(b)

Comprised predominantly of interest rate swap agreements used for interest rate risk management (Level 2), interest rate and foreign exchange contracts not designated as hedging instruments (Level 2), commitments to sell real estate loans (Level 2) and commitments to originate real estate loans to be held for sale (Level 3).

~~(a)~~

~~There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2017 and the year ended December 31, 2016.~~

~~(b)~~

Comprised predominantly of interest rate swap agreements used for interest rate risk management (Level 2), commitments to sell real estate loans (Level 2) and commitments to originate real estate loans to be held for sale (Level 3).

- 3433 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

12. Fair value measurements, continued

~~The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the three months ended September 30, 2017 were as follows:~~

Investment Securities
Available for Sale

Privately Issued
Mortgage-Backed
Securities

Other Assets and Other Liabilities

(In thousands)

Balance — June 30, 2017

$
35

12,425

Total gains (losses) realized/unrealized:

Included in earnings

—

22,313

(b)
Settlements

(5
)

—

Transfers in and/or out of Level 3 (a)

—

(21,016
)
(d)
Balance — September 30, 2017

$
30

13,722

Changes in unrealized gains included in earnings
related to assets still held at September 30, 2017

$
—

12,659

(b)

~~The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the three months ended September 30, 2016 were as follows:~~

Investment Securities Available for Sale

Privately Issued Mortgage-Backed Securities

Collateralized
Debt Obligations

Other Assets and Other Liabilities

(In thousands)

Balance — June 30, 2016

$
57

43,305

21,383

Total gains (losses) realized/unrealized:

Included in earnings

—

28,475

45,534

(b)
Included in other comprehensive income

—

(15,050
)
(c)

—

Sales

—

(56,730
)

—

Settlements

(6
)

—

—

Transfers in and/or out of Level 3 (a)

—

—

(37,117
)
(d)
Balance — September 30, 2016

$
51

—

29,800

Changes in unrealized gains included in earnings
related to assets still held at September 30, 2016

$
—

—

27,663

(b)

~~- 35 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

~~The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the nine months ended September 30, 2017 were as follows:~~

Investment Securities
Available for Sale

Privately Issued
Mortgage-Backed
Securities

Other Assets and Other Liabilities

(In thousands)

Balance — January 1, 2017

$
44

7,325

Total gains (losses) realized/unrealized:

Included in earnings

—

65,824

(b)
Settlements

(14
)

—

Transfers in and/or out of Level 3 (a)

—

(59,427
)
(d)
Balance — September 30, 2017

$
30

$
13,722

Changes in unrealized gains included in earnings
related to assets still held at September 30, 2017

$
—

$
13,684

(b)

~~The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the nine months ended September 30, 2016 were as follows:~~

Investment Securities Available for Sale

Privately Issued Mortgage-Backed Securities

Collateralized Debt Obligations

Other Assets and Other Liabilities

(In thousands)

Balance — January 1, 2016

$
74

47,393

9,879

Total gains (losses) realized/unrealized:

Included in earnings

—

28,475

104,862

(b)
Included in other comprehensive income

—

(18,268
)
(c)

—

Sales

—

(56,730
)

—

Settlements

(23
)

(870
)

—

Transfers in and/or out of Level 3 (a)

—

—

(84,941
)
(d)
Balance — September 30, 2016

$
51

—

29,800

Changes in unrealized gains included in earnings
related to assets still held at
September 30, 2016

$
—

—

29,288

(b)

~~(a)~~

~~The Company’s policy for transfers between fair value levels is to recognize the transfer as of the actual date of the event or change in circumstances that caused the transfer.~~

~~(b)~~

~~Reported as mortgage banking revenues in the consolidated statement of income and includes the fair value of commitment issuances and expirations.~~

~~(c)~~

Reported as net unrealized losses on investment securities in the consolidated statement of comprehensive income. The Company sold its collateralized debt obligations during the third and fourth quarters of 2016.

~~(d)~~

~~Transfers out of Level 3 consist of interest rate locks transferred to closed loans.~~

~~- 36 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements. The more significant of those assets follow.

Loans

Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the ~~uncollectible~~uncollectable portions of those loans. Nonrecurring adjustments also include certain impairment amounts for collateral-dependent loans when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace and the related nonrecurring fair value measurement adjustments have ~~generally~~ been classified as Level 2, unless significant adjustments have been made to the valuation that are not readily observable by market participants. Non-real estate collateral supporting commercial and industrial loans generally consists of business assets such as receivables, inventory and equipment. Fair value estimations are typically determined by discounting recorded values of those assets to reflect estimated net realizable value consideringspecific borrower facts and circumstances and the experience of credit personnel in their dealings with similar borrower collateral liquidations. Such discounts were ~~generally~~ in the range of ~~15%~~10% to ~~90%~~90% with a weighted-average of 38% at ~~September 30, 2017.~~March 31, 2024. As these discounts are not readily observable and are considered significant, the valuations have been classified as Level 3. Automobile collateral is typically valued by reference to independent pricing sources based on recent sales transactions of similar vehicles and, accordingly, the related nonrecurring fair value measurement adjustments have been classified as Level 2. Collateral values for other consumer installment loans are generally estimated based on historical recovery rates for similar types of ~~loans.~~loans which at March 31, 2024 was 46%. As these recovery rates are not readily observable by market participants, such valuation adjustments have been classified as Level 3. Loans subject to nonrecurring fair value measurement were ~~$184 million~~$1.0 billion at ~~September 30, 2017~~March 31, 2024 ($~~105~~312 million and ~~$79~~$707 million of which were classified as Level 2 and Level 3, respectively), ~~$293~~$923 million at December 31, ~~2016~~2023 ($~~153~~234 million and ~~$140~~$689 million of which were classified as Level 2 and Level 3, respectively) and ~~$249~~$670 million at ~~September 30, 2016~~March 31, 2023 ($~~144~~374 million and ~~$105~~$296 million of which were classified as Level 2 and Level 3, respectively). Changes in the fair value recognized for partial charge-offs of loans and loan impairment reserves on loans held by the Company on ~~September 30, 2017~~March 31, 2024 and 2023 were decreases of ~~$16~~$175 million and ~~$55~~$69 million for the three-month ~~and nine-month~~ periods ended ~~September 30, 2017,~~March 31, 2024 and 2023, respectively. Changes in fair value recognized for partial charge-offs of loans and loan impairment reserves on loans held by the Company on September 30, 2016 were decreases of $20 million and $42 million for the three-month and nine-month periods ended September 30, 2016, respectively.

Assets taken in foreclosure of defaulted loans

Assets taken in foreclosure of defaulted loans are primarily comprised of commercial and residential real property and are generally measured at the lower of cost or fair value less costs to sell. The fair value of the real property is generally determined using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace and the related nonrecurring fair value measurement adjustments have generally been classified as Level 2. Assets taken ininto foreclosure of defaulted loans subject to nonrecurring fair value measurement were ~~$36 million~~not material at each of March 31, 2024 and ~~$53 million at September 30, 2017 and 2016, respectively.~~2023. Changes in fair value recognized for those foreclosed assets held by the Company were not material during the three-month ~~and nine-month~~ periods ended ~~September 30, 2017~~March 31, 2024 and ~~2016.~~2023.

- 3734 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

12. Fair value measurements, continued

~~Significant unobservable inputs~~Capitalized servicing rights

Capitalized servicing rights are initially measured at fair value in the Company’s Consolidated Balance Sheet. The Company utilizes the amortization method to ~~Level 3 measurements~~

~~The following tables present quantitative information about significant unobservable inputs used in~~subsequently measure its capitalized servicing assets. In accordance with GAAP, the Company must record impairment charges, on a nonrecurring basis, when the carrying value of certain strata exceed their estimated fair value. To estimate the fair value ~~measurements~~of servicing rights, the Company considers market prices for ~~certain Level 3~~similar assets, if available, and ~~liabilities at September 30, 2017~~the present value of expected future cash flows associated with the servicing rights calculated using assumptions that market participants would use in estimating future servicing income and ~~December 31, 2016:~~

Fair Value

Valuation
Technique

Unobservable
Inputs/Assumptions

Range
(Weighted-
Average)

(In thousands)

September 30, 2017

Recurring fair value measurements

Privately issued mortgage-backed
securities

$
30

Two independent pricing quotes

—

��
—

Net other assets (liabilities) (a)

13,722

Discounted cash flow

Commitment expirations

0%-80% (28%)

December 31, 2016

Recurring fair value measurements

Privately issued mortgage-backed
securities

$
44

Two independent pricing quotes

—

—

Net other assets (liabilities) (a)

7,325

Discounted cash flow

Commitment expirations

0%-77% (30%)

~~(a)~~

~~Other Level 3 assets (liabilities) consist of commitments to originate real estate loans.~~

~~Sensitivity~~expense. Such assumptions include estimates of the cost of servicing loans, loan default rates, an appropriate discount rate and prepayment speeds. For purposes of evaluating and measuring impairment of capitalized servicing rights, the Company stratifies such assets based on the predominant risk characteristics of the underlying financial instruments that are expected to have the most impact on projected prepayments, cost of servicing and other factors affecting future cash flows associated with the servicing rights. Such factors may include financial asset or loan type, note rate and term. The amount of impairment recognized is the amount by which the carrying value of the capitalized servicing rights for a stratum exceed estimated fair value. Impairment is recognized through a valuation allowance. The determination of fair value ~~measurements~~of capitalized servicing rights is considered a Level 3 valuation. Capitalized servicing rights related to ~~changes in unobservable inputs~~residential mortgage loans required no valuation allowance at each of March 31, 2024, December 31, 2023 and March 31, 2023.

An increase (decrease) in the estimate of expirations for commitments to originate real estate loans would generally result in a lower (higher) fair value measurement. Estimated commitment expirations are derived considering loan type, changes in interest rates and remaining length of time until closing.

~~- 38 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

Disclosures of fair value of financial instruments

The carrying amounts and estimated fair value for certain financial ~~instrument assets (liabilities)~~instruments that are not recorded at fair value in the Consolidated Balance Sheet are presented in the following ~~table:~~tables:


(Dollars in millions)	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
March 31, 2024
Financial assets:
Cash and cash equivalents	$	1,695	$	1,695	$	1,396	$	299	$	—
Interest-bearing deposits at banks		32,144		32,144		—		32,144		—
Investment securities held to maturity		15,078		13,865		—		13,821		44
Loans and leases, net		132,782		129,771		—		7,354		122,417
Financial liabilities:
Time deposits		20,279		20,236		—		20,236		—
Short-term borrowings		4,795		4,795		—		4,795		—
Long-term borrowings		11,450		11,370		—		11,370		—

December 31, 2023
Financial assets:
Cash and cash equivalents		1,731		1,731		1,668		63		—
Interest-bearing deposits at banks		28,069		28,069		—		28,069		—
Investment securities held to maturity		15,330		14,308		—		14,262		46
Loans and leases, net		131,939		129,138		—		7,240		121,898
Financial liabilities:
Time deposits		20,759		20,715		—		20,715		—
Short-term borrowings		5,316		5,316		—		5,316		—
Long-term borrowings		8,201		8,107		—		8,107		—

September 30, 2017

Carrying
Amount

Estimated
Fair Value

Level 1

Level 2

Level 3

(In thousands)

Financial assets:

Cash and cash equivalents

$
1,368,252

1,368,252

1,290,532

77,720

—

Interest-bearing deposits at banks

6,306,484

6,306,484

—

6,306,484

—

Trading account assets

170,516

170,516

47,927

122,589

—

Investment securities

15,073,926

15,079,756

50,917

14,916,360

112,479

Loans and leases:

Commercial loans and leases

21,743,251

21,409,984

—

—

21,409,984

Commercial real estate loans

32,914,288

32,507,319

—

223,659

32,283,660

Residential real estate loans

20,265,162

20,369,392

—

4,557,929

15,811,463

Consumer loans

13,002,433

12,935,924

—

—

12,935,924

Allowance for credit losses

(1,013,326
)

—

—

—

—

Loans and leases, net

86,911,808

87,222,619

—

4,781,588

82,441,031

Accrued interest receivable

325,982

325,982

—

325,982

—

Financial liabilities:

Noninterest-bearing deposits

$
(33,111,246
)

(33,111,246
)

—

(33,111,246
)

—

Savings and interest-checking deposits

(52,936,615
)

(52,936,615
)

—

(52,936,615
)

—

Time deposits

(7,233,518
)

(7,294,182
)

—

(7,294,182
)

—

Deposits at Cayman Islands office

(232,014
)

(232,014
)

—

(232,014
)

—

Short-term borrowings

(200,768
)

(200,768
)

—

(200,768
)

—

Long-term borrowings

(8,577,645
)

(8,630,195
)

—

(8,630,195
)

—

Accrued interest payable

(69,290
)

(69,290
)

—

(69,290
)

—

Trading account liabilities

(109,730
)

(109,730
)

—

(109,730
)

—

Other financial instruments:

Commitments to originate real estate loans for sale

$
13,722

13,722

—

—

13,722

Commitments to sell real estate loans

2,333

2,333

—

2,333

—

Other credit-related commitments

(119,938
)

(119,938
)

—

—

(119,938
)
Interest rate swap agreements used for interest
rate risk management

697

697

—

697

—

- 3935 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

12. Fair value measurements, continued

December 31, 2016

Carrying
Amount

Estimated
Fair Value

Level 1

Level 2

Level 3

(In thousands)

Financial assets:

Cash and cash equivalents

$
1,320,549

1,320,549

1,249,654

70,895

—

Interest-bearing deposits at banks

5,000,638

5,000,638

—

5,000,638

—

Trading account assets

323,867

323,867

46,135

277,732

—

Investment securities

16,250,468

16,244,412

301,711

15,821,176

121,525

Loans and leases:

Commercial loans and leases

22,610,047

22,239,428

—

—

22,239,428

Commercial real estate loans

33,506,394

33,129,428

—

642,590

32,486,838

Residential real estate loans

22,590,912

22,638,167

—

4,912,488

17,725,679

Consumer loans

12,146,063

12,061,590

—

—

12,061,590

Allowance for credit losses

(988,997
)

—

—

—

—

Loans and leases, net

89,864,419

90,068,613

—

5,555,078

84,513,535

Accrued interest receivable

308,805

308,805

—

308,805

—

Financial liabilities:

Noninterest-bearing deposits

$
(32,813,896
)

(32,813,896
)

—

(32,813,896
)

—

Savings and interest-checking deposits

(52,346,207
)

(52,346,207
)

—

(52,346,207
)

—

Time deposits

(10,131,846
)

(10,222,585
)

—

(10,222,585
)

—

Deposits at Cayman Islands office

(201,927
)

(201,927
)

—

(201,927
)

—

Short-term borrowings

(163,442
)

(163,442
)

—

(163,442
)

—

Long-term borrowings

(9,493,835
)

(9,473,844
)

—

(9,473,844
)

—

Accrued interest payable

(75,172
)

(75,172
)

—

(75,172
)

—

Trading account liabilities

(174,376
)

(174,376
)

—

(174,376
)

—

Other financial instruments:

Commitments to originate real estate loans for sale

$
7,325

7,325

—

—

7,325

Commitments to sell real estate loans

36,653

36,653

—

36,653

—

Other credit-related commitments

(136,295
)

(136,295
)

—

—

(136,295
)
Interest rate swap agreements used for interest
rate risk management

11,892

11,892

—

11,892

—

With the exception of marketable securities ~~certain off-balance sheet financial instruments~~ and mortgage loans originated for sale, the ~~Company’s~~Company's financial instruments presented in the preceding tables are not readily marketable and market prices do not exist. The Company, in attempting to comply with the provisions of GAAP that require disclosures of fair value of financial instruments, has not attempted to market its financial instruments to potential buyers, if any exist. Since negotiated prices in illiquid markets depend greatly upon the then present motivations of the buyer and seller, it is reasonable to assume that actual sales prices could vary widely from any estimate of fair value made without the benefit of negotiations. Additionally, changes in market interest rates can dramatically impact the value of financial instruments in a short period of time. ~~The following assumptions, methods and calculations were used in determining the estimated fair value of financial instruments not measured at fair value in the consolidated balance sheet.~~

~~Cash and cash equivalents, interest-bearing deposits at banks, deposits at Cayman Islands office, short-term borrowings, accrued interest receivable and accrued interest payable~~

Due to the nature of cash and cash equivalents and the near maturity of interest-bearing deposits at banks, deposits at Cayman Islands office, short-term borrowings, accrued interest receivable and accrued interest payable, the Company estimated that the carrying amount of such instruments approximated estimated fair value.

~~- 40 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

~~Investment securities~~

Estimated fair values of investments in readily marketable securities were generally based on quoted market prices. Investment securities that were not readily marketable were assigned amounts based on estimates provided by outside parties or modeling techniques that relied upon discounted calculations of projected cash flows or, in the case of other investment securities, which include capital stock of the Federal Reserve Bank of New York and the Federal Home Loan Bank of New York, at an amount equal to the carrying amount.

~~Loans and leases~~

In general, discount rates used to calculate values for loan products were based on the Company’s pricing at the respective period end. A higher discount rate was assumed with respect to estimated cash flows associated with nonaccrual loans. Projected loan cash flows were adjusted for estimated credit losses. However, such estimates made by the Company may not be indicative of assumptions and adjustments that a purchaser of the Company’s loans and leases would seek.

~~Deposits~~

Pursuant to GAAP, the estimated fair value ascribed to noninterest-bearing deposits, savings deposits and interest-checking deposits must be established at carrying value because of the customers’ ability to withdraw funds immediately. Time deposit accounts are required to be revalued based upon prevailing market interest rates for similar maturity instruments. As a result, amounts assigned to time deposits were based on discounted cash flow calculations using prevailing market interest rates based on the Company’s pricing at the respective date for deposits with comparable remaining terms to maturity.

The Company believes that deposit accounts have a value greater than that prescribed by GAAP. The Company feels, however, that the value associated with these deposits is greatly influenced by characteristics of the buyer, such as the ability to reduce the costs of servicing the deposits and deposit attrition which often occurs following an acquisition.

~~Long-term borrowings~~

The amounts assigned to long-term borrowings were based on quoted market prices, when available, or were based on discounted cash flow calculations using prevailing market interest rates for borrowings of similar terms and credit risk.

~~Other commitments and contingencies~~

As described in note 13, in the normal course of business, various commitments and contingent liabilities are outstanding, such as loan commitments, credit guarantees and letters of credit. The Company’s pricing of such financial instruments is based largely on credit quality and relationship, probability of funding and other requirements. Loan commitments often have fixed expiration dates and contain termination and other clauses which provide for relief from funding in the event of significant deterioration in the credit quality of the customer. The rates and terms of the Company’s loan commitments, credit guarantees and letters of credit are competitive with other financial institutions operating in markets served by the Company. The Company believes that the carrying amounts, which are included in other liabilities, are reasonable estimates of the fair value of these financial instruments.

~~- 41 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~12. Fair value measurements, continued~~

The Company does not believe that the estimated information presented herein is representative of the earnings power or value of the Company. The preceding analysis, which is inherently limited in depicting fair value, also does not consider any value associated with existing customer relationships nor the ability of the Company to create value through loan origination, deposit gathering or fee generating activities. Many of the estimates presented herein are based upon the use of highly subjective information and assumptions and, accordingly, the results may not be precise. Management believes that fair value estimates may not be comparable between financial institutions due to the wide range of permitted valuation techniques and numerous estimates which must be made. Furthermore,because the disclosed fair value amounts were estimated as of the balance sheet date, the amounts actually realized or paid upon maturity or settlement of the various financial instruments could be significantly different.

13. Commitments and contingencies

In the normal course of business, various commitments and contingent liabilities are outstanding. The following table presents the Company's significant commitments. Certain of these commitments are not included in the Company's ~~consolidated balance sheet.~~

Consolidated Balance Sheet.

	September 30,		December 31,
	2017		2016		March 31,		December 31,
	(In thousands)
Commitments to extend credit
Home equity lines of credit	$	5,492,892		5,499,609
(Dollars in millions)					2024		2023
Commitments to extend credit:
Commercial and industrial					$	28,439	$	28,566
Commercial real estate loans to be sold		170,786		70,100		451		916
Other commercial real estate		5,749,428		6,451,709		4,413		5,019
Residential real estate loans to be sold		482,650		478,950		211		163
Other residential real estate		202,702		232,721		393		331
Commercial and other		12,677,838		12,298,473
Home equity lines of credit						8,080		8,109
Credit cards						5,651		5,578
Other						389		413
Standby letters of credit		2,657,352		2,987,091		2,230		2,289
Commercial letters of credit		42,684		44,723		56		62
Financial guarantees and indemnification contracts		3,385,498		3,043,580		4,129		4,036
Commitments to sell real estate loans		1,052,472		1,489,237		1,329		1,400

Commitments to extend credit are agreements to lend to customers, generally having fixed expiration dates or other termination clauses that may require payment of a fee. In addition to the amounts in the preceding table, the Company had discretionary funding commitments to commercial customers of $12.4 billion and $12.3 billion at March 31, 2024 and December 31, 2023, respectively, that the Company had the unconditional right to cancel prior to funding. Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party, whereas commercial letters of credit are issued to facilitate commerce and typically result in the commitment being funded when the underlying transaction is consummated between the customer and a third party. The credit risk associated with commitments to extend credit and standby and commercial letters of credit is essentially the same as that involved with extending loans to customers and is subject to normal credit policies. Collateral may be obtained based on management's assessment of the customer's creditworthiness.

- 36 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

13. Commitments and contingencies, continued

Financial guarantees and indemnification contracts are ~~oftentimes similar to standby letters~~predominantly comprised of ~~credit and include mandatory purchase agreements issued to ensure that customer obligations are fulfilled,~~ recourse obligations associated with sold loans and other guarantees ~~of customer performance or compliance with designated rules~~ and ~~regulations.~~commitments. Included in financial guarantees and indemnification contracts are loan principal amounts sold with recourse in conjunction with the Company's involvement in the Fannie Mae ~~Delegated Underwriting and Servicing~~DUS program. The Company's maximum credit risk for recourse associated with loans sold under this program totaled approximately ~~$3.2~~$4.0 billion and ~~$2.8~~$3.9 billion at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016,~~2023, respectively. At March 31, 2024, the Company estimated that the recourse obligations described above were not material to the Company's consolidated financial position. There have been no material losses incurred as a result of those credit recourse arrangements.

~~- 42 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~13. Commitments and contingencies, continued~~

Since many loan commitments, standby letters of credit, and guarantees and indemnification contracts expire without being funded in whole or in part, the contract amounts are not necessarily indicative of future cash flows.

The Company utilizes commitments to sell real estate loans to hedge exposure to changes in the fair value of real estate loans held for sale. Such commitments are ~~considered~~accounted for as derivatives and along with commitments to originate real estate loans to be held for sale are ~~generally~~ recorded in the ~~consolidated balance sheet~~Consolidated Balance Sheet at estimated fair market value.

~~The Company also has commitments under long-term operating leases.~~

The Company is contractually obligated to repurchase previously sold residential real estate loans that do not ultimately meet investor sale criteria related to underwriting procedures or loan documentation. When required to do so, the Company may reimburse loan purchasers for losses incurred or may repurchase certain loans. The Company reduces residential mortgage banking revenues by an estimate for losses related to its obligations to loan purchasers. The amount of those charges is based on the volume of loans sold, the level of reimbursement requests received from loan purchasers and estimates of losses that may be associated with previously sold loans. At ~~September 30, 2017~~March 31, 2024, the ~~Company believes that its~~Company's estimated obligation to loan purchasers was not material to the Company’s consolidated financial position.

M&T and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings and other matters in which claims for monetary damages are asserted. On an on-going basis management, after consultation with legal counsel, assesses the Company’s liabilities and contingencies in connection with such proceedings. For those matters where it is probable that the Company will incur losses and the amounts of the losses can be reasonably estimated, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent ~~the~~ pending or threatened litigation could result in exposure in excess of that liability, the amount of such excess is not currently estimable. Although not considered probable, the range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability, was between $0$0 and ~~$50 million.~~$25 million as of March 31, 2024. Although the Company does not believe that the outcome of pending ~~litigations~~legal matters will be material to the Company’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future.

In February 2024, the FDIC notified member banks that the loss estimate attributable to certain failed banks in 2023 was approximately $20.4 billion, an increase of approximately $4.1 billion from the estimate of $16.3 billion described in the final rule. The FDIC also indicated that through the receivership of one of the failed banks, it had estimated residual interests in securities that were sold into trusts that could potentially reduce that loss estimate in the amount of $1.7 billion. The FDIC is expected to provide an updated estimate of the Company's special assessment amount with its first quarter 2024 invoice, which is anticipated to be received in June 2024. Reflecting the update to the loss estimate and related residual interest, the Company recorded an expense of $29 million in the Consolidated Statement of Income in the first quarter of 2024 in addition to the $197 million recorded in the fourth quarter of 2023, resulting in an accrued liability recorded in "accrued interest and other liabilities" in the Company's Consolidated Balance Sheet of $226 million at March 31, 2024 and $197 million at December 31, 2023. The FDIC has indicated that the amount of the special assessment will be adjusted as its loss estimates change.

- 37 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

14. Segment information

Reportable segments have been determined based upon the Company's organizational structure and its internal profitability reporting system, which is organized by strategic business unit. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer and the distribution of those products and services are similar. The reportable segments are ~~Business Banking,~~ Commercial ~~Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking~~Bank, Retail Bank and ~~Retail Banking.~~Institutional Services and Wealth Management.

The financial information of the Company's segments was compiled utilizing the accounting policies described in note 2223 of Notes to Financial Statements in the ~~2016~~2023 Annual Report. The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, the financial information of the reported segments is not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data. ~~As disclosed in the 2016 Annual Report, during 2016 the Company revised its funds transfer pricing allocation related to borrowings. Additionally, during the second quarter of 2017, the~~ ~~Company revised its funds transfer pricing allocation related to certain deposit categories. As a result, prior period~~

~~- 43 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~14. Segment information, continued~~

~~financial information has been reclassified to provide segment information on a comparable basis, as noted in the following tables.~~

Three Months Ended September 30, 2016

Total Revenues as Previously Reported

Impact of Changes

Total Revenues as Reclassified

Net Income (Loss) as Previously Reported

Impact of Changes

Net Income (Loss) as Reclassified

(In thousands)

Business Banking

$
116,513

4,388

120,901

$
21,422

2,602

24,024

Commercial Banking

268,683

(155
)

268,528

102,796

(92
)

102,704

Commercial Real Estate

205,562

—

205,562

90,065

—

90,065

Discretionary Portfolio

114,391

(8,806
)

105,585

50,773

(5,222
)

45,551

Residential Mortgage Banking

108,576

(11,901
)

96,675

22,924

(7,059
)

15,865

Retail Banking

353,016

8,848

361,864

69,506

5,247

74,753

All Other

182,949

7,626

190,575

(7,502
)

4,524

(2,978
)
Total

$
1,349,690

—

1,349,690

$
349,984

—

349,984

Nine Months Ended September 30, 2016

Total Revenues as Previously Reported

Impact of Changes

Total Revenues as Reclassified

Net Income (Loss) as Previously Reported

Impact of Changes

Net Income (Loss) as Reclassified

(In thousands)

Business Banking

$
344,562

13,022

357,584

$
69,617

7,723

77,340

Commercial Banking

787,781

(423
)

787,358

309,515

(251
)

309,264

Commercial Real Estate

575,117

—

575,117

254,682

—

254,682

Discretionary Portfolio

324,195

(28,575
)

295,620

151,522

(16,947
)

134,575

Residential Mortgage Banking

309,393

(28,539
)

280,854

59,981

(16,926
)

43,055

Retail Banking

1,037,727

25,196

1,062,923

204,291

14,943

219,234

All Other

575,885

19,319

595,204

(65,065
)

11,458

(53,607
)
Total

$
3,954,660

—

3,954,660

$
984,543

—

984,543

As also described in note 22 in the 2016 Annual Report, neither goodwill nor core deposit and other intangible assets (and the amortization charges associated with such assets) resulting from acquisitions of financial institutions have been allocated to the Company's reportable segments, but are included in the “All Other” category. The Company does, however, assign such intangible assets to business units for purposes of testing for impairment.

~~- 44 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~14. Segment information, continued~~

Information about the Company's segments follows:


	Three Months Ended March 31,
	2024											2023
(Dollars in millions)	Total Revenues(a)			Inter- segment Revenues			Net Income (Loss)			Total Average Assets		Total Revenues(a)			Inter- segment Revenues			Net Income (Loss)			Total Average Assets
Commercial Bank	$	699		$	2		$	201		$	81,083	$	811		$	2		$	333		$	79,034
Retail Bank		1,268			—			446			52,232		1,234			—			452			51,293
Institutional Services and Wealth Management		377			3			128			3,636		390			3			110			3,655
All Other		(84	)		(5	)		(244	)		74,527		(30	)		(5	)		(193	)		68,617
Total	$	2,260		$	—		$	531		$	211,478	$	2,405		$	—		$	702		$	202,599

(a)

Total revenues are comprised of net interest income and other income. Net interest income is ~~presented~~the difference between taxable-equivalent interest earned on assets and interest paid on liabilities owed by a segment and a funding charge (credit) based on the Company's internal funds transfer and allocation methodology. Segments are charged a cost to fund any assets (e.g. loans) and are paid a funding credit for any funds provided (e.g. deposits). The taxable-equivalent adjustment aggregated $12 million and $14 million for the three-month periods ended March 31, 2024 and 2023 and is eliminated in ~~the following table:~~

"All Other" total revenues.

Three Months Ended September 30

2017

2016

Total
Revenues(a)

Inter-
segment
Revenues

Net
Income
(Loss)

Total
Revenues(a)

Inter-
segment
Revenues

Net
Income
(Loss)

(In thousands)

Business Banking

$
130,501

919

31,408

$
120,901

1,086

24,024

Commercial Banking

267,822

840

109,797

268,528

950

102,704

Commercial Real Estate

212,014

401

97,295

205,562

463

90,065

Discretionary Portfolio

65,808

(12,346
)

31,515

105,585

(14,795
)

45,551

Residential Mortgage Banking

90,018

18,866

13,546

96,675

22,051

15,865

Retail Banking

392,542

2,668

96,329

361,864

3,052

74,753

All Other

257,858

(11,348
)

(23,967
)

190,575

(12,807
)

(2,978
)
Total

$
1,416,563

—

355,923

$
1,349,690

—

349,984

Nine Months Ended September 30

2017

2016

Total
Revenues(a)

Inter-
segment
Revenues

Net
Income
(Loss)

Total
Revenues(a)

Inter- segment Revenues

Net
Income
(Loss)

(In thousands)

Business Banking

$
375,816

2,836

85,146

$
357,584

3,274

77,340

Commercial Banking

818,846

2,603

328,211

787,358

2,917

309,264

Commercial Real Estate

604,437

1,165

269,113

575,117

1,299

254,682

Discretionary Portfolio

216,798

(37,670
)

95,200

295,620

(43,726
)

134,575

Residential Mortgage Banking

264,120

55,221

37,206

280,854

62,955

43,055

Retail Banking

1,144,964

8,760

282,614

1,062,923

9,198

219,234

All Other

751,703

(32,915
)

(11,587
)

595,204

(35,917
)

(53,607
)
Total

$
4,176,684

—

1,085,903

$
3,954,660

—

984,543

~~- 45 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~14. Segment information, continued~~

Average Total Assets

Nine Months Ended September 30

Year Ended
December 31

2017

2016

2016

(In millions)

Business Banking

$
5,596

5,442

5,456

Commercial Banking

26,699

25,363

25,592

Commercial Real Estate

22,800

20,571

21,131

Discretionary Portfolio

37,807

41,253

40,867

Residential Mortgage Banking

2,335

2,578

2,569

Retail Banking

12,519

11,739

11,840

All Other

13,317

16,951

16,885

Total

$
121,073

123,897

124,340

~~(a)~~

Total revenues are comprised of net interest income and other income. Net interest income is the difference between taxable-equivalent interest earned on assets and interest paid on liabilities owed by a segment and a funding charge (credit) based on the Company's internal funds transfer and allocation methodology. Segments are charged a cost to fund any assets (e.g. loans) and are paid a funding credit for any funds provided (e.g. deposits). The taxable-equivalent adjustment aggregated $8,828,000 and $6,725,000 for the three-month periods ended September 30, 2017 and 2016, respectively, and $25,563,000 and $19,579,000 for the nine-month periods ended September 30, 2017 and 2016, respectively, and is eliminated in "All Other" total revenues. Intersegment revenues are included in total revenues of the reportable segments. The elimination of intersegment revenues is included in the determination of "All Other" total revenues.

15. Relationship with ~~Bayview Lending Group LLC~~BLG and Bayview Financial ~~Holdings, L.P.~~

M&T holds a ~~20%~~20% minority interest in ~~Bayview Lending Group LLC ("BLG"),~~BLG, a privately-held commercial mortgage company. ~~M&T recognizes income or loss from BLG using the equity method of accounting.~~ That investment had no remaining carrying value at ~~September 30, 2017~~March 31, 2024 as a result of cumulative losses recognized and cash distributions ~~received.~~received in prior years. Cash distributions now received from BLG are recognized as income by M&T and included in "other revenues from operations" in the Consolidated Statement of Income. That income totaled $25 million and $20 million for the three-month periods ended March 31, 2024 and 2023, respectively.

Bayview Financial, ~~Holdings, L.P. (together with its affiliates, "Bayview Financial"),~~ a privately-held specialty ~~mortgage~~ finance company, is BLG's majority investor. In addition to their common investment in BLG, the Company and Bayview Financial conduct other business activities with each other. The Company has obtained loan servicing rights for mortgage loans from BLG and Bayview Financial having outstanding principal balances of ~~$3.2~~$1.1 billion and ~~$3.5~~$1.2 billion at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016,~~2023, respectively. Revenues from those servicing rights were $4$1 million and $5$2 million ~~for~~in the three-month periods ended ~~September 30, 2017~~March 31, 2024 and ~~2016, respectively, and $13 million and $15 million for the nine-month periods ended September 30, 2017 and 2016,~~2023, respectively. The Company sub-services residential mortgage loans for Bayview Financial having outstanding principal balances of ~~$59.3~~$112.0 billion and ~~$30.4~~$115.3 billion at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016,~~2023, respectively. Revenues earned for sub-servicing loans for Bayview Financial were ~~$26~~$32 million ~~and $25 million for~~in each of the three-month periods ended ~~September 30, 2017~~March 31, 2024 and ~~2016, respectively, and $74 million and $73 million for the nine-month periods ended September 30, 2017 and 2016, respectively.~~2023. In addition, the Company held ~~$141~~$41 million and ~~$158~~$42 million of mortgage-backed securities in its held-to-maturity portfolio at ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016,~~2023, respectively, that were securitized by Bayview Financial. In April 2017, the Company provided a loan to Bayview Financial for $100 million at terms consistent with those offered to non-affiliated customers. That loan was subsequently paid in full in June 2017. Also in June 2017, a new syndicated loan facility was entered into by Bayview Financial for $750 million, of whichAt March 31, 2024, the Company held ~~$88~~$674 million ~~at September 30, 2017.~~of Bayview Financial's $3.7 billion syndicated loan facility.

- 38 -

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and other information included in this Quarterly Report on Form 10-Q as well as with M&T's 2023 Annual Report. Information regarding the Company's business, its supervision and regulation and potential risks and uncertainties that may affect the Company's business, financial condition, liquidity and results of operations are also included in M&T's 2023 Annual Report.

~~- 46 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~As described in note 1 of Notes to Financial Statements in M&T's 2023 Annual Report, certain financial reporting changes became effective in the fourth quarter of 2023. Prior periods have been presented in conformity with the new classifications.

Overview

~~16. Recent accounting developments~~

~~Effective January 1, 2017,~~The Company's results of operations for the ~~Company adopted amended accounting guidance~~first quarter of 2024 reflect an elevated interest rate environment which has led to higher costs of interest-bearing liabilities that have modestly outpaced increased yields on the Company's earning assets and an elevated level of provision for ~~share-based transactions.~~credit losses. The ~~most significant aspect~~FOMC hiked its federal funds target rate four times in the first three quarters of 2023, totaling 100 basis points, but has not adjusted that rate since. Included in each of the ~~amended guidance that affects the Company requires that all excess tax~~first quarters of 2024 and 2023 results were seasonal salaries and employee benefits and tax deficiencies be recognized in income tax expense in the income statement and that such amounts be recognized in the period in which the tax deduction arises or in the period in which an expirationexpenses of ~~an award occurs. The adoption of this guidance resulted in an $18 million reduction of income tax expense~~$99 million. Results for the ~~three-month period ended March 31, 2017, that under previous accounting guidance would have been recognized directly in shareholders’ equity. The amended accounting guidance did not have~~first quarter of 2024 also included a ~~significant impact on income tax expense in the three-month periods ended September 30 and June 30, 2017.~~

Effective January 2017, the Company also adopted amended accounting guidance for the transition to the equity method of accounting. The amended guidance eliminates the requirement that when an investment qualifies for use of the equity method as a result of an$29 million estimated increase in the ~~level~~Company's FDIC special assessment. In the fourth quarter of ~~ownership~~2023, an estimate of the FDIC special assessment for M&T of $197 million was recorded in the Consolidated Statement of Income. Additional information about the FDIC special assessment is included in note 13 of Notes to Financial Statements. A summary of financial results for the Company is provided below:

SUMMARY OF FINANCIAL RESULTS


	Three Months Ended						Change						Three Months Ended						Change
(Dollars in millions, except per share)	March 31, 2024			December 31, 2023			Amount			%			March 31, 2024			March 31, 2023			Amount			%
Net interest income	$	1,680		$	1,722		$	(42	)		-2	%	$	1,680		$	1,818		$	(138	)		-8	%
Taxable-equivalent adjustment (a)		12			13			(1	)		-2			12			14			(2	)		-6
Net interest income (taxable-equivalent basis) (a)		1,692			1,735			(43	)		-2			1,692			1,832			(140	)		-8
Provision for credit losses		200			225			(25	)		-11			200			120			80			67
Other income		580			578			2			—			580			587			(7	)		-1
Other expense		1,396			1,450			(54	)		-4			1,396			1,359			37			3
Net income		531			482			49			10			531			702			(171	)		-24
Per common share data:
Basic earnings		3.04			2.75			0.29			11			3.04			4.03			(0.99	)		-25
Diluted earnings		3.02			2.74			0.28			10			3.02			4.01			(0.99	)		-25
Performance ratios, annualized
Return on:
Average assets		1.01	%		.92	%								1.01	%		1.40	%
Average common shareholders’ equity	8.14			7.41									8.14			11.74
Net interest margin	3.52			3.61									3.52			4.04

(a)

Net interest ~~or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively~~income data are presented on a ~~step-by-step~~taxable-equivalent basis aswhich is a non-GAAP measure. The taxable-equivalent adjustment represents additional income taxes that would be due if ~~the equity method has been in effect during~~ all ~~previous periods that the investment had been held. Instead, the amended guidance requires the investor~~interest income were subject to adopt the equity method of accounting as of the date the investment first qualifies for such accounting. The adoption of this guidance did not have a material effect on the Company’s consolidated financial position or results of operations.

In January 2017, the Company adopted two amendments to the accounting guidance for derivatives and hedging. The first amendment clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The second amendment clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment is required to assess the embedded call (put) options solely in accordance with a four-step decision sequence and no longer has to assess whether the event that triggers the ability to exercise the optionincome taxes. This adjustment, which is related to interest ~~rates or credit risks.~~ received on qualified municipal securities, industrial revenue financings and preferred equity securities, is based on a composite income tax rate of approximately 25%.

The ~~adoption of this guidance did not have a material effect on the Company’s consolidated financial position or results of operations.~~

In August 2017, the Financial Accounting Standards Board (“FASB”) issued amended guidance expanding and clarifying hedge accounting for nonfinancial and financial risk components, aligning the recognition and presentation of the effects of the hedging instrument and hedged itemincrease in net income in the ~~financial statements, and simplifying~~recent quarter as compared with the ~~requirements for assessing effectiveness in a hedging relationship. The guidance eliminates~~fourth quarter of 2023 resulted from the ~~concept of benchmark~~following:

•

Net interest rates for cash flow hedges of interest rate risk and permits variability in cash flows attributable to the contractually specified interest rate to be designated as the hedged risk in a cash flows hedge of a variable-rate financial instrument. For a fair value hedge of interest rate risk, the amended guidance added the Securities Industry and Financial Markets Association Municipal Swap Rate as an eligible benchmark interest rate. The amendments also change the guidance for designating fair value hedges of interest rate risk and for measuring the change in fair value of the hedged item in fair value hedges of interest rate risk by (1) for a closed portfolio of prepayable financial assets or one or more beneficial interests secured by a portfolio of prepayable financial instruments, permitting an amount that is not expected to be affected by prepayments, defaults, and other events affecting the timing and amount of cash flow (“last of layer” method) to be designated as the hedged item, (2) permitting the change in fair value of the hedged item to be measured on the basis of the benchmark interest rate component of the contractual coupon cash flows rather than the full contractual coupon cash flows, (3) permitting the hedged item in a partial-term fair value hedge to be measured by assuming the hedged item has a term that reflects only the designated cash flows being hedged, and (4) for prepayable financial instruments, permitting the consideration of only how changes in the benchmark interest rate affect a decision to settle a debt instrument before its scheduled maturity in calculating the change in fair value of the hedged item attributable to interest rate risk. As it relates to aligning the recognition and

~~- 47 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~16. Recent accounting developments, continued~~

presentation of the effects of the hedging instrument and hedged item in the financial statements, the amended guidance requires (1) the entire change in fair value of the hedging instrument that is included in the assessment of hedge effectiveness to be presented in the same income statement line item that is used to present the earnings effect of the hedged item in a fair value hedge and the hedged transaction in a cash flow hedge and (2) for cash flow hedges, the entire change in fair value of the hedging instrument to be included in other comprehensive income (hedge ineffectiveness no longer will be recognized in earnings for cash flow hedges) and reclassified to earnings when the hedged forecasted transaction effects earnings. From the perspective of simplifying the requirements for assessing effectiveness in a hedging relationship, the amendments permit (1) qualitative subsequent assessments of hedge effectiveness when the facts and circumstances related to the hedging relationship have not changed, (2) initial prospective quantitative assessments at any time after hedge designation up to the first quarterly effectiveness testing date, and (3) application of the long-haul method for assessing hedge effectiveness if the shortcut method was initially applied and is no longer appropriate. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018, with early adoption permitted. If adopted in an interim period, the effects of the adoption should be reflected as of the beginning of the fiscal year of adoption. For cash flow hedges existing at the date of adoption, a cumulative-effect adjustment should be applied related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments. The amended presentation and disclosure guidance is required only prospectively. The Company is evaluating when it will adopt the amended guidance and does not expect such adoption will have a material impact on its consolidated financial statements.

In May 2017, the FASB issued amended guidance relating to which changes to the terms and conditions of a share-based payment award require an entity to apply modification accounting. The guidance requires an entity to account for the effects of a modification unless all the following criteria are met: (1) the fair value of the modified award is the same as the fair value of the original award immediately before the original award was modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award was modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award was modified. The guidance is effective for annual periods; and interim periods within those annual periods beginning after December 15, 2017, and should be applied on a ~~prospective~~taxable-equivalent basis ~~to an award modified on or after the adoption date. The Company does not expect the guidance to have~~declined $43 million reflecting a ~~material impact on its consolidated financial statements.~~

In March 2017, the FASB issued amended guidance requiring the premium on callable debt securities held at a premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018, with early adoption permitted. If adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company does not expect the guidance to have a material impact on its consolidated financial statements.

~~In March 2017, the FASB issued amended guidance requiring the service cost component~~narrowing of the net ~~periodic pension cost and net periodic postretirement benefit cost to be reported in the same line item in the income statement as other compensation costs arising from services rendered~~interest margin by ~~the pertinent employees during the period. The amendments also require that the other components of net benefit costs be presented separately from the service cost~~

~~- 48 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~16. Recent accounting developments, continued~~

component. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, using a retrospective transition method for the presentation of the service cost and other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement. The amendments allow for a practical expedient that permits the use of the amounts disclosed in the Company’s pension and other postretirement benefit plan note for the prior comparative periods as the estimation9 basis ~~for applying the retrospective presentation requirements. The Company does not expect the guidance to have a material impact on its consolidated financial statements.~~

In January 2017, the FASB issued amended guidance eliminating step 2 from the goodwill impairment test. Under the amendments to the guidance, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized, however, should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The guidance is effective for annual periods or any interim goodwill impairment tests beginning after December 15, 2019 using a prospective transition method. Early adoption is permitted. The Company does not expect the guidance will have a material impact on its consolidated financial statements, unless at some point in the future one of its reporting units were to fail step 1 of the goodwill impairment test.

In January 2017, the FASB issued amended guidance clarifying the definition of a business for purposes of evaluating whether transactions would be accounted for as acquisitions (or disposals) of assets or businesses. The amendments provide a screen to determine when a set of assets and activities (collectively referred to as a “set”) is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar assets, the set is not a business. If the screen is not met, the amendments (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output, and (2) remove the evaluation of whether a market participant could replace missing elements. The guidance is effective for annual
periods and interim periods within those annual periods beginning after December 15, 2017 using a prospective transition method. The Company does not expect the guidance to have a material impact on its consolidated financial statements.

In November 2016, the FASB issued amended guidance for the presentation of restricted cash in the statement of cash flows. The guidance requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. In addition, when cash, cash equivalents, and restricted cash or restricted cash equivalents are presented in more than one line item within the statement of financial position, the line items and amounts must be presented on the face of the statement of cash flows or disclosed in the notes to the financial statements. Information about the nature of restrictions on an entity’s cash and cash equivalents must also be disclosed. The guidance, which applies only to the consolidated statement of cash flows, is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, using a retrospective transition method.

~~- 49 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~16. Recent accounting developments, continued~~

In August 2016, the FASB issued amended guidance for how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance addresses the following eight specific cash flow issues: (1) cash payments for debt extinguishment costs should be classified as cash outflows for financing activities; (2) for zero-coupon debt instruments, the portion of the cash payment attributable to the accreted interest should be classified as a cash outflow for operating activities; (3) contingent consideration payments made after a business combination should be classified based on the timing of the payment; (4) cash proceeds received from the settlement of insurance claims should be classified on the basis of the related insurance coverage; (5) cash proceeds received from the settlement of corporate-owned and bank-owned life insurance policies should be classified as cash inflows from investing activities; (6) when the equity method is applied, an accounting policy election should be made to classify distributions received using either the cumulative earnings approach or the nature of the distribution approach; (7) cash receipts from payments on a transferor’s beneficial interests obtained in a securitization of financial assets should be classified as cash inflows from investing activities; and (8) the classification of cash receipts and payments that have aspects of more than one class of cash flows should be determined by applying specific guidance in GAAP. The guidance, which only impacts the presentation of the consolidated statement of cash flows, is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017.

In June 2016, the FASB issued amended guidance for the measurement of credit losses on certain financial assets. The amended guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The allowancepoints.

•

Provision for credit losses ~~will represent~~declined $25 million reflecting a valuation account that is deducted from the amortized cost basis of the financial assets to present their net carrying value at the amount expected to be collected. The income statement will reflect the measurement of credit losses for newly recognized financial assets as well as expected increases or decreases of expected credit losses that have taken place during the period. When determining the allowance, expected credit losses over the contractual term of the financial asset(s) (taking into account prepayments) will be estimated considering relevant information about past events, current conditions, and reasonable and supportablemodest improvement in economic forecasts, that affect the collectibility of the reported amount. The amended guidance also requires recording an allowance for credit losses for purchased financial assets with a more-than-insignificant amount of credit deterioration since origination. The initial allowance for these assets will be added to the purchase price at acquisition rather than being reported as an expense. Subsequent changes in the allowance will be recorded through the income statement as an expense adjustment. In addition, the amended guidance requires credit losses relating to available-for-sale debt securities to be recorded through an allowance for credit losses. The calculation of credit losses for available-for-sale securities will be similar to how it is determined under existing guidance. The guidance is effective for annual periods and interim periods within those annual periods beginning after

December 15, 2019. The Company is assessing the new guidance to determine what modifications to existing credit estimation processes may be required. The Company expects that the new guidance will result inpartially offset by an increase in ~~its allowance for credit losses as~~criticized commercial and industrial loans.

•

Other expenses declined $54 million reflecting a ~~result of considering credit losses over the expected life of its loan portfolios.~~ ~~Increases~~$29 million FDIC assessment in the ~~level of the allowance for credit losses will also reflect new requirements to include the~~ ~~nonaccretable principal difference on purchased credit impaired loans and estimated credit losses on investment securities classified~~recent quarter as ~~held-to-maturity, if any. The Company is still evaluating the extent of the increase to the allowance for credit losses and the impact to its financial statements.~~

In February 2016, the FASB issued guidance related to the accounting for leases. The core principle of the guidance is that all leases create an asset and a liability for the lessee and, therefore, lease assets and lease liabilities should be recognizedcompared with $197 million in the ~~balance sheet. Lease assets will be recognized as a right-of-use asset~~fourth quarter of 2023, partially offset by seasonally higher salaries and lease liabilities will be recognized as a liability to make lease payments. While the guidance requires all leases to be recognized in the balance sheet, there continues to be a differentiation between finance leases and operating leases for purposes of income statement recognition and cash flow statement presentation. For finance leases, interest on the lease liability

employee benefits expenses.

- 5039 -

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~16. Recent accounting developments, continued~~

and amortization of the right-of-use asset will be recognized separately in the statement of income. Repayments of principal on those lease liabilities will be classified within financing activities and payments of interest on the lease liability will be classified within operating activities in the statement of cash flows. For operating leases, a single lease cost is recognized in the statement of income and allocated over the lease term, generally on a straight-line basis. All cash payments are presented within operating activities in the statement of cash flows. The accounting applied by lessors is largely unchanged from existing GAAP, however, the guidance eliminates the accounting model for leveraged leases for leases that commence after the effective date of the guidance. The guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company occupies certain banking offices and uses certain equipment under noncancelable operating lease agreements, which currently are not reflected in its consolidated balance sheet. Upon adoption of the guidance, the Company expects to report increased assets and increased liabilities as a result of recognizing right-of-use assets and lease liabilities on its consolidated balance sheet. The Company was committed to $467 million of minimum lease payments under noncancelable operating lease agreements at December 31, 2016. The Company does not expect the new guidance will have a material impact to its consolidated statement of income.

In January 2016, the FASB issued amended guidance related to recognition and measurement of financial assets and liabilities. The amended guidance requires that equity investments (excluding those accounted for under the equity method of accounting or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognizeddecrease in net income. An entity can elect to measure equity investments that do not have readily determinable fair values at cost less impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. The impairment assessment of equity investments without readily determinable fair values is simplified by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates impairment exists, an entity is required to measure the investment at fair value. The guidance eliminates the requirement for public business entities to disclose the method and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. Further, the guidance requires public entities to use the exit price when measuring the fair value of financial instruments for disclosure purposes. The guidance also requires an entity to present separately in other comprehensive income a change in the instrument-specific credit risk when the entity has elected to measure a liability at fair value in accordance with the fair value option. Separate presentation of financial assets and liabilities by measurement category and type of instrument on the balance sheet or accompanying notes to the financial statements is required. The guidance also clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. This guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company does hold certain equity securities in its available-for-sale portfolio. Upon adoption of this guidance, fair value changes in such equity securities will be recognized in the consolidated statement of income as opposed to accumulated other comprehensive income where they are recognized under current accounting guidance. Although those securities have historically fluctuated in value, how those securities could change in value in the future is not predictable.

In May 2014, the FASB issued amended accounting and disclosure guidance for revenue from contracts with customers. The core principle of the accounting guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; (5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer. The amended disclosure guidance requires sufficient information to enable users of financial statements to understand the nature, amount,

~~- 51 -~~

~~NOTES TO FINANCIAL STATEMENTS, CONTINUED~~

~~16. Recent accounting developments, continued~~

timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amended guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The guidance should be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application (the “modified retrospective approach”). The Company expects to adopt the revenue recognition guidance in the first quarter of ~~2018. A significant amount of~~2024 as compared with 2023's initial quarter reflects the ~~Company’s revenues are derived from~~following:

•

Taxable-equivalent net interest income on financial assets and liabilities, which are excluded from the scope of the amended guidance. With respect to noninterest income, the Company has identified revenue streams within the scope of the guidance and is in the final stages of its accounting analysis of the underlying contracts. The Company does not presently expect that changes in the timing of revenue recognition will be material to the amount of annual revenue recognized by the Company.

~~- 52 -~~

~~Item 2.~~

~~Management’s Discussion and Analysis of~~ ~~Financial Condition and Results of Operations.~~

~~Overview~~

M&T Bank Corporation (“M&T”) recorded net income in the third quarter of 2017 of $356 million or $2.21 of diluted earnings per common share, compared with $350 million or $2.10 of diluted earnings per common share in the similar quarter of 2016. Net income in the second quarter of 2017 totaled $381 million or $2.35 of diluted earnings per common share. Basic earnings per common share were $2.22 in the recent quarter, compared with $2.10 and $2.36 in the third quarter of 2016 and the second quarter of 2017, respectively. For the first nine months of 2017, net income was $1.09 billion or $6.69 of diluted earnings per common share, compared with $985 million or $5.80 of diluted earnings per common share in the corresponding 2016 period. Basic earnings per common share were $6.71 for the first nine months of 2017, compared with $5.82 for the initial nine months of 2016.

The annualized rate of return on average total assets for M&T and its consolidated subsidiaries (“the Company”) in the third quarter of 2017 was 1.18%, compared with 1.12% in the year-earlier quarter and 1.27% in the second quarter of 2017. The annualized rate of return on average common shareholders’ equity was 8.89% in the recently completed quarter, compared with 8.68% and 9.67% in the third quarter of 2016 and the second 2017 quarter, respectively. During the nine-month period ended September 30, 2017, the annualized rates of return on average assets and average common shareholders’ equity were 1.20% and 9.15%, respectively, compared with 1.06% and 8.17%, respectively, in the similar period of 2016.

On October 9, 2017, Wilmington Trust Corporation, a wholly owned subsidiary of M&T, reached an agreement with the U.S. Attorney’s Office for the District of Delaware related to alleged conduct that took place between 2009 and 2010 prior to the acquisition of Wilmington Trust Corporation by M&T. Under terms of the agreement, Wilmington Trust Corporation was required to pay $60 million and settled the government’s claims. The settlement amount included $16 million previously paid to the U.S. Securities and Exchange Commission in a related action. The result was a payment of $44 million that is not deductible for income tax purposes. Wilmington Trust Corporation did not admit any liability.

As of September 30, 2017, the Company increased the reserve for legal matters by $50 million. That increase, coupled with the non-deductible nature of the $44 million payment, reduced net income by $48 million, or $.31 of diluted earnings per common share, in the third quarter of 2017.

During the first quarter of 2017, M&T adopted new accounting guidance for share-based transactions. That guidance requires that all excess tax benefits and tax deficiencies associated with share-based compensation be recognized in income tax expense in the income statement. Previously, tax effects resulting from changes in M&T’s share price subsequent to the grant date were recorded through shareholders’ equity at the time of vesting or exercise. The adoption of the amended accounting guidance resulted in an $18 million reduction of income tax expense or $.12 of diluted earnings per common share in the initial 2017 quarter. The impact of that change in accounting on income tax expense was not significant in the second and third quarters of 2017.

During the third quarter of 2016, the Company sold substantially all of its collateralized debt obligations with an amortized cost of $28 million held in the available-for-sale investment securities portfolio, resulting in an after-tax gain of $17 million ($28 million pre-tax), or $.11 per diluted common share. Those securities, which had been obtained in previous acquisitions, were sold in response to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) commonly referred to as the “Volcker Rule.” There were no significant gains or losses on investment securities during the second or third quarters of 2017.

On June 28, 2017, M&T announced that the Federal Reserve did not object to M&T’s proposed 2017 Capital Plan. That capital plan includes the repurchase of up to $900 million of common shares during the four-quarter period starting on July 1, 2017, an increase in the quarterly common stock dividend in the second quarter of 2018 of up to $.05 per share to $.80 per share, and the issuance of subordinated capital notes in the third quarter of 2017 of $500 million. M&T may continue to pay dividends and interest on equity and debt instruments included in regulatory capital, including preferred stock, trust preferred securities and subordinated debt that were outstanding at December 31, 2016, consistent with the contractual terms of those instruments. Dividends are subject to declaration

~~- 53 -~~

by M&T’s Board of Directors. In July 2017, M&T’s Board of Directors authorized a new stock repurchase program to repurchase up to $900 million of shares of M&T’s common stock subject to all applicable regulatory limitations, including those set forth in M&T’s 2017 Capital Plan. In accordance with M&T’s 2017 Capital Plan, during the third quarter of 2017, M&T repurchased 1,382,746 shares of its common stock at a cost of $225 million and issued $500 million of subordinated capital notes. In accordance with M&T’s revised 2016 Capital Plan, during the second quarter of 2017, M&T repurchased 1,409,807 shares of its common stock at a total cost of $225 million and in the first quarter of ~~2017, M&T repurchased 3,233,196 shares of its common stock at a cost of $532~~2024 declined $140 million, ~~and increased the quarterly common stock dividend from $.70 to $.75 per share. In the aggregate, M&T repurchased 6,025,749 shares of its common stock at a cost of $982 million during~~or 8%, when compared with the first ~~three quarters~~quarter of ~~2017 and 5,307,595 shares~~2023, reflecting a narrowing of the net interest margin by 52 basis points.

•

The comparatively higher provision for ~~$604 million during~~credit losses in the recent quarter as compared with the first ~~three quarters~~quarter of ~~2016.~~2023 reflects declines in commercial real estate values and higher interest rates contributing to a deterioration in the performance of loans to commercial borrowers, including nonautomotive finance dealers and healthcare facilities, and growth in loans to certain sectors of the Company's commercial and industrial and consumer loan portfolios.

•

Noninterest income in the first quarter of 2024 declined $7 million as compared with 2023's initial quarter. Lower trust income reflecting the CIT divestiture in April 2023 was partially offset by higher mortgage banking revenues and an increase in service charges on commercial deposit accounts.

•

Noninterest expenses, excluding the increased FDIC special assessment, rose modestly from 2023's initial quarter. Higher levels of salaries and employee benefits expense, outside data processing and software expense and other costs of operations were partially offset by lower professional and other services, reflecting the CIT divestiture, and lower advertising and marketing costs.

The Company's effective tax rate was 20.0% in the first quarter of 2024, compared with 22.9% in the fourth quarter of 2023 and 24.2% in the first quarter of 2023. The first quarter of 2024 income tax expense reflects a net discrete benefit related to the resolution of a tax matter inherited from the acquisition of People's United.

On July 25, 2017, the Federal Reserve Bank of New York terminated its written agreement with M&T and its principal bank subsidiary, M&T Bank, that had been entered into in June 2013. Under the terms of that agreement, M&T and M&T Bank implemented an enhanced compliance risk management program designed to ensure compliance with the Bank Secrecy Act and anti-money-laundering laws and regulations (“BSA/AML”) and took other steps to enhance their compliance practices.

Supplemental Reporting of Non-GAAP Results of Operations

M&T consistently provides supplemental reporting of its results on a “net operating” or “tangible” basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and gains (when realized) and expenses (when incurred) associated with merging acquired operations into the Company, since such items are considered by management to be “nonoperating” in nature. Those merger-related expenses generally consist of professional services and other temporary help fees associated with the actual or planned conversion of systems and/or integration of operations; costs related to branch and office consolidations; costs related to termination of existing contractual arrangements to purchase various services; initial marketing and promotion expenses designed to introduce the Company to its new customers; severance; incentive compensation costs; travel costs; and printing, supplies and other costs of completing the transactions and commencing operations in new markets and offices. Merger-related expenses associated with the 2015 acquisition of Hudson City Bancorp, Inc. (“Hudson City”) were $36 million ($22 million after-tax effect) in the first nine months of 2016 ($.14 per diluted common share). There were no merger-related expenses during the third quarter of 2016 or in the first nine months of 2017. Although “net operating income” as defined by M&T is not a GAAP measure, M&T’s management believes that this information helps investors understand the effect of acquisition activity in reported results.

SUPPLEMENTAL REPORTING OF NON-GAAP RESULTS OF OPERATIONS


	Three Months Ended						Change					Three Months Ended						Change
(Dollars in millions, except per share data)	March 31, 2024			December 31, 2023			Amount		%			March 31, 2024			March 31, 2023			Amount			%
Net operating income	$	543		$	494		$	49		10	%	$	543		$	715		$	(172	)		-24	%
Diluted net operating earnings per share		3.09			2.81			0.28		10			3.09			4.09			(1.00	)		-24
Return on:
Average tangible assets		1.08	%		.98	%							1.08	%		1.49	%
Average tangible common equity		12.67			11.70								12.67			19.00
Efficiency ratio		60.8			62.1								60.8			55.5
Tangible equity per common share (a)	$	99.54		$	98.54		$	1.00		1	%	$	99.54		$	88.81		$	10.73			12	%

~~Net~~

(a)

At the period end.

The efficiency ratio measures the relationship of noninterest operating ~~income was $361 million~~expenses, which exclude expenses M&T considers to be "nonoperating" in nature consisting of amortization of core deposit and other intangible assets and merger-related expenses, to revenues. The calculations of the ~~third quarter~~Company’s efficiency ratio, or noninterest operating expenses divided by the sum of ~~2017, compared with $356 million in the year-earlier quarter. Diluted~~taxable-equivalent net ~~operating earnings per common share for the recent quarter were $2.24, compared with $2.13 in the third quarter of 2016. Net operating~~interest income and ~~diluted net operating earnings per common share were $386 million~~noninterest income (exclusive of gains and ~~$2.38, respectively, in the second quarter of 2017. For the first nine months of 2017, net operating income~~losses from bank investment securities), and ~~diluted net operating earnings per common share were $1.10 billion and $6.78, respectively, compared with $1.03 billion and $6.07, respectively, in the corresponding 2016 period.~~

Net operating income in the recent quarter expressed as an annualized rate of return on average tangible assets was 1.25%, compared with 1.18% in the year-earlier quarter and 1.33% in the second quarter of 2017. Net operating income represented an annualized return on average tangible common equity of 13.03% in 2017’s third quarter, compared with 12.77% in the similar quarter of 2016 and 14.18% in 2017’s second quarter. For the first nine months of 2017, net operating income represented an annualized return on average tangible assets and average tangible common shareholders’ equity of 1.26% and 13.42%, respectively, compared with 1.15% and 12.36%, respectively, in the first nine months of 2016.

~~Reconciliations~~reconciliations of GAAP amounts with corresponding non-GAAP amounts are ~~provided~~presented in ~~table~~Table 2.

- 5440 -

Taxable-equivalent Net Interest Income

Interest income earned on certain of the Company's assets is exempt from federal income tax. Taxable-equivalent net interest income is a non-GAAP measure that adjusts income earned on a tax-exempt asset to present it on an equivalent basis to interest income earned on a fully taxable asset. The Company's average balance sheets accompanied by the annualized taxable-equivalent interest income and expense and the average rate on the Company's earning assets and interest-bearing liabilities are presented as follows.

AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES


	2024 First Quarter								2023 Fourth Quarter								2023 Third Quarter
(Dollars in millions)	Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate
Assets
Earning assets:
Loans and leases, net of unearned discount (a):
Commercial and industrial	$	56,821		$	987		6.99	%	$	55,420		$	979		7.01	%	$	54,567		$	943		6.86	%
Commercial real estate		32,696			526		6.36			33,455			560		6.54			34,288			570		6.50
Residential real estate		23,136			247		4.28			23,339			248		4.25			23,573			244		4.14
Consumer		21,143			343		6.54			20,556			332		6.42			20,189			313		6.16
Total loans and leases, net		133,796			2,103		6.32			132,770			2,119		6.33			132,617			2,070		6.19
Interest-bearing deposits at banks		30,647			419		5.49			30,153			416		5.48			26,657			363		5.40
Trading account		105			1		3.42			123			1		3.80			136			1		4.05
Investment securities (b):
U.S. Treasury and federal agencies		24,625			191		3.11			23,675			173		2.90			24,166			177		2.90
Obligations of states and political subdivisions		2,489			23		3.77			2,507			24		3.75			2,527			24		3.70
Other		1,473			20		5.54			1,308			20		6.04			1,300			21		6.51
Total investment securities		28,587			234		3.30			27,490			217		3.13			27,993			222		3.14
Total earning assets		193,135			2,757		5.74			190,536			2,753		5.73			187,403			2,656		5.62
Allowance for credit losses		(2,156	)							(2,073	)							(1,998	)
Cash and due from banks		1,687								1,634								1,730
Other assets		18,812								18,655								18,656
Total assets	$	211,478							$	208,752							$	205,791
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Interest-bearing deposits:
Savings and interest-checking deposits	$	94,867		$	615		2.61	%	$	93,365		$	606		2.58	%	$	89,274		$	494		2.20	%
Time deposits		20,583			225		4.41			21,224			230		4.30			19,528			202		4.09
Total interest-bearing deposits		115,450			840		2.93			114,589			836		2.90			108,802			696		2.54
Short-term borrowings		6,228			84		5.42			5,156			69		5.27			5,346			69		5.16
Long-term borrowings		9,773			141		5.81			7,901			113		5.70			7,240			101		5.52
Total interest-bearing liabilities		131,451			1,065		3.26			127,646			1,018		3.17			121,388			866		2.83
Noninterest-bearing deposits		48,615								50,124								53,886
Other liabilities		4,393								4,482								4,497
Total liabilities		184,459								182,252								179,771
Shareholders’ equity		27,019								26,500								26,020
Total liabilities and shareholders’ equity	$	211,478							$	208,752							$	205,791
Net interest spread							2.48								2.56								2.79
Contribution of interest-free funds							1.04								1.05								1.00
Net interest income/margin on earning assets				$	1,692		3.52	%				$	1,735		3.61	%				$	1,790		3.79	%

(a)

Includes nonaccrual loans.

(b)

Includes available-for-sale securities at amortized cost.

- 41 -

AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES (continued)


	2023 Second Quarter								2023 First Quarter
(Dollars in millions)	Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate
Assets
Earning assets:
Loans and leases, net of unearned discount (a):
Commercial and industrial	$	54,572		$	901		6.63	%	$	52,510		$	816		6.30	%
Commercial real estate		34,903			563		6.38			35,245			519		5.89
Residential real estate		23,781			244		4.10			23,770			235		3.96
Consumer		20,289			298		5.88			20,487			287		5.67
Total loans and leases, net		133,545			2,006		6.02			132,012			1,857		5.70
Interest-bearing deposits at banks		23,617			302		5.14			24,312			277		4.64
Trading account		151			1		2.66			123			1		2.32
Investment securities (b):
U.S. Treasury and federal agencies		24,630			179		2.92			23,795			167		2.85
Obligations of states and political subdivisions		2,555			24		3.71			2,570			24		3.75
Other		1,438			18		4.83			1,257			15		4.38
Total investment securities		28,623			221		3.09			27,622			206		3.00
Total earning assets		185,936			2,530		5.46			184,069			2,341		5.16
Allowance for credit losses		(1,985	)							(1,938	)
Cash and due from banks		1,747								1,952
Other assets		18,678								18,516
Total assets	$	204,376							$	202,599
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Interest-bearing deposits:
Savings and interest-checking deposits	$	87,210		$	369		1.69	%	$	88,053		$	277		1.28	%
Time deposits		16,009			150		3.77			11,630			89		3.11
Total interest-bearing deposits		103,219			519		2.02			99,683			366		1.49
Short-term borrowings		7,539			96		5.11			4,994			58		4.69
Long-term borrowings		7,516			102		5.43			6,511			85		5.27
Total interest-bearing liabilities		118,274			717		2.43			111,188			509		1.86
Noninterest-bearing deposits		56,180								61,854
Other liabilities		4,237								4,180
Total liabilities		178,691								177,222
Shareholders’ equity		25,685								25,377
Total liabilities and shareholders’ equity	$	204,376							$	202,599
Net interest spread							3.03								3.30
Contribution of interest-free funds							.88								.74
Net interest income/margin on earning assets				$	1,813		3.91	%				$	1,832		4.04	%

(a)

Includes nonaccrual loans.

(b)

Includes available-for-sale securities at amortized cost.

Expressed on a taxable-equivalent basis net interest income was ~~$966 million~~$1.69 billion in the ~~third~~first quarter of ~~2017, 12% higher than $865 million~~2024, compared with $1.74 billion and $1.83 billion, respectively, in the fourth and first quarters of 2023. The decrease in net interest income in the recent quarter reflects a 9 basis point reduction from the fourth quarter of 2023 and a 52 basis point reduction from the year-earlier ~~quarter. That growth resulted primarily from a widening~~quarter of the net interest margin, or taxable-equivalent net interest income expressed as an annualized percentage of average earning assets, to ~~3.53%~~3.52% in the recent quarter. The lower net interest margin in the first quarter of 2024 compared with the fourth and first quarters of 2023 predominantly reflects a comparatively higher interest rate environment, which has resulted in increases in rates paid on interest-bearing deposit products and borrowings outpacing increases in yields on the Company's interest-earning assets. Although the FOMC has not raised its federal funds target rate since July 2023, interest rates have remained elevated and the Company has experienced increased competition for customer deposits in the marketplace and a mix shift in those deposits toward higher cost interest-bearing products, including time deposits. The Company has also altered its use of other funding sources including borrowings and placement of brokered deposits. Average short-term and long-term borrowings in the recent quarter collectively rose by $2.9 billion, or 23%, while average brokered deposits decreased $736 million, or 5%, from ~~3.05% in~~ the ~~corresponding 2016 period. The improvement in~~fourth quarter of 2023. As compared with the ~~net interest margin was largely the result~~first quarter of ~~the higher interest rate environment due to actions initiated~~2023, average short-term and long-term borrowings collectively rose by ~~the Federal Reserve in mid-December 2016, mid-March 2017~~$4.5 billion, or 39%, and ~~mid-June 2017 to raise its target Federal funds rate by .25% at each of those dates. Taxable-equivalent net interest income~~average brokered deposits increased $5.2 billion, or 64% in the recent quarter increased from $947 million in the second 2017 quarter, predominantly due to an 8 basis point (hundredths of one percent) widening of the net interest margin from 3.45% in the second quarter of 2017. That widening reflected the impact in the recent quarter of the June interest rate increase initiated by the Federal Reserve.quarter.

- 42 -

Lending Activities

For the first three quarters of 2017, taxable-equivalent net interest income was $2.84 billion, 8% higher than $2.61 billion in the similar period of 2016. That increase was primarily due to a 32 basis point widening of the net interest margin to 3.44% in 2017 from 3.12% in 2016. Also contributing to the higher taxable-equivalent net interest income in the 2017 period was growth inThe following table summarizes average ~~loan balances, which increased $986 million from the first nine months of 2016.~~

~~Average~~ loans and leases ~~totaled $88.4 billion~~outstanding in the ~~recent quarter, compared with $88.7 billion in the third~~first quarter of ~~2016. Commercial loans~~2024 and leases averaged $21.7 billion in the third quarter of 2017, $254 million or 1% above $21.5 billion in the year-earlier quarter. Average commercial real estate loans were $33.3 billion in the recent quarter, up $2.0 billion, or 6%, from $31.3 billion in the third quarter of 2016. Reflecting ongoing repayments of loans obtained in the acquisition of Hudson City, average residential real estate loans declined $3.5 billion, or 14%, to $20.6 billion in the third quarter of 2017 from $24.1 billion in the year-earlier quarter. Included in average residential real estate loans were loans held for sale, which averaged $346 million in the recent quarter and $374 million in the corresponding 2016 quarter. Consumer loans averaged $12.8 billion in the third quarter of 2017, an increase of $844 million, or 7%, from $11.9 billion in the year-earlier quarter, predominantly due to growth in average automobile and recreational vehicle loans, partially offset by lower outstanding balances of home equity lines of credit.

Average loan and lease balances in the third quarter of 2017 declined $882 million from $89.3 billion in the second quarter of 2017. As compared with 2017’s second quarter, average commercial loan and lease balances decreased $616 million, or 3%, in the recent quarter and average residential real estate loans in the third quarter of 2017 declined $710 million, or 3%, reflecting the continued pay down of loans obtained in the acquisition of Hudson City, while commercial real estate loan average balances increased $43 million, or less than 1%, and average consumer loans increased $400 million, or 3%. The accompanying table summarizes quarterlypercentage changes in the major components of the ~~loan and lease portfolio.~~portfolio over comparable periods.

~~- 55 -~~

AVERAGE LOANS AND LEASES


			Percent Change from
(Dollars in millions)	First Quarter 2024		Fourth Quarter 2023			First Quarter 2023
Commercial and industrial	$	56,821		3	%		8	%
Commercial real estate		32,696		-2			-7
Residential real estate		23,136		-1			-3
Consumer:
Recreational finance		10,306		5			13
Automobile		4,177		6			-6
Home equity lines and loans		4,597		-1			-7
Other		2,063		-2			3
Total consumer		21,143		3			3
Total	$	133,796		1	%		1	%

~~(net of unearned discount)~~

Percent Increase

(Decrease) from

3rd Qtr.

3rd Qtr.

2nd Qtr.

2017

2016

2017

(In millions)

Commercial, financial, etc.

$
21,734

1

%

(3
)
%
Real estate — commercial

33,257

6

—

Real estate — consumer

20,609

(14
)

(3
)

Consumer

Automobile

3,328

19

5

Home equity lines and loans

5,413

(6
)

(1
)

Other

4,045

19

9

Total consumer

12,786

7

3

Total

$
88,386

—

%

(1
)
%

~~For the first nine months of 2017, average~~Average loans and leases totaled ~~$89.1 billion, up $986 million, or 1%, from $88.2~~$133.8 billion in the ~~corresponding period~~first quarter of ~~2016. Growth in commercial real estate loans, commercial~~2024, up $1.0 billion or 1% from the fourth quarter of 2023.

•

Commercial and industrial loans and leases ~~and consumer loans were partially offset by a decline in residential real estate loans.~~

~~The investment securities portfolio~~ averaged ~~$15.4~~$56.8 billion in the recent quarter, up ~~$1.1~~$1.4 billion ~~or 8%,~~ from ~~$14.4~~the fourth quarter of 2023 reflecting growth which spanned most industry types.

•

Average commercial real estate loans were $32.7 billion in the ~~year-earlier~~first quarter ~~but $470~~of 2024, $759 million lower than the ~~$15.9~~final quarter of 2023 reflecting declines of $296 million in average construction loans and $463 million in average permanent commercial real estate loans.

•

Average residential real estate loans decreased $203 million to $23.1 billion ~~averaged~~ in the ~~second~~first quarter of ~~2017. For~~2024 as compared with the fourth quarter of 2023, largely attributable to customer payments on loans held for investment.

•

Consumer loans averaged $21.1 billion in the first ~~nine months~~quarter of ~~2017~~2024 or $587 million higher than the fourth quarter of 2023. That growth reflected an increase in average balances of $452 million and ~~2016, investment securities averaged $15.8~~$247 million in M&T's portfolio of recreational finance loans and automobile loans, respectively.

Average loans and leases increased $1.8 billion or 1% from $132.0 billion in the similar quarter of 2023.

•

Average commercial and ~~$14.9~~industrial loans and leases increased $4.3 billion ~~respectively. Those changes reflect~~from the ~~net effect~~year-earlier quarter predominantly reflecting growth in loans to financial and insurance industry customers and to motor vehicle and recreational finance dealers.

•

Average commercial real estate loans decreased $2.5 billion in the recent quarter as compared with the first quarter of ~~purchases,~~2023 reflecting decreases of $1.0 billion in average construction loans and $1.5 billion in average permanent commercial real estate loans.

•

Average residential real estate loans decreased $634 million in the first quarter of 2024 from the year-earlier quarter. That decrease was largely attributable to customer payments on loans held for investment. In the first quarter of 2023, the Company returned to originating for sale the majority of its newly originated residential mortgage loans.

•

Average consumer loans in the first quarter of 2024 increased $656 million from the year-earlier quarter. That growth reflected higher average balances of $1.2 billion of recreational finance loans, partially offset by ~~maturities~~declines of $252 million and ~~pay downs~~$332 million in average balances of ~~mortgage-backed securities. During the second quarter~~automobile loans and home equity loans and lines of ~~2017, the Company purchased $658 million of mortgage-backed securities, predominantly Ginnie Mae securities, and $214 million of U.S. Treasury notes.~~ credit, respectively.

- 43 -

Investing Activities

The Company sold $512 million of available-for-sale Fannie Mae and Freddie Mac mortgage-backed securities during 2017’s second quarter largely due to the limitations on the amount of Fannie Mae and Freddie Mac mortgage-backed securities that are permitted to be included in the highest tier of “high quality liquid assets” for the Liquidity Coverage Ratio (“LCR”) calculation. During the third quarter of 2016, the Company sold substantially all of its collateralized debt obligations that were held in the available-for-sale investment securities portfolio ~~for a gain of approximately $28 million. Those securities were sold~~averaged $28.6 billion in ~~large part in response to~~ the ~~provisions of the Volcker Rule. During the third~~first quarter of ~~2017, there~~2024, up $1.1 billion and $965 million from the fourth and first quarters of 2023, respectively. The higher average balance in the recent quarter when compared with the fourth quarter of 2023 and year-earlier quarter reflects the purchase of $4.1 billion of debt securities during the three-month period ended March 31, 2024. Those purchases were predominantly U.S. Treasury notes and fixed rate government issued or guaranteed mortgage-backed securities. There were no significant ~~purchases or~~ sales of investment ~~securities.~~ securities during the three months ended March 31, 2024, December 31, 2023 and March 31, 2023. The Company routinely increases and decreases its holdings of capital stock of the FHLB of New York and the FRB of New York based on amounts of outstanding borrowings and available lines of credit with those entities.

The investment securities portfolio is largely comprised of government issued or guaranteed residential mortgage-backed securities ~~debt securities issued by municipalities, trust preferred securities issued by certain financial institutions,~~ and shorter-term U.S. Treasury and federal agency ~~notes.~~notes, but also includes commercial mortgage-backed securities and municipal securities. When purchasing investment securities, the Company considers its liquidity position and its overall ~~interest-rate~~interest rate risk profile as well as the adequacy of expected returns relative to risks assumed, including prepayments. The Company manages its investment securities portfolio, in part, to satisfy the requirements of the LCR that became effective in January 2016. The LCR is intended to ensure that banks hold a sufficient amount of “high quality liquid assets” to cover the anticipated net cash outflows during a hypothetical acute 30-day stress scenario. For additional information concerning the LCR rules, refer to Part I, Item 1 of M&T’s Form 10-K for the year ended December 31, 2016 under the heading “Liquidity.”

~~In addition to the sales noted above, the Company~~ may occasionally sell investment securities as a result of ~~changes~~movements in interest rates and spreads, changes in liquidity needs, actual or anticipated prepayments, credit risk associated with a particular security, or as a result of restructuring its investment securities portfolio in connection with a business combination. The amounts of investment securities held by the Company are influenced by such factors as available yield in comparison with alternative investments, demand for loans, which generally yield more than investment securities, ongoing repayments, the levels of deposits, and management of liquidity ~~(including the LCR)~~ and balance sheet size and resulting capital ratios.

~~- 56 -~~

The Company regularly reviews its debt investment securities for declines in value below amortized cost that might be ~~characterized as “other than temporary.” There~~indicative of credit-related losses. In light of such reviews, there were no ~~other-than-temporary impairment charges~~credit-related losses on debt investment securities recognized in ~~either~~any of the ~~nine-month periods~~three months ended ~~September 30, 2017 or 2016.~~March 31, 2024, December 31, 2023 and March 31, 2023. A further discussion of fair values of investment securities is included herein under the heading "Capital." Additional information about the investment securities portfolio is included in notes 3 and 12 of Notes to Financial Statements.

Other earning assets include interest-bearing deposits at ~~the Federal Reserve Bank of New York and other~~ banks, trading account assets, ~~and~~ federal funds ~~sold.~~sold and agreements to resell securities. Those other earning assets in the aggregate averaged ~~$4.8~~$30.8 billion in the ~~two most recent quarters,~~recently completed quarter, compared with ~~$9.8~~$30.3 billion inand $24.4 billion during the ~~third quarter of 2016.~~three months ended December 31, 2023 and March 31, 2023, respectively. Interest-bearing deposits at banks averaged ~~$4.7~~$30.6 billion, $30.2 billion and $24.3 billion during ~~each of~~ the ~~quarters~~three months ended ~~September 30, 2017~~March 31, 2024, December 31, 2023 and June 30, 2017 and $9.7 billion in the quarter ended September 30, 2016. For the nine-month periods ended September 30, 2017 and 2016, average balances of interest-bearing deposits at banks were $5.2 billion and $8.9 billion,March 31, 2023, respectively. The amounts of investment securities and other earning assets held by the Company are influenced by such factors as demand for loans, which generally yield more than investment securities and other earning assets, ongoing repayments, the levels of deposits, and management of liquidity (including the LCR) and balance sheet size and resulting capital ratios. The amounts of interest-bearing deposits at banks at ~~the~~those respective dates were predominantly comprised of deposits held at the ~~Federal Reserve Bank~~FRB of New York. ~~The~~In general, the levels of those deposits often fluctuate due to changes in deposits of retail and commercial customers, trust-related deposits ~~of commercial entities, purchases~~and additions to or maturities of investment securities or ~~borrowings to manage the Company’s liquidity.~~borrowings.

As a result of the changes described herein, average earning assets totaled $108.6 billion in the most recent quarter, compared with $112.9 billion in the year-earlier quarter and $110.0 billion in the second quarter of 2017. Average earning assets aggregated $110.2 billion and $112.0 billion during the nine-month periods ended September 30, 2017 and 2016, respectively.Funding Activities - Deposits

The most significant source of funding for the Company is core deposits. The Company considers noninterest-bearing deposits, interest-bearing transaction accounts, savings deposits and time deposits of $250,000 or less as core deposits. The Company’s branch network is its principal source of core deposits, which generally carry lower interest rates than wholesale funds of comparable maturities. Average core deposits totaled ~~$91.0~~$147.4 billion, inor 76% of average earning assets, for the ~~third~~ quarter ~~of 2017,~~ended March 31, 2024, compared with ~~$93.2~~$147.6 billion, inor 77%, and $152.0 billion, or 83%, for the ~~year-earlier quarter~~quarters ended December 31, 2023 and ~~$92.0 billion in the second quarter~~March 31, 2023, respectively. The lower level of ~~2017. The decline in average~~ core deposits in the ~~third quarter of 2017~~two most recent quarters as compared with the ~~year-earlier~~first quarter ~~reflected~~of 2023 reflects a ~~$4.1 billion, or 37%, decrease in time deposits, predominantly related to maturities of relatively high-rate deposits obtained~~shift in the ~~acquisition~~mix of Hudson City, partially offset by growth in noninterest-bearing deposits, in part reflecting balances associated with trust customers. As compared with 2017’s second quarter, the most significant factor for the decrease in average core deposits in the recent quarter was the continued decline of average time deposits, largely associated with deposits obtained in the Hudson City acquisition. The following table provides an analysis of quarterly changes in the components of average core deposits.

~~AVERAGE CORE DEPOSITS~~

Percent Increase

(Decrease) from

3rd Qtr.

3rd Qtr.

2nd Qtr.

2017

2016

2017

(In millions)

Savings and interest-checking deposits

$
52,056

1

%

(1
)
%
Time deposits

6,897

(37
)

(10
)

Noninterest-bearing deposits

32,005

4

—

Total

$
90,958

(2
)
%

(1
)
%

~~- 57 -~~

~~The Company also receives~~ funding sources, including from other deposit sources ~~including~~such as branch-related time deposits over $250,000 ~~deposits associated with the Company’s Cayman Islands office,~~ and brokered deposits. ~~Time deposits over $250,000, excluding~~Brokered savings and interest-bearing transaction accounts and brokered ~~deposits,~~time deposit accounts averaged ~~$717 million~~$8.0 billion and $5.2 billion, respectively, in the recent quarter, compared with ~~$1.3~~$6.7 billion and $7.3 billion, respectively, in the ~~third~~fourth quarter of ~~2016~~2023 and ~~$808 million~~$3.4 billion and $4.6 billion, respectively, in the second 2017 quarter. Cayman Islands office deposits averaged $169 million, $220 million and $163 million for the quarters ended September 30, 2017, September 30, 2016 and June 30, 2017, respectively. Brokered time deposits averaged $59 million in each of the quarters ended September 30, 2017, September 30, 2016 and June 30, 2017. The Company also had brokered savings and interest-bearing transaction accounts, which in the aggregate averaged $1.2 billion, $1.0 billion and $1.1 billion during the thirdfirst quarter of 2017, the corresponding 2016 quarter and the second quarter of 2017, respectively. The levels of brokered deposit accounts reflect the demand for such deposits, largely resulting from the desire of brokerage firms to earn reasonable yields while ensuring that customer deposits are fully insured. The level of Cayman Islands office deposits is also reflective of customer demand.2023. Additional ~~amounts of Cayman Islands office deposits or~~ brokered deposits may be added in the future depending on market conditions, including demand by customers and other investors for those deposits, and the cost of funds available from alternative sources at that time. The following table provides an analysis of quarterly changes in the ~~time.~~components of average deposits.

- 44 -

AVERAGE DEPOSITS


			Percent Change from
(Dollars in millions)	First Quarter 2024		Fourth Quarter 2023			First Quarter 2023
Noninterest-bearing deposits	$	48,615		-3	%		-21	%
Savings and interest-checking deposits		86,837		—			3
Time deposits of $250,000 or less		11,985		11			117
Total core deposits		147,437		—		-3

Time deposits greater than $250,000		3,405		7			130
Brokered deposits		13,223	-5				64
Total deposits	$	164,065		—	%		2	%

Deposits averaged $164.1 billion in the recent quarter, a $648 million decline from $164.7 billion in the fourth quarter of 2023.

•

Average core deposits decreased nominally from the fourth quarter of 2023 reflecting a stabilization of customer deposits in the higher rate environment.

•

The decrease in average brokered deposits in the recent quarter reflected a mix shift in the Company's wholesale funding strategies. Average brokered time deposits decreased $2.1 billion to $5.2 billion in the recent quarter from $7.3 billion in the fourth quarter of 2023 and the rates paid on those deposits averaged 5.01% and 4.97%, respectively. Average brokered savings and interest-bearing transaction accounts increased $1.3 billion to $8.0 billion in the recent quarter from $6.7 billion in the fourth quarter of 2023 and the rates paid on those deposits averaged 4.78% and 4.66%, respectively. The rate paid on total non-brokered interest-bearing deposits was 2.67% in the first quarter of 2024, compared with 2.62% in the fourth quarter of 2023.

Average deposits increased $2.5 billion from $161.5 billion in the year-earlier quarter.

•

The decrease in average core deposits in the recent quarter as compared with the year-earlier quarter reflects the impact of an elevated interest rate environment that influenced customers to seek higher rate alternatives, including a shift from noninterest-bearing deposit accounts to commercial sweep products and time deposits over $250,000.

•

The increase in average brokered deposits in the recent quarter as compared with the first quarter of 2023 reflects the Company's liquidity management and funding strategies during a period of rising interest rates, partially offset by the maturity of some brokered time deposits in the recent quarter. The Company had brokered savings and interest-bearing transaction accounts and brokered time deposits that averaged $3.4 billion and $4.6 billion, respectively, in the year-earlier quarter and the rates paid on those deposits averaged 3.54% and 4.82%, respectively. The rate paid on total non-brokered interest-bearing deposits in the first quarter of 2023 was 1.24%.

- 45 -

The accompanying table summarizes the components of average total deposits by segment for the quarters ended March 31, 2024, December 31, 2023 and March 31, 2023.

AVERAGE DEPOSITS BY SEGMENT


(Dollars in millions)	Commercial Bank		Retail Bank		Institutional Services and Wealth Management		All Other		Total
Three Months Ended March 31, 2024
Noninterest-bearing deposits	$	13,459	$	25,380	$	9,081	$	695	$	48,615
Savings and interest-checking deposits		29,721		51,274		7,131		6,741		94,867
Time deposits		353		14,995		37		5,198		20,583
Total	$	43,533	$	91,649	$	16,249	$	12,634	$	164,065

Three Months Ended December 31, 2023
Noninterest-bearing deposits	$	14,527	$	26,474	$	8,477	$	646	$	50,124
Savings and interest-checking deposits		28,702		51,941		6,728		5,994		93,365
Time deposits		425		13,507		31		7,261		21,224
Total	$	43,654	$	91,922	$	15,236	$	13,901	$	164,713

Three Months Ended March 31, 2023
Noninterest-bearing deposits	$	20,206	$	30,552	$	10,363	$	733	$	61,854
Savings and interest-checking deposits		22,263		54,650		7,957		3,183		88,053
Time deposits		330		6,667		13		4,620		11,630
Total	$	42,799	$	91,869	$	18,333	$	8,536	$	161,537

Funding Activities - Borrowings

The following table summarizes the average balances utilized from the Company's short-term and long-term borrowing facilities and note programs.

AVERAGE BORROWINGS


	Three Months Ended
	March 31,		December 31,		March 31,
(Dollars in millions)	2024		2023		2023
Short-term borrowings:
Federal funds purchased and repurchase agreements	$	307	$	404	$	364
FHLB advances		5,921		4,752		4,630
Total short-term borrowings	$	6,228	$	5,156	$	4,994

Long-term borrowings:
Senior notes	$	6,418	$	5,863	$	4,979
FHLB advances		1,323		5		5
Subordinated notes		977		989		980
Junior subordinated debentures		540		539		537
Asset-backed notes		505		495		—
Other		10		10		10
Total long-term borrowings		9,773		7,901		6,511
Total borrowed funds	$	16,001	$	13,057	$	11,505

The Company also uses ~~borrowings~~borrowing capacity from banks, ~~securities dealers, various Federal Home Loan Banks,~~ the ~~Federal Reserve Bank~~FHLBs, the FRB of New York and others as sources of funding. Short-term borrowings represent ~~borrowing~~ arrangements that at the time they were entered into had a contractual maturity of ~~less than~~ one ~~year. Average~~year or less. The higher levels of short-term borrowings ~~totaled $244 million~~ in the ~~recent~~first quarter of 2024 as compared with ~~$231 million in~~ the ~~third~~fourth quarter of ~~2016~~2023 and ~~$212 million in~~year-earlier first quarter reflect the ~~second quarter~~Company's management of 2017. Included in short-term borrowings were unsecured federal funds borrowings, which generally mature on the next business day, that averaged $139 million and $160 million in the third quarters of 2017 and 2016, respectively, and $141 million in the second quarter of 2017.liquidity.

Long-term borrowings averaged ~~$8.0~~$9.8 billion, $7.9 billion and $6.5 billion in the ~~recent quarter, compared with $10.3 billion in the year-earlier quarter~~three-month periods ending March 31, 2024, December 31, 2023 and ~~$8.3 billion in the second quarter of 2017.~~March 31, 2023, respectively. In February 2024, M&T Bank ~~has~~advanced $2.0 billion from the FHLB of New York which matures in February 2025 at a ~~Bank Note Program whereby~~variable rate of SOFR plus 25 basis points payable quarterly until maturity. In March 2024, M&T Bank may offer unsecured senior and subordinated notes. Average balances of senior notes outstanding under that program were $4.7 billion, $5.2 billion and $4.8 billion during the three-month periods ended September 30, 2017, September 30, 2016 and June 30, 2017, respectively. During August 2017, M&T Bank issued ~~$750~~$850 million of ~~2.05% fixed rate~~ senior notes that mature in ~~2020. During May 2017,~~March 2032 and pay a 6.08% fixed rate semi-annually until March 2031 after which SOFR plus 2.26% will be paid quarterly until maturity. Also in March 2024, M&T Bank issued ~~$650~~$511 million of ~~fixed~~asset-backed notes secured by automobile loans with a weighted-average estimated life of approximately two years and a weighted-average interest rate of 5.29% at the time

- 46 -

of securitization. The increased usage of borrowing facilities reflects the Company's strategies to diversify its wholesale funding options to provide long-term funding stabilization and ~~$250 million~~prepare for proposed regulations enumerating certain long-term debt requirements as described in Part I, Item 1 of ~~variable rate senior notes that mature in 2022. During June 2017,~~ M&T Bank redeemed $750 million of 1.40% fixed rate senior notes. The notes had a maturity date of July 25, 2017 and were redeemable on or after the 30th day prior to the maturity date. Outstanding balances of the senior unsecured notes were $5.0 billion at September 30, 2017 and $5.2 billion at December 31, 2016. Also included in average long-term borrowings were amounts borrowed from the Federal Home Loan Banks of New York, Atlanta and Pittsburgh of $580 million in the recent quarter, compared with $1.2 billion and $1.0 billion in the third quarter of 2016 and the second quarter of 2017, respectively. Subordinated capital notes included in long-term borrowings averaged $1.8 billion in the recent quarter and $1.5 billion during each of the quarters ended September 30, 2016 and June 30, 2017. During August 2017, M&T Bank issued $500 million of 3.40% fixed rate subordinated capital notes that mature in 2027 in accordance with M&T’s 2017 Capital Plan. Junior subordinated debentures associated with trust preferred securities that were included in average long-term borrowings totaled $518 million in each of the two most recent quarters, compared with $516 million in the third quarter of 2016. &T's 2023 Annual Report.

Additional information regarding ~~junior subordinated debentures~~borrowings is provided in ~~note~~notes 5 and 11 of Notes to Financial Statements. Also included in long-term borrowings were agreements to repurchase securities, which averaged $427 million in the recently completed quarter, compared with $1.9 billion in the year-earlier quarter and $430 million in the second quarter of 2017. The lower average balances of repurchase agreements in the 2017 periods as compared with the third quarter of 2016 reflect maturities. The repurchase agreements held at September 30, 2017 totaled $425 million and have various repurchase dates through 2020, however, the contractual maturities of the underlying securities extend beyond such repurchase dates. The Company has utilized

Net Interest Margin

Net interest rate swap agreements to modify the repricing characteristics of certain components of long-term debt. As of September 30, 2017, interest rate swap agreements were used to hedge approximately $5.0 billion of outstanding fixed rate long-term borrowings. During the third quarter of 2017, the Company entered into $1.3 billion of interest rate swap agreements to hedge the senior notes and subordinated capital notes issued in

~~- 58 -~~

August 2017. In the second quarter of 2017, the Company entered into $2.8 billion of interest rate swap agreements to hedge the aforementioned senior notes issued during that quarter and certain existing fixed rate borrowings. Further information on interest rate swap agreements is provided in note 10 of Notes to Financial Statements.

~~Changes~~income can be impacted by changes in the composition of the ~~Company’s~~Company's earning assets and interest-bearing liabilities, as discussed herein, as well as changes in interest rates and ~~spreads, can impact net interest income.~~spreads. Net interest spread, or the difference between the taxable-equivalent yield on earning assets and the rate paid on interest-bearing liabilities, was ~~3.32%~~2.48% in the recent quarter, ~~compared with 2.85%~~down 8 basis points from 2.56% in the ~~third~~fourth quarter of ~~2016.~~2023. The decline in the net interest spread from the fourth quarter of 2023 reflects higher levels of average borrowings, partially offset by higher rates earned on investment securities. The yield on earning assets during the ~~third~~first quarter of ~~2017~~2024 was ~~3.89%~~5.74%, up 451 basis ~~points~~point from ~~3.44%~~5.73% in the ~~year-earlier period, while the~~fourth quarter of 2023. The rate paid on interest-bearing liabilities ~~decreased two basis points to .57%~~was 3.26% in the recent quarter, ~~from .59%~~compared with 3.17% in the ~~similar 2016 period.~~final quarter of 2023. In the ~~second~~first quarter of ~~2017,~~2023, the net interest spread was ~~3.27%~~3.30%, the yield on earning assets was ~~3.79%~~5.16% and the rate paid on interest-bearing liabilities was ~~.52%~~1.86%. ~~For the first nine months of 2017, the net interest spread was 3.25%, up 31 basis points from the year-earlier period.~~ The yield on earning assets and the rate paid on interest-bearing liabilities for the nine-month period ended September 30, 2017 were 3.79% and .54%, respectively, compared with 3.50% and .56%, respectively,decline in ~~the corresponding 2016 period. The widening of~~ the net interest spread in the recent quarter as compared with the ~~third~~first quarter of ~~2016 and second quarter~~2023 reflects the impact of ~~2017 and~~higher rates paid on interest-bearing liabilities (predominantly interest-bearing deposits) resulting from a general rise in interest rates during the first ~~nine months~~three quarters of 2017 as compared with the corresponding nine months of 2016 was largely due to the effect of increases in short-term interest rates initiated by the Federal Reserve in mid-December 2016, mid-March 2017 and mid-June 2017 that contributed to2023, which outpaced higher yields earned on loans and ~~leases.~~leases, deposits at the FRB of New York and investment securities.

Net interest-free funds consist largely of noninterest-bearing demand deposits and shareholders’ equity, partially offset by bank owned life insurance and non-earning assets, including goodwill and core deposit and other intangible assets. Net interest-free funds averaged ~~$39.2~~$61.7 billion in the ~~recent~~first quarter of 2024, compared with ~~$37.3~~$62.9 billion in the ~~third~~fourth quarter of ~~2016~~2023 and ~~$39.1~~$72.9 billion in the ~~second quarter~~year-earlier quarter. The lower level of ~~2017. The increases in~~ average net interest-free funds in the ~~two most~~ recent ~~quarters~~quarter as compared with the ~~third quarter~~fourth and first quarters of ~~2016 reflect higher~~2023 is predominantly the result of a decline in the average ~~balances~~balance of noninterest-bearing ~~deposits. Those~~deposits, partially offset by increases in common shareholders equity from retained earnings, net of common and preferred stock dividends. Noninterest-bearing deposits averaged ~~$32.0 billion, $30.8 billion and $31.9~~$48.6 billion in the ~~quarters ended September 30, 2017, September 30, 2016~~first quarter of 2024, compared with $50.1 billion in the last quarter of 2023 and ~~June 30, 2017, respectively. During~~$61.9 billion in the first ~~nine months~~quarter of ~~2017 and 2016, average net interest-free funds aggregated $39.6 billion and $36.0 billion, respectively.~~2023. The ~~growth~~decline in average noninterest-bearing deposits since the ~~third~~first quarter of ~~2016~~2023 reflects customer use of off-balance sheet investment products and a shift in ~~part, higher~~ deposits of trust customers. Shareholders’ equity averaged $16.3 billion and goodwill and core deposit and other intangible assets averaged $4.7 billion in each of the three-month periods ended September 30, 2017, September 30, 2016 and June 30, 2017. Cash surrender value of bank owned life insurance averaged $1.8 billion in the recent quarter, compared with $1.7 billion during each of the quarters ended September 30, 2016 and June 30, 2017. Increases in the cash surrender value of bank owned life insurance and benefits received are not included into interest-bearing accounts as interest ~~income, but rather are recorded in “other revenues from operations.”~~rates rose. The contribution of net interest-free funds to net interest margin was ~~.21%~~1.04% in the ~~third~~first quarter of ~~2017,~~2024, compared with ~~.20% and .18%~~1.05% in the ~~third~~fourth quarter of ~~2016~~2023 and .74% in the ~~second~~first quarter of ~~2017, respectively. That~~2023. The increased contribution ~~for~~of net interest-free funds to net interest margin in the two most recent quarters as compared with the first ~~nine months of 2017 and 2016 was .19% and .18%, respectively.~~2023 quarter reflects higher rates paid on interest-bearing liabilities used to value net interest-free funds.

Reflecting the changes to the net interest spread and the contribution of net interest-free funds as described herein, the Company’s net interest margin was ~~3.53%~~3.52% in the ~~third~~first quarter of ~~2017,~~2024, compared with ~~3.05%~~3.61% in the ~~corresponding 2016 period~~fourth quarter of 2023 and ~~3.45%~~4.04% in the ~~second quarter~~year-earlier period. The higher interest rate environment has led to an increase in the rates paid on the Company's sources of ~~2017. During~~funding which has outpaced the ~~first nine months of 2017 and 2016, the net interest margin was 3.44% and 3.12%, respectively.~~rise in yields on earning assets. Future changes in market interest rates or spreads, as well as changes in the composition of the Company’s portfolios of earning assets and interest-bearing liabilities that result in ~~reductions in~~changes to spreads, could ~~adversely~~ impact the Company’s net interest income and net interest margin.

Management assesses the potential impact of future changes in interest rates and spreads by projecting net interest income under several interest rate scenarios. In managing interest rate risk, the Company has utilized interest rate swap agreements to modify the repricing characteristics of certain portions of its earning assets and interest-bearing liabilities. Periodic settlement amounts arising from these agreements are reflected in either the yields earned on assets or the rates paid on interest-bearing liabilities. The notional amount of interest rate swap agreements entered into for interest rate risk management purposes was $7.0 billion at September 30, 2017,

~~- 59 -~~

~~compared with $1.4 billion and $900 million at September 30, 2016 and December 31, 2016, respectively.~~ Under the terms of those interest rate swap agreements, the Company received payments based on the outstanding notional amount at fixed rates and made payments at variable rates. Periodic settlement amounts arising from these agreements are reflected in either the yields on earning assets or the rates paid on interest-bearing liabilities. The $6.1 billion increase in notional amount from December 31, 2016 reflects additions of $2.0 billion of interest rate swaps designated as cash flow hedges of variable rate commercial real estate loans and $4.1 billion of interest rate swaps designated as fair value hedges of fixed rate long-term borrowings. There were noCompany enters into forward-starting interest rate swap agreements ~~designated as cash flow hedges at September 30, 2016 or December 31, 2016.~~

~~In a fair value~~predominantly to hedge ~~the fair value of the derivative (the~~ interest rate ~~swap agreement) and changes~~exposures expected in ~~the fair value of the hedged item are recorded in the Company’s consolidated balance sheet with the corresponding gain or loss recognized in current earnings.~~future periods. The ~~difference between changes in the fair value of the~~following table summarizes information about interest rate swap agreements entered into for interest rate risk management purposes at March 31, 2024 and December 31, 2023.

- 47 -

INTEREST RATE SWAP AGREEMENTS - DESIGNATED AS HEDGES


	Notional Amount						Average		Weighted-
			Forward-				Maturity		Average Rate
(Dollars in millions)	Active		Starting		Total		(In years)		Fixed			Variable
March 31, 2024
Fair value hedges:
Fixed rate long-term borrowings	$	2,000	$	1,850	$	3,850		5.9		3.48	%		5.51	%
Cash flow hedges:
Interest payments on variable rate commercial real estate loans		17,477		5,950		23,427		1.7	3.38			5.33
Total	$	19,477	$	7,800	$	27,277		2.3
December 31, 2023
Fair value hedges:
Fixed rate long-term borrowings	$	2,000	$	1,000	$	3,000		5.8		3.45	%		5.62	%
Cash flow hedges:
Interest payments on variable rate commercial real estate loans		14,977		9,000		23,977		1.7	3.45			5.36
Total	$	16,977	$	10,000	$	26,977		2.2

Information regarding the hedged items represents hedge ineffectiveness and is recorded in “other revenues from operations” in the Company’s consolidated statement of income. In a cash flow hedge, unlike in a fair value hedge, the effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings when the forecasted transaction affects earnings. The ineffective portion of the gain or loss is reported in “other revenues from operations” immediately. The amounts of hedge ineffectiveness recognized during each of the quarters ended September 30, 2017, September 30, 2016 and June 30, 2017 were not material to the Company’s consolidated results of operations. The estimated aggregate net fair value of interest rate swap agreements ~~designated as fair value hedges represented losses (without consideration~~is presented in note 10 of any settlement payments) of approximately $12 million at September 30, 2017, compared with gains (without consideration of any settlement payments) of $21 million at September 30, 2016, $12 million at December 31, 2016 and $2 million at June 30, 2017. The fair values of such interest rate swap agreements were substantially offset by changes in the fair values of the hedged items. The estimated fair values of the interest rate swap agreements designated as cash flow hedges were net losses (without consideration of any settlement payments) of approximately $3.4 million at September 30, 2017 and $1.5 million at June 30, 2017. Net of applicable income taxes, the amount of such losses reflected in “accumulated other comprehensive income, net” in the Company’s consolidated balance sheet were approximately $2 million and $1 million at September 30 and June 30, 2017, respectively. The changes in the fair values of the interest rate swap agreements and the hedged items primarily result from the effects of changing interest rates and spreads. The Company’s credit exposure as of September 30, 2017 with respectNotes to the estimated fair value of interest rate swap agreements used for managing interest rate risk has been substantially mitigated through master netting arrangements with trading account interest rate contracts with the same counterparty, periodic settlements and counterparty postings of $5 million of collateral with the Company.

~~The weighted-average rates to be received and paid under interest rate swap agreements currently in effect were 2.29% and 1.81% respectively, at September 30, 2017.~~Financial Statements. The average notional amounts of interest rate swap agreements entered into for interest rate risk management purposes (excluding forward-starting interest rate swap agreements not in effect during the quarter), the related effect on net interest income and margin and the weighted-average interest rates paid or received on those swap agreements is presented in the table that follows.

INTEREST RATE SWAP AGREEMENTS - EFFECT ON NET INTEREST INCOME


	Three Months Ended March 31,
.	2024						2023
(Dollars in millions)	Amount			Rate (a)			Amount			Rate (a)
Increase (decrease) in:
Interest income (cash flow hedges)	$	(87	)		-.18	%	$	(59	)		-.13	%
Interest expense (fair value hedges)		13			.04			10			.04
Net interest income/margin	$	(100	)		-.21	%	$	(69	)		-.15	%
Average notional amount (b)	$	19,202					$	11,069
Rate received (c)					3.32	%					2.68	%
Rate paid (c)					5.38						5.17

(a)

Computed as an annualized percentage of average earning assets or interest-bearing liabilities.

(b)

Excludes forward-starting interest rate swap agreements not in effect during the period.

(c)

Weighted-average rate paid or received on interest rate swap agreements in effect during the period.

Provision for Credit Losses

A provision for credit losses is recorded to adjust the level of the allowance to reflect expected credit losses that are based on economic forecasts as of each reporting date. A provision for credit losses of $200 million was recorded in the first quarter of 2024, compared with $225 million in the fourth quarter of 2023 and $120 million in the year-earlier quarter. The comparatively higher provisions for credit losses in the most recent two quarters as compared with the first quarter of 2023 reflect declines in commercial real estate values and higher interest rates contributing to a deterioration in the performance of loans to commercial borrowers, including nonautomotive dealers and healthcare facilities, as well as growth in certain sectors of M&T's commercial and industrial and consumer loan portfolios. Net charge-offs totaled $138 million in 2024's first quarter as compared with $148 million in 2023's final quarter and $70 million in the year-earlier quarter. The lower level of net charge-offs in the first quarter of 2024 as compared with the preceding quarter included a decline in commercial real estate loan net charge-offs, partially offset by an increase in net charge-offs of commercial and industrial and consumer loans. As compared with year-earlier first quarter, the recent quarter net charge-offs reflect higher levels of commercial and industrial and consumer loan net charge-offs.

- 48 -

A summary of net charge-offs by loan type and as an annualized percentage of such average loans is presented in the table that follows.

NET CHARGE-OFF (RECOVERY) INFORMATION


	First Quarter 2024					Fourth Quarter 2023					First Quarter 2023
(Dollars in millions)	Net Charge-Offs (Recoveries)		Annualized Percentage of Average Loans			Net Charge-Offs (Recoveries)		Annualized Percentage of Average Loans			Net Charge-Offs (Recoveries)			Annualized Percentage of Average Loans
Commercial and industrial	$	73		.51	%	$	42		.30	%	$	10			.08	%
Real estate:
Commercial		8		.13			63		.98			28			.43
Residential builder and developer		—		.03			—		.10			2			.48
Other commercial construction		11		.69			7		.39			(2	)		-.09
Residential		—		-.01			3		.07			1			.01
Residential - limited documentation		—		—			—		-.01			—			—
Consumer:
Home equity lines and loans		—		.02			—		.04			—			.04
Recreational finance		21		.80			18		.72			11			.50
Automobile		5		.46			3		.32			2			.21
Other		20		4.03			12		2.14			18			3.51
Total	$	138		.42	%	$	148		.44	%	$	70			.22	%

Asset Quality

A summary of nonperforming assets and certain past due loan data and credit quality ratios is presented in the accompanying table.

NONPERFORMING ASSET AND PAST DUE LOAN DATA


(Dollars in millions)	March 31, 2024			December 31, 2023			March 31, 2023
Nonaccrual loans	$	2,302		$	2,166		$	2,557
Real estate and other foreclosed assets		38			39			44
Total nonperforming assets	$	2,340		$	2,205		$	2,601
Accruing loans past due 90 days or more (a)	$	297		$	339		$	407
Government-guaranteed loans included in totals above:
Nonaccrual loans	$	62		$	53		$	42
Accruing loans past due 90 days or more (a)		244			298			306
Loans 30-89 days past due		1,410			1,724			1,892

Nonaccrual loans to total net loans and leases		1.71	%		1.62	%		1.92	%
Nonperforming assets to total net loans and leases and real estate and other foreclosed assets		1.73			1.64			1.96
Accruing loans past due 90 days or more to total net loans and leases		.22			.25			.31
Loans 30-89 days past due to total net loans and leases		1.04			1.29			1.42

(a)

Predominantly residential real estate loans.

Nonaccrual loans were $2.3 billion at March 31, 2024, $136 million higher than December 31, 2023 and $255 million lower than March 31, 2023. The higher level of nonaccrual loans at the recent quarter end as compared with the immediately preceding quarter end was largely attributable to an increase in commercial and industrial nonaccrual loans, most notably loans to nonautomotive finance dealers and the manufacturing and services industries, partially offset by a decrease in commercial real estate nonaccrual loans. The decrease in nonaccrual loans at March 31, 2024 as compared with year-earlier quarter was predominantly due to lower levels of commercial real estate nonaccrual loans, including net charge-offs, and residential real estate nonaccrual loans, partially offset by a rise in commercial and industrial nonaccrual loans.

- 49 -

Government-guaranteed loans classified as accruing loans past due 90 days or more included one-to-four family residential mortgage loans serviced by the Company that were repurchased to reduce associated servicing costs, including a requirement to advance principal and interest payments that had not been received from individual mortgagors. Despite the loans being purchased by the Company, the insurance or guarantee by the applicable government-related entity remains in force. The outstanding principal balances of the repurchased loans included in the amounts noted herein that are guaranteed by government-related entities totaled $195 millionat March 31, 2024, $228 million at December 31, 2023 and $242 million at March 31, 2023. The remaining accruing loans past due 90 days or more not guaranteed by government-related entities were loans considered to be with creditworthy borrowers that were in the process of collection or renewal.

Approximately 73% of loans 30 to 89 days past due were less than 60 days delinquent at each of March 31, 2024 and December 31, 2023. Information about past due and nonaccrual loans at March 31, 2024 and December 31, 2023 is also included in note 4 of Notes to Financial Statements.

During the normal course of business, the Company modifies loans to maximize recovery efforts. The types of modifications that the Company grants typically include principal deferrals and interest rate reductions but may also include other types of modifications. The Company may offer such modified terms to borrowers experiencing financial difficulty. Such modified loans may be considered nonaccrual if the Company does not expect to collect the contractual cash flows owed under the loan agreement. Information about modifications of loans to borrowers experiencing financial difficulty is included in note 4 of Notes to Financial Statements.

The Company utilizes a loan grading system to differentiate risk amongst its commercial and industrial loans and commercial real estate loans. Loans with a lower expectation of default are assigned one of ten possible “pass” loan grades while specific loans determined to have an elevated level of credit risk are classified as “criticized.” A criticized loan may be classified as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more.

Line of business personnel in different geographic locations with support from and review by the Company’s credit risk personnel review and reassign loan grades based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. The Company’s policy is that, at least annually, updated financial information is obtained from commercial borrowers associated with pass grade loans and additional analysis performed. On a quarterly basis, the Company’s centralized credit risk department personnel reviews all criticized commercial and industrial loans and commercial real estate loans greater than $5 million to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing. For criticized nonaccrual loans, additional meetings are held with loan officers and their managers, workout specialists and senior management to discuss each of the relationships. In analyzing criticized loans, borrower-specific information is reviewed, including operating results, future cash flows, recent developments and the borrower’s outlook, and other pertinent data. The timing and extent of potential losses, considering collateral valuation and other factors, and the Company’s potential courses of action are contemplated.

Targeted loan reviews have periodically been performed over segments of loan portfolios that are experiencing heightened credit risk due to current or anticipated economic conditions. The intention of such reviews is to identify trends across such portfolios and inform portfolio risk limits and loss mitigation strategies. The business climate in the first quarter of 2024 has continued to be subjected to inflationary pressures and elevated interest rates. These conditions have impacted many borrowers, particularly those with investor-owned commercial real estate loans in the hotel, office, retail, multifamily and healthcare sectors, including construction-related financing, and commercial and industrial loans to nonautomotive dealers and manufacturing and transportation industries. In 2023 and 2024, the Company completed targeted loan reviews covering the majority of its investor-owned commercial real estate portfolio, inclusive of construction loans, with a focus on criticized loans and loans with maturities in the next twelve months. The primary source of repayment of these loans is typically tenant lease payments to the investor/borrower. Vacancies, which have been influenced by certain demographic changes, and higher interest rates have contributed to lower current and anticipated future debt service coverage ratios, which has and could continue to influence the ability of borrowers to make existing loan payments. Lower debt service coverage ratios and reduced commercial real estate values also impact the ability of borrowers to refinance their obligations at loan maturity. As a result, criticized

- 50 -

investor-owned commercial real estate loans have remained elevated at $8.5 billion or 26% of such loans at March 31, 2024 and $8.8 billion or 27% of such loans at December 31, 2023. Investor-owned commercial real estate loans comprised 66% and 70% of total criticized loans at March 31, 2024 and December 31, 2023, respectively. The weighted-average LTV ratios for investor-owned commercial real estate loans was approximately 56% at each of March 31, 2024 and December 31, 2023. Criticized loans secured by investor-owned commercial real estate had a weighted-average LTV ratio of approximately 62% at March 31, 2024 and 61% at December 31, 2023.

The Company monitors its concentration of commercial real estate lending as a percentage of its Tier 1 capital plus its allowable allowance for credit losses, consistent with a metric utilized to differentiate such concentrations amongst regulated financial institutions. This metric, as prescribed in supervisory guidance, excludes loans secured by commercial real estate considered to be owner-occupied, but includes certain other loans, such as loans to real estate investment trusts, that are classified as commercial and industrial loans. The Company's commercial real estate loan concentration approximated 176% of Tier 1 capital plus its allowable allowance for credit losses at March 31, 2024, compared with 183% at December 31, 2023. The Company has reduced its relative concentration of investor-owned commercial real estate loans throughout 2023 and the first quarter of 2024.

The accompanying tables summarize the outstanding balances, and associated criticized balances, of commercial and industrial loans and leases by industry and commercial real estate loans by property type, respectively, at March 31, 2024 and December 31, 2023.

CRITICIZED COMMERCIAL AND INDUSTRIAL LOANS


	March 31, 2024								December 31, 2023
(Dollars in millions)	Outstanding		Criticized Accrual		Criticized Nonaccrual		Total Criticized		Outstanding		Criticized Accrual		Criticized Nonaccrual		Total Criticized
Commercial and industrial excluding owner-occupied real estate by industry:
Financial and insurance	$	10,538	$	261	$	37	$	298	$	10,679	$	346	$	3	$	349
Services		7,180		260		130		390		6,715		295		100		395
Motor vehicle and recreational finance dealers		6,268		525		109		634		6,242		164		51		215
Manufacturing		6,226		616		122		738		5,981		549		65		614
Wholesale		3,955		268		34		302		3,803		180		45		225
Transportation, communications, utilities		3,525		233		70		303		3,342		195		71		266
Retail		2,893		83		41		124		2,727		102		35		137
Construction		2,089		176		68		244		2,092		173		62		235
Health services		1,991		286		34		320		1,950		297		28		325
Real estate investors		1,618		195		4		199		1,684		189		4		193
Other		1,676		100		54		154		1,889		123		50		173
Total commercial and industrial excluding owner-occupied real estate	$	47,959	$	3,003	$	703	$	3,706	$	47,104	$	2,613	$	514	$	3,127
Owner-occupied real estate by industry:
Services	$	2,122	$	140	$	51	$	191	$	2,162	$	154	$	51	$	205
Motor vehicle and recreational finance dealers		1,922		45		9		54		1,867		10		7		17
Retail		1,587		132		14		146		1,541		107		13		120
Wholesale		944		48		3		51		940		28		2		30
Manufacturing		837		58		29		87		842		64		24		88
Real estate investors		795		24		16		40		818		26		12		38
Health services		639		53		22		75		656		55		26		81
Other		1,092		33		17		50		1,080		32		21		53
Total owner-occupied real estate		9,938		533		161		694		9,906		476		156		632
Total	$	57,897	$	3,536	$	864	$	4,400	$	57,010	$	3,089	$	670	$	3,759

- 51 -

CRITICIZED COMMERCIAL REAL ESTATE LOANS


	March 31, 2024								December 31, 2023
(Dollars in millions)	Outstanding		Criticized Accrual		Criticized Nonaccrual		Total Criticized		Outstanding		Criticized Accrual		Criticized Nonaccrual		Total Criticized
Permanent finance by property type:
Apartments/Multifamily	$	6,441	$	1,003	$	112	$	1,115	$	6,165	$	1,184	$	115	$	1,299
Retail/Service		5,795		1,039		229		1,268		5,912		1,075		227		1,302
Office		4,599		1,011		147		1,158		4,727		879		185		1,064
Health services		3,626		1,409		177		1,586		3,615		1,364		117		1,481
Hotel		2,485		485		175		660		2,510		496		210		706
Industrial/Warehouse		1,925		133		13		146		2,034		224		13		237
Other		297		45		2		47		314		28		2		30
Total permanent		25,168		5,125		855		5,980		25,277		5,250		869		6,119
Construction/Development		7,248		2,419		144		2,563		7,726		2,527		174		2,701
Total	$	32,416	$	7,544	$	999	$	8,543	$	33,003	$	7,777	$	1,043	$	8,820

Total criticized commercial and industrial loans and commercial real estate loans were $12.9 billion and $12.6 billion at March 31, 2024 and December 31, 2023, respectively. Criticized loans represented 14.3% of the total commercial and industrial and commercial real estate loans at March 31, 2024, compared with 14.0% at December 31, 2023. At March 31, 2024 and December 31, 2023, permanent finance commercial real estate loans comprised 46% and 49% of total criticized loans, respectively, whereas commercial and industrial loans represented 34% and 30%, respectively, and construction loans represented 20% and 21%, respectively. Loans to nonautomotive finance dealers and manufacturing, wholesale and transportation companies mainly contributed to the $641 million increase in commercial and industrial criticized loans from December 31, 2023 to March 31, 2024.

The Company’s loss identification and estimation techniques with respect to loans secured by residential real estate make reference to loan performance and house price data in specific areas of the country where collateral securing the Company’s residential real estate loans is located. For residential real estate-related loans, including home equity loans and lines of credit, the excess of the loan balance over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. That charge-off is based on recent indications of value from external parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that file for bankruptcy are generally charged-off to estimated net collateral value shortly after the Company is notified of such filings. Limited documentation first lien mortgage loans represent loans secured by residential real estate that at origination typically included some form of limited borrower documentation requirements as compared with more traditional loans. The Company no longer originates limited documentation loans. With respect to junior lien loans, to the extent known by the Company, if a related senior lien loan would be on nonaccrual status because of payment delinquency, even if such senior lien loan was not owned by the Company, the junior lien loan or line that is owned by the Company is placed on nonaccrual status. In monitoring the credit quality of its home equity portfolio for purposes of determining the allowance for credit losses, the Company reviews delinquency and nonaccrual information and considers recent charge-off experience. When evaluating individual home equity loans and lines of credit for charge-off and for purposes of determining the allowance for credit losses, the Company considers the required repayment of any first lien positions related to collateral property. Information about the location of loans secured by residential real estate is presented in the following table.

- 52 -

NONACCRUAL LOANS SECURED BY RESIDENTIAL REAL ESTATE


	March 31, 2024
			Nonaccrual
					Percent of
	Outstanding				Outstanding
(Dollars in millions)	Balances		Balances		Balances
Residential mortgage loans:
New York	$	6,625	$	85		1.28	%
Mid-Atlantic (a)		6,605		57		.86
New England (b)		6,010		43		.72
Other		2,952		17		.58
Total	$	22,192	$	202		.91	%
Limited documentation first lien mortgage loans:
New York	$	403	$	24		5.81	%
Mid-Atlantic (a)		361		20		5.52
New England (b)		84		7		8.76
Other		36		2		6.53
Total	$	884	$	53		6.00	%
First lien home equity loans and lines of credit:
New York	$	815	$	17		2.06	%
Mid-Atlantic (a)		967		23		2.43
New England (b)		456		6		1.25
Other		17		3		16.54
Total	$	2,255	$	49		2.16	%
Junior lien home equity loans and lines of credit:
New York	$	767	$	16		2.15	%
Mid-Atlantic (a)		910		15		1.64
New England (b)		600		7		1.11
Other		26		—		.52
Total	$	2,303	$	38		1.66	%

(a)

Includes Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia and the District of Columbia.

(b)

Includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

Factors that influence the Company’s credit loss experience include overall economic conditions affecting businesses and consumers, generally, but also residential and commercial real estate valuations, in particular, given the size of the Company’s real estate loan portfolios. Commercial real estate valuations can be highly subjective, as they are based upon many assumptions. Such valuations can be significantly affected over relatively short periods of time by changes in business climate, economic conditions, interest rates and, in many cases, the results of operations of businesses and other occupants of the real property. Similarly, residential real estate valuations can be impacted by housing trends, the availability of financing at reasonable interest rates and general economic conditions affecting consumers.

A comparative summary of consumer loans in nonaccrual status by product is presented in the following table.

NONACCRUAL CONSUMER LOANS


(Dollars in millions)	March 31, 2024		December 31, 2023
Home equity lines and loans	$	87	$	81
Recreational finance		30		36
Automobile		13		14
Other		54		52
Total	$	184	$	183

- 53 -

Allowance for Credit Losses

Management determines the allowance for credit losses under accounting guidance that requires estimating the amount of current expected credit losses over the remaining contractual term of the loan and lease portfolio. A description of the methodologies used by the Company to estimate its allowance for credit losses can be found in note 4 of Notes to Financial Statements.

In establishing the allowance for credit losses, the Company estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes and also estimates losses for other loans and leases with similar risk characteristics on a collective basis. For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by type. At the time of the Company’s analysis regarding the determination of the allowance for credit losses as of March 31, 2024 concerns existed about elevated levels of inflation; potential liquidity shortages and tightening credit in the financial services markets; a slowing economy or possible recession during the remainder of 2024; the volatile nature of global markets and international economic conditions that could impact the U.S. economy; Federal Reserve positioning of monetary policy; downward pressures on commercial and residential real estate values especially in the office, retail and healthcare sectors; higher interest rates and wage pressures impacting commercial borrowers, including nonautomotive finance dealers; the extent to which borrowers, in particular commercial real estate borrowers, may be negatively affected by general economic conditions; and continued stagnant population and economic growth in the upstate New York and central Pennsylvania regions (approximately 37% of the Company’s loans and leases are to customers in New York State and Pennsylvania) that historically lag other regions of the country.

The Company generally estimates current expected credit losses on loans with similar risk characteristics on a collective basis. To estimate expected losses, the Company utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and determine estimated credit losses through a reasonable and supportable forecast period. The Company’s approach for estimating current expected credit losses for loans and leases at March 31, 2024 and December 31, 2023 included utilizing macroeconomic assumptions to project losses over a two-year reasonable and supportable forecast period. Subsequent to the forecast period, the Company reverted to longer-term historical loss experience, over a period of one year, to estimate expected credit losses over the remaining contractual life. Forward-looking estimates of certain macroeconomic variables are determined by the M&T Scenario Review Committee, which is comprised of senior management business leaders and economists. The assumptions utilized as of March 31, 2024 and December 31, 2023 are presented in the following table and were based on information available at or near the time the Company was preparing its estimate of expected credit losses as of those dates.

ALLOWANCE FOR CREDIT LOSSES MACROECONOMIC ASSUMPTIONS


	March 31, 2024									December 31, 2023
	Year 1			Year 2			Cumulative			Year 1			Year 2			Cumulative
National unemployment rate		4.4	%		4.7	%					4.4	%		4.7	%
Real GDP growth rate		1.0		1.8				2.8	%		.9		1.9				2.8	%
Commercial real estate price index growth/decline rate	-6.9			5.5			-1.5			-9.1			4.8			-4.5
Home price index growth/ decline rate		-2.0			.4		-1.6			-3.2				-.1		-3.3

In establishing the allowance for credit losses, the Company also considers the impact of portfolio concentrations, imprecision in economic forecasts, geopolitical conditions and other risk factors that influence the loss estimation process. With respect to economic forecasts, the Company assessed the likelihood of alternative economic scenarios during the two-year reasonable and supportable time period. Generally, an increase in unemployment rate or a decrease in any of the rate of change in GDP, commercial real estate prices or home prices could have an adverse impact on expected credit losses and may result in an increase to the allowance for credit losses. Forward-looking economic forecasts are subject to inherent imprecision and future events may differ materially from forecasted events. In consideration of such uncertainty, the following alternative economic scenarios were considered to estimate the possible impact on modeled credit losses.

- 54 -

ALLOWANCE FOR CREDIT LOSSES SENSITIVITIES


	March 31, 2024
	Year 1			Year 2			Cumulative
Potential downside economic scenario:
National unemployment rate		6.5	%		7.4	%
Real GDP growth/decline rate	-2.3			1.6				-.8	%
Commercial real estate price index decline rate		-18.0			-2.0		-19.6
Home price index growth/decline rate		-10.4			.5			-10.0
Potential upside economic scenario:
National unemployment rate	3.3			3.2
Real GDP growth rate	3.5			2.4				6.0
Commercial real estate price index growth/decline rate	-1.8			9.2				7.3
Home price index growth rate	2.7			2.2				5.0


(Dollars in millions)	Impact to Modeled Credit Losses Increase (Decrease)
Potential downside economic scenario	$	347
Potential upside economic scenario		(170	)

These examples are only a few of the numerous possible economic scenarios that could be utilized in assessing the sensitivity of expected credit losses. The estimated impacts on credit losses in such scenarios pertain only to modeled credit losses and do not include consideration of other factors the Company may evaluate when determining its allowance for credit losses. As a result, it is possible that the Company may, at another point in time, reach different conclusions regarding credit loss estimates. The Company’s process for determining the allowance for credit losses undergoes quarterly and periodic evaluations by independent risk management personnel, which among many other considerations, evaluate the reasonableness of management’s methodology and significant assumptions. Further information about the Company’s methodology to estimate expected credit losses is included in note 4 of Notes to Financial Statements.

Management has assessed that the allowance for credit losses at March 31, 2024 appropriately reflected expected credit losses inherent in the portfolio as of that date. The allowance for credit losses totaled $2.2 billion at March 31, 2024, compared with $2.1 billion at December 31, 2023. As a percentage of loans outstanding, the allowance was 1.62% at March 31, 2024 and 1.59% at December 31, 2023. The increase in the allowance for credit losses as a percentage of loans and leases outstanding reflects a higher level of credit losses expected on certain commercial borrowers, including nonautomotive dealers and healthcare facilities. Included in the allocation of the allowance for credit losses were reserves for loans secured by office properties of 4.37% at each of March 31, 2024 and December 31, 2023. The level of the allowance reflects management’s evaluation of the loan and lease portfolio using the methodology and considering the factors as described herein. Should the various economic forecasts and credit factors considered by management in establishing the allowance for credit losses change and should management’s assessment of losses in the loan portfolio also change, the level of the allowance as a percentage of loans could increase or decrease in future periods. The reported level of the allowance reflects management’s evaluation of the loan and lease portfolio as of each respective date. Furthermore, the Company's allowance is general in nature and is available to absorb losses from any loan or lease category.

The ratio of the allowance for credit losses to total nonaccrual loans at March 31, 2024 and December 31, 2023 was 95% and 98%, respectively. Given the Company’s general position as a secured lender and its practice of charging off loan balances when collection is deemed doubtful, that ratio and changes in the ratio are generally not an indicative measure of the adequacy of the Company’s allowance for credit losses, nor does management rely upon that ratio in assessing the adequacy of the Company’s allowance for credit losses.

- 55 -

Other Income

The components of other income are presented in the accompanying table. ~~Additional information~~

OTHER INCOME


	Three Months Ended				Change						Three Months Ended				Change
(Dollars in millions)	March 31, 2024		December 31, 2023		Amount			%			March 31, 2024		March 31, 2023		Amount			%
Mortgage banking revenues	$	104	$	112	$	(8	)		-7	%	$	104	$	85	$	19			23	%
Service charges on deposit accounts		124		121		3			2			124		113		11			9
Trust income		160		159		1			1			160		194		(34	)		-17
Brokerage services income		29		26		3			10			29		24		5			20
Trading account and other non-hedging derivative gains		9		11		(2	)		-19			9		12		(3	)		-21
Gain (loss) on bank investment securities		2		4		(2	)		-35			2		—		2			—
Other revenues from operations		152		145		7			4			152		159		(7	)		-5
Total other income	$	580	$	578	$	2			—	%	$	580	$	587	$	(7	)		-1	%

Mortgage banking revenues

Mortgage banking revenues are comprised of both residential and commercial mortgage banking activities, which consist of realized gains and losses from sales of real estate loans and loan servicing rights, unrealized gains and losses on real estate loans held for sale and related commitments, real estate loan servicing fees, and other real estate loan related fees and income. The Company's involvement in commercial mortgage banking activities includes the origination, sales and servicing of loans under the multifamily loan programs of Fannie Mae, Freddie Mac, and the U.S. Department of Housing and Urban Development.

RESIDENTIAL MORTGAGE BANKING ACTIVITIES


	Three Months Ended				Change					Three Months Ended				Change
(Dollars in millions)	March 31, 2024		December 31, 2023		Amount		%			March 31, 2024		March 31, 2023		Amount		%
Residential mortgage banking revenues
Gains on loans originated for sale	$	7	$	5	$	2		35	%	$	7	$	3	$	4		138	%
Loan servicing fees		39		38		1		2			39		20		19		100
Loan sub-servicing and other fees		32		31		1		5			32		32		—		1
Total loan servicing revenues		71		69		2		3			71		52		19		38
Total residential mortgage banking revenues	$	78	$	74	$	4		5	%	$	78	$	55	$	23		43	%
New commitments to originate loans for sale	$	288	$	243	$	45		18	%	$	288	$	276	$	12		5	%


(Dollars in millions)	March 31, 2024		December 31, 2023		March 31, 2023
Balances at period end
Loans held for sale	$	165	$	190	$	152
Commitments to originate loans for sale		211		163		199
Commitments to sell loans		315		295		284
Capitalized mortgage loan servicing assets		432		456		532

Loans serviced for others		39,598		40,021		41,547
Loans sub-serviced for others (a)		111,964		115,321		97,989
Total loans serviced for others	$	151,562	$	155,342	$	139,536

(a)

The contractual servicing rights associated with residential mortgage loans sub-serviced by the Company were predominantly held by affiliates of BLG. Information about the Company’s ~~use of interest rate swap agreements~~relationship with BLG and ~~other derivatives~~its affiliates is included in note 1015 of Notes to Financial Statements.

•

The increase in residential mortgage loan servicing fees of $19 million in the three-month period ending March 31, 2024 as compared with the similar 2023 period primarily reflects a $350 million bulk purchase of residential mortgage loan servicing rights associated with $19.5 billion of residential real estate loans on March 31, 2023.

•

The lower balance of capitalized residential mortgage servicing rights at March 31, 2024 and December 31, 2023 as compared with March 31, 2023 reflects amortization of those servicing rights.

- 56 -

COMMERCIAL MORTGAGE BANKING ACTIVITIES


	Three Months Ended				Change						Three Months Ended				Change
(Dollars in millions)	March 31, 2024		December 31, 2023		Amount			%			March 31, 2024		March 31, 2023		Amount			%
Commercial mortgage banking revenues
Gains on loans originated for sale	$	8	$	20	$	(12	)		-62	%	$	8	$	14	$	(6	)		-45	%
Loan servicing fees and other		18		18		—			2			18		16		2			12
Total commercial mortgage banking revenues	$	26	$	38	$	(12	)		-32	%	$	26	$	30	$	(4	)		-14	%
Loans originated for sale to other investors	$	1,044	$	506	$	538			106	%	$	1,044	$	672	$	372			55	%


(Dollars in millions)	March 31, 2024		December 31, 2023		March 31, 2023
Balances at period end
Loans held for sale	$	563	$	189	$	321
Commitments to originate loans for sale		451		916		588
Commitments to sell loans		1,014		1,105		909
Capitalized mortgage loan servicing assets		122		123		124

Loans serviced for others (a)		24,771		24,157		22,389
Loans sub-serviced for others		3,906		3,873		3,786
Total loans serviced for others	$	28,677	$	28,030	$	26,175

(a)

Includes $4.0 billion, $3.9 billion and $3.8 billion of loan balances for which investors had recourse to the Company if such balances are ultimately uncollectible at March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

•

The decline in gains on commercial mortgage loans originated for sale in the first three months of 2024 as compared with the fourth quarter of 2023 and the corresponding 2023 period reflects lower volumes of new commitments to originate commercial real estate loans for sale, which were influenced by a higher interest rate environment.

Service charges on deposit accounts

Service charges on deposit accounts in the recent quarter increased $3 million from the fourth quarter of 2023 reflecting higher commercial service charges from pricing changes. The $11 million increase in the recent quarter as compared with the similar 2023 quarter also reflects the increased customer usage of sweep products.

Trust income

Trust income includes fees from two significant businesses managed within the Company's Institutional Services and Wealth Management segment. The Institutional Services business provides a variety of trustee, agency, investment management and administrative services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients who: (i) use capital markets financing structures; (ii) use independent trustees to hold assets (including retirement plan assets prior to the sale of CIT); and (iii) need investment and cash management services. The Wealth Management business offers personal trust, planning, fiduciary, asset management, family office and other services designed to help high net worth individuals and families grow, preserve and transfer wealth.

TRUST INCOME AND ASSETS UNDER MANAGEMENT


	Three Months Ended				Change						Three Months Ended				Change
(Dollars in millions)	March 31, 2024		December 31, 2023		Amount			%			March 31, 2024		March 31, 2023		Amount			%
Trust income
Institutional Services	$	81	$	82	$	(1	)		-1	%	$	81	$	120	$	(39	)		-32	%
Wealth Management		78		76		2			3			78		74		4			4
Commercial		1		1		—			9			1		—		1			179
Total trust income	$	160	$	159	$	1			1	%	$	160	$	194	$	(34	)		-17	%


(Dollars in millions)	March 31, 2024		December 31, 2023		March 31, 2023
Assets under management at period end
Trust assets under management (excluding proprietary funds)	$	65,191	$	63,963	$	161,495
Proprietary mutual funds		15,280		14,772		14,124
Total assets under management	$	80,471	$	78,735	$	175,619

- 6057 -

•

In April 2023, M&T completed the divestiture of its CIT business to a private equity firm. Revenues associated with that business and included in Institutional Services trust income totaled $45 million in the first quarter of 2023. After considering expenses, the results of operations of that business were not material to M&T's net income in 2023's initial quarter.

•

Institutional Services trust income not related to the CIT business increased $6 million for the first three months of 2024 as compared with the similar 2023 period reflecting higher sales and fund management fees from its global capital markets business.

•

The lower assets under management at March 31, 2024 and December 31, 2023 as compared with March 31, 2023 reflects the sale of the CIT business in the second quarter of 2023.

Other revenues from operations

~~INTEREST RATE SWAP AGREEMENTS~~The components of other revenues from operations are presented in the accompanying table.

OTHER REVENUES FROM OPERATIONS


	Three Months Ended				Change						Three Months Ended				Change
(Dollars in millions)	March 31, 2024		December 31, 2023		Amount			%			March 31, 2024		March 31, 2023		Amount			%
Letter of credit and other credit-related fees	$	44	$	54	$	(10	)		-19	%	$	44	$	43	$	1			1	%
Merchant discount and credit card fees		40		42		(2	)		-6			40		39		1			1
Bank owned life insurance revenue (a)		16		19		(3	)		-18			16		13		3			23
Equipment operating lease income		11		12		(1	)		-7			11		21		(10	)		-49
BLG income (b)		25		—		25			—			25		20		5			25
Other		16		18		(2	)		-7			16		23		(7	)		-26
Total other revenues from operations	$	152	$	145	$	7			4	%	$	152	$	159	$	(7	)		-5	%

Three Months Ended September 30

.

2017

2016

Amount

Rate(a)

Amount

Rate(a)

(Dollars in thousands)

Increase (decrease) in:

Interest income

$
1,181

—

%
$
—

—

%
Interest expense

(6,059
)

(.03
)

(9,462
)

(.05
)

Net interest income/margin

$
7,240

.03

%
$
9,462

.03

%
Average notional amount

$
6,352,174

$
1,400,000

Rate received (b)

2.26

%

4.42

%
Rate paid (b)

1.76

%

1.68

%
(a)

Tax-exempt income earned from bank owned life insurance includes increases in the cash surrender value of life insurance policies and benefits received. The Company owns both general account and separate account life insurance policies. To the extent market conditions change such that the market value of assets in a separate account bank owned life insurance policy becomes less than the previously recorded cash surrender value, an adjustment is recorded as a reduction to other revenues from operations.

(b)

During 2017, the operating losses of BLG resulted in M&T reducing the carrying value of its investment in BLG to zero. Subsequently, M&T has received cash distributions when declared by BLG that result in the recognition of income by M&T. M&T expects cash distributions from BLG in the future, but the timing and amount of those distributions are not within M&T's control. BLG is entitled to receive distributions from its affiliates that provide asset management and other services that are available for distribution to BLG’s owners, including M&T. Information about the Company’s relationship with BLG and its affiliates is included in note 15 of Notes to Financial Statements.

•

The decrease in letter of credit and other credit-related fees of $10 million in the recent quarter as compared with the fourth quarter of 2023 was primarily the result of lower loan syndication fees.

•

Equipment operating lease income declined $10 million in 2024's first quarter as compared with the similar 2023 quarter reflecting lower gains on sales of leased equipment.

•

Distributions from M&T's investment in BLG were $25 million and $20 million for the quarters ended March 31, 2024 and 2023, respectively. There were no such distributions in the fourth quarter of 2023.

Other Expense

The components of other expense are presented in the accompanying table.

OTHER EXPENSE


	Three Months Ended				Change						Three Months Ended				Change
(Dollars in millions)	March 31, 2024		December 31, 2023		Amount			%			March 31, 2024		March 31, 2023		Amount			%
Salaries and employee benefits	$	833	$	724	$	109			15	%	$	833	$	808	$	25			3	%
Equipment and net occupancy		129		134		(5	)		-4			129		127		2			2
Outside data processing and software		120		114		6			5			120		106		14			13
Professional and other services		85		99		(14	)		-13			85		125		(40	)		-31
FDIC assessments		60		228		(168	)		-74			60		30		30			101
Advertising and marketing		20		26		(6	)		-21			20		31		(11	)		-35
Amortization of core deposit and other intangible assets		15		15		—			—			15		17		(2	)		-13
Other costs of operations		134		110		24			21			134		115		19			16
Total other expense	$	1,396	$	1,450	$	(54	)		-4	%	$	1,396	$	1,359	$	37			3	%

Nine Months Ended September 30

2017

2016

Amount

Rate(a)

Amount

Rate(a)

(Dollars in thousands)

Increase (decrease) in:

Interest income

$
2,275

—

%
$
—

—

%
Interest expense

(15,611
)

(.03
)

(29,593
)

(.05
)

Net interest income/margin

$
17,886

.02

%
$
29,593

.04

%
Average notional amount

$
3,807,326

$
1,400,000

Rate received (b)

2.38

%

4.42

%
Rate paid (b)

1.74

%

1.58

%

- 58 -

Salaries and employee benefits

~~(a)~~

~~Computed as an annualized percentage of average earning assets or interest-bearing liabilities.~~

•

The number of full time equivalent employees was 21,927 at March 31, 2024, compared with 21,980 at December 31, 2023 and 23,004 at March 31, 2023. Included in each of the first quarters of 2024 and 2023 was $99 million of seasonally higher stock-based compensation, medical plan costs, payroll-related taxes and unemployment insurance.

~~(b)~~

~~Weighted-average rate paid or received on interest rate swap agreements in effect during the period.~~

•

Salaries and employee benefits expenses increased $109 million in the recent quarter as compared with the fourth quarter of 2023 reflecting the aforementioned seasonal costs, annual merit increases and a rise in incentive compensation, partially offset by lower severance expense.

•

Salaries and employee benefits expenses increased $25 million in the recent quarter as compared with the year-earlier quarter reflecting annual merit increases in the first quarter of 2024, other pay increases in 2023 and higher incentive compensation, partially offset by lower employee staffing levels.

Nonpersonnel expenses

•

FDIC assessments reflect a $197 million estimated special assessment in the fourth quarter of 2023 and $29 million of estimated incremental special assessment expense recorded in the first quarter of 2024.

•

Nonpersonnel expenses aggregated $563 million in the recent quarter as compared with $726 million in the fourth quarter of 2023. After considering the FDIC special assessments, the $5 million increase in the recent quarter as compared with 2023's fourth quarter reflects an increase in other costs of operations of $24 million, including higher costs associated with the Company's supplemental executive retirement savings plan, losses on lease terminations related to certain vacated properties and incremental charitable contributions. Those unfavorable factors were partially offset by lower professional and other services expenses of $14 million, reflecting the timing and level of consulting and legal-related fees.

•

Nonpersonnel expenses increased $12 million in the recent quarter from $551 million in the year-earlier first quarter. That increase includes an FDIC special assessment of $29 million, higher outside data processing and software costs of $14 million and a rise in other costs of operations of $19 million, reflecting amortization of mortgage loan servicing rights obtained through a bulk purchase in March 2023. Those unfavorable factors were partially offset by lower professional and other services expenses of $40 million reflecting lower sub-advisory fees following the sale of the CIT business in April 2023 and a decline in advertising and marketing costs of $11 million.

Income Taxes

Income tax expense was $133 million in the first quarter of 2024, compared with $143 million in the fourth quarter of 2023 and $224 million in the year-earlier quarter. The effective tax rates were 20.0%, 22.9% and 24.2% for the quarters ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively. The first quarter of 2024 income tax expense included a net discrete benefit related to the resolution of a tax matter inherited from the acquisition of People's United. The effective tax rate is affected by the level of income earned that is exempt from tax relative to the overall level of pre-tax income, the amount of income allocated to the various state and local jurisdictions where the Company operates, because tax rates differ among such jurisdictions, and the impact of any large discrete or infrequently occurring items. The Company’s effective tax rate in future periods may also be affected by any change in income tax laws or regulations and interpretations of income tax regulations that differ from the Company’s interpretations by any of various tax authorities that may examine tax returns filed by M&T or any of its subsidiaries.

- 59 -

Liquidity Risk

As a financial intermediary, the Company is exposed to various risks, including liquidity and market risk. Liquidity refers to the Company’s ability to ensure that sufficient cash flow and liquid assets are available to satisfy current and future obligations, including demands for loans and deposit withdrawals, funding operating costs and other corporate purposes. Liquidity risk arises whenever ~~the maturities of~~cash flows associated with financial instruments included in assets and liabilities differ.

The most significant source of funding for the Company is core deposits, which are generated from a large base of consumer, corporate and institutional customers. That customer base has, over the past several years, become more geographically diverse as a result of expansion of the Company’s businesses. Nevertheless, the Company faces competition in offering products and services from a large array of financial market participants, including banks, thrifts, mutual funds, securities dealers and others. Core deposits totaled $151.5 billion and $146.5 billion at March 31, 2024 and December 31, 2023, respectively. The increase in core deposits at March 31, 2024 as compared with December 31, 2023 reflects a higher level of trust customer deposits.

The Company supplements funding provided through deposits with various short-term and long-term wholesale borrowings, including overnight federal funds purchased, repurchase agreements, advances from FHLBs, brokered deposits and longer-term borrowings. M~~&T’s bank subsidiaries have~~&T Bank has access to additional funding sources through secured borrowings from the FHLB of New York ~~lines~~and the FRB of ~~credit with~~New York. Beginning in the ~~Federal Reserve~~first quarter of 2024, M&T Bank became a counterparty to the FRB of New York ~~the previously noted Bank Note Program, and other available borrowing facilities.~~standing repurchase agreement facility, which allows it to enter into overnight repurchase transactions using eligible investment securities. The Company has, ~~from time to time,~~in the past, issued subordinated capital notes and junior subordinated debentures associated with trust preferred securities to provide liquidity and enhance regulatory capital ratios. Such notes generally qualify under the Federal Reserve Board’s risk-based capital guidelines for inclusion in the Company’s regulatory capital. However, pursuant to the Dodd-Frank Act, the Company’s junior subordinated debentures associated with trust preferred securities have been phased-out of the definition of Tier 1 capital. Beginning January 1, 2016 those instruments are considered Tier 2 capital and are only includable in total regulatory capital.

The Company has informal and sometimes reciprocal sources of funding available through various arrangements for unsecured short-term borrowings from a wide group of banks and other financial institutions. Short-term federal funds borrowings were $134 million, $159 million and $112 million at September 30, 2017, September 30, 2016At March 31, 2024 and December 31, ~~2016,~~2023, long-term borrowings aggregated $11.5 billion and $8.2 billion, respectively and short-term borrowings aggregated $4.8 billion and $5.3 billion, respectively. ~~In general, those~~Information about the Company's borrowings ~~were unsecured and matured on the next business day. In addition~~is presented in note 5 of Notes to satisfying customer demand, Cayman Islands office deposits may be used by the Company as an alternative to short-term borrowings. Cayman Islands office deposits totaled $232 million at September 30, 2017, $223 million at September 30, 2016 and $202 million at December 31, 2016. Financial Statements.

The Company has ~~also~~ benefited from the placement of brokered deposits. The Company had brokered savings and ~~interest-bearing checking~~interest-checking deposit accounts which ~~totaled approximately $1.3~~aggregated $7.9 billion at ~~September 30, 2017, $1.1 billion at September 30, 2016~~March 31, 2024 and ~~$1.2~~$7.8 billion at December 31, ~~2016.~~2023. Brokered time deposits totaled $4.7 billion at March 31, 2024 and $6.1 billion at December 31, 2023. Approximately 87% of brokered time deposits at March 31, 2024 have a contractual maturity date in the next 12 months.

Total uninsured deposits were ~~not a significant source of funding as~~estimated to be $71.9 billion at March 31, 2024 and $67.0 billion at December 31, 2023. Approximately $11.4 billion and $10.7 billion of those ~~dates.~~uninsured deposits were collateralized by the Company at March 31, 2024 and December 31, 2023, respectively. The Company maintains available liquidity sources which represent approximately 135% of uninsured deposits that are not collateralized by the Company at March 31, 2024.

~~- 61 -~~

The Company’s ability to obtain funding from these ~~other~~ sources could be negatively impacted should the Company experience a substantial deterioration in its financial condition or its debt ratings or should the availability of ~~short-term~~ funding become restricted due to a disruption in the financial markets. The Company attempts to quantify such ~~credit-event risk~~risks by ~~modeling scenarios~~conducting scenario analyses that estimate the liquidity impact resulting from a ~~short-term~~debt ratings downgrade ~~over various grading levels.~~and other market events. Such impact is estimated by attempting to measure the effect on available unsecured lines of credit, available capacity from secured borrowing sources and securitizable assets.

M&T’s primary source of funds to pay for operating expenses, shareholder dividends and treasury stock repurchases has historically been the receipt of dividends from its bank subsidiaries, which are subject to various regulatory limitations. Dividends from any bank subsidiary to M&T are limited by the amount of earnings of the subsidiary in the current year and the two preceding years. For purposes of that test, at March 31, 2024 approximately $1.2 billion was available for payment of dividends to M&T from bank subsidiaries. M&T also may obtain funding through long-term borrowings. Further information about the long-term outstanding borrowings of M&T is provided in note 5 of Notes to Financial Statements. As a bank holding company, M&T is obligated to serve as a managerial and financial source of strength to its bank subsidiaries as described in Part I, Item 1, "Business" in the 2023 Annual Report. As its ability to access the capital markets may be affected by market disruptions, M&T maintains sufficient cash resources at its parent company to satisfy projected cash outflows for an extended period without reliance on dividends from subsidiaries or external financing. As of March 31, 2024, M&T's parent company liquidity covered projected cash

- 60 -

outflows for more than 24 months, including dividends on common and preferred stock, debt service and scheduled debt maturities.

In addition to deposits and borrowings, other sources of liquidity include maturities and repayments of investment securities, loans and other earning assets, ~~repayments of loans and investment securities, and~~as well as cash generated from operations, such as fees collected for services.

~~Certain customers~~ The Company also has the ability to securitize or sell certain financial assets, including various loan types, to provide other liquidity alternatives. U.S. Treasury and federal agency securities and government issued or guaranteed mortgage-backed securities comprised 90% of the ~~Company obtain financing through the issuance~~Company's debt securities portfolio at March 31, 2024. The weighted-average durations of ~~variable rate demand bonds (“VRDBs”). The VRDBs are generally enhanced by letters of credit provided by M&T Bank. M&T Bank oftentimes acts as remarketing agent~~debt investment securities available for ~~the VRDBs~~sale and held to maturity at its discretion, may from time-to-time own some of the VRDBs while such instruments are remarketed. When this occurs, the VRDBs are classified as trading account assets in the Company’s consolidated balance sheet. Nevertheless, M&T Bank is not contractually obligated to purchase the VRDBs. ThereMarch 31, 2024 were ~~$2 million of VRDBs in the Company’s trading account at September 30, 2017, compared with $73 million at September 30, 2016~~2.0 years and $30 million at December 31, 2016. The total amount of VRDBs outstanding backed by M&T Bank letters of credit was $1.2 billion at September 30, 2017, compared with $1.6 billion and $1.3 billion at September 30, 2016 and December 31, 2016,5.4 years, respectively. ~~M&T Bank also serves as remarketing agent for most of those bonds.~~

The Company enters into contractual obligations in the normal course of business that require future cash payments. Such obligations include, among others, payments related to deposits, borrowings, leases and other contractual commitments. Off-balance sheet commitments to customers may impact liquidity, including commitments to extend credit, standby letters of credit, commercial letters of credit, financial guarantees and indemnification contracts, and commitments to sell real estate loans. Because many of these commitments or contracts expire without being funded in whole or in part, the contract amounts are not necessarily indicative of future cash flows. Further discussion of these commitments is provided in note 13 of Notes to Financial Statements.

~~Management~~The Company's Executive ALCO Committee closely monitors the Company’s liquidity position on an ongoing basis for compliance with internal policies and ~~believes that~~regulatory expectations. As a Category IV institution, the Company adheres to enhanced liquidity standards which require the performance of internal liquidity stress testing. The stress testing is designed to ensure the Company has sufficient liquidity to withstand both institution-specific and market-wide stress scenarios. For each scenario, the Company applies liquidity stress which may include deposit run-off, increased draws on unfunded loan commitments, increased collateral need for margin calls, increased haircuts on investment security-based funding and reductions in unsecured and secured borrowing capacity. Stress scenarios are measured over various time frames ranging from overnight to twelve months. As required by regulation, the Company maintains a liquidity buffer comprised of cash and highly liquid unencumbered securities to cover a 30-day stress horizon. Liquidity stress events occurring over longer time horizons can be mitigated by the availability of secured funding sources at the FHLB of New York and FRB of New York. The following table is a summary of the Company's available sources of liquidity ~~are adequate to meet~~at March 31, 2024.

AVAILABLE LIQUIDITY SOURCES


(Dollars in millions)	March 31, 2024
Deposits at the FRB of New York	$	32,033
Unused secured borrowing facilities:
FRB of New York		18,404
FHLB of New York		14,589
Unencumbered investment securities (after estimated haircuts)		16,506
Total	$	81,532

Management continuously evaluates the use and mix of its various available funding ~~needs anticipated in~~alternatives, including short-term borrowings, issuances of long-term debt, the ~~normal course~~placement of ~~business.~~brokered deposits and the securitization of certain loan products. Management does not anticipate engaging in any activities, either currently or in the ~~long-term,~~long term, for which adequate funding would not be available and would therefore result in a significant strain on liquidity at either M&T or its subsidiary banks. ~~Banking regulators have enacted~~In accordance with liquidity regulations, the ~~LCR rules requiring~~Company maintains a ~~banking company~~contingency funding plan to ~~maintain~~facilitate on-going liquidity management in times of liquidity stress. The plan outlines various funding options available during a ~~minimum amount of liquid assets to withstand a standardized supervisory~~ liquidity stress ~~scenario.~~event and establishes a clear escalation protocol to be followed within the Company's risk management framework. The ~~Company has taken steps~~plan sets forth funding strategies and procedures that management can quickly leverage to ~~maintain appropriate~~assist in decision-making and specifies roles and responsibilities for departments impacted by a potential liquidity stress event.

- 61 -

Market Risk and ~~is in compliance with the LCR rules.~~Interest Rate Sensitivity

Market risk is the risk of loss from adverse changes in the market prices and/or interest rates of the Company’s financial instruments. The primary market risk the Company is exposed to is interest rate risk. Interest rate risk arises from the Company’s core banking activities of lending and deposit-taking, because assets and liabilities reprice at different times and by different amounts as interest rates change. As a result, net interest income earned by the Company is subject to the effects of changing interest rates. The Company measures interest rate risk by calculating the variability of net interest income in future periods under various interest rate scenarios using projected balances for earning assets, interest-bearing liabilities and derivatives used to hedge interest rate risk. Management’s philosophy toward interest rate risk management is to limit the variability of net interest income. The

~~- 62 -~~

balances of financial instruments used in the projections are based on expected growth from forecasted business opportunities, anticipated prepayments of loans and investment securities, and expected maturities of investment securities, loans and deposits. ~~Management uses a “value~~The Company has entered into interest rate swap agreements to help manage exposure to interest rate risk. At March 31, 2024, the aggregate notional amount of equity” model to supplement the modeling technique described above. Those supplemental analyses are based on discounted cash flows associated with on- and off-balance sheet financial instruments. Such analyses are modeled to reflect changes in interest ~~rates and provide management with a long-term~~rate swap agreements entered into for interest rate risk ~~metric.~~management purposes that were currently in effect was $19.5 billion. In addition, the Company has entered into $7.8 billion of forward-starting interest rate swap agreements predominantly related to cash flow hedges. Information about interest rate swap agreements entered into for interest rate risk management purposes is included herein under the heading “Net Interest Margin” and in note 10 of Notes to Financial Statements.

The Company’s ~~Asset-Liability~~Executive ALCO Committee ~~which includes members of senior management,~~ monitors the sensitivity of the Company’s net interest income to changes in interest rates with the aid of a computer model that forecasts net interest income under different interest rate scenarios. In modeling changing interest rates, the Company considers different yield curve shapes that consider both parallel (that is, simultaneous changes in interest rates at each point on the yield curve) and non-parallel (that is, allowing interest rates at points on the yield curve to vary by different amounts) shifts in the yield curve. In utilizing the model, ~~projections of~~market-implied forward interest rates over the subsequent twelve months are generally used to determine a base interest rate scenario for the net interest income simulation. That calculated base net interest income is then compared with the income calculated under the varying interest rate ~~scenarios are compared to a base interest rate scenario.~~scenarios. The model considers the impact of ongoing lending and deposit-gathering activities, as well as interrelationships in the magnitude and timing of the repricing of financial instruments, including the effect of changing interest rates on expected prepayments and maturities. When deemed prudent, management has taken actions to mitigate exposure to interest rate risk through the use of on- or off-balance sheet financial instruments and intends to do so in the future. Possible actions include, but are not limited to, changes in the pricing of loan and deposit products, modifying the composition of earning assets and interest-bearing liabilities, and adding to, modifying or terminating existing interest rate swap agreements or other financial instruments used for interest rate risk management purposes.

The accompanying table as of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016~~2023 displays the estimated impact on net interest income ~~from non-trading financial instruments~~ in the base scenario described above resulting from parallel changes in interest rates across repricing categories during the first modeling year.

SENSITIVITY OF NET INTEREST INCOME

TO CHANGES IN INTEREST RATES


Changes in interest rates	Calculated Change in Projected Net Interest Income
(Dollars in millions)	March 31, 2024			December 31, 2023
+200 basis points	$	(50	)	$	(18	)
+100 basis points		5			20
-100 basis points		(18	)		(46	)
-200 basis points		(36	)		(83	)

Calculated Increase (Decrease)
in Projected Net Interest Income

Changes in interest rates

September 30, 2017

December 31, 2016

(In thousands)

+200 basis points

$
134,336

227,283

+100 basis points

96,895

147,400

-50 basis points

—

(a)

(98,945
)

-100 basis points

(180,632
)

—

(a)

~~(a)The Company did not analyze this scenario.~~

The Company utilized many assumptions to calculate the impact that changes in interest rates may have on net interest income. The more significant of those assumptions included the rate of prepayments of mortgage-related assets, cash flows from derivative and other financial instruments, ~~held for non-trading purposes,~~ loan and deposit volumes, mix and pricing, and deposit maturities. In the scenarios presented, the Company also assumed gradual changes in interest rates during a twelve-month period as compared with the base scenario. InChanges in amounts presented since December 31, 2023 reflect changes in portfolio composition (including shifts between noninterest-bearing and interest-bearing deposits and higher levels of borrowings), the ~~declining rate scenario, the rate changes may be limited to lesser amounts such that~~level of market-implied forward interest rates ~~remain positive on all points~~and hedging actions taken by the

- 62 -

Company. Amidst the rising interest rate environment since the first quarter of 2022, M&T's cumulative deposit pricing beta, which is the ~~yield curve. In 2016,~~change in deposit pricing in response to a change in market interest rates, approximated 55 percent. Excluding brokered deposits that cumulative pricing beta approximated 50 percent. The cumulative deposit pricing beta (including and excluding brokered deposits) is assumed to approximate 50 to 55 percent in the ~~Company suspended the -100 basis point scenario due to the persistent low level of~~ interest ~~rates. This scenario was reinstated as of June 30, 2017.~~rate scenarios presented. The assumptions used in interest rate sensitivity modeling are inherently uncertain and, as a result, the Company cannot precisely predict the impact of changes in interest rates on

~~- 63 -~~

net interest income. Actual results may differ significantly from those presented due to the timing, magnitude and frequency of changes in interest rates and changes in market conditions and interest rate differentials (spreads) between maturity/repricing categories, as well as any actions, such as those previously described, which management may take to counter such changes. ~~Given recent increases~~Management also uses an “economic value of equity” model to supplement the modeling technique described above and provide a long-term interest rate risk metric. Economic value of equity is a point-in-time analysis of the economic sensitivity of assets, liabilities and off-balance sheet positions that incorporates all cash flows over their estimated remaining lives. Management measures the impact of changes in ~~short-term~~market values due to interest rates ~~management believes that~~under a number of scenarios, including immediate shifts of the ~~likelihood of potential volatility~~yield curve.

In addition to the effect of interest rates, has increased. As a result, as previously described, in 2017 management added interest rate swap agreements designated as hedging instruments to mitigate the Company’s exposure to such potential volatility. In light of the uncertainties and assumptions associated with the process, the amounts presented in the table are not considered significant to the Company’s past or projected net interest income.

~~Changes~~changes in fair value of the Company’s financial instruments can also result from a lack of trading activity for similar instruments in the financial markets. ~~That impact is most notable on the values assigned to some of the Company’s investment securities.~~ Information about the fair valuation of ~~investment securities~~financial instruments is presented ~~herein under the heading “Capital” and~~ in ~~notes 3 and~~note 12 of Notes to Financial Statements.

The Company ~~engages in limited trading account activities~~enters into interest rate and foreign exchange contracts to meet the financial needs of customers that it includes in its financial statements as other non-hedging derivatives within other assets and ~~to fund the Company’s obligations under certain deferred compensation plans.~~other liabilities. Financial instruments utilized ~~in trading account~~for such activities consist predominantly of interest rate ~~contracts, such as~~ swap agreements and forward and futures contracts related to foreign currencies. The Company generally mitigates the foreign currency and interest rate risk associated with ~~trading account~~customer activities by entering into offsetting ~~trading~~ positions with third parties that are also included in ~~the trading account.~~other assets and other liabilities. The fair values of ~~the offsetting trading account~~non-hedging derivative positions associated with interest rate contracts and foreign currency and other option and futures contracts are presented in note 10 of Notes to Financial Statements. The amounts of gross and net trading account positions, as well as the type of trading account activities conducted by the Company, are subject to a well-defined series of potential loss exposure limits established by management and approved by M&T’s Board of Directors. However, asAs with any non-government guaranteed financial instrument, the Company is exposed to credit risk associated with counterparties to the Company’s ~~trading account~~non-hedging derivative activities.

The notional amounts of interest rate contracts entered into for trading account purposes were $15.5 billion at September 30, 2017, $21.2 billion at September 30, 2016 and $21.6 billion at December 31, 2016. The notional amounts of foreign currency and other option and futures contracts entered into for trading account purposes were $545 million at September 30, 2017, compared with $891 million at September 30, 2016 and $471 million at December 31, 2016. Although the notional amounts of these contracts are not recorded in the ~~consolidated balance sheet,~~Consolidated Balance Sheet, the unsettled fair values of ~~all~~such financial instruments ~~used for trading account activities~~ are recorded in the ~~consolidated balance sheet.~~Consolidated Balance Sheet. The fair values of ~~all trading account~~such non-hedging derivative assets and liabilities recognized on the ~~balance sheet totaled $171~~Consolidated Balance Sheet were $258 million and ~~$110~~$1.0 billion, respectively, at March 31, 2024 and $256 million and $898 million, respectively, at September 30, 2017. Effective January 2017, certain clearinghouse exchanges revised their rules to re-characterize required collateral postings for changes in fair value of exchange-traded derivatives as legal settlements of those positions. As a result, theDecember 31, 2023. The fair value asset and liability amounts at ~~September 30, 2017~~March 31, 2024 have been reduced by contractual settlements of ~~$89~~$893 million and ~~$29~~$16 million, respectively, and at December 31, 2023 have been reduced by contractual settlements of $783 million and $32 million, respectively. The ~~fair~~amounts associated with the Company's non-hedging derivative activities at March 31, 2024 and December 31, 2023 reflect changes in values ~~of trading~~associated with interest rate swap agreements entered into with commercial customers that are not subject to periodic variation margin settlement payments.

Trading account assets were $99 million at March 31, 2024 and ~~liabilities were $489~~$106 million ~~and $293 million, respectively, at September 30, 2016 and $324 million and $174 million, respectively,~~ at December 31, ~~2016.~~2023. Included in trading account assets were assets related to deferred compensation plans ~~totaling $23~~of $22 million at each of ~~September 30, 2017~~March 31, 2024 and ~~2016 and $22 million at~~ December 31, ~~2016.~~2023. Changes in the fair values of such assets are recorded as ~~“trading~~trading account and ~~foreign exchange gains”~~other non-hedging derivative gains in the ~~consolidated statement~~Consolidated Statement of ~~income.~~Income. Included in ~~“other liabilities”~~accrued interest and other liabilities in the ~~consolidated balance sheet were~~Consolidated Balance Sheet was $27 million of liabilities related to deferred compensation plans ~~totaling $26 million~~ at each of ~~September 30, 2017, September 30, 2016~~March 31, 2024 and December 31, ~~2016.~~2023. Changes in the balances of such liabilities due to the valuation of allocated investment options to which the liabilities are indexed ~~are~~and recorded in ~~“other~~other costs of ~~operations”~~operations in the ~~consolidated statement~~Consolidated Statement of ~~income.~~Income. Also included in trading account assets were investments in mutual funds and other assets that the Company was required to hold under terms of certain non-qualified supplemental retirement and other benefit plans that were assumed by the Company in various acquisitions. Those assets totaled ~~$25~~$77 million at ~~September 30, 2017, $28 million at September 30, 2016~~March 31, 2024 and ~~$24~~$80 million at December 31, ~~2016.~~2023.

~~- 64 -~~

Given the Company’s policies ~~limits~~ and positions, management believes that the potential loss exposure to the Company resulting from market risk associated with trading account and other non-hedging derivative activities was not material, however, as previously noted, the Company is exposed to credit risk associated with counterparties to transactions

- 63 -

related to the Company’s ~~trading account~~actions to mitigate foreign currency and interest rate risk associated with customer activities. ~~Additional information~~Information about the Company’s use of derivative financial instruments ~~in its trading account activities~~ is included in note 10 of Notes to Financial Statements.

~~Provision for Credit Losses~~Capital

The Company maintains an allowance for credit losses that in management’s judgment appropriately reflects losses inherent in the loan and lease portfolio. A provision for credit losses is recorded to adjust the level of the allowance as deemed necessary by management. The provision for credit losses was $30 million in the recent quarter, compared with $47 million in the third quarter of 2016 and $52 million in the second quarter of 2017. For the nine-month periods ended September 30, 2017 and 2016, the provision for credit losses was $137 million and $128 million, respectively. Net charge-offs of loans were $25 million in the recent quarter, compared with $41 million in the corresponding 2016 quarter and $45 million in the second quarter of 2017. Net charge-offs as an annualized percentage of average loans and leases were .11% in the recent quarter, compared with .19% in the year-earlier quarter and .20% in the second quarter of 2017. Net charge-offs for the nine-month periods ended September 30 totaled $113 million in 2017 and $108 million in 2016, representing an annualized rate of .17% and .16% of average loans and leases in those respective periods. A summary of net charge-offs by loan type is presented in thefollowing table ~~that follows.~~

~~NET CHARGE-OFFS (RECOVERIES)~~

~~BY LOAN/LEASE TYPE~~

��
2017

First
Quarter

Second Quarter

Third Quarter

Year-
to-date

(In thousands)

Commercial, financial, leasing, etc.

$
11,896

21,814

5,291

39,001

Real estate:

Commercial

3,971

1,419

(5,637
)

(247
)
Residential

4,752

3,169

2,178

10,099

Consumer

21,948

18,803

23,067

63,818

$
42,567

45,205

24,899

112,671

2016

First
Quarter

Second Quarter

Third Quarter

Year-
to-date

(In thousands)

Commercial, financial, leasing, etc.

$
902

(3,132
)

14,117

11,887

Real estate:

Commercial

(1,141
)

(1,866
)

(140
)

(3,147
)
Residential

5,085

3,115

4,835

13,035

Consumer

37,394

26,139

22,563

86,096

$
42,240

24,256

41,375

107,871

Reflected in net charge-offs of commercial loans and leases was: an $8 million charge-off in the second quarter of 2017 associated with a provider of asset management, trading, and merger and acquisition advisory services; a $6 million charge-off in the first quarter of 2017 associated with a producer of powdered cellulose and fiber filler products used for food and industrial applications; a $12 million charge-off of loans to a commercial maintenance services provider in the third quarter of 2016 and a $7 million recovery of a previously charged-off loan in the second quarter of 2016. Included in net charge-offs of consumer loans and leases were net charge-offs during the

~~- 65 -~~

quarters ended September 30, 2017, September 30, 2016 and June 30, 2017, respectively, of: automobile loans of $9 million, $7 million and $7 million; recreational vehicle loans of $4 million, $4 million and $2 million; and home equity loans and lines of credit secured by one-to-four family residential properties of $2 million, $5 million and $3 million. Beginning in the first quarter of 2016, the Company accelerated the charge off of consumer loans associated with customers who were either deceased or had filed for bankruptcy that, in accordance with GAAP, had previously been considered when determining the level of the allowance for credit losses and were charged-off following the Company’s normal charge-off procedures to the extent the loans subsequently became delinquent. Reflected in consumer loan charge-offs in the second quarter of 2016 was a $6 million charge-off of a personal usage loan. For the nine-month periods ended September 30, 2017 and 2016, net consumer loan charge-offs included the following: automobile loans of $25 million and $24 million, respectively; recreational vehicle loans of $11 million and $19 million, respectively; and home equity loans and lines of credit of $8 million and $14 million, respectively.

Loans acquired in connection with acquisition transactions subsequent to 2008 were recorded at fair value with no carry-over of any previously recorded allowance for credit losses. Determining the fair value of the acquired loans required estimating cash flows expected to be collected on the loans and discounting those cash flows at then-current interest rates. For acquired loans where fair value was less than outstanding principal as of the acquisition date and the resulting discount was due, at least in part, to credit deterioration, the excess of expected cash flows over the carrying value of the loans is recognized as interest income over the lives of loans. The difference between contractually required payments and the cash flows expected to be collected is referred to as the nonaccretable balance and is not recorded on the consolidated balance sheet. The nonaccretable balance reflects estimated future credit losses and other contractually required payments that the Company does not expect to collect. The Company regularly evaluates the reasonableness of its cash flow projections associated with such loans, including its estimates of lifetime principal losses. Any decreases to the expected cash flows require the Company to evaluate the need for an additional allowance for credit losses and could lead to charge-offs of loan balances. Any significant increases in expected cash flows result in additional interest income to be recognized over the then-remaining lives of the loans. The carrying amount of loans acquired at a discount subsequent to 2008 and accounted for based on expected cash flows was $1.1 billion, $2.0 billion and $1.8 billion at September 30, 2017, September 30, 2016 and December 31, 2016, respectively. The nonaccretable balancepresents components related to ~~remaining principal losses associated with loans acquired at a discount as of September 30, 2017~~shareholders' equity and ~~December 31, 2016 is presented in the accompanying table.~~

~~NONACCRETABLE BALANCE - PRINCIPAL~~

Remaining balance

September 30, 2017

December 31, 2016

(In thousands)

Commercial, financial, leasing, etc.

$
4,606

4,794

Commercial real estate

31,524

39,867

Residential real estate

36,128

59,657

Consumer

8,484

11,275

Total

$
80,742

115,593

For acquired loans where the fair value exceeded the outstanding principal balance, the resulting premium is recognized as a reduction of interest income over the lives of the loans. Immediately following the acquisition date and thereafter, an allowance for credit losses is recorded for incurred losses inherent in the portfolio, consistent with the accounting for originated loans and leases. The carrying amount of Hudson City loans acquired at a premium was $12.1 billion and $14.2 billion at September 30, 2017 and December 31, 2016, respectively. GAAP does not allow the credit loss component of the net premium associated with those loans to be bifurcated and accounted for as a nonaccreting balance as is the case with purchased impaired loans and other loans acquired at a discount. Rather, subsequent to the acquisition date, incurred losses associated with those loans are evaluated using methods consistent with those applied to originated loans and such losses are considered by management in evaluating the Company’s allowance for credit losses.

~~- 66 -~~

Nonaccrual loans aggregated $869 million or .99% of total loans and leases outstanding at September 30, 2017, compared with $837 million or .93% a year earlier, $920 million or 1.01% at December 31, 2016 and $872 million or .98% at June 30, 2017. The higher levels of nonaccrual loans since September 30, 2016 reflect the migration of previously performing residential real estate loans obtained in the acquisition of Hudson City that became past due over 90 days after September 30, 2016. The lower level of nonaccrual loans at September 30, 2017 as compared with December 31, 2016 reflects the effect of borrower repayment performance and charge-offs.

Accruing loans past due 90 days or more (excluding loans acquired at a discount) totaled $261 million or .30% of total loans and leases at September 30, 2017, compared with $317 million or .35% at September 30, 2016, $301 million or .33% at December 31, 2016 and $265 million or .30% at June 30, 2017. Those amounts included loans guaranteed by government-related entities of $252 million, $282 million, $283 million and $235 million at September 30, 2017, September 30, 2016, December 31, 2016 and June 30, 2017, respectively. Guaranteed loans included one-to-four family residential mortgage loans serviced by the Company that were repurchased to reduce associated servicing costs, including a requirement to advance principal and interest payments that had not been received from individual mortgagors. Despite the loans being purchased by the Company, the insurance or guarantee by the applicable government-related entity remains in force. The outstanding principal balances of the repurchased loans that are guaranteed by government-related entities totaled $207 million at September 30, 2017, $225 million at September 30, 2016, $224 million at December 31, 2016 and $185 million at June 30, 2017. The remaining accruing loans past due 90 days or more not guaranteed by government-related entities were loans considered to be with creditworthy borrowers that were in the process of collection or renewal.

Purchased impaired loans are loans obtained in acquisition transactions subsequent to 2008 that as of the acquisition date were specifically identified as displaying signs of credit deterioration and for which the Company did not expect to collect all contractually required principal and interest payments. Those loans were impaired at the date of acquisition, were recorded at estimated fair value and were generally delinquent in payments, but, in accordance with GAAP, the Company continues to accrue interest income on such loans based on the estimated expected cash flows associated with the loans. The carrying amount of such loans was $467 million at September 30, 2017, or .5% of total loans. Of that amount, $411 million was related to the Hudson City acquisition. Purchased impaired loans totaled $617 million and $578 million at September 30 and December 31, 2016, respectively.

Accruing loans acquired at a discount past due 90 days or more are loans that could not be specifically identified as impaired as of the acquisition date, but were recorded at estimated fair value as of such date. Such loans totaled $56 million at September 30, 2017, compared with $65 million at September 30, 2016 and $61 million at December 31, 2016.

The Company modified the terms of select loans in an effort to assist borrowers. If the borrower was experiencing financial difficulty and a concession was granted, the Company considered such modifications as troubled debt restructurings. Loan modifications included such actions as the extension of loan maturity dates and the lowering of interest rates and monthly payments. The objective of the modifications was to increase loan repayments by customers and thereby reduce net charge-offs. In accordance with GAAP, the modified loans are included in impaired loans for purposes of determining the level of the allowance for credit losses. Information about modifications of loans that are considered troubled debt restructurings is included in note 4 of Notes to Financial Statements.

Residential real estate loans modified under specified loss mitigation programs prescribed by government guarantors have not been included in renegotiated loans because the loan guarantee remains in full force and, accordingly, the Company has not granted a concession with respect to the ultimate collection of the original loan balance. Such loans aggregated $184 million, $170 million and $171 million at September 30, 2017, September 30, 2016 and December 31, 2016, respectively.

~~- 67 -~~

Nonaccrual commercial loans and leases were $204 million at September 30, 2017, $231 million at September 30, 2016, $261 million at December 31, 2016 and $201 million at June 30, 2017. Commercial real estate loans classified as nonaccrual aggregated $222 million at September 30, 2017, $198 million at September 30, 2016, $211 million at December 31, 2016 and $225 million at June 30, 2017. Nonaccrual commercial real estate loans included construction-related loans of $22 million, $41 million, $35 million and $23 million at September 30, 2017, September 30, 2016, December 31, 2016 and June 30, 2017, respectively. Those nonaccrual construction loans included loans to residential builders and developers of $2 million, $20 million, $17 million and $7 million at September 30, 2017, September 30, 2016, December 31, 2016 and June 30, 2017, respectively. Information about the location of nonaccrual and charged-off loans to residential real estate builders and developers as of and for the three-month period ended September 30, 2017 is presented in the accompanying table.

~~RESIDENTIAL BUILDER AND DEVELOPER LOANS, NET OF UNEARNED DISCOUNT~~

Quarter Ended

September 30, 2017

September 30, 2017

Nonaccrual

Net Charge-offs (Recoveries)

Outstanding
Balances(b)

Balances

Percent of
Outstanding
Balances

Balances

Annualized
Percent of
Average
Outstanding
Balances

(Dollars in thousands)

New York

$
430,628

$
382

.09

%

$
(33
)

(.03
)
%
Pennsylvania

100,932

263

.26

(3,608
)

(13.13
)

Mid-Atlantic (a)

469,064

1,691

.36

(249
)

(.21
)

Other

663,269

1,187

.18

(13
)

(.01
)

Total

$
1,663,893

$
3,523

.21

%

$
(3,903
)

(.93
)
%

~~(a)~~

~~Includes Delaware, Maryland, New Jersey, Virginia, West Virginia and the District of Columbia.~~

~~(b)~~

~~Includes approximately $16 million of loans not secured by real estate, of which approximately $1 million are in nonaccrual status.~~

Residential real estate loans in nonaccrual status aggregated $338 million at September 30, 2017, compared with $303 million at September 30, 2016, $336 million at December 31, 2016 and $343 million at June 30, 2017. The increase in residential real estate loans classified as nonaccrual subsequent to September 30, 2016 reflects the migration of previously performing loans obtained in the acquisition of Hudson City that became more than 90 days delinquent. Such nonaccrual residential real estate loans totaled $211 million at each of September 30 and June 30, 2017, $149 million at September 30, 2016 and $190 million at December 31, 2016. Those loans could not be identified as purchased impaired loans at the acquisition date because the borrowers were making loan payments at that time and the loans were not recorded at a discount. Included in residential real estate loans classified as nonaccrual were limited documentation first mortgage loans of $102 million, $89 million, $107 million and $106 million at September 30, 2017, September 30, 2016, December 31, 2016 and June 30, 2017, respectively. Limited documentation first mortgage loans represent loans secured by residential real estate that at origination typically included some form of limited borrower documentation requirements as compared with more traditional loans. Such loans in the Company’s portfolio prior to the Hudson City transaction were originated by the Company before 2008. Hudson City discontinued its limited documentation loan program in January 2014. Residential real estate loans past due 90 days or more and accruing interest (excluding loans acquired at a discount) aggregated $250 million at September 30, 2017, compared with $281 million at each of September 30, 2016 and December 31, 2016 and $233 million at June 30, 2017. A substantial portion of such amounts related to guaranteed loans repurchased from government-related entities. Information about the location of nonaccrual and charged-off residential real estate loans as of and for the quarter ended September 30, 2017 is presented in the accompanying table.

~~- 68 -~~

~~SELECTED RESIDENTIAL REAL ESTATE-RELATED LOAN DATA~~

September 30, 2017

Quarter Ended September 30, 2017

Nonaccrual

Net Charge-offs (Recoveries)

Annualized
Percent of

Percent of

Average

Outstanding

Outstanding

Outstanding

Balances

Balances

Balances

Balances

Balances

(Dollars in thousands)

Residential mortgages:

New York

$
5,749,347

$
77,500

1.35
%

$
1,023

.07
%
Pennsylvania

1,449,304

15,090

1.04

50

.01

Maryland

1,149,341

13,122

1.14

(412
)

(.14
)
New Jersey

4,472,114

58,123

1.30

1,014

.09

Other Mid-Atlantic (a)

1,004,391

10,438

1.04

(11
)

(.01
)
Other

3,283,823

61,418

1.87

573

.07

Total

$
17,108,320

$
235,691

1.38
%

$
2,237

.05
%
Residential construction loans:

New York

$
5,032

$
—

—
%

$
—

—
%
Pennsylvania

1,936

343

17.74

(66
)

(16.23
)
Maryland

1,376

—

—

—

—

New Jersey

1,984

—

—

—

—

Other Mid-Atlantic (a)

3,742

—

—

—

—

Other

8,232

329

3.99

(17
)

(.90
)
Total

$
22,302

$
672

3.01
%

$
(83
)

(1.55
%)
Limited documentation first mortgages:

New York

$
1,351,590

$
40,086

2.97
%

$
39

.01
%
Pennsylvania

65,542

5,333

8.14

(112
)

(.66
)
Maryland

38,316

2,605

6.80

20

.21

New Jersey

1,207,609

25,694

2.13

158

.05

Other Mid-Atlantic (a)

31,445

2,210

7.03

84

1.00

Other

440,038

25,990

5.91

(165
)

(.14
)
Total

$
3,134,540

$
101,918

3.25
%

$
24

—
%
First lien home equity loans and lines of credit:

New York

$
1,293,963

$
15,927

1.23
%

$
699

.22
%
Pennsylvania

809,772

8,772

1.08

92

.05

Maryland

668,522

6,544

.98

468

.28

New Jersey

60,068

351

.58

43

.31

Other Mid-Atlantic (a)

207,006

1,701

.82

11

.02

Other

28,365

915

3.22

53

.82

Total

$
3,067,696

$
34,210

1.12
%

$
1,366

.18
%
Junior lien home equity loans and lines of credit:

New York

$
835,542

$
20,598

2.47
%

$
634

.30
%
Pennsylvania

326,133

3,844

1.18

(75
)

(.09
)
Maryland

719,782

11,402

1.58

287

.16

New Jersey

117,989

1,196

1.01

142

.47

Other Mid-Atlantic (a)

280,435

2,089

.74

204

.28

Other

41,420

1,761

4.25

(200
)

(1.92
)
Total

$
2,321,301

$
40,890

1.76
%

$
992

.17
%
Limited documentation junior lien:

New York

$
753

$
—

—
%

$
(1
)

(.48
%)
Pennsylvania

324

—

—

—

—

Maryland

1,373

91

6.64

—

—

New Jersey

382

—

—

—

—

Other Mid-Atlantic (a)

643

—

—

—

—

Other

4,190

393

9.38

19

1.77

Total

$
7,665

$
484

6.31
%

$
18

.92
%

~~(a)~~

~~Includes Delaware, Virginia, West Virginia and the District of Columbia.~~

~~- 69 -~~

Nonaccrual consumer loans were $105 million at September 30, 2017, compared with $104 million at September 30, 2016, $112 million at December 31, 2016 and $103 million at June 30, 2017. Included in nonaccrual consumer loans at September 30, 2017, September 30, 2016, December 31, 2016 and June 30, 2017 were: automobile loans of $21 million, $14 million, $19 million and $17 million, respectively; recreational vehicle loans of $5 million, $6 million, $7 million and $5 million, respectively; and outstanding balances of home equity loans and lines of credit of $76 million, $80 million, $82 million and $77 million, respectively. Information about the location of nonaccrual and charged-off home equity loans and lines of credit as of and for the quarter ended September 30, 2017 is presented in the accompanying table.

~~Information about past due and nonaccrual loans as of September 30, 2017 and December 31, 2016 is also included in note 4 of Notes to Financial Statements.~~

Real estate and other foreclosed assets totaled $111 million at September 30, 2017, compared with $160 million at September 30, 2016, $139 million at December 31, 2016 and $104 million at June 30, 2017. Net gains or losses resulting from sales of real estate and other foreclosed assets were not material in the three-month periods ended September 30, 2017, September 30, 2016 or June 30, 2017. At September 30, 2017, the Company’s holding of residential real estate-related properties comprised approximately 96% of foreclosed assets.

~~A comparative summary of nonperforming assets and certain past due loan data and credit quality ratios is presented in the accompanying table.~~

~~NONPERFORMING ASSET AND PAST DUE, RENOGIATED AND IMPAIRED LOAN DATA~~

2017 Quarters

2016 Quarters

Third

Second

First

Fourth

Third

(Dollars in thousands)

Nonaccrual loans

$
869,362

872,374

926,675

920,015

837,362

Real estate and other foreclosed assets

110,515

104,424

119,155

139,206

159,881

Total nonperforming assets

$
979,877

976,798

1,045,830

1,059,221

997,243

Accruing loans past due 90 days or more(a)

$
261,288

265,461

280,019

300,659

317,282

Government guaranteed loans included in totals above:

Nonaccrual loans

$
34,687

39,296

39,610

40,610

47,130

Accruing loans past due 90 days or more

252,072

235,227

252,552

282,659

282,077

Renegotiated loans

$
226,672

221,892

191,343

190,374

217,559

Acquired accruing loans past due 90 days or more(b)

$
56,225

57,498

63,732

61,144

65,182

Purchased impaired loans(c):

Outstanding customer balance

$
779,340

838,476

890,431

927,446

981,105

Carrying amount

466,943

512,393

552,935

578,032

616,991

Nonaccrual loans to total loans and leases, net of unearned
   discount

.99
%

.98
%

1.04
%

1.01
%

.93
%

Nonperforming assets to total net loans and leases and real estate
   and other foreclosed assets

1.11
%

1.10
%

1.17
%

1.16
%

1.11
%

Accruing loans past due 90 days or more (a) to total loans and
   leases, net of unearned discount

.30
%

.30
%

.31
%

.33
%

.35
%

~~(a) Excludes loans acquired at a discount. Predominantly residential real estate loans.~~

~~(b) Loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.~~

~~(c) Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.~~

~~- 70 -~~

Management determined the allowance for credit losses by performing ongoing evaluations of the loan and lease portfolio, including such factors as the differing economic risks associated with each loan category, the financial condition of specific borrowers, the economic environment in which borrowers operate, the level of delinquent loans, the value of any collateral and, where applicable, the existence of any guarantees or indemnifications. Management evaluated the impact of changes in interest rates and overall economic conditions on the ability of borrowers to meet repayment obligations when quantifying the Company’s exposure to credit losses and the allowance for such losses as of each reporting date. Factors also considered by management when performing its assessment, in addition to general economic conditions and the other factors described above, included, but were not limited to: (i) the impact of residential real estate values on the Company’s portfolio of loans to residential real estate builders and developers and other loans secured by residential real estate; (ii) the concentrations of commercial real estate loans in the Company’s loan portfolio; (iii) the amount of commercial and industrial loans to businesses in areas of New York State outside of the New York City metropolitan area and in central Pennsylvania that have historically experienced less economic growth and vitality than the vast majority of other regions of the country; (iv) the expected repayment performance associated with the Company’s first and second lien loans secured by residential real estate, including loans obtained in the acquisition of Hudson City that were not classified as purchased impaired; and (v) the size of the Company’s portfolio of loans to individual consumers, which historically have experienced higher net charge-offs as a percentage of loans outstanding than other loan types. The level of the allowance is adjusted based on the results of management’s analysis.

Management cautiously and conservatively evaluated the allowance for credit losses as of September 30, 2017 in light of: (i) residential real estate values and the level of delinquencies of loans secured by residential real estate; (ii) economic conditions in the markets served by the Company; (iii) slower growth in private sector employment in upstate New York and central Pennsylvania than in other regions served by the Company and nationally; (iv) the significant subjectivity involved in commercial real estate valuations; and (v) the amount of loan growth experienced by the Company. While there has been general improvement in economic conditions, concerns continue to exist about the strength and sustainability of such improvements; the volatile nature of global markets, including the impact international economic conditions could have on the U.S. economy; Federal Reserve positioning of monetary policy; and continued stagnant population growth in the upstate New York and central Pennsylvania regions (approximately 55% of the Company’s loans and leases are to customers in New York State and Pennsylvania).

The Company utilizes a loan grading system which is applied to all commercial loans and commercial real estate loans. Loan grades are utilized to differentiate risk within the portfolio and consider the expectations of default for each loan. Commercial loans and commercial real estate loans with a lower expectation of default are assigned one of ten possible “pass” loan grades and are generally ascribed lower loss factors when determining the allowance for credit losses. Loans with an elevated level of credit risk are classified as “criticized” and are ascribed a higher loss factor when determining the allowance for credit losses. Criticized loans may be classified as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more. Criticized commercial loans and commercial real estate loans were $2.4 billion at each of September 30, 2017 and December 31, 2016, compared with $2.5 billion at September 30, 2016 and $2.3 billion at June 30, 2017. Approximately 97% of loan balances added to the criticized category during the recent quarter were less than 90 days past due and 86% had a current payment status. Given payment performance, amount of supporting collateral, and, in certain instances, the existence of loan guarantees, the Company still expects to collect the full outstanding principal balance on most of those loans.

Loan officers in different geographic locations with the support of the Company’s credit department personnel are responsible to continuously review and reassign loan grades to pass and criticized loans based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. At least annually, updated financial information is obtained from commercial borrowers associated with pass grade loans and additional analysis is performed. On a quarterly basis, the Company’s centralized credit department reviews all criticized commercial loans and commercial real estate loans greater than $1 million to determine the appropriateness of the assigned loan grade, including whether the loan

~~- 71 -~~

should be reported as accruing or nonaccruing. For criticized nonaccrual loans, additional meetings are held with loan officers and their managers, workout specialists and senior management to discuss each of the relationships. In analyzing criticized loans, borrower-specific information is reviewed, including operating results, future cash flows, recent developments and the borrower’s outlook, and other pertinent data. The timing and extent of potential losses, considering collateral valuation and other factors, and the Company’s potential courses of action are reviewed. To the extent that these loans are collateral-dependent, they are evaluated based on the fair value of the loan’s collateral as estimated at or near the financial statement date. As the quality of a loan deteriorates to the point of classifying the loan as “criticized,” the process of obtaining updated collateral valuation information is usually initiated, unless it is not considered warranted given factors such as the relative size of the loan, the characteristics of the collateral or the age of the last valuation. In those cases where current appraisals may not yet be available, prior appraisals are utilized with adjustments, as deemed necessary, for estimates of subsequent declines in value as determined by line of business and/or loan workout personnel in the respective geographic regions. Those adjustments are reviewed and assessed for reasonableness by the Company’s credit department. Accordingly, for real estate collateral securing larger commercial loans and commercial real estate loans, estimated collateral values are based on current appraisals and estimates of value. For non-real estate loans, collateral is assigned a discounted estimated liquidation value and, depending on the nature of the collateral, is verified through field exams or other procedures. In assessing collateral, real estate and non-real estate values are reduced by an estimate of selling costs. With regard to residential real estate loans, the Company’s loss identification and estimation techniques make reference to loan performance and house price data in specific areas of the country where collateral securing the Company’s residential real estate loans is located. For residential real estate-related loans, including home equity loans and lines of credit, the excess of the loan balance over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. That charge-off is based on recent indications of value from external parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that file for bankruptcy are generally charged off to estimated net collateral value shortly after the Company is notified of such filings. At September 30, 2017, approximately 57% of the Company’s home equity portfolio consisted of first lien loans and lines of credit. Of the remaining junior lien loans in the portfolio, approximately 69% (or approximately 30% of the aggregate home equity portfolio)consisted of junior lien loans that were behind a first lien mortgage loan that was not owned or serviced by the Company. To the extent known by the Company, if a senior lien loan would be on nonaccrual status because of payment delinquency, even if such senior lien loan was not owned by the Company, the junior lien loan or line that is owned by the Company is placed on nonaccrual status. At September 30, 2017, the balance of junior lien loans and lines that were in nonaccrual status solely as a result of first lien loan performance was $10 million, compared with $14 million at September 30, 2016, $12 million at December 31, 2016 and $11 million at June 30, 2017. In monitoring the credit quality of its home equity portfolio for purposes of determining the allowance for credit losses, the Company reviews delinquency and nonaccrual information and considers recent charge-off experience. When evaluating individual home equity loans and lines of credit for charge-off and for purposes of estimating incurred losses in determining the allowance for credit losses, the Company gives consideration to the required repayment of any first lien positions related to collateral property. Home equity line of credit terms vary but such lines are generally originated with an open draw period of ten years followed by an amortization period of up to twenty years. At September 30, 2017, approximately 83% of all outstanding balances of home equity lines of credit related to lines that were still in the draw period, the weighted-average remaining draw periods were approximately five years, and approximately 20% were making contractually allowed payments that do not include any repayment of principal.

Factors that influence the Company’s credit loss experience include overall economic conditions affecting businesses and consumers, generally, but also residential and commercial real estate valuations, in particular, given the size of the Company’s real estate loan portfolios. Commercial real estate valuations can be highly subjective, as they are based upon many assumptions. Such valuations can be significantly affected over relatively short periods of time by changes in business climate, economic conditions, interest rates and, in many cases, the results of operations of businesses and other occupants of the real property. Similarly, residential real estate valuations can be impacted by housing trends, the availability of financing at reasonable interest rates, and general economic conditions affecting consumers.

~~- 72 -~~

In determining the allowance for credit losses, the Company estimates losses attributable to specific troubled credits identified through both normal and detailed or intensified credit review processes and also estimates losses inherent in other loans and leases. In quantifying incurred losses, the Company considers the factors and uses the techniques described herein and in note 4 of Notes to Financial Statements. For purposes of determining the level of the allowance for credit losses, the Company segments its loan and lease portfolio by loan type. The amount of specific loss components in the Company’s loan and lease portfolios is determined through a loan-by-loan analysis of commercial loans and commercial real estate loans in nonaccrual status. Measurement of the specific loss components is typically based on expected future cash flows, collateral values or other factors that may impact the borrower’s ability to pay. Losses associated with residential real estate loans and consumer loans are generally determined by reference to recent charge-off history and are evaluated (and adjusted if deemed appropriate) through consideration of other factors including near-term forecasted loss estimates developed by the Company’s credit department. These forecasts give consideration to overall borrower repayment performance and current geographic region changes in collateral values using third party published historical price indices or automated valuation methodologies. With regard to collateral values, the realizability of such values by the Company contemplates repayment of any first lien position prior to recovering amounts on a junior lien position. Approximately 43% of the Company’s home equity portfolio consists of junior lien loans and lines of credit. Except for consumer loans and residential real estate loans that are considered smaller balance homogeneous loans and are evaluated collectively and loans obtained at a discount in acquisition transactions, the Company considers a loan to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more and has been placed in nonaccrual status. Those impaired loans are evaluated for specific loss components. Modified loans, including smaller balance homogenous loans, that are considered to be troubled debt restructurings are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows. Loans less than 90 days delinquent are deemed to have a minimal delay in payment and are generally not considered to be impaired. Loans acquired in connection with acquisition transactions subsequent to 2008 were recorded at fair value with no carry-over of any previously recorded allowance for credit losses. Determining the fair value of the acquired loans required estimating cash flows expected to be collected on the loans and discounting those cash flows at then-current interest rates. For loans acquired at a discount, the impact of estimated future credit losses represents the predominant difference between contractually required payments and the cash flows expected to be collected. Subsequent decreases to those expected cash flows require the Company to evaluate the need for an additional allowance for credit losses and could lead to charge-offs of acquired loan balances. Additional information regarding the Company’s process for determining the allowance for credit losses is included in note 4 of Notes to Financial Statements.

Management believes that the allowance for credit losses at September 30, 2017 appropriately reflected credit losses inherent in the portfolio as of that date. The allowance for credit losses was $1.01 billion, or 1.15% of total loans and leases at September 30, 2017, compared with $976 million or 1.09% at September 30, 2016, $989 million or 1.09% at December 31, 2016 and $1.01 billion or 1.13% at June 30, 2017. The ratio of the allowance to total loans and leases at each respective date reflects the impact of loans obtained in acquisition transactions subsequent to 2008 that have been recorded at estimated fair value. As noted earlier, GAAP prohibits any carry-over of an allowance for credit losses for acquired loans recorded at fair value. However, for loans acquired at a premium, GAAP provides that an allowance for credit losses be recognized for incurred losses inherent in the portfolio. The level of the allowance reflects management’s evaluation of the loan and lease portfolio using the methodology and considering the factors as described herein. Should the various credit factors considered by management in establishing the allowance for credit losses change and should management’s assessment of losses inherent in the loan portfolio also change, the level of the allowance as a percentage of loans could increase or decrease in future periods. The ratio of the allowance for credit losses to nonaccrual loans was 117% at each of September 30, 2017 and 2016, compared with 107% at December 31, 2016 and 116% at June 30, 2017. Given the Company’s general position as a secured lender and its practice of charging off loan balances when collection is deemed doubtful, that ratio and changes in that ratio are generally not an indicative measure of the adequacy of the Company’s allowance

~~- 73 -~~

for credit losses, nor does management rely upon that ratio in assessing the adequacy of the Company’s allowance for credit losses. The level of the allowance reflects management’s evaluation of the loan and lease portfolio as of each respective date.

~~Other Income~~

Other income totaled $459 million in the third quarter of 2017, compared with $491 million in the corresponding 2016 period and $461 million in the second quarter of 2017. The higher other income in last year’s third quarter resulted predominantly from $28 million of gains on bank investment securities. As compared with the second quarter of 2017, higher mortgage banking revenues in the recent quarter were largely offset by lower credit-related fees.

Mortgage banking revenues were $97 million in the recent quarter, compared with $104 million in the third quarter of 2016 and $86 million in the second quarter of 2017. Mortgage banking revenues are comprised of both residential and commercial mortgage banking activities. The Company’s involvement in commercial mortgage banking activities includes the origination, sales and servicing of loans under the multi-family loan programs of Fannie Mae, Freddie Mac and the U.S. Department of Housing and Urban Development.

Residential mortgage banking revenues, consisting of realized gains from sales of residential real estate loans and loan servicing rights, unrealized gains and losses on residential real estate loans held for sale and related commitments, residential real estate loan servicing fees, and other residential real estate loan-related fees and income, were $63 million in the third quarter of 2017, compared with $67 million in the year-earlier quarter and $61 million in 2017’s second quarter. The decline in residential mortgage banking revenues in the recent quarter as compared with the corresponding 2016 quarter was the result of lower gains from origination activities, reflecting a 9% decline in origination volumes. The improvement from 2017’s second quarter was due to higher servicing fees.

New commitments to originate residential real estate loans to be sold were approximately $757 million in the recently completed quarter, compared with $836 million in the third quarter of 2016 and $773 million in the second quarter of 2017. Realized gains from sales of residential real estate loans and loan servicing rights and recognized net unrealized gains or losses attributable to residential real estate loans held for sale, commitments to originate loans for sale and commitments to sell loans totaled to gains of $17 million in each of the second and third quarters of 2017, compared with gains of $21 million in the third quarter of 2016.

Loans held for sale that were secured by residential real estate were $347 million at September 30, 2017, $415 million at September 30, 2016 and $414 million at December 31, 2016. Commitments to sell residential real estate loans and commitments to originate residential real estate loans for sale at pre-determined rates aggregated $658 million and $483 million, respectively, at September 30, 2017, $845 million and $636 million, respectively, at September 30, 2016, and $777 million and $479 million, respectively, at December 31, 2016. Net recognized unrealized gains on residential real estate loans held for sale, commitments to sell loans, and commitments to originate loans for sale were $15 million at each of September 30, 2017 and December 31, 2016, and $22 million at September 30, 2016. Changes in such net unrealized gains are recorded in mortgage banking revenues and resulted in net decreases in revenues of $2 million in the recent quarter, compared with net increases of $3 million in the third quarter of 2016 and $4 million in the second quarter of 2017.

Revenues from servicing residential real estate loans for others were $46 million in each of the third quarters of 2017 and 2016, compared with $44 million during the quarter ended June 30, 2017. Residential real estate loans serviced for others aggregated $81.9 billion at September 30, 2017, $55.0 billion at September 30, 2016, $53.2 billion at December 31, 2016 and $72.6 billion at June 30, 2017. Reflected in residential real estate loans serviced for others were loans sub-serviced for others of $59.3 billion at September 30, 2017, $32.1 billion at September 30, 2016, $30.4 billion at December 31, 2016 and $49.9 billion at June 30, 2017. Revenues earned for sub-servicing loans aggregated $26 million for the three-month period ended September 30, 2017, compared with $25 million for

~~- 74 -~~

~~each of the three-month periods ended June 30, 2017 and September 30, 2016.~~ During 2017, the Company acquired additional sub-servicing of residential real estate loans as follows: in March, approximately $12.4 billion of outstanding principal balances were added; in June, outstanding principal balances of approximately $11.2 billion were added; and during September, approximately $12.0 billion of outstanding principal balances were added. The contractual servicing rights associated with loans sub-serviced by the Company were predominantly held by affiliates of Bayview Lending Group LLC (“BLG”). Information about the Company’s relationship with BLG and its affiliates is included in note 15 of Notes to Financial Statements.

Capitalized servicing rights consist largely of servicing associated with loans sold by the Company. Capitalized residential mortgage loan servicing assets totaled $116 million at September 30, 2017, compared with $117 million at each of September 30, 2016 and December 31, 2016.

Commercial mortgage banking revenues totaled $34 million in the third quarter of 2017, compared with $37 million in the corresponding 2016 period and $25 million in the second quarter of 2017. Included in such amounts were revenues from loan origination and sales activities of $21 million in the recently completed quarter, compared with $25 million and $11 million in the third quarter of 2016 and the second quarter of 2017, respectively. Commercial real estate loans originated for sale to other investors aggregated approximately $839 million in the third quarter of 2017, compared with $721 million in the year-earlier quarter and $510 million in the second quarter of 2017. Loan servicing revenues were $13 million in the recent quarter, compared with $11 million in the third quarter of 2016 and $14 million in the second 2017 quarter. Capitalized commercial mortgage servicing assets totaled $111 million and $92 million at September 30, 2017 and 2016, respectively, and $104 million at December 31, 2016. Commercial real estate loans serviced for other investors totaled $15.7 billion, $11.3 billion, and $11.8 billion at September 30, 2017, September 30, 2016 and December 31, 2016, respectively, and included $3.2 billion, $2.7 billion and $2.8 billion, respectively, of loan balances for which investors had recourse to the Company if such balances are ultimately uncollectible. In January 2017, the Company purchased commercial mortgage servicing rights and other assets associated with approximately $2.7 billion of loans. The purchase price and assets acquired were not material to the Company’s consolidated financial position. Commitments to sell commercial real estate loans and commitments to originate commercial real estate loans for sale were $394 million and $171 million, respectively, at September 30, 2017, $694 million and $403 million, respectively, at September 30, 2016 and $713 million and $70 million, respectively, at December 31, 2016. Commercial real estate loans held for sale at September 30, 2017, September 30, 2016 and December 31, 2016 were $224 million, $290 million and $643 million, respectively. The higher balance at December 31, 2016 reflected loans originated late in 2016 that were not delivered to investors until 2017.

Service charges on deposit accounts were $109 million in the third quarter of 2017, compared with $108 million in the similar 2016 quarter and $106 million in the second quarter of 2017. Brokerage services income, which includes revenues from the sale of mutual funds and annuities and securities brokerage fees, aggregated $15 million during the recently completed quarter, compared with $16 million in the third quarter of 2016 and $17 million in the second 2017 quarter. Trading account and foreign exchange activity resulted in gains of $7 million in the third quarter of 2017, compared with gains of $13 million and $8 million in the third quarter of 2016 and the second quarter of 2017, respectively. The decline in such gains in the two most recent quarters as compared with the third quarter of 2016 reflects reduced activity related to interest rate swap transactions executed on behalf of commercial customers. Information about the notional amount of interest rate, foreign exchange and other contracts entered into by the Company for trading account purposes is included in note 10 of Notes to Financial Statements and herein under the heading “Taxable-equivalent Net Interest Income.”

Trust income includes fees related to two significant businesses. The Institutional Client Services (“ICS”) business provides a variety of trustee, agency, investment management and administrative services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients who: (i) use capital markets financing structures; (ii) use independent trustees to hold retirement plan and other assets; and (iii) need investment and cash management services. The Wealth Advisory Services (“WAS”) business helps high net worth clients grow their wealth, protect it, and transfer it to their heirs. A comprehensive array of wealth

~~- 75 -~~

management services are offered, including asset management, fiduciary services and family office services. Trust income totaled $125 million in the third quarter of 2017, compared with $119 million in the third quarter of 2016 and $127 million in second quarter of 2017. Revenues associated with the ICS business were approximately $64 million, $58 million and $63 million during the quarters ended September 30, 2017, September 30, 2016 and June 30, 2017, respectively. The higher revenues in the two most recent quarters as compared with the third quarter of 2016 reflect increased fees earned from money-market funds and stronger sales activities. Revenues attributable to WAS were approximately $56 million, $52 million and $60 million for the three-month periods ended September 30, 2017, September 30, 2016 and June 30, 2017, respectively. The increase in the recent quarter as compared with the similar 2016 period largely reflects the impact of improved equity market performance and stronger sales activities. The second quarter of 2017 included $4 million of annual tax preparation fees. Total trust assets, which include assets under management and assets under administration, totaled $230.5 billion at September 30, 2017, compared with $208.4 billion at September 30, 2016 and $210.6 billion at December 31, 2016. Trust assets under management were $76.9 billion, $70.8 billion and $70.7 billion at September 30, 2017, September 30, 2016 and December 31, 2016, respectively. Trust assets under management include the Company’s proprietary mutual funds’ assets of $10.7 billion, $11.5 billion and $10.9 billion at September 30, 2017, September 30, 2016 and December 31, 2016, respectively. Additional trust income from investment management activities aggregated $5 million in the recent quarter, $8 million in the third quarter of 2016 and $4 million in the second quarter of 2017. That income largely relates to fees earned from retail customer investment accounts and from an affiliated investment manager. Assets managed by that affiliated manager totaled $6.6 billion at September 30, 2017, $7.0 billion at September 30, 2016 and $7.3 billion at December 31, 2016. The Company’s trust income from that affiliate was not material during any of the quarters then-ended.

The Company realized gains from sales of investment securities of $28 million during the third quarter of 2016, when the Company sold substantially all of its collateralized debt obligations that had been held in the available-for-sale investment securities portfolio and that had been obtained through the acquisition of other banks. In total, securities with an amortized cost of $28 million were sold. Divestiture of the majority of those securities would have been required prior to July 21, 2017 in accordance with the provisions of the Volcker Rule. There were no significant gains or losses on investment securities in the second or third quarters of 2017.

Other revenues from operations were $107 million in the third quarter of 2017, compared with $104 million in the year-earlier quarter and $117 million in the second quarter of 2017. The higher other revenues from operations in the second quarter of 2017 reflects a greater amount of letter of credit and other credit-related fees in that quarter. Included in other revenues from operations were the following significant components. Letter of credit and other credit-related fees aggregated $25 million in the recent quarter, compared with $31 million and $35 million in the third quarter of 2016 and the second 2017 quarter, respectively. The lower revenues in the recent quarter as compared with those prior periods predominantly resulted from declines in fees for providing loan syndication services. Tax-exempt income from bank owned life insurance, which includes increases in the cash surrender value of life insurance policies and benefits received, aggregated $16 million in the most recent quarter, compared with $12 million and $14 million in the third quarter of 2016 and second quarter of 2017, respectively. Revenues from merchant discount and credit card fees were $31 million in the quarter ended September 30, 2017, compared with $28 million and $29 million during the quarters ended September 30, 2016 and June 30, 2017, respectively. Insurance-related sales commissions and other revenues were $10 million in the third quarter of 2017, compared with $11 million in each of the year-earlier quarter and the second quarter of 2017. M&T’s share of the operating losses of BLG recognized using the equity method of accounting and cash distributions received resulted in losses of $2 million in the third quarter of 2016 and income of $1 million in the second quarter of 2017. There was no income or loss attributable to M&T’s investment in BLG in the recent quarter. During the second quarter of 2017, the operating losses of BLG resulted in M&T reducing the carrying value of its investment in BLG to zero. During that quarter, M&T received a cash distribution from BLG that resulted in the recognition of income by M&T. M&T expects cash distributions from BLG in the future, but the timing and amount of those distributions cannot be estimated at this time. BLG is entitled to receive distributions from affiliates that provide asset management and

~~- 76 -~~

other services that are available for distribution to BLG’s owners, including M&T. Information about the Company’s relationship with BLG and its affiliates is included in note 15 of Notes to Financial Statements.

Other income aggregated $1.37 billion during the first nine months of 2017, $7 million higher than $1.36 billion in the first nine months of 2016. That increase was largely attributable to higher trust income, merchant discount and credit card fees, and credit-related fees, and lower losses related to M&T’s share of the operating losses of BLG. Partially offsetting those improvements were lower mortgage banking revenues and trading account and foreign exchange gains in the 2017 period and gains on investment securities recognized during the 2016 period.

Mortgage banking revenues totaled $268 million and $275 million during the nine-month periods ended September 30, 2017 and 2016, respectively. Residential mortgage banking revenues aggregated $183 million in the first nine months of 2017, compared with $192 million during the nine-month period ended September 30, 2016. New commitments to originate residential real estate loans to be sold aggregated $2.3 billion and $2.4 billion during the first nine months of 2017 and 2016, respectively. Realized gains from sales of residential real estate loans and loan servicing rights and recognized unrealized gains and losses on residential real estate loans held for sale, commitments to originate loans for sale and commitments to sell loans aggregated to gains of $47 million and $54 million in the nine-month periods ended September 30, 2017 and 2016, respectively. Revenues from servicing residential mortgage loans for others through September 30 were $136 million in 2017 and $137 million in 2016. Included in servicing revenues were sub-servicing revenues aggregating $74 million and $73 million in the first nine months of 2017 and 2016, respectively. Commercial mortgage banking revenues were $85 million and $83 million in the nine months ended September 30, 2017 and 2016, respectively. Commercial real estate loans originated for sale to other investors totaled $1.7 billion and $1.6 billion in the nine-month periods ended September 30, 2017 and 2016, respectively.

Service charges on deposit accounts aggregated $320 million during the first nine months of 2017, compared with $314 million in the year-earlier period. Trust income totaled $372 million and $350 million during the first nine months of 2017 and 2016, respectively. The increase in trust income in 2017 as compared with 2016 was largely due to higher revenues from the ICS business, reflecting increased fees earned from money-market funds and stronger sales activities, and from the WAS business, resulting from improved equity market performance and stronger sales activities. Brokerage services income was $49 million and $48 million in the nine-month periods ended September 30, 2017 and 2016, respectively. Trading account and foreign exchange activity resulted in gains of $25 million and $33 million for the first nine months of 2017 and 2016, respectively. The decline resulted predominantly from reduced activity associated with interest rate swap agreements executed on behalf of commercial customers. Gains on investment securities were not significant in 2017 and were $29 million in the nine-month period ended September 30, 2016.

Other revenues from operations totaled $335 million in the first nine months of 2017, compared with $311 million in the similar 2016 period. Other revenues from operations include the following significant components. Letter of credit and other credit-related fees aggregated $94 million and $89 million in 2017 and 2016, respectively. The higher revenues in the 2017 period were largely attributable to fees for providing loan syndication services. Income from bank owned life insurance totaled $44 million in 2017 and $41 million in 2016. Merchant discount and credit card fees were $88 million and $81 million in the first nine months of 2017 and 2016, respectively. The higher revenues in the 2017 period were largely attributable to increased transaction volumes related to merchant activity and usage of the Company’s credit card products. Insurance-related commissions and other revenues aggregated $33 million and $32 million in 2017 and 2016, respectively. M&T’s investment in BLG resulted in losses of $1 million in 2017 and $8 million in 2016.

~~- 77 -~~

~~Other Expense~~

Other expense aggregated $806 million in the third quarter of 2017, compared with $752 million in the year-earlier quarter and $751 million in the 2017’s second quarter. Included in those amounts are expenses considered to be “nonoperating” in nature consisting of amortization of core deposit and other intangible assets of $8 million in the two most recent quarters and $10 million in the third quarter of 2016. Exclusive of those nonoperating expenses, noninterest operating expenses were $798 million in the third quarter of 2017, compared with $743 million in each of the third quarter of 2016 and the second quarter of 2017. The most significant factors for the increased level of operating expenses in the recent quarter as compared with the earlier quarters were increased legal-related and professional services costs. As of September 30, 2017, the Company increased its reserve for legal matters by $50 million. Table 2 provides a reconciliation of other expense to noninterest operating expense.

Other expense for the first nine months of 2017 aggregated $2.34 billion, $66 million higher than $2.28 billion in the first nine months of 2016. Included in those amounts are expenses considered to be “nonoperating” in nature consisting of amortization of core deposit and other intangible assets of $24 million and $34 million in the nine-month periods ended September 30, 2017 and 2016, respectively, and merger-related expenses of $36 million in the first nine months of 2016. Exclusive of those nonoperating expenses, noninterest operating expenses for the nine months of 2017 increased 5% to $2.32 billion from $2.21 billion from the corresponding 2016 period. That $111 million increase was largely due to higher legal-related and professional service costs and increased expenses for salaries, including incentive compensation.

Salaries and employee benefits expense totaled $399 million in each of the recent quarter and the second quarter of 2017, compared with $400 million in the third quarter 2016. During the first nine months of 2017 and 2016, salaries and employee benefits expense totaled $1.25 billion and $1.23 billion, respectively. The higher level of expenses in the first nine months of 2017 as compared with the similar 2016 period was largely attributable to the impact of annual merit increases and higher incentive compensation costs. Salaries and employee benefits expense included stock-based compensation of $10 million in each of the three-month periods ended September 30, 2017, September 30, 2016 and June 30, 2017, and $52 million and $55 million during the nine-month periods ended September 30, 2017 and 2016, respectively. The number of full-time equivalent employees was 16,478 at September 30, 2017, 16,709 at September 30, 2016, 16,593 at December 31, 2016 and 16,526 at June 30, 2017, respectively.

Excluding the nonoperating expense items described earlier from each quarter, nonpersonnel operating expenses were $399 million and $343 million in the quarters ended September 30, 2017 and September 30, 2016, respectively, and $344 million in the second quarter of 2017. On that same basis, such expenses were $1.07 billion and $984 million in the nine-month periods ended September 30, 2017 and 2016, respectively. The increases in nonpersonnel operating expenses reflected in the third 2017 quarter as compared with the year-earlier quarter and the second quarter of 2017, and in the first nine months of 2017 as compared with the first nine months of 2016, were predominantly the result of higher legal-related and professional services costs, including the $50 million increase in the Company’s reserve for legal matters as of September 30, 2017.

The efficiency ratio measures the relationship of noninterest operating expenses to revenues. The Company’s efficiency ratio was 56.0% during the recent quarter, compared with 55.9% during the third quarter of 2016 and 52.7% in the second quarter of 2017. The efficiency ratios for the nine-month periods ended September 30, 2017 and 2016 were 55.2% and 56.0%, respectively. The calculation of the efficiency ratio is presented in Table 2.

~~- 78 -~~

~~Income Taxes~~

The provision for income taxes for the third quarter of 2017 was $225 million, compared with $200 million and $215 million in the year-earlier quarter and the second quarter of 2017, respectively. For the nine-month periods ended September 30, 2017 and 2016, the provision for income taxes was $609 million and $564 million, respectively. As noted earlier, M&T adopted new accounting guidance for share-based transactions during the first quarter of 2017. That guidance requires that all excess tax benefits and tax deficiencies associated with share-based compensation be recognized as a component of income tax expense in the income statement. Previously, tax effects resulting from changes to M&T’s share price subsequent to the grant date were recorded through shareholders’ equity at the time of vesting or exercise. The adoption of the amended accounting guidance resulted in an $18 million reduction of income tax expense in the initial 2017 quarter. The impact of the amended guidance on the second and third quarters of 2017 was not significant. As discussed earlier, the October 2017 settlement between Wilmington Trust Corporation and the U.S. Attorney’s Office for the District of Delaware resulted in a $44 million payment by Wilmington Trust Corporation that is not deductible for income tax purposes, resulting in a higher effective tax rate in the recent quarter. The effective tax rates were 38.7%, 36.4% and 36.1% for the quarters ended September 30, 2017, September 30, 2016 and June 30, 2017, respectively, and 35.9% and 36.4% for the nine-month periods ended September 30, 2017 and 2016, respectively. Excluding the impact on income tax expense of the Wilmington Trust Corporation matter, the effective tax rate would have been 35.8% in the third quarter of 2017. The effective tax rate is affected by the level of income earned that is exempt from tax relative to the overall level of pre-tax income, the level of income allocated to the various state and local jurisdictions where the Company operates, because tax rates differ among such jurisdictions, and the impact of any large but infrequently occurring items.

The Company’s effective tax rate in future periods will also be affected by the results of operations allocated to the various tax jurisdictions within which the Company operates, any change in income tax laws or regulations within those jurisdictions, and interpretations of income tax regulations that differ from the Company’s interpretations by any of various tax authorities that may examine tax returns filed by M&T or any of its subsidiaries.

~~Capital~~

Shareholders’ equity was $16.3 billion at each of September 30, 2017 and 2016, representing 13.55% and 12.88% of total assets, respectively, compared with $16.5 billion or 13.35% at December 31, 2016.

Included in shareholders’ equity was preferred stock with financial statement carrying values of $1.2 billion at each of September 30, 2017, September 30, 2016 and December 31, 2016. Further information concerning M&T’s preferred stock can be found in note 6 of Notes to Financial Statements.

Reflecting the impact of repurchases of M&T’s common stock, common shareholders’ equity was $15.1 billion at each of September 30, 2017 and 2016, or $99.70 per share and $97.47 per share, respectively, compared with $15.3 billion, or $97.64 at December 31, 2016. Tangible equity per common share, which excludes goodwill and core deposit and other intangible assets and applicable deferred tax balances, was $69.02 at the end of the recent quarter, compared with $67.42 a year earlier and $67.85 at December 31, 2016. The Company’s ratio of tangible common equity to tangible assets was 9.02% at September 30, 2017, compared with 8.55% a year earlier and 8.92% at December 31, 2016.dividends. Reconciliations of total common shareholders’ equity and tangible common equity and total assets and tangible assets as of each of those ~~respective~~ dates are presented in ~~table~~Table 2.

SHAREHOLDERS' EQUITY, DIVIDENDS AND SELECT RATIOS


(Dollars in millions, except per share)	March 31, 2024			December 31, 2023			March 31, 2023
Shareholders' equity	$	27,169		$	26,957		$	25,377
Preferred stock		(2,011	)		(2,011	)		(2,011	)
Common shareholders' equity	$	25,158		$	24,946		$	23,366
Per share:
Common shareholders’ equity	$	150.90		$	150.15		$	140.88
Tangible common shareholders’ equity		99.54			98.54			88.81
Ratios:
Shareholder's equity to total assets		12.63	%		12.94	%		12.50	%
Tangible common shareholders' equity to tangible assets		8.03			8.20			7.58
Cash dividends declared for quarter ended:
Common stock	$	218		$	217		$	219
Common stock per share		1.30			1.30			1.30
Preferred stock		25			25			25

Shareholders’ equity reflects accumulated other comprehensive income or loss, which includes the net after-tax impact of unrealized gains or losses on investment securities classified as available for sale, ~~unrealized losses on held-to-maturity securities for which an other-than-temporary impairment charge has been recognized,~~ gains or losses associated with interest rate swap agreements designated as cash flow hedges ~~foreign currency translation adjustments~~ and adjustments to reflect the funded status of defined benefit pension and other postretirement plans. ~~Net unrealized gains on investment securities reflected~~The components of other comprehensive income (loss) are presented in ~~shareholders’ equity, net~~the following table.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - NET OF INCOME TAX


	March 31,			December 31,			March 31,
(Dollars in millions, except per share)	2024			2023			2023
Investment securities unrealized losses, net (a)	$	(197	)	$	(187	)	$	(264	)
Cash flow hedges unrealized losses, net (b)		(268	)		(151	)		(169	)
Defined benefit plans adjustments, net (c)		(116	)		(115	)		(204	)
Other, net		(8	)		(6	)		(8	)
Total	$	(589	)	$	(459	)	$	(645	)

Accumulated other comprehensive income (loss), net, per common share	$	(3.53	)	$	(2.76	)	$	(3.89	)

(a)

Refer to note 3 of ~~applicable tax effect, were $18 million, or $.12 per common share, at September 30, 2017 and $175 million, or $1.13 per common share, at September 30, 2016, compared with net unrealized losses~~Notes to Financial Statements.

(b)

Refer to note 10 of ~~$16 million, or $.10 per common share, at December~~

~~- 79 -~~

~~31, 2016. Changes in unrealized gains and losses on investment securities are predominantly reflective~~Notes to Financial Statements.

(c)

Refer to note 7 of ~~the impact of changes in interest rates on the values of such securities.~~

Notes to Financial Statements.

Reflected in the carrying amount of ~~available for sale~~available-for-sale investment securities at ~~September 30, 2017~~March 31, 2024 were pre-tax effect unrealized ~~losses~~gains of ~~$86~~$1 million on securities with an amortized cost of ~~$6.3 billion~~$622 million and pre-tax effect unrealized ~~gains~~losses of ~~$133~~$264 million on securities with an amortized cost of ~~$5.1~~$11.8 billion. ~~Information about unrealized gains and losses as of September 30, 2017 and December 31, 2016 is included in note 3 of Notes to Financial Statements.~~ Information concerning the Company’s fair valuations of investment securities is provided in ~~note~~notes 3 and 12 of Notes to Financial Statements.

As also described in note 3 of ~~September 30, 2017, based on a review of each of~~Notes to Financial Statements, the ~~securities in the~~Company does not expect any material credit-related losses with respect to its investment securities portfolio ~~the Company concluded that the declines in the values~~at March 31, 2024.

Pursuant to previously approved capital plans and authorizations approved by M&T's Board of any securities containing an unrealized loss were temporary and that any other-than-temporary impairment charges were not appropriate. As of September 30, 2017, the Company did not intend to sell nor is it anticipated that it would be required to sell any of its impaired securities, that is, where fair value is less than the cost basis of the security. The Company intends to continue to closely monitor the performance of its securities because changes in their underlying credit performance or other events could cause the cost basis of those securities to become other-than-temporarily impaired. However, because the unrealized losses on available-for-sale investment securities have generally already been reflected in the financial statement values for investment securities and shareholders’ equity, any recognition of an other-than-temporary decline in value of those investment securities would not have a material effect on the Company’s consolidated financial condition. Any other-than-temporary impairment charge related to held-to-maturity securities would result in reductions in the financial statement values for investment securities and shareholders’ equity. Additional information concerning fair value measurements and the Company’s approach to the classification of such measurements is included in note 12 of the Notes to Financial Statements.

The Company assessed impairment losses on privately issued mortgage-backed securities in the held-to-maturity portfolio by performing internal modeling to estimate bond-specific cash flows considering recent performance of the mortgage loan collateral and utilizing assumptions about future defaults and loss severity. These bond-specific cash flows also reflect the placement of the bond in the overall securitization structure and the remaining subordination levels. In total, at September 30, 2017 and December 31, 2016, the Company had in its held-to-maturity portfolio privately issued mortgage-backed securities with an amortized cost basis of $141 million and $158 million, respectively, and a fair value of $112 million and $121 million, respectively. At September 30, 2017, 85% of the mortgage-backed securities were in the most senior tranche of the securitization structure with 22% being independently rated as investment grade. The mortgage-backed securities are generally collateralized by residential and small-balance commercial real estate loans originated between 2004 and 2008 and had a weighted-average credit enhancement of 17% at September 30, 2017, calculated by dividing the remaining unpaid principal balance of bonds subordinate to the bonds owned by the Company plus any overcollateralization remaining in the securitization structure by the remaining unpaid principal balance of all bonds in the securitization structure. The weighted-average default percentage and loss severity assumptions utilized in the Company’s internal modeling were 33% and 64% respectively. Given the terms of the securitization structure, the bonds held by the Company may defer interest payments in certain circumstances, but after considering the repayment structure and estimated future collateral cash flows of each individual senior and subordinate tranche bond, the Company has concluded that as of September 30, 2017, those privately issued mortgage-backed securities were not other-than-temporarily impaired. Nevertheless, it is possible that adverse changes in the estimated future performance of mortgage loan collateral underlying such securities could impact the Company’s conclusions.

Adjustments to reflect the funded status of defined benefit pension and other postretirement plans, net of applicable tax effect, reduced accumulated other comprehensive income by $260 million, or $1.72 per common share, at September 30, 2017, $285 million, or $1.84 per common share, at September 30, 2016 and $273 million, or $1.75 per common share, at December 31, 2016.

~~- 80 -~~

~~Consistent with its revised 2016 Capital Plan filed with the Federal Reserve,~~Directors, M&T repurchased 3,233,196 common shares for $532 million during the first quarter of 2017 and 1,409,807 common shares for $225 million in the second quarter of 2017. On June 28, 2017, M&T announced that the Federal Reserve did not object to M&T’s 2017 Capital Plan. That plan includes the repurchase of up to $900 million of common shares during the four-quarter period beginning on July 1, 2017 and an increase in the quarterly common stock cash dividend in the second quarter of 2018 of up to $.05 per share to $.80 per share. M&T may also continue to pay dividends and interest on other equity and debt instruments included in regulatory capital, including preferred stock, trust preferred securities and subordinated debt that were outstanding at December 31, 2016, consistent with the contractual terms of those instruments. Dividends are subject to declaration by M&T’s Board of Directors. Furthermore, on July 18, 2017, M&T’s Board of Directors authorized a new stock repurchase program to repurchase up to $900 million of3,838,157 shares of its common stock ~~subject to all applicable regulatory reporting limitations,~~for a total cost of $600 million, including ~~those set forth~~the share repurchase excise tax, under the program in M&T’s 2017 Capital Plan. During the recent quarter, M&T repurchased 1,382,746 common shares for $225 million in accordance with that program. In total, M&T repurchased 6,025,749 common shares during the first ~~nine months~~quarter of ~~2017 for an aggregate amount of $982 million. M&T repurchased 5,307,595~~2023. There were no shares of common stock ~~during~~repurchased in the fourth quarter of 2023 and the first ~~nine months of 2016 at a total cost of $604 million.~~

Cash dividends declared on M&T’s common stock aggregated $114 million in the recent quarter, compared with $109 million and $115 million in the quarters ended September 30, 2016 and June 30, 2017, respectively. Cash dividends on common stock during the nine-month periods ended September 30, 2017 and 2016 were $344 million and $332 million, respectively.

~~Cash dividends declared on preferred stock totaled $18 million during each of the two most recent quarters, as compared with $20 million in the third~~ quarter of 2016. The decline in preferred stock dividends in the two most recent quarters as compared with the third quarter of 2016 resulted from the lower dividend rate for the $500 million of Series F preferred stock issued in October 2016 as compared with the like-amount of Series D preferred stock that had been redeemed in December 2016.2024.

- 64 -

M&T and its subsidiary banks are required to comply with applicable ~~capital adequacy standards established by the federal banking agencies.~~Capital Rules. Pursuant to those regulations, the minimum capital ratios are as follows:

•

4.5% ~~Common Equity Tier 1 (“CET1”)~~CET1 to ~~risk-weighted assets~~RWA (each as defined in the ~~capital regulations)~~Capital Rules);

•

6.0% Tier 1 capital (that is, CET1 plus ~~Additional~~additional Tier 1 capital) to ~~risk-weighted assets~~RWA (each as defined in the ~~capital regulations)~~Capital Rules);

•

8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to ~~risk-weighted assets~~RWA (each as defined in the ~~capital regulations)~~Capital Rules); and

•

4.0% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”), as defined in the ~~capital regulations.~~

Capital Rules.

InCapital Rules require buffers in addition to the minimum risk-based capital ~~regulations provide for~~ratios noted above. M&T is subject to a SCB requirement that is determined through the ~~phase-in of~~Federal Reserve’s supervisory stress tests and M&T’s bank subsidiaries are subject to a ~~“capital~~2.5% capital conservation ~~buffer”~~buffer requirement. The buffer requirement must be composed entirely of ~~CET1~~CET1. Based on ~~top of these minimum risk-weighted asset ratios. When fully phased-in on January 1, 2019~~ the ~~capital conservation buffer will be 2.5%. For 2017, the phase-in transition portion of that buffer~~Federal Reserve's most recent supervisory stress tests M&T's SCB is ~~1.25%~~4.0%.

The regulatory capital ratios of the Company and its bank subsidiaries, M&T Bank and Wilmington Trust, N.A., as of ~~September 30, 2017~~March 31, 2024 are presented in the accompanying table.

~~- 81 -~~

REGULATORY CAPITAL RATIOS

~~September 30, 2017~~March 31, 2024


	M&T			M&T			Wilmington
(Dollars in millions)	(Consolidated)			Bank			Trust, N.A.
CET1		11.08	%		11.66	%		260.57	%
Tier 1 capital		12.38			11.66			260.57
Total capital		14.04			13.11			260.98
Tier 1 leverage		9.47			8.90			86.02
RWA	$	155,338		$	154,730		$	227

Capital Rules generally require the deduction of goodwill and core deposit and other intangible assets, net of applicable deferred taxes, from the calculation of capital in the determination of the minimum capital ratios. As a result of previous business acquisitions, the Company recorded goodwill of $8.5 billion and core deposit and other intangible assets of $132 million at March 31, 2024. Goodwill, as required by GAAP, is not amortized, but rather is tested for impairment at least annually at the business reporting unit level. The Company completed its annual goodwill impairment test in the fourth quarter of 2023 and concluded the amount of goodwill was not impaired at the testing date. The Company has not identified events or circumstances that would more likely than not reduce the fair value of a business reporting unit below its carrying amount at March 31, 2024. Should a business reporting unit with assigned goodwill experience declines in revenue, increased credit losses or expenses, or other adverse developments due to economic, regulatory, competition or other factors, that would be material to that reporting unit, an impairment of goodwill could occur in a future period that could be material to the Company's Consolidated Balance Sheet and its Consolidated Statement of Income. Although a goodwill impairment charge would not have a significant impact on the Company's regulatory tangible capital ratios, it would reduce the capacity of its bank subsidiary, M&T Bank, to dividend earnings to M&T. As described herein under the heading "Liquidity Risk", M&T's parent company liquidity at March 31, 2024 covered projected cash outflows for more than 24 months, including dividends on common and preferred stock, debt service and scheduled debt maturities. Information concerning goodwill and other intangible assets is included in note 8 of Notes to Financial Statements in the 2023 Annual Report.

M&T

M&T

Wilmington

(Consolidated)

Bank

Trust, N.A.

Common equity Tier 1

10.98%

10.69%

67.58%
Tier 1 capital

12.25%

10.69%

67.58%
Total capital

14.87%

12.99%

68.14%
Tier 1 leverage

10.35%

9.05%

14.55%

- 65 -

The Company is subject to the comprehensive regulatory framework applicable to bank and financial holding companies and their subsidiaries, which includes ~~regular~~ examinations by a number of regulators. Regulation of financial institutions such as M&T and its subsidiaries is intended primarily for the protection of depositors, the ~~Deposit Insurance Fund~~DIF of the FDIC and the banking and financial system as a whole, and generally is not intended for the protection of shareholders, investors or creditors other than insureddepositors. Changes in laws, regulations and regulatory policies applicable to the Company’s operations can increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive environment in which the Company operates, all of which could have a material effect on the business, financial condition or results of operations of the Company and in M&T’s ability to pay dividends. For additional information concerning this comprehensive regulatory framework, refer to Part I, Item 1 of ~~M&T’s Form 10-K for~~ the ~~year ended December 31, 2016.~~2023 Annual Report.

~~Segment Information~~

~~As required by GAAP,~~On July 27, 2023, the federal banking agencies issued a notice of proposed rulemaking to modify the regulatory capital requirements applicable to large banking organizations with over $100 billion of total assets and their depository institution subsidiaries. The proposed rule would generally require banking organizations subject to Category III and IV standards, like the Company, to compute their regulatory capital consistent with Category I and II standards. Management is in the process of evaluating the impact of the proposed rule on the regulatory capital requirements of M&T and its subsidiary banks and currently estimates the proposed rules would increase the Company's ~~reportable~~RWA by a percentage in the mid-single digits.

Segment Information

Reportable segments have been determined based upon the Company's organizational structure and its internal profitability reporting ~~system, which is organized by strategic business unit.~~system. Financial information about the Company's segments is presented in note 14 of Notes to Financial Statements. ~~As disclosed~~The reportable segments are Commercial Bank, Retail Bank, and Institutional Services and Wealth Management. All other business activities that are not included in ~~M&T’s Form 10-K~~the three reportable segment results have been included in the "All Other" category.

NET INCOME (LOSS) BY SEGMENT


	Three Months Ended						Change						Three Months Ended						Change
(Dollars in millions)	March 31, 2024			December 31, 2023			Amount			%			March 31, 2024			March 31, 2023			Amount			%
Net income (loss)
Commercial Bank	$	201		$	220		$	(19	)		-9	%	$	201		$	333		$	(132	)		-40	%
Retail Bank		446			438			8			2			446			452			(6	)		-1
Institutional Services and Wealth Management		128			105			23			21			128			110			18			16
All Other		(244	)		(281	)		37			13			(244	)		(193	)		(51	)		-26
Total net income	$	531		$	482		$	49			10	%	$	531		$	702		$	(171	)		-24	%

Commercial Bank

The Commercial Bank segment provides a wide range of credit products and banking services to middle-market and large commercial customers, mainly within the markets served by the Company. Services provided by this segment include commercial lending and leasing, credit facilities which are secured by various types of commercial real estate, letters of credit, deposit products and cash management services. Commercial real estate loans may be secured by multifamily residential buildings, hotels, office, retail and industrial space or other types of collateral. Activities of this segment include the origination, sales and servicing of commercial real estate loans through the Fannie Mae DUS program and other programs. Commercial real estate loans held for sale are included in this segment.

- 66 -

COMMERCIAL BANK SEGMENT FINANCIAL SUMMARY


	Three Months Ended				Change						Three Months Ended				Change
(Dollars in millions)	March 31, 2024		December 31, 2023		Amount			%			March 31, 2024		March 31, 2023		Amount			%
Income Statement
Net interest income	$	548	$	583	$	(35	)		-6	%	$	548	$	649	$	(101	)		-16	%
Noninterest income		151		176		(25	)		-14			151		162		(11	)		-7
Total revenue		699		759		(60	)		-8			699		811		(112	)		-14
Provision for credit losses		77		113		(36	)		-31			77		34		43			129
Noninterest expense		345		344		1			—			345		322		23			7
Income before taxes		277		302		(25	)		-9			277		455		(178	)		-39
Income taxes		76		82		(6	)		-8			76		122		(46	)		-38
Net income	$	201	$	220	$	(19	)		-9	%	$	201	$	333	$	(132	)		-40	%
Average Balance Sheet
Loans and leases:
Commercial and industrial	$	49,048	$	47,717	$	1,331			3	%	$	49,048	$	44,655	$	4,393			10	%
Commercial real estate		30,747		31,489		(742	)		-2			30,747		33,280		(2,533	)		-8
Residential real estate		447		444		3			1			447		329		118			36
Consumer		25		21		4			14			25		25		—			-3
Total loans and leases, net	$	80,267	$	79,671	$	596			1	%	$	80,267	$	78,289	$	1,978			3	%
Deposits:
Noninterest-bearing		13,459		14,527		(1,068	)		-7			13,459		20,206		(6,747	)		-33
Interest-bearing		30,074		29,127		947			3			30,074		22,593		7,481			33
Total deposits	$	43,533	$	43,654	$	(121	)		—	%	$	43,533	$	42,799	$	734			2	%

The Commercial Bank segment’s net income was $201 million in the ~~year ended December 31, 2016,~~first quarter of 2024, compared with $220 million in the fourth quarter of 2016 the Company revised its funds transfer pricing allocation related to borrowings. Additionally, during the second quarter of 2017, the Company revised its funds transfer pricing allocation related to certain deposit categories. As a result of the changes and as described in note 14 of Notes to Financial Statements, prior period financial information has been reclassified to provide segment information on a comparable basis.2023.

The Business Banking segment contributed net income of $31 million during the quarter ended September 30, 2017, compared with $24 million in the third quarter of 2016 and $29 million in the second quarter of 2017. As compared with the third quarter of 2016, the recent quarter’s higher net income primarily reflected an $8 million increase in net

•

Net interest income ~~that resulted from~~declined $35 million reflecting a ~~widening~~narrowing of the net interest margin on loans and deposits ~~of 16~~by 13 basis points and ~~an increase~~4 basis points, respectively.

•

Noninterest income decreased $25 million reflecting lower commercial mortgage banking revenues and a decrease in credit-related fees (predominantly loan syndication fees).

•

The provision for credit losses decreased $36 million reflecting lower net charge-offs on loans secured by commercial real estate, partially offset by higher net charge-offs on commercial and industrial loans.

•

Average loans and leases increased $596 million reflecting $1.3 billion of growth in average ~~outstanding deposit balances of $629 million. The improvement~~commercial and industrial loans that spanned most industry types, partially offset by a reduction in ~~net income~~average commercial real estate loans.

•

Average deposits in ~~2017’s third~~the recent quarter as compared with the ~~immediately preceding~~final quarter of 2023 reflect a shift from noninterest-bearing accounts to interest-bearing products amidst an elevated interest rate environment.

Net income for the Commercial Bank segment declined $132 million in the first quarter of 2024 from $333 million in the year-earlier quarter.

•

Net interest income declined $101 million reflecting a narrowing of the net interest margin on loans and deposits of 37 basis points and 43 basis points, respectively, partially offset by a rise in average outstanding loan balances of $2.0 billion.

•

Noninterest income decreased $11 million due to lower gains on sales of leased equipment and lower gains on commercial mortgage loans originated for sale, partially offset by higher service charges on commercial deposit accounts.

•

The provision for credit losses increased $43 million reflecting higher net charge-offs on commercial and industrial loans, partially offset by lower net charge-offs on loans secured by commercial real estate.

•

Noninterest expense increased $23 million reflecting a rise in centrally-allocated costs associated with data processing, risk management and other support services provided to the Commercial Bank segment of $21 million.

- 67 -

•

The increase in average loans from the first quarter of 2023 reflects higher average balances of commercial and industrial loans including growth in loans to financial and insurance industry customers and to motor-vehicle and recreational finance dealers, partially offset by a reduction in average permanent commercial real estate and average construction loans.

•

Average deposits grew $734 million from the year-earlier first quarter and reflected a $4shift in customer funds from noninterest-bearing accounts to interest-bearing products amidst an elevated interest rate environment.

Retail Bank

The Retail Bank segment provides a wide range of services to consumers and small businesses through the Company’s branch network and several other delivery channels such as telephone banking, internet banking and automated teller machines. The Company has branch offices in New York State, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Massachusetts, Maine, Vermont, New Hampshire, Virginia, West Virginia and the District of Columbia. The segment offers to its customers deposit products, including demand, savings and time accounts, and other services. Credit services offered by this segment include automobile and recreational finance loans (originated both directly and indirectly through dealers), home equity loans and lines of credit, credit cards and other loan products. This segment also originates and services residential mortgage loans and either sells those loans in the secondary market to investors or retains them for investment purposes. Residential mortgage loans are also originated and serviced on behalf of the Institutional Services and Wealth Management segment. The Company periodically purchases the rights to service residential real estate loans that have been originated by other entities and also sub-services residential real estate loans for others. Residential real estate loans held for sale are included in this segment. This segment also provides various business loans, including loans guaranteed by the SBA, business credit cards, deposit products and services such as cash management, payroll and direct deposit, merchant credit card and letters of credits to small businesses and professionals through the Company's branch network and other delivery channels.

RETAIL BANK SEGMENT FINANCIAL SUMMARY


	Three Months Ended				Change						Three Months Ended				Change
(Dollars in millions)	March 31, 2024		December 31, 2023		Amount			%			March 31, 2024		March 31, 2023		Amount			%
Income Statement
Net interest income	$	1,071	$	1,083	$	(12	)		-1	%	$	1,071	$	1,064	$	7			1	%
Noninterest income		197		194		3			2			197		170		27			16
Total revenue		1,268		1,277		(9	)		-1			1,268		1,234		34			3
Provision for credit losses		68		56		12			22			68		43		25			61
Noninterest expense		599		629		(30	)		-5			599		580		19			3
Income before taxes		601		592		9			1			601		611		(10	)		-1
Income taxes		155		154		1			—			155		159		(4	)		-3
Net income	$	446	$	438	$	8			2	%	$	446	$	452	$	(6	)		-1	%
Average Balance Sheet
Loans and leases:
Commercial and industrial	$	6,874	$	6,766	$	108			2	%	$	6,874	$	6,819	$	55			1	%
Commercial real estate		1,904		1,908		(4	)		—			1,904		1,909		(5	)		—
Residential real estate		20,843		21,057		(214	)		-1			20,843		21,721		(878	)		-4
Consumer		20,387		19,762		625			3			20,387		19,645		742			4
Total loans and leases, net	$	50,008	$	49,493	$	515			1	%	$	50,008	$	50,094	$	(86	)		—	%
Deposits:
Noninterest-bearing		25,380		26,474		(1,094	)		-4			25,380		30,552		(5,172	)		-17
Interest-bearing		66,269		65,448		821			1			66,269		61,317		4,952			8
Total deposits	$	91,649	$	91,922	$	(273	)		—	%	$	91,649	$	91,869	$	(220	)		—	%

- 68 -

The Retail Bank segment’s net income increased $8 million to $446 million in the first quarter of 2024 from $438 million in the final quarter of 2023.

•

Net interest income declined $12 million.

•

Noninterest income increased $3 million.

•

The provision for credit losses increased $12 million reflecting higher net charge-offs of recreational finance loans, indirect auto loans and business banking loans.

•

Noninterest expenses declined $30 million due to declines in equipment and net occupancy costs of $10 million, centrally-allocated costs associated with data processing, risk management, and other support services provided to the Retail Bank segment of $8 million and advertising and marketing expenses of $7 million.

•

Average loans increased $515 million reflecting growth in the segment's portfolio of recreational finance loans and automobile loans.

•

Average deposits in the recent quarter as compared with the final quarter of 2023 reflect a shift from noninterest-bearing accounts to interest-bearing products amidst an elevated interest rate environment.

Net income for the Retail Bank segment decreased $6 million in the recent quarter from $452 million in the first quarter of 2023.

•

Net interest income rose $7 million.

•

Noninterest income increased $27 million primarily due to higher residential mortgage banking revenues reflecting a rise in servicing income from the bulk purchase of residential mortgage loan servicing rights at the end of the first quarter of 2023 and an increase in service charges on deposit accounts.

•

The provision for credit losses increased $25 million reflecting higher net ~~interest income. That improvement was attributable~~charge-offs of consumer loans.

•

Noninterest expense rose $19 million predominantly due to higher ~~average outstanding deposit~~centrally-allocated costs associated with data processing, risk management, and other support services provided to the Retail Bank segment of $22 million, partially offset by a decrease in personnel-related costs reflecting lower staffing levels.

•

Average loans in the recent quarter declined slightly from the first quarter of 2023, reflecting lower balances of ~~$254~~residential real estate loans, partially offset by higher average consumer loans resulting from growth of recreational finance loan balances. In the first quarter of 2023, the Company returned to originating for sale the majority of its newly originated residential mortgage loans.

•

Average deposits in the recent quarter as compared with the first quarter of 2023 reflect a shift from noninterest-bearing accounts to interest-bearing products amidst an elevated interest rate environment.

- 69 -

Institutional Services & Wealth Management

The Institutional Services and Wealth Management segment provides a variety of trustee, agency, investment management and administrative services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients, as well as personal trust, planning, fiduciary, asset management, family office and other services designed to help high net worth individuals and families grow, preserve and transfer wealth. This segment also provides investment products, including mutual funds and annuities and other services to customers.

INSTITUTIONAL SERVICES & WEALTH MANAGEMENT SEGMENT FINANCIAL SUMMARY


	Three Months Ended				Change						Three Months Ended				Change
(Dollars in millions)	March 31, 2024		December 31, 2023		Amount			%			March 31, 2024		March 31, 2023		Amount			%
Income Statement
Net interest income	$	186	$	176	$	10			6	%	$	186	$	170	$	16			9	%
Noninterest income		191		186		5			3			191		220		(29	)		-13
Total revenue		377		362		15			4			377		390		(13	)		-4
Provision for credit losses		—		—		—			—			—		—		—			—
Noninterest expense		205		219		(14	)		-6			205		241		(36	)		-15
Income before taxes		172		143		29			21			172		149		23			15
Income taxes		44		38		6			19			44		39		5			14
Net income	$	128	$	105	$	23			21	%	$	128	$	110	$	18			16	%
Average Balance Sheet
Loans and leases:
Commercial and industrial	$	783	$	761	$	22			3	%	$	783	$	787	$	(4	)		-1	%
Commercial real estate		48		56		(8	)		-13			48		53		(5	)		-9
Residential real estate		1,846		1,838		8			—			1,846		1,720		126			7
Consumer		722		766		(44	)		-6			722		812		(90	)		-11
Total loans and leases, net	$	3,399	$	3,421	$	(22	)		-1	%	$	3,399	$	3,372	$	27			1	%
Deposits:
Noninterest-bearing		9,081		8,477		604			7			9,081		10,363		(1,282	)		-12
Interest-bearing		7,168		6,759		409			6			7,168		7,970		(802	)		-10
Total deposits	$	16,249	$	15,236	$	1,013			7	%	$	16,249	$	18,333	$	(2,084	)		-11	%

The Institutional Services and Wealth Management segment’s net income increased $23 million to $128 million in the first quarter of 2024 from $105 million in the last quarter of 2023.

•

Net interest income increased $10 million reflecting a widening of the net interest margin on deposits of 3 basis points and the impact of one additional day in the current quarter. Net income earned by the Business Banking segment totaled $85 million during the first nine months of 2017, compared with $77 million in the year-earlier period. That 10% increase in net income was attributable to a $16 million rise in net interest income and higher merchant discount and credit card fees of $2 million offset, in part, by a $5 million increase in the provision for credit losses, predominantly due to higher net charge-offs. The improvement in net interest income reflected a widening of the net interest margin on deposits of 15 basis points and an$1.0 billion increase in average outstanding deposit ~~balances of $399 million.~~

balances.

•

Noninterest income increased $5 million reflecting higher brokerage fee and trust income.

•

Noninterest expenses decreased $14 million reflecting a decline in personnel-related costs and professional and other services.

Net income offor the ~~Commercial Banking~~Institutional Services and Wealth Management segment ~~was $110~~increased $18 million in the recent quarter compared with $103 million in 2016’s third quarter and $106 million in the second quarter of 2017. The recent quarter’s 7% rise in net income as compared with the third quarter of 2016 was largely due to a $12 million decrease in the provision for credit losses and a $6 million increase in net interest income. Those favorable factors were partially offset by an $8

~~- 82 -~~

~~million decline in letter of credit and credit-related fees, primarily due to lower loan syndication fees. The higher net interest income resulted predominately~~ from a widening of the net interest margin on deposits of 40 basis points and higher average outstanding balances of loans of $780 million, partially offset by a narrowing of the net interest margin on loans of 15 basis points and lower average deposit balances of $795 million. The increase in net income in the recent quarter as compared with the second quarter of 2017 was largely due to a $13 million decrease in the provision for credit losses and higher net interest income of $3 million, reflecting the impact of one additional day in the current quarter, partially offset by a $9 million decrease in credit-related fees, primarily due to lower loan syndication fees. Year-to-date net income for the Commercial Banking segment totaled $328 million in 2017, compared with $309 million in 2016. That improvement was largely due to higher net interest income of $19 million, a $7 million decline in the provision for credit losses and a $4 million increase on gains on sales of previously leased equipment. The improvement in net interest income reflected a widening of the net interest margin on deposits of 31 basis points and higher average loan balances of $1.3 billion, partially offset by a narrowing of the net interest margin on loans of 17 basis points.

~~The Commercial Real Estate segment recorded net income of $97 million in the third quarter of 2017, compared with $90~~$110 million in the year-earlier ~~period and $87 million in the second quarter of 2017. The recent quarter’s improvement in net income as compared with the third quarter of 2016 reflects a $10 million rise in net~~first quarter.

•

Net interest income and a $3 million decrease in the provision for credit losses, partially offset by lower trading account and foreign exchange gains of $5 million, due predominately to reduced activity related to interest rate swap transactions executed on behalf of customers. The higher net interest income resulted from an increase in average outstanding loan balances of $1.1 billion and a widening of the net interest margin on deposits of 46 basis points, partially offset by a narrowing of the net interest margin on loans of 5 basis points. The recent quarter’s 11% increase in net income as compared with the immediately preceding quarter reflected higher mortgage banking revenues as previously noted, resulting from increased loan origination activities, and a $5 million increase in net interest income. The higher net interest income resulted largely from a widening of net interest margin on loans of 4 basis points and the impact of one additional day in the current quarter. Net income for the Commercial Real Estate segment totaled $269 million in the first nine months of 2017, compared with $255 million in the similar 2016 period. That improvement resulted from a rise in net interest income of $33 million and higher letter of credit and other credit-related fees of $4 million, partially offset by lower trading account and foreign exchange gains of $11 million and a $5 million increase in personnel-related expenses. The higher net interest income resulted from increased average outstanding loan balances of $2.2 billion and a widening of the net interest margin on deposits of 37 basis points offset, in part, by a narrowing of the net interest margin on loans of 13 basis points. The lower trading account and foreign exchange gains during the nine-month period ended September 30, 2017 resulted from decreased activity related to interest rate swap transactions executed on behalf of customers.

Net income earned by the Discretionary Portfolio segment totaled $32 million during the three-month period ended September 30, 2017, compared with $46 million in the year-earlier period and $30 million in the second quarter of 2017. Reflected in the results for the third quarter of 2016 were net after-tax investment securities gains of $17 million ($28 million pre-tax), while there were no significant gains or losses on investment securities in 2017. Largely in response to the provisions of the Dodd-Frank Act commonly referred to as the “Volcker Rule,” the Company sold substantially all of its collateralized debt obligations in 2016’s third quarter. In addition to those gains on investment securities, contributing to the recent quarter decline in net income as compared with the third quarter of 2016 was a $17 million decline in net interest income, due largely to lower average outstanding loan balances of $3.4 billion and a narrowing of the net interest margin on loans of 9 basis points. Partially offsetting those unfavorable factors were a $6 million decline in the provision for credit losses and lower loan and other real estate servicing costs. As compared with the second quarter of 2017, a $6 million decrease in the provision for credit losses and lower operating expenses in the recent quarter were largely offset by a $7 million decline in net interest income. The lower net interest income reflected decreased average outstanding loan balances of $758 million and a narrowing of the net interest margin on investment securities of 6 basis points. The Discretionary Portfolio segment recorded net income of $95 million and $135 million in the first nine months of 2017 and 2016, respectively. That year-over-year decline was predominantly the result of a $57 million decrease in net interest income and the noted

~~- 83 -~~

~~investment securities ga~~ins recorded in 2016, partially offset by lower loan and other real estate-related servicing costs. The decrease in net interest income reflected lower average outstanding loan balances of $3.6 billion and a 12 basis point narrowing of the net interest margin on loans, each largely due to pay downs of loans obtained in the acquisition of Hudson City, partially offset by a widening of the net interest margin on investment securities of 9 basis points.

~~Net income recorded by the Residential Mortgage Banking segment aggregated $14 million in each of the two most recent quarters, compared with~~ $16 million in the third quarter of 2016. The decline in net income for the third quarter of 2017 as compared with the year-earlier period was predominantly attributable to lower revenues of $7 million associated with mortgage origination and sales activities (including intersegment revenues) and servicing income. As compared with the second quarter of 2017, increased personnel expenses and a decrease in net interest income were largely offset by higher origination and servicing income. Year-to-date net income for this segment totaled $37 million in 2017 and $43 million in 2016. Contributing to that decline were decreased revenues from mortgage origination and sales activities (including intersegment revenues) and from servicing residential real estate loans.

Net income for the Retail Banking segment totaled $96 million in the quarter ended September 30, 2017, compared with $75 million in the year-earlier period and $100 million in the second quarter of 2017. As compared with the third quarter of 2016, a $30 million rise in net interest income in the recent quarter and decreases in advertising, marketing and personnel-related costs contributed to the improvement. The higher net interest income was due to a 39 basis point widening of the net interest margin on deposits offset, in part, by lower average outstanding deposit balances of $3.9 billion. The modest decline in net income in the recent quarter as compared with the second quarter of 2017 reflected a $7 million rise in the provision for credit losses and an increase in equipment and net occupancy costs of $5 million. Partially offsetting those unfavorable factors was a $7 million increase in net interest income, resulting largely from a widening of the net interest margin on deposits of 6 basis points, the impact of one additional day in the current quarter and an increase in the average outstanding loan balances of $420 million, partially offset by lower average outstanding deposit balances of $1.4 billion. The Retail Banking segment recorded net income of $283 million and $219 million in the first nine months of 2017 and 2016, respectively. That improvement was predominantly due to a $79 million rise in net interest income, primarily reflecting a widening of the net interest margin on deposits of 3480 basis points, ~~that was~~partially offset ~~in part,~~ by ~~lower~~a $2.1 billion decline in average outstanding deposit ~~balances~~balances.

•

Noninterest income decreased $29 million predominantly due to lower trust income of ~~$3.1 billion,~~$34 million reflecting lower revenues associated with the CIT business of approximately $45 million following its sale in April 2023, partially offset by higher revenues from the segment’s global capital markets business. An increase in brokerage services income reflecting sales of annuity products partially offset the trust income decline.

•

Noninterest expenses decreased $36 million reflecting a $39 million decline in professional and ~~a $14 million decrease in the provision for credit losses~~other services due, in part, to ~~higher levels~~lower sub-advisory fees as a result of ~~partial charge-offs recognized~~the sale of the CIT business, partially offset by an increase in ~~the first quarter of 2016~~centrally-allocated costs associated with ~~loans for which~~data processing, risk management and other support services provided to the ~~Company identified that the customer was either bankrupt or deceased.~~Institutional Services and Wealth Management segment.

- 70 -

All Other

The “All Other” category reflects other activities of the Company that are not directly attributable to the reported segments. Reflected in this category are the ~~amortization of~~difference between the provision for credit losses and the calculated provision allocated to the reportable segments; goodwill and core deposit and other intangible assets resulting from the acquisitions of financial ~~institutions, M&T’s share of the operating results of BLG,~~institutions; merger-related gains and expenses ~~resulting from acquisitions, and~~related to acquisitions; the net impact of the Company’s internal funds transfer pricing methodology; eliminations of transactions between reportable segments; certain non-recurring transactions; and the residual effects of unallocated support systems and general and administrative expenses. The Company’s investment securities portfolio, brokered deposits and short-term and long-term borrowings are generally included in the “All Other” category. In its management of interest rate risk, the Company utilizes interest rate swap agreements to modify the repricing characteristics of certain portfolios of earning assets and interest-bearing liabilities. The results of such activities are captured in the "All Other" category.

ALL OTHER CATEGORY FINANCIAL SUMMARY


	Three Months Ended						Change						Three Months Ended						Change
(Dollars in millions)	March 31, 2024			December 31, 2023			Amount			%			March 31, 2024			March 31, 2023			Amount			%
Income Statement
Net interest income (expense)	$	(125	)	$	(120	)	$	(5	)		4	%	$	(125	)	$	(65	)	$	(60	)		91	%
Noninterest income		41			22			19			76			41			35			6			16
Total revenue (expense)		(84	)		(98	)		14			-13			(84	)		(30	)		(54	)		179
Provision for credit losses		55			56			(1	)		—			55			43			12			25
Noninterest expense		247			258			(11	)		-5			247			216			31			15
Income before taxes		(386	)		(412	)		26			-6			(386	)		(289	)		(97	)		34
Income taxes		(142	)		(131	)		(11	)		9			(142	)		(96	)		(46	)		49
Net income	$	(244	)	$	(281	)	$	37			-13	%	$	(244	)	$	(193	)	$	(51	)		26	%

The “All Other” category recorded a net loss in the first quarter of 2024 of $244 million, compared with a net loss of $281 million in the fourth quarter of 2023.

•

Net interest income decreased $5 million.

•

Noninterest income increased $19 million primarily reflecting BLG distributions of $25 million, partially offset by a decline in tax-exempt income earned from bank owned life insurance revenue.

•

Noninterest expense decreased $11 million reflecting a decline in FDIC assessment expense of $169 million due to the $197 million special assessment expense recorded in the fourth quarter of 2023, partially offset by the incremental special assessment expense of $29 million recorded in the first quarter of 2024. The decrease was partially offset by a rise in personnel-related costs of $109 million reflecting merit increases and seasonally higher stock-based compensation and employee benefits expenses; an increase in other costs of operations of $27 million reflecting higher costs associated with the Company's supplemental executive retirement savings plan, losses on lease terminations related to certain vacated properties and incremental charitable contributions as compared with the fourth quarter of 2023; and increased outside data processing and software expense of $8 million.

The net loss recorded for the “All Other” category was $193 million in the first quarter 2023.

•

Net interest income decreased $60 million reflecting higher net interest expense from interest rate swap agreements entered into for interest rate risk management purposes, as well as the unfavorable impact from the Company’s allocation methodologies for internal transfers ~~for~~related to funding charges and credits associated with ~~the~~ earning assets and interest-bearing liabilities of the Company’s reportable ~~segments and~~segments.

•

Noninterest income increased $6 million reflecting an increase in BLG distributions of $5 million.

•

The $12 million increase in the provision for credit ~~losses. The “All Other” category also includes trust income~~losses reflects the net impact of the allocation of provision to reportable segments.

•

Noninterest expense increased $31 million reflecting estimated incremental special FDIC assessment expense of $29 million recorded in the first quarter of 2024.

- 71 -

Other Matters

On March 6, 2024, the SEC adopted a final rule to enhance and standardize climate-related disclosures by public companies. The final rule requires registrants, including the Company, to disclose their risk management processes for material climate-related risks, governance and oversight of material climate-risks and any risks that ~~reflects~~have materially impacted, or are reasonably likely to have a material impact on, its business strategy, results of operations or financial condition. Additionally, the ~~ICS~~final rule requires disclosure of material Scope 1 and ~~WAS business activities. The various components~~Scope 2 greenhouse gas emissions, material climate targets and goals and certain disclosures related to severe weather events and other natural conditions. Such disclosures will be required in a registrant’s annual reporting under a phased-in approach beginning with annual reports for the year ending December 31, 2025 for calendar-year-end large accelerated filers, such as M&T. On April 4, 2024, the SEC issued an order to stay the final rule pending the completion of judicial review by the United States Court of Appeals for the Eighth Circuit.

Recent Accounting Developments

A discussion of the ~~“All Other” category resulted in net losses of $24 million for the third quarter of 2017~~Company's significant accounting policies and ~~$3 million~~critical accounting estimates can be found in the corresponding 2016 quarter, compared with net income of $16 million in the second quarter of 2017. The higher net loss in the recent quarter as compared with the year-earlier quarter resulted largely from increased legal-related and professional services costs of $66 million (including additions to the reserve for legal matters of $50 million in 2017’s third quarter) and a $6 million increase in personnel-related expenses. Those unfavorable factors were partially offset by the favorable impact from the Company’s allocation methodologies in the recent quarter and higher trust income of $6 million. As compared with the net income earned in the second quarter of 2017, the recent quarter’s net loss predominately reflected the $50 million addition to the reserve for legal matters, partially offset by the favorable impact from the Company’s allocation methodology. The “All Other” category had net losses of $12 million and $54 million for the nine-month periods ended September 30, 2017 and 2016, respectively. The lower net

~~- 84 -~~

~~loss in the 2017 period was predominantly due to: merger-related expenses of $36 million in 2016~~(there were no such expenses in 2017); higher trust income of $22 million; tax benefits of $19 million recognized in 2017 associated with the adoption of new accounting guidance requiring that excess tax benefits associated with share-based compensation be recognized in income tax expense in the income statement; and the favorable impact from the Company’s allocation methodology. Those favorable factors were partially offset by higher legal-related and professional services costs and personnel-related expenses during 2017.

~~Recent Accounting Developments~~

2023 Annual Report. A ~~discussion~~summary of recent accounting developments is included in note 161 of Notes to Financial Statements.

Forward-Looking Statements

Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this quarterly report contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statement that ~~are~~does not describe historical or current facts is a forward-looking statement, including statements based on current expectations, estimates and projections about the Company’s business, ~~management’s~~and management's beliefs and ~~assumptions made by management.~~ assumptions.

Statements regarding the potential effects of events or factors specific to the Company and/or the financial industry as a whole, as well as national and global events generally, on the Company's business, financial condition, liquidity and results of operations may constitute forward-looking statements. Such statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the Company's control.

Forward-looking statements are typically identified by words such as ~~“believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “prospects”~~"believe," "expect," "anticipate," "intend," "target," "estimate," "continue," or ~~“potential,”~~"potential," by future conditional verbs such as ~~“will,” “would,” “should,” “could,”~~"will," "would," "should," "could," or ~~“may,”~~"may," or by variations of such words or by similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ~~(“Future Factors”)~~ which are difficult to ~~predict. Therefore,~~predict and may cause actual outcomes ~~and results may~~to differ materially from what is expressed or ~~forecasted~~forecasted.

While there can be no assurance that any list of risks and uncertainties is complete, important factors that could cause actual outcomes and results to differ materially from those contemplated by forward-looking statements include the following, without limitation: economic conditions and growth rates, including inflation and market volatility; events and developments in ~~such forward-looking statements. Forward-looking statements speak only as of~~ the ~~date they are made and the Company assumes no duty to update forward-looking statements.~~

~~Future Factors include~~financial services industry, including industry conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, loan concentrations by type and industry, credit losses and market values ofon loans, collateral securing loans, and other assets; sources of liquidity; levels of client deposits; ability to contain costs and expenses; changes in the Company's credit ratings; the impact of the People's United acquisition; domestic or international political developments and other geopolitical events, including international conflicts and hostilities; changes and trends in the securities markets; common shares ~~outstanding;~~outstanding, common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; federal, state or local legislation and/or ~~regulation~~regulations affecting the financial services industry, ~~as a whole, and~~or M&T and its subsidiaries individually or collectively, including tax ~~legislation or regulation;~~policy; regulatory supervision and oversight, including monetary policy and capital requirements; governmental and public policy changes; political conditions, either nationally or in the states in which M&T and its subsidiaries do business; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; changes in accounting policies or procedures as may be required

- 72 -

by the ~~FASB~~Financial Accounting Standards Board, regulatory agencies or ~~regulatory agencies;~~legislation; increasing price, product and ~~product/~~service competition by competitors, including new entrants; ~~rapid~~ technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of ~~products/services; containing costs~~products and ~~expenses; governmental and public policy changes;~~services; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; ~~the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters;~~ continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its ~~subsidiaries’~~subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition, divestment and investment activities compared with M~~&T’s~~&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

These are representative of the ~~Future Factors~~factors that could affect the outcome of the forward-looking statements. In addition, as noted, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which ~~M&T~~the Company does business, and ~~its subsidiaries do business, including interest rate~~other factors.

The Company provides further detail regarding these risks and ~~currency exchange rate fluctuations, changes and trends~~uncertainties in the ~~securities markets,~~2023 Annual Report, including in the Risk Factors section of such report, as well as in other SEC filings. Forward-looking statements speak only as of the date they are made, and ~~other Future Factors.~~the Company assumes no duty and does not undertake to update forward-looking statements.

- 8573 -

M&T BANK CORPORATION AND SUBSIDIARIES

Table 1

QUARTERLY TRENDS


	2024			2023 Quarters
(Dollars in millions, except per share, shares in thousands)	First Quarter			Fourth			Third			Second			First
Earnings and dividends
Interest income (taxable-equivalent basis)	$	2,757		$	2,753		$	2,656		$	2,530		$	2,341
Interest expense		1,065			1,018			866			717			509
Net interest income		1,692			1,735			1,790			1,813			1,832
Less: provision for credit losses		200			225			150			150			120
Other income		580			578			560			803			587
Less: other expense		1,396			1,450			1,278			1,293			1,359
Income before income taxes		676			638			922			1,173			940
Applicable income taxes		133			143			217			292			224
Taxable-equivalent adjustment		12			13			15			14			14
Net income	$	531		$	482		$	690		$	867		$	702
Net income available to common shareholders-diluted	$	505		$	457		$	664		$	841		$	676
Per common share data:
Basic earnings		3.04			2.75			4.00			5.07			4.03
Diluted earnings		3.02			2.74			3.98			5.05			4.01
Cash dividends		1.30			1.30			1.30			1.30			1.30
Average common shares outstanding:
Basic		166,460			165,985			165,909			165,842			167,732
Diluted		167,084			166,731			166,570			166,320			168,410
Performance ratios, annualized
Return on:
Average assets		1.01	%		.92	%		1.33	%		1.70	%		1.40	%
Average common shareholders’ equity		8.14			7.41			10.99			14.27			11.74
Net interest margin on average earning assets (taxable-equivalent basis)		3.52			3.61			3.79			3.91			4.04
Nonaccrual loans to total loans and leases, net of unearned discount		1.71			1.62			1.77			1.83			1.92
Net operating (tangible) results (a)
Net operating income	$	543		$	494		$	702		$	879		$	715
Diluted net operating income per common share	3.09				2.81			4.05			5.12			4.09
Annualized return on:
Average tangible assets		1.08	%		.98	%		1.41	%		1.80	%		1.49	%
Average tangible common shareholders’ equity		12.67			11.70		17.41			22.73				19.00
Efficiency ratio (b)		60.8			62.1			53.7			48.9			55.5
Balance sheet data
Average balances:
Total assets (c)	$	211,478		$	208,752		$	205,791		$	204,376		$	202,599
Total tangible assets (c)		202,906			200,172			197,199			195,764			193,957
Earning assets		193,135			190,536			187,403			185,936			184,069
Investment securities		28,587			27,490			27,993			28,623			27,622
Loans and leases, net of unearned discount		133,796			132,770			132,617			133,545			132,012
Deposits		164,065			164,713			162,688			159,399			161,537
Borrowings		16,001			13,057			12,585			15,055			11,505
Common shareholders’ equity (c)		25,008			24,489			24,009			23,674			23,366
Tangible common shareholders’ equity (c)		16,436			15,909			15,417			15,062			14,724
At end of quarter:
Total assets (c)		215,137			208,264			209,124			207,672			202,956
Total tangible assets (c)		206,574			199,689			200,538			199,074			194,321
Earning assets		195,712			189,140			189,942			188,504			183,853
Investment securities		28,496			26,897			27,336			27,916			28,443
Loans and leases, net of unearned discount		134,973			134,068			132,355			133,344			132,938
Deposits		167,196			163,274			164,128			162,058			159,075
Borrowings		16,245			13,517			13,854			15,325			14,458
Common shareholders’ equity (c)		25,158			24,946			24,186			23,790			23,366
Tangible common shareholders’ equity (c)		16,595			16,371			15,600			15,192			14,731
Equity per common share		150.90			150.15			145.72			143.41			140.88
Tangible equity per common share		99.54			98.54			93.99			91.58			88.81

2017 Quarters

2016 Quarters

Third

Second

First

Fourth

Third

Second

First

Earnings and dividends

Amounts in thousands, except per share

Interest income (taxable-equivalent basis)

$
1,066,038

1,039,149

1,014,032

990,284

976,240

977,143

979,166

Interest expense

100,076

92,213

91,773

107,137

111,175

106,802

100,870

Net interest income

965,962

946,936

922,259

883,147

865,065

870,341

878,296

Less: provision for credit losses

30,000

52,000

55,000

62,000

47,000

32,000

49,000

Other income

459,429

460,816

446,845

465,459

491,350

448,254

420,933

Less: other expense

806,025

750,635

787,852

769,103

752,392

749,895

776,095

Income before income taxes

589,366

605,117

526,252

517,503

557,023

536,700

474,134

Applicable income taxes

224,615

215,328

169,326

179,549

200,314

194,147

169,274

Taxable-equivalent adjustment

8,828

8,736

7,999

7,383

6,725

6,522

6,332

Net income

$
355,923

381,053

348,927

330,571

349,984

336,031

298,528

Net income available to common shareholders-diluted

$
335,804

360,662

328,567

307,797

326,998

312,974

275,748

Per common share data

Basic earnings

$
2.22

2.36

2.13

1.98

2.10

1.98

1.74

Diluted earnings

2.21

2.35

2.12

1.98

2.10

1.98

1.73

Cash dividends

$
.75

.75

.75

.70

.70

.70

.70

Average common shares outstanding

Basic

151,347

152,857

154,427

155,123

155,493

157,802

158,734

Diluted

151,691

153,276

154,949

155,700

156,026

158,341

159,181

Performance ratios, annualized

Return on

Average assets

1.18

%

1.27

%

1.15

%

1.05

%

1.12

%

1.09

%

.97

%
Average common shareholders’ equity

8.89

%

9.67

%

8.89

%

8.13

%

8.68

%

8.38

%

7.44

%
Net interest margin on average earning assets (taxable-equivalent
    basis)

3.53

%

3.45

%

3.34

%

3.08

%

3.05

%

3.13

%

3.18

%
Nonaccrual loans to total loans and leases, net of
   unearned discount

.99

%

.98

%

1.04

%

1.01

%

.93

%

.96

%

1.00

%
Net operating (tangible) results (a)

Net operating income (in thousands)

$
360,658

385,974

354,035

336,095

355,929

350,604

320,064

Diluted net operating income per common share

2.24

2.38

2.15

2.01

2.13

2.07

1.87

Annualized return on

Average tangible assets

1.25

%

1.33

%

1.21

%

1.10

%

1.18

%

1.18

%

1.09

%
Average tangible common shareholders’ equity

13.03

%

14.18

%

13.05

%

11.93

%

12.77

%

12.68

%

11.62

%
Efficiency ratio (b)

56.00

%

52.74

%

56.93

%

56.42

%

55.92

%

55.06

%

57.00

%
Balance sheet data

In millions, except per share

Average balances

Total assets (c)

$
119,515

120,765

122,978

125,734

124,725

123,706

123,252

Total tangible assets (c)

114,872

116,117

118,326

121,079

120,064

119,039

118,577

Earning assets

108,642

109,987

112,008

114,254

112,864

111,872

111,211

Investment securities

15,443

15,913

15,999

15,417

14,361

14,914

15,348

Loans and leases, net of unearned discount

88,386

89,268

89,797

89,977

88,732

88,155

87,584

Deposits

93,134

94,201

96,300

96,914

95,852

94,033

92,391

Common shareholders’ equity (c)

15,069

15,053

15,091

15,181

15,115

15,145

15,047

Tangible common shareholders’ equity (c)

10,426

10,405

10,439

10,526

10,454

10,478

10,372

At end of quarter

Total assets (c)

$
120,402

120,897

123,223

123,449

126,841

123,821

124,626

Total tangible assets (c)

115,761

116,251

118,573

118,797

122,183

119,157

119,955

Earning assets

109,365

109,976

112,287

112,192

115,293

112,057

113,005

Investment securities

15,074

15,816

15,968

16,250

14,734

14,963

15,467

Loans and leases, net of unearned discount

87,925

89,081

89,313

90,853

89,646

88,522

87,872

Deposits

93,513

93,541

97,043

95,494

98,137

94,650

94,215

Common shareholders’ equity, net of undeclared cumulative
    preferred dividends (c)

15,083

15,049

14,978

15,252

15,106

15,237

15,120

Tangible common shareholders’ equity (c)

10,442

10,403

10,328

10,600

10,448

10,573

10,449

Equity per common share

99.70

98.66

97.40

97.64

97.47

96.49

95.00

Tangible equity per common share

69.02

68.20

67.16

67.85

67.42

66.95

65.65

Market price per common share

High

$
166.85

164.03

173.72

158.35

120.40

121.11

119.24

Low

141.12

147.55

149.51

112.25

111.13

107.01

100.08

Closing

161.04

161.95

154.73

156.43

116.10

118.23

111.00

(a)

Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. A reconciliation of net income and net operating income appears in Table 2.

(b)

Excludes impact of merger-related expenses and net securities transactions.

(c)

The difference between total assets and total tangible assets, and common shareholders’ equity and tangible common shareholders’ equity, represents goodwill, core deposit and other intangible assets, net of applicable deferred tax balances. A reconciliation of such balances appears in Table 2.

~~(a)~~

- 74 -

~~(b)~~

~~Excludes impact of merger-related expenses and net securities transactions.~~

~~(c)~~

~~- 86 -~~

M&T BANK CORPORATION AND SUBSIDIARIES

Table 2

RECONCILIATION OF QUARTERLY GAAP TO NON-GAAP MEASURES


	2024			2023 Quarters
(Dollars in millions, except per share)	First Quarter			Fourth			Third			Second			First
Income statement data
Net income
Net income	$	531		$	482		$	690		$	867		$	702
Amortization of core deposit and other intangible assets (a)		12			12			12			12			13
Net operating income	$	543		$	494		$	702		$	879		$	715
Earnings per common share
Diluted earnings per common share	$	3.02		$	2.74		$	3.98		$	5.05		$	4.01
Amortization of core deposit and other intangible assets (a)		.07			.07			.07			.07			.08
Diluted net operating earnings per common share	$	3.09		$	2.81		$	4.05		$	5.12		$	4.09
Other expense
Other expense	$	1,396		$	1,450		$	1,278		$	1,293		$	1,359
Amortization of core deposit and other intangible assets		(15	)		(15	)		(15	)		(15	)		(17	)
Noninterest operating expense	$	1,381		$	1,435		$	1,263		$	1,278		$	1,342
Efficiency ratio
Noninterest operating expense (numerator)	$	1,381		$	1,435		$	1,263		$	1,278		$	1,342
Taxable-equivalent net interest income	$	1,692		$	1,735		$	1,790		$	1,813		$	1,832
Other income		580			578			560			803			587
Less: Gain (loss) on bank investment securities		2			4			—			1			—
Denominator	$	2,270		$	2,309		$	2,350		$	2,615		$	2,419
Efficiency ratio		60.8	%		62.1	%		53.7	%		48.9	%		55.5	%
Balance sheet data
Average assets
Average assets	$	211,478		$	208,752		$	205,791		$	204,376		$	202,599
Goodwill		(8,465	)		(8,465	)		(8,465	)		(8,473	)		(8,490	)
Core deposit and other intangible assets		(140	)		(154	)		(170	)		(185	)		(201	)
Deferred taxes		33			39			43			46			49
Average tangible assets	$	202,906		$	200,172		$	197,199		$	195,764		$	193,957
Average common equity
Average total equity	$	27,019		$	26,500		$	26,020		$	25,685		$	25,377
Preferred stock		(2,011	)		(2,011	)		(2,011	)		(2,011	)		(2,011	)
Average common equity		25,008			24,489			24,009			23,674			23,366
Goodwill		(8,465	)		(8,465	)		(8,465	)		(8,473	)		(8,490	)
Core deposit and other intangible assets		(140	)		(154	)		(170	)		(185	)		(201	)
Deferred taxes		33			39			43			46			49
Average tangible common equity	$	16,436		$	15,909		$	15,417		$	15,062		$	14,724
At end of quarter
Total assets
Total assets	$	215,137		$	208,264		$	209,124		$	207,672		$	202,956
Goodwill		(8,465	)		(8,465	)		(8,465	)		(8,465	)		(8,490	)
Core deposit and other intangible assets		(132	)		(147	)		(162	)		(177	)		(192	)
Deferred taxes		34			37			41			44			47
Total tangible assets	$	206,574		$	199,689		$	200,538		$	199,074		$	194,321
Total common equity
Total equity	$	27,169		$	26,957		$	26,197		$	25,801		$	25,377
Preferred stock		(2,011	)		(2,011	)		(2,011	)		(2,011	)		(2,011	)
Common equity		25,158			24,946			24,186			23,790			23,366
Goodwill		(8,465	)		(8,465	)		(8,465	)		(8,465	)		(8,490	)
Core deposit and other intangible assets		(132	)		(147	)		(162	)		(177	)		(192	)
Deferred taxes		34			37			41			44			47
Total tangible common equity	$	16,595		$	16,371		$	15,600		$	15,192		$	14,731

(a)

After any related tax effect.

- 75 -

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

2017 Quarters

2016 Quarters

Third

Second

First

Fourth

Third

Second

First

Income statement data (in thousands, except per share)

Net income

Net income

$
355,923

381,053

348,927

330,571

349,984

336,031

298,528

Amortization of core deposit and other intangible assets (a)

4,735

4,921

5,108

5,524

5,945

6,936

7,488

Merger-related expenses (a)

—

—

—

—

—

7,637

14,048

Net operating income

$
360,658

385,974

354,035

336,095

355,929

350,604

320,064

Earnings per common share

Diluted earnings per common share

$
2.21

2.35

2.12

1.98

2.10

1.98

1.73

Amortization of core deposit and other intangible assets (a)

.03

.03

.03

.03

.03

.04

.05

Merger-related expenses (a)

—

—

—

—

—

.05

.09

Diluted net operating earnings per common share

$
2.24

$
2.38

$
2.15

$
2.01

$
2.13

$
2.07

$
1.87

Other expense

Other expense

$
806,025

750,635

787,852

769,103

752,392

749,895

776,095

Amortization of core deposit and other intangible assets

(7,808
)

(8,113
)

(8,420
)

(9,089
)

(9,787
)

(11,418
)

(12,319
)
Merger-related expenses

—

—

—

—

—

(12,593
)

(23,162
)
Noninterest operating expense

$
798,217

742,522

779,432

760,014

742,605

725,884

740,614

Merger-related expenses

Salaries and employee benefits

$
—

—

—

—

—

60

5,274

Equipment and net occupancy

—

—

—

—

—

339

939

Outside data processing and software

—

—

—

—

—

352

715

Advertising and marketing

—

—

—

—

—

6,327

4,195

Printing, postage and supplies

—

—

—

—

—

545

937

Other costs of operations

—

—

—

—

—

4,970

11,102

Total

$
—

—

—

—

—

12,593

23,162

Efficiency ratio

Noninterest operating expense (numerator)

$
798,217

742,522

779,432

760,014

742,605

725,884

740,614

Taxable-equivalent net interest income

965,962

946,936

922,259

883,147

865,065

870,341

878,296

Other income

459,429

460,816

446,845

465,459

491,350

448,254

420,933

Less: Gain on bank investment securities

—

(17
)

—

1,566

28,480

264

4

Denominator

$
1,425,391

1,407,769

1,369,104

1,347,040

1,327,935

1,318,331

1,299,225

Efficiency ratio

56.00
%

52.74
%

56.93
%

56.42
%

55.92
%

55.06
%

57.00
%
Balance sheet data (in millions)

Average assets

Average assets

$
119,515

120,765

122,978

125,734

124,725

123,706

123,252

Goodwill

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)
Core deposit and other intangible assets

(82
)

(90
)

(98
)

(102
)

(112
)

(122
)

(134
)
Deferred taxes

32

35

39

40

44

48

52

Average tangible assets

$
114,872

116,117

118,326

121,079

120,064

119,039

118,577

Average common equity

Average total equity

$
16,301

16,285

16,323

16,673

16,347

16,377

16,279

Preferred stock

(1,232
)

(1,232
)

(1,232
)

(1,492
)

(1,232
)

(1,232
)

(1,232
)
Average common equity

15,069

15,053

15,091

15,181

15,115

15,145

15,047

Goodwill

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)
Core deposit and other intangible assets

(82
)

(90
)

(98
)

(102
)

(112
)

(122
)

(134
)
Deferred taxes

32

35

39

40

44

48

52

Average tangible common equity

$
10,426

10,405

10,439

10,526

10,454

10,478

10,372

At end of quarter

Total assets

Total assets

120,402

120,897

123,223

123,449

126,841

123,821

124,626

Goodwill

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)
Core deposit and other intangible assets

(79
)

(86
)

(95
)

(98
)

(107
)

(117
)

(128
)
Deferred taxes

31

33

38

39

42

46

50

Total tangible assets

$
115,761

116,251

118,573

118,797

122,183

119,157

119,955

Total common equity

Total equity

$
16,318

16,284

16,213

16,487

16,341

16,472

16,355

Preferred stock

(1,232
)

(1,232
)

(1,232
)

(1,232
)

(1,232
)

(1,232
)

(1,232
)
Undeclared dividends — cumulative preferred stock

(3
)

(3
)

(3
)

(3
)

(3
)

(3
)

(3
)
Common equity, net of undeclared cumulative preferred dividends

15,083

15,049

14,978

15,252

15,106

15,237

15,120

Goodwill

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)

(4,593
)
Core deposit and other intangible assets

(79
)

(86
)

(95
)

(98
)

(107
)

(117
)

(128
)
Deferred taxes

31

33

38

39

42

46

50

Total tangible common equity

$
10,442

10,403

10,328

10,600

10,448

10,573

10,449

(a)	~~After any related tax effect.~~

~~- 87 -~~

~~M&T BANK CORPORATION AND SUBSIDIARIES~~

~~Table 3~~

~~AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES~~

2017 Third Quarter

2017 Second Quarter

2017 First Quarter

Average
Balance

Interest

Average
Rate

Average
Balance

Interest

Average
Rate

Average
Balance

Interest

Average
Rate

Average balance in millions; interest in thousands

Assets

Earning assets

Loans and leases, net of unearned
    discount*

Commercial, financial, etc.

$
21,734

$
217,953

3.98

%

22,350

213,840

3.84

%

22,290

201,126

3.66

%
Real estate — commercial

33,257

382,352

4.50

33,214

361,313

4.30

33,175

347,010

4.18

Real estate — consumer

20,609

204,008

3.96

21,318

210,152

3.94

22,179

217,263

3.92

Consumer

12,786

157,721

4.89

12,386

147,597

4.78

12,153

140,170

4.68

Total loans and leases, net

88,386

962,034

4.32

89,268

932,902

4.19

89,797

905,569

4.09

Interest-bearing deposits at banks

4,740

14,970

1.25

4,741

12,213

1.03

6,152

12,162

.80

Federal funds sold

—

1

1.58

1

3

1.44

—

—

—

Trading account

73

351

1.92

64

240

1.50

60

328

2.20

Investment securities**

U.S. Treasury and federal agencies

14,632

81,707

2.22

15,060

87,171

2.32

15,113

88,573

2.38

Obligations of states and political
   subdivisions

37

442

4.69

46

553

4.86

56

578

4.17

Other

774

6,533

3.35

807

6,067

3.02

830

6,822

3.33

Total investment securities

15,443

88,682

2.28

15,913

93,791

2.36

15,999

95,973

2.43

Total earning assets

108,642

1,066,038

3.89

109,987

1,039,149

3.79

112,008

1,014,032

3.67

Allowance for credit losses

(1,014
)

(1,011
)

(1,003
)

Cash and due from banks

1,297

1,257

1,283

Other assets

10,590

10,532

10,690

Total assets

$
119,515

120,765

122,978

Liabilities and shareholders’ equity

Interest-bearing liabilities

Interest-bearing deposits

Savings and interest-checking
   deposits

$
53,287

37,714

.28

53,611

30,543

.23

53,260

25,634

.20

Time deposits

7,673

13,992

.72

8,559

16,303

.76

9,561

18,998

.81

Deposits at Cayman Islands office

169

310

.73

163

281

.69

192

265

.56

Total interest-bearing deposits

61,129

52,016

.34

62,333

47,127

.30

63,013

44,897

.29

Short-term borrowings

244

554

.90

212

378

.71

184

216

.48

Long-term borrowings

8,033

47,506

2.35

8,292

44,708

2.16

8,423

46,660

2.25

Total interest-bearing liabilities

69,406

100,076

.57

70,837

92,213

.52

71,620

91,773

.52

Noninterest-bearing deposits

32,005

31,868

33,287

Other liabilities

1,803

1,775

1,748

Total liabilities

103,214

104,480

106,655

Shareholders’ equity

16,301

16,285

16,323

Total liabilities and
shareholders’ equity

$
119,515

120,765

122,978

Net interest spread

3.32

3.27

3.15

Contribution of interest-free funds

.21

.18

.19

Net interest income/margin on
    earning assets

$
965,962

3.53

%

946,936

3.45

%

922,259

3.34

%

*	~~Includes nonaccrual loans.~~

**	~~Includes available-for-sale securities at amortized cost.~~

~~(continued)~~

~~- 88 -~~

~~M&T BANK CORPORATION AND SUBSIDIARIES~~

~~Table 3 (continued)~~

~~AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES (continued)~~

2016 Fourth Quarter

2016 Third Quarter

Average
Balance

Interest

Average
Rate

Average
Balance

Interest

Average
Rate

Average balance in millions; interest in thousands

Assets

Earning assets

Loans and leases, net of unearned
discount*

Commercial, financial, etc.

$
21,936

$
191,228

3.47

%

21,480

185,552

3.44

%
Real estate — commercial

32,822

336,597

4.01

31,252

319,694

4.00

Real estate — consumer

23,096

223,758

3.88

24,058

235,813

3.92

Consumer

12,123

138,144

4.53

11,942

136,592

4.55

Total loans and leases, net

89,977

889,727

3.93

88,732

877,651

3.93

Interest-bearing deposits at banks

8,790

11,833

.54

9,681

12,355

.51

Federal funds sold

—

—

—

—

—

—

Trading account

70

358

2.05

90

342

1.52

Investment securities**

U.S. Treasury and federal agencies

14,511

80,510

2.21

13,418

78,259

2.32

Obligations of states and political subdivisions

71

778

4.38

82

888

4.32

Other

835

7,078

3.37

861

6,745

3.12

Total investment securities

15,417

88,366

2.28

14,361

85,892

2.38

Total earning assets

114,254

990,284

3.45

112,864

976,240

3.44

Allowance for credit losses

(989
)

(982
)

Cash and due from banks

1,278

1,281

Other assets

11,191

11,562

Total assets

$
125,734

124,725

Liabilities and shareholders’ equity

Interest-bearing liabilities

Interest-bearing deposits

Savings and interest-checking deposits

$
54,055

26,798

.20

52,516

24,067

.18

Time deposits

10,936

23,766

.86

12,334

27,886

.90

Deposits at Cayman Islands office

206

219

.42

220

204

.37

Total interest-bearing deposits

65,197

50,783

.31

65,070

52,157

.32

Short-term borrowings

200

151

.30

231

169

.29

Long-term borrowings

9,901

56,203

2.26

10,287

58,849

2.28

Total interest-bearing liabilities

75,298

107,137

.57

75,588

111,175

.59

Noninterest-bearing deposits

31,717

30,782

Other liabilities

2,046

2,008

Total liabilities

109,061

108,378

Shareholders’ equity

16,673

16,347

Total liabilities and shareholders’ equity

$
125,734

124,725

Net interest spread

2.88

2.85

Contribution of interest-free funds

.20

.20

Net interest income/margin on earning assets

$
883,147

3.08

%

865,065

3.05

%

*	~~Includes nonaccrual loans.~~

**	~~Includes available-for-sale securities at amortized cost.~~

~~- 89 -~~

~~Item 3.~~

~~Quantitative and Qualitative Disclosures About Market Risk.~~

Incorporated by reference to the discussion contained ~~under the caption “Taxable-equivalent Net Interest Income”~~ in Part I, Item 2, ~~“Management’s~~"Management's Discussion and Analysis of Financial Condition and Results of ~~Operations.”~~Operations," under the captions "Liquidity Risk," "Market Risk and Interest Rate Sensitivity" and "Capital."

Item 4. Controls and Procedures.

~~Item 4.~~

~~Controls and Procedures.~~

(a) Evaluation of disclosure controls and procedures. Based upon their evaluation of the effectiveness of M&T’s disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)), ~~Robert G. Wilmers,~~René F. Jones, Chairman of the Board and Chief Executive Officer, and ~~Darren J. King,~~Daryl N. Bible, Senior Executive Vice President and Chief Financial Officer, concluded that M&T’s disclosure controls and procedures were effective as of ~~September 30, 2017.~~March 31, 2024.

(b) Changes in internal control over financial reporting. M&T regularly assesses the adequacy of its internal control over financial reporting and enhances its controls in response to internal control assessments and internal and external audit and regulatory recommendations. No changes in internal control over financial reporting have been identified in connection with the evaluation of disclosure controls and procedures during the quarter ended ~~September 30, 2017~~March 31, 2024 that have materially affected, or are reasonably likely to materially affect, M&T’s internal control over financial reporting.

- 76 -

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

~~Item 1.~~

~~Legal Proceedings.~~

M&T and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings and other matters in which claims for monetary damages are asserted. On an on-going basis management, after consultation with legal counsel, assesses the Company’s liabilities and contingencies in connection with such proceedings. For those matters where it is probable that the Company will incur losses and the amounts of the losses can be reasonably estimated, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent the pending or threatened litigation could result in exposure in excess of that liability, the amount of such excess is not currently estimable. Although not considered probable, the range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability, was between $0 and ~~$50 million.~~$25 millionas of March 31, 2024. Although the Company does not believe that the outcome of pending ~~litigations~~legal matters will be material to the Company’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future.

~~Wilmington Trust Corporation Investigative and Litigation Matters~~Item 1A. Risk Factors.

~~DOJ Investigation (United States v. Wilmington Trust Corp., et al, District of Delaware, Crim. No. 15-23-RGA):~~ Prior to M&T’s acquisition of Wilmington Trust Corporation, the Department of Justice (“DOJ”) commenced an investigation of Wilmington Trust Corporation relating to Wilmington Trust Corporation’s financial reporting and securities filings, as well as certain commercial real estate lending relationships involving its subsidiary bank, Wilmington Trust Company, all of which relate to filings and activities occurring prior to the acquisition of Wilmington Trust Corporation by M&T. On January 6, 2016, the U.S. Attorney for the District of Delaware obtained an indictment against Wilmington Trust Corporation relating to alleged conduct that occurred prior to M&T’s acquisition of Wilmington Trust Corporation in May 2011. On October 9, 2017, Wilmington Trust Corporation reached a civil settlement with the U.S. Attorney’s Office for the District of Delaware to resolve this matter. Under the terms of the agreement, Wilmington Trust Corporation agreed to pay $60 million. The settlement amount included $16 million previously paid by Wilmington Trust Corporation to the U.S. Securities and Exchange Commission in a related action. Wilmington Trust Corporation did not admit any liability, nor was there any finding of wrongdoing.~~All indictments and charges against Wilmington Trust Corporation were dismissed by Court order on October 12, 2017.~~

~~- 90 -~~

~~In Re Wilmington Trust Securities Litigation (U.S. District Court, District of Delaware, Case No. 10-CV-0990-SLR):~~ Beginning on November 18, 2010, a series of parties, purporting to be class representatives, commenced a putative class action lawsuit against Wilmington Trust Corporation, alleging that Wilmington Trust Corporation’s financial reporting and securities filings were in violation of securities laws. The cases were consolidated and Wilmington Trust Corporation moved to dismiss. The Court issued an order denying Wilmington Trust Corporation’s motion to dismiss on March 20, 2014. Fact discovery commenced. Plaintiffs’ motion for class certification was granted on September 3, 2015. On April 13, 2016, the Court issued an order staying fact discovery in the case pending completion of the trial in ~~U.S. v. Wilmington Trust Corp., et al.~~ On September 19, 2016, the plaintiffs filed a motion to modify the stay of discovery in this matter to allow for additional, limited discovery. On December 19, 2016, the Court issued an order lifting the existing stay in its entirety. The Court has removed this matter from the trial calendar, to be rescheduled at some future date.

Due to their complex nature, it is difficult to estimate when litigation or investigatory matters such as these may be resolved. As set forth in the introductory paragraph to this Item 1 — Legal Proceedings, losses from current litigation and regulatory matters which the Company is subject to that are not currently considered probable are within a range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability, and are included in the range of reasonably possible losses set forth above.

~~- 91 -~~

I~~tem 1A.~~

~~Risk Factors.~~

There have been no material changes in risk factors relating to M&T to those disclosed in response to ~~Item 1A. to~~ Part I, Item 1A of ~~Form 10-K for~~ the ~~year ended December 31, 2016.~~2023 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

I~~tem 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds.~~

(a) – (b) Not applicable.

(c)


	Issuer Purchases of Equity Securities
Period	Total Number of Shares (or Units) Purchased (1)		Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be Purchased Under the Plans or Programs (2)
January 1 - January 31, 2024		210	$	136.94		—	$	1,200,060,000
February 1 - February 29, 2024		—		—		—		1,200,060,000
March 1 - March 31, 2024		18,205		140.05		—		1,200,060,000
Total		18,415	$	140.01		—

(1)

The total number of shares purchased during the periods indicated includes shares purchased as part of publicly announced programs and/or shares deemed to have been received from employees who exercised stock options by attesting to previously acquired common shares in satisfaction of the exercise price or shares received from employees upon the vesting of restricted stock awards in satisfaction of applicable tax withholding obligations, as is permitted under M&T’s stock-based compensation plans.

(2)

In July 2022, M&T's Board of Directors authorized a program under which $3.0 billion of common shares may be repurchased with the exact number, timing, price and terms of such repurchases to be determined at the discretion of management and subject to all regulatory limitations.

Item 3. Defaults Upon Senior Securities.

Issuer Purchases of Equity Securities

Period

(a)Total
Number
of Shares
(or Units)
Purchased (1)

(b)Average
Price Paid
per Share
(or Unit)

(c)Total
Number of
Shares
(or Units)
Purchased
as Part of
Publicly
Announced
Plans or
Programs

(d)Maximum
Number (or
Approximate
Dollar Value)
of Shares
(or Units)
that may yet
be Purchased
Under the
Plans or
Programs (2)

July 1 — July 31, 2017

600,005

$
161.59

600,000

$
803,048,000

August 1 — August 31, 2017

778,806

163.32

778,052

675,976,000

September 1 — September 30, 2017

4,694

149.10

4,694

675,276,000

Total

1,383,505

$
162.52

1,382,746

(None.)

~~(1)~~

The total number of shares purchased during the periods indicated includes shares purchased as part of publicly announced programs and shares deemed to have been received from employees who exercised stock options by attesting to previously acquired common shares in satisfaction of the exercise price or shares received from employees upon the vesting of restricted stock awards in satisfaction of applicable tax withholding obligations, as is permitted under M&T’s stock-based compensation plans.

~~(2)~~

~~On July 18, 2017, M&T announced a program to purchase up to $900 million of its common stock through June 30, 2018.~~

Item 4. Mine Safety Disclosures.

~~Item 3.~~

~~Defaults Upon Senior Securities.~~

(Not applicable.)

- 77 -

Item 5. Other Information.

(a) – (b) Not applicable.

~~Item 4.~~

~~Mine Safety Disclosures.~~

~~(None.)~~(c) Certain of our officers or directors have made elections to participate in, and are participating in, our tax-qualified 401(k) plan and nonqualified deferred compensation plans, or have made, and may from time to time make, elections to reinvest dividends in M&T Bank Corporation common stock, or have shares withheld to cover withholding taxes upon the vesting of equity awards or to pay the exercise price of options, each of which may be designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may constitute non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K).

Item 6. Exhibits.

~~Item 5.~~

~~Other Information.~~

~~(None.)~~

~~- 92 -~~

~~Item 6.~~

~~Exhibits.~~

The following exhibits are filed as a part of this report.


Exhibit No.

10.1		Retirement and Consulting Agreement, dated as of February 8, 2024, by and between Doris Meister and M&T Bank. Filed herewith.*
~~31.1~~
31.1		Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

31.2		Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002. Filed ~~herewith~~.herewith.

32.1		Certification of Chief Executive Officer under 18 U.S.C. §1350 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed ~~herewith~~.herewith.

32.2		Certification of Chief Financial Officer under 18 U.S.C. §1350 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed ~~herewith~~herewith..

101.INS		Inline XBRL Instance Document. Filed herewith.

101.SCH		Inline XBRL Taxonomy Extension ~~Schema.~~Schema With Embedded Linkbase Documents. Filed herewith.

~~101.CAL~~104		~~XBRL Taxonomy Extension Calculation Linkbase. Filed herewith.~~The cover page from M&T Bank Corporation’s Quarterly Report on Form 10-Q for the quarter ended

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase. Filed herewith.~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase. Filed herewith.~~

~~101.DEF~~		~~XBRL Taxonomy Definition Linkbase. Filed herewith.~~

		March 31, 2024 has been formatted in Inline XBRL.

* Management contract or compensatory plan or arrangement.

- 78 -

SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	M&T BANK CORPORATION

Date: ~~November~~May 3, ~~2017~~2024	By:	/s/ ~~Darren J. King~~Daryl N. Bible
		~~Darren J. King~~Daryl N. Bible
		Senior Executive Vice President and Chief Financial Officer

- 9379 -

		September 30,			December 31,
Dollars in thousands, except per share		2017			2016

Assets	Cash and due from banks	$	1,368,252			1,320,549
	Interest-bearing deposits at banks		6,306,484			5,000,638
	Trading account		170,516			323,867
	Investment securities (includes pledged securities that can be sold or repledged of $488,200 at September 30, 2017; $1,203,473 at December 31, 2016)
	Available for sale (cost: $11,369,815 at September 30, 2017; $13,338,301 at December 31, 2016)		11,416,824			13,332,072
	Held to maturity (fair value: $3,247,954 at September 30, 2017; $2,451,222 at December 31, 2016)		3,242,124			2,457,278
	Other (fair value: $414,978 at September 30, 2017; $461,118 at December 31, 2016)		414,978			461,118
	Total investment securities		15,073,926			16,250,468
	Loans and leases		88,171,225			91,101,677
	Unearned discount		(246,091	)		(248,261	)
	Loans and leases, net of unearned discount		87,925,134			90,853,416
	Allowance for credit losses		(1,013,326	)		(988,997	)
	Loans and leases, net		86,911,808			89,864,419
	Premises and equipment		656,713			675,263
	Goodwill		4,593,112			4,593,112
	Core deposit and other intangible assets		78,614			97,655
	Accrued interest and other assets		5,242,379			5,323,235
	Total assets	$	120,401,804			123,449,206

Liabilities	Noninterest-bearing deposits	$	33,111,246			32,813,896
	Savings and interest-checking deposits		52,936,615			52,346,207
	Time deposits		7,233,518			10,131,846
	Deposits at Cayman Islands office		232,014			201,927
	Total deposits		93,513,393			95,493,876
	Federal funds purchased and agreements to repurchase securities		200,768			163,442
	Accrued interest and other liabilities		1,791,946			1,811,431
	Long-term borrowings		8,577,645			9,493,835
	Total liabilities		104,083,752			106,962,584
Shareholders' equity	Preferred stock, $1.00 par, 1,000,000 shares authorized; Issued and outstanding: Liquidation preference of $1,000 per share: shares 731,500 at September 30, 2017 and December 31, 2016; Liquidation preference of $10,000 per share: 50,000 shares at September 30, 2017 and December 31, 2016		1,231,500			1,231,500
	Common stock, $.50 par, 250,000,000 shares authorized, 159,819,892 shares issued at September 30, 2017; 159,945,678 shares issued at December 31, 2016		79,910			79,973
	Common stock issuable, 27,019 shares at September 30, 2017; 32,403 shares at December 31, 2016		1,827			2,145
	Additional paid-in capital		6,598,048			6,676,948
	Retained earnings		9,909,415			9,222,488
	Accumulated other comprehensive income (loss), net		(247,915	)		(294,636	)
	Treasury stock — common, at cost — 8,555,636 shares at September 30, 2017; 3,764,742 shares at December 31, 2016		(1,254,733	)		(431,796	)
	Total shareholders’ equity		16,318,052			16,486,622
	Total liabilities and shareholders’ equity	$	120,401,804			123,449,206

		Three Months Ended September 30				Nine Months Ended September 30
In thousands, except per share		2017		2016		2017			2016

Interest income	Loans and leases, including fees	$	953,662		871,345	$	2,776,340			2,602,208
	Investment securities
	Fully taxable		87,937		84,893		276,057			274,092
	Exempt from federal taxes		345		623		1,154			2,081
	Deposits at banks		14,970		12,354		39,345			33,684
	Other		296		300		760			905
	Total interest income		1,057,210		969,515		3,093,656			2,912,970
Interest expense	Savings and interest-checking deposits		37,714		24,067		93,891			60,906
	Time deposits		13,992		27,886		49,293			79,075
	Deposits at Cayman Islands office		310		204		856			578
	Short-term borrowings		554		169		1,148			3,474
	Long-term borrowings		47,506		58,849		138,874			174,814
	Total interest expense		100,076		111,175		284,062			318,847
	Net interest income		957,134		858,340		2,809,594			2,594,123
	Provision for credit losses		30,000		47,000		137,000			128,000
	Net interest income after provision for credit losses		927,134		811,340		2,672,594			2,466,123
Other income	Mortgage banking revenues		96,737		103,747		267,592			275,193
	Service charges on deposit accounts		109,356		107,935		319,589			314,212
	Trust income		124,900		118,654		371,712			350,181
	Brokerage services income		14,676		15,914		48,677			48,190
	Trading account and foreign exchange gains		7,058		12,754		24,833			33,434
	Gain (loss) on bank investment securities		—		28,480		(17	)		28,748
	Other revenues from operations		106,702		103,866		334,704			310,579
	Total other income		459,429		491,350		1,367,090			1,360,537
Other expense	Salaries and employee benefits		399,089		399,786		1,247,851			1,230,246
	Equipment and net occupancy		75,558		75,263		223,721			225,165
	Outside data processing and software		45,761		42,878		134,637			128,402
	FDIC assessments		23,969		28,459		78,149			76,054
	Advertising and marketing		17,403		21,996		49,837			66,063
	Printing, postage and supplies		8,732		8,972		27,397			30,865
	Amortization of core deposit and other intangible assets		7,808		9,787		24,341			33,524
	Other costs of operations		227,705		165,251		558,579			488,063
	Total other expense		806,025		752,392		2,344,512			2,278,382
	Income before taxes		580,538		550,298		1,695,172			1,548,278
	Income taxes		224,615		200,314		609,269			563,735
	Net income	$	355,923		349,984	$	1,085,903			984,543
	Net income available to common shareholders
	Basic	$	335,801		326,992	$	1,025,011			915,670
	Diluted		335,804		326,998		1,025,023			915,686
	Net income per common share
	Basic	$	2.22		2.10	$	6.71			5.82
	Diluted		2.21		2.10		6.69			5.80
	Cash dividends per common share	$	.75		.70	$	2.25			2.10
	Average common shares outstanding
	Basic		151,347		155,493		152,866			157,336
	Diluted		151,691		156,026		153,293			157,843

	Three Months Ended September 30						Nine Months Ended September 30
In thousands	2017			2016			2017			2016

Net income	$	355,923			349,984		$	1,085,903			984,543
Other comprehensive income, net of tax and reclassification adjustments:
Net unrealized gains (losses) on investment securities		18,258			(17,133	)		33,834			127,331
Cash flow hedges adjustments		(1,120	)		(23	)		(2,098	)		(70	)
Foreign currency translation adjustment		863			(229	)		2,489			(1,847	)
Defined benefit plans liability adjustments		4,165			3,847			12,496			11,654
Total other comprehensive income (loss)		22,166			(13,538	)		46,721			137,068
Total comprehensive income	$	378,089			336,446		$	1,132,624			1,121,611

	Nine Months Ended September 30, 2016
	(In thousands)

Salaries and employee benefits	$	5,334
Equipment and net occupancy		1,278
Outside data processing and software		1,067
Advertising and marketing		10,522
Printing, postage and supplies		1,482
Other costs of operations		16,072
Total	$	35,755

December 31, 2016
Investment securities available for sale:
U.S. Treasury and federal agencies	$	1,912,110	386	9,952	$	1,902,544
Obligations of states and political subdivisions		3,570	77	6		3,641
Mortgage-backed securities:
Government issued or guaranteed		10,980,507	88,343	113,989		10,954,861
Privately issued		45	—	1		44
Other debt securities		134,105	1,407	16,996		118,516
Equity securities		307,964	45,073	571		352,466
		13,338,301	135,286	141,515		13,332,072
Investment securities held to maturity:
Obligations of states and political subdivisions		60,858	267	224		60,901
Mortgage-backed securities:
Government issued or guaranteed		2,233,173	37,498	7,374		2,263,297
Privately issued		157,704	897	37,120		121,481
Other debt securities		5,543	—	—		5,543
		2,457,278	38,662	44,718		2,451,222
Other securities		461,118	—	—		461,118
Total	$	16,256,697	173,948	186,233	$	16,244,412

	Current		30-89 Days Past Due		Accruing Loans Past Due 90 Days or More (a)		Accruing Loans Acquired at a Discount Past Due 90 days or More (b)		Purchased Impaired (c)		Nonaccrual		Total
	(In thousands)
September 30, 2017
Commercial, financial, leasing, etc.	$	21,486,942		48,159		3,710		369		75		203,996	$	21,743,251
Real estate:
Commercial		24,724,768		273,539		1,710		7,523		20,509		200,193		25,228,242
Residential builder and developer		1,604,095		26,182		—		4,413		10,717		2,416		1,647,823
Other commercial construction		5,952,636		51,132		1,220		—		13,972		19,263		6,038,223
Residential		15,868,656		458,066		249,983		10,025		307,529		236,363		17,130,622
Residential — limited documentation		2,829,667		88,814		—		—		114,141		101,918		3,134,540
Consumer:
Home equity lines and loans		5,275,572		34,878		772		9,856		—		75,584		5,396,662
Automobile		3,327,148		67,280		—		1		—		21,267		3,415,696
Other		4,120,712		33,070		3,893		24,038		—		8,362		4,190,075
Total	$	85,190,196		1,081,120		261,288		56,225		466,943		869,362	$	87,925,134

December 31, 2016
Commercial, financial, leasing, etc.	$	22,287,857		53,503		6,195		417		641		261,434	$	22,610,047
Real estate:
Commercial		25,076,684		183,531		7,054		12,870		31,404		176,201		25,487,744
Residential builder and developer		1,884,989		4,667		5		1,952		14,006		16,707		1,922,326
Other commercial construction		5,985,118		77,701		922		198		14,274		18,111		6,096,324
Residential		17,631,377		485,468		281,298		11,537		378,549		229,242		19,017,471
Residential — limited documentation		3,239,344		88,366		—		—		139,158		106,573		3,573,441
Consumer:
Home equity lines and loans		5,502,091		44,565		—		12,678		—		81,815		5,641,149
Automobile		2,869,232		56,158		—		1		—		18,674		2,944,065
Other		3,491,629		31,286		5,185		21,491		—		11,258		3,560,849
Total	$	87,968,321		1,025,245		300,659		61,144		578,032		920,015	$	90,853,416

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated		Total
	(In thousands)

Beginning balance	$	339,314			366,229			66,006			158,559			78,117	$	1,008,225
Provision for credit losses		2,451			(7,699	)		1,267			33,886			95		30,000
Net charge-offs
Charge-offs		(9,714	)		(258	)		(4,206	)		(32,874	)		—		(47,052	)
Recoveries		4,423			5,895			2,028			9,807			—		22,153
Net (charge-offs) recoveries		(5,291	)		5,637			(2,178	)		(23,067	)		—		(24,899	)
Ending balance	$	336,474			364,167			65,095			169,378			78,212	$	1,013,326

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated		Total
	(In thousands)

Beginning balance	$	330,833			362,719			61,127			156,288			78,030	$	988,997
Provision for credit losses		44,642			1,201			14,067			76,908			182		137,000
Net charge-offs
Charge-offs		(51,318	)		(7,556	)		(16,364	)		(96,060	)		—		(171,298	)
Recoveries		12,317			7,803			6,265			32,242			—		58,627
Net (charge-offs) recoveries		(39,001	)		247			(10,099	)		(63,818	)		—		(112,671	)
Ending balance	$	336,474			364,167			65,095			169,378			78,212	$	1,013,326

	September 30, 2017						December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
With an allowance recorded:
Commercial, financial, leasing, etc.	$	148,747		179,120		49,447		168,072		184,432		48,480
Real estate:
Commercial		73,144		81,244		10,200		71,862		86,666		11,620
Residential builder and developer		6,537		6,842		288		7,396		8,361		506
Other commercial construction		1,626		1,785		292		2,475		2,731		448
Residential		97,483		118,030		3,475		86,680		105,944		3,457
Residential — limited documentation		79,030		94,194		4,600		82,547		97,718		6,000
Consumer:
Home equity lines and loans		48,231		52,975		8,711		44,693		48,965		8,027
Automobile		14,225		16,743		3,011		16,982		18,272		3,740
Other		3,176		5,633		650		3,791		5,296		776
		472,199		556,566		80,674		484,498		558,385		83,054
With no related allowance recorded:
Commercial, financial, leasing, etc.		80,952		97,073		—		100,805		124,786		—
Real estate:
Commercial		148,733		158,815		—		113,276		121,846		—
Residential builder and developer		1,174		1,174		—		14,368		21,124		—
Other commercial construction		17,850		37,237		—		15,933		35,281		—
Residential		17,312		23,291		—		16,823		24,161		—
Residential — limited documentation		11,091		18,480		—		15,429		24,590		—
		277,112		336,070		—		276,634		351,788		—
Total:
Commercial, financial, leasing, etc.		229,699		276,193		49,447		268,877		309,218		48,480
Real estate:
Commercial		221,877		240,059		10,200		185,138		208,512		11,620
Residential builder and developer		7,711		8,016		288		21,764		29,485		506
Other commercial construction		19,476		39,022		292		18,408		38,012		448
Residential		114,795		141,321		3,475		103,503		130,105		3,457
Residential — limited documentation		90,121		112,674		4,600		97,976		122,308		6,000
Consumer:
Home equity lines and loans		48,231		52,975		8,711		44,693		48,965		8,027
Automobile		14,225		16,743		3,011		16,982		18,272		3,740
Other		3,176		5,633		650		3,791		5,296		776
Total	$	749,311		892,636		80,674		761,132		910,173		83,054

	Three Months Ended September 30, 2017						Three Months Ended September 30, 2016
			Interest Income Recognized						Interest Income Recognized
	Average Recorded Investment		Total		Cash Basis		Average Recorded Investment		Total		Cash Basis
	(In thousands)

Commercial, financial, leasing, etc.	$	224,526		391		391		262,796		744		744
Real estate:
Commercial		233,572		1,425		1,425		175,256		1,806		1,806
Residential builder and developer		8,550		895		895		26,996		405		405
Other commercial construction		16,578		25		25		21,500		190		190
Residential		113,892		1,903		905		96,961		1,572		570
Residential — limited documentation		91,974		1,624		569		101,877		1,501		378
Consumer:
Home equity lines and loans		47,831		419		99		41,740		368		112
Automobile		14,588		251		22		18,571		303		19
Other		3,269		80		2		4,077		72		11
Total	$	754,780		7,013		4,333		749,774		6,961		4,235

	Nine Months Ended September 30, 2017						Nine Months Ended September 30, 2016
			Interest Income Recognized						Interest Income Recognized
	Average Recorded Investment		Total		Cash Basis		Average Recorded Investment		Total		Cash Basis
	(In thousands)

Commercial, financial, leasing, etc.	$	242,410		1,674		1,674		283,783		7,055		7,055
Real estate:
Commercial		205,814		3,213		3,213		177,579		3,891		3,891
Residential builder and developer		14,551		1,791		1,791		30,832		488		488
Other commercial construction		15,474		958		958		19,774		563		563
Residential		108,741		5,004		2,285		97,229		4,778		2,591
Residential — limited documentation		94,680		4,573		1,292		104,382		4,580		1,648
Consumer:
Home equity lines and loans		46,829		1,240		290		33,998		937		295
Automobile		15,483		788		62		20,358		964		83
Other		3,430		227		8		10,987		371		74
Total	$	747,412		19,468		11,573		778,922		23,627		16,688

			Real Estate
	Commercial,				Residential		Other
	Financial,				Builder and		Commercial
	Leasing, etc.		Commercial		Developer		Construction
	(In thousands)
September 30, 2017
Pass	$	20,561,077		24,309,923		1,580,763		5,830,122
Criticized accrual		978,178		718,126		64,644		188,838
Criticized nonaccrual		203,996		200,193		2,416		19,263
Total	$	21,743,251		25,228,242		1,647,823		6,038,223
December 31, 2016
Pass	$	21,398,581		24,570,269		1,789,071		5,912,351
Criticized accrual		950,032		741,274		116,548		165,862
Criticized nonaccrual		261,434		176,201		16,707		18,111
Total	$	22,610,047		25,487,744		1,922,326		6,096,324

					Post-modification (a)
	Number		Pre- modification recorded investment		Principal Deferral		Other		Combination of Concession Types		Total
Three Months Ended September 30, 2017	(Dollars in thousands)

Commercial, financial, leasing, etc.		49	$	15,812	$	5,888	$	97	$	9,251	$	15,236
Real estate:
Commercial		17		5,861		1,420		868		3,450		5,738
Residential		34		5,123		3,033		—		2,716		5,749
Residential — limited documentation		4		515		383		—		167		550
Consumer:
Home equity lines and loans		25		2,154		461		—		1,776		2,237
Automobile		17		342		326		—		16		342
Other		1		5		5		—		—		5
Total		147	$	29,812	$	11,516	$	965	$	17,376	$	29,857

Three Months Ended September 30, 2016

Commercial, financial, leasing, etc.		43	$	69,486	$	40,183	$	—	$	19,802	$	59,985
Real estate:
Commercial		18		14,925		11,644		—		2,614		14,258
Residential		30		5,638		4,714		—		1,214		5,928
Residential — limited documentation		6		827		470		—		493		963
Consumer:
Home equity lines and loans		26		2,552		251		—		2,301		2,552
Automobile		10		186		186		—		—		186
Other		1		26		26		—		—		26
Total		134	$	93,640	$	57,474	$	—	$	26,424	$	83,898

	Shares Issued and Outstanding		Carrying Value
	(Dollars in thousands)
Series A (a)
Fixed Rate Cumulative Perpetual Preferred Stock, $1,000 liquidation preference per share		230,000	$	230,000
Series C (a)
Fixed Rate Cumulative Perpetual Preferred Stock, $1,000 liquidation preference per share		151,500	$	151,500
Series E (b)
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock, $1,000 liquidation preference per share		350,000	$	350,000
Series F (c)
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock, $10,000 liquidation preference per share		50,000	$	500,000

	Investment Securities						Defined Benefit						Total Amount				Income
	With OTTI (a)			All Other			Plans			Other			Before Tax				Tax			Net
	(In thousands)

Balance — January 1, 2017	$	46,725			(73,785	)		(449,917	)		(8,268	)	$	(485,245	)			190,609		$	(294,636	)
Other comprehensive income before reclassifications:
Unrealized holding gains (losses), net		(7,365	)		60,586			—			—			53,221				(20,934	)		32,287
Foreign currency translation adjustment		—			—			—			3,829			3,829				(1,340	)		2,489
Unrealized losses on cash flow hedges		—			—			—			(1,076	)		(1,076	)			424			(652	)
Total other comprehensive income (loss) before reclassifications		(7,365	)		60,586			—			2,753			55,974				(21,850	)		34,124
Amounts reclassified from accumulated other comprehensive income that (increase) decrease net income:
Amortization of unrealized holding losses on held-to-maturity (“HTM”) securities		—			2,535			—			—			2,535		(b)		(998	)		1,537
(Gains) losses realized in net income		(50	)		67			—			—			17		(c)		(7	)		10
Accretion of net gain on terminated cash flow hedges		—			—			—			(109	)		(109	)	(d)		43			(66	)
Net yield adjustment from cash flow hedges currently in effect		—			—			—			(2,275	)		(2,275	)	(b)		895			(1,380	)
Amortization of prior service credit		—			—			(601	)		—			(601	)	(e)		236			(365	)
Amortization of actuarial losses		—			—			21,206			—			21,206		(e)		(8,345	)		12,861
Total reclassifications		(50	)		2,602			20,605			(2,384	)		20,773				(8,176	)		12,597
Total gain (loss) during the period		(7,415	)		63,188			20,605			369			76,747				(30,026	)		46,721
Balance — September 30, 2017	$	39,310			(10,597	)		(429,312	)		(7,899	)	$	(408,498	)			160,583		$	(247,915	)

Balance — January 1, 2016	$	16,359			62,849			(489,660	)		(4,093	)	$	(414,545	)			162,918		$	(251,627	)
Other comprehensive income before reclassifications:
Unrealized holding gains, net		1,228			234,438			—			—			235,666				(92,714	)		142,952
Foreign currency translation adjustment		—			—			—			(2,836	)		(2,836	)			989			(1,847	)
Total other comprehensive income (loss) before reclassifications		1,228			234,438			—			(2,836	)		232,830				(91,725	)		141,105
Amounts reclassified from accumulated other comprehensive income that (increase) decrease net income:
Amortization of unrealized holding losses on HTM securities		—			2,998			—			—			2,998		(b)		(1,180	)		1,818
Gains realized in net income		—			(28,748	)		—			—			(28,748	)	(c)		11,309			(17,439	)
Accretion of net gain on terminated cash flow hedges		—			—			—			(116	)		(116	)	(d)		46			(70	)
Amortization of prior service credit		—			—			(3,440	)		—			(3,440	)	(e)		1,354			(2,086	)
Amortization of actuarial losses		—			—			22,654			—			22,654		(e)		(8,914	)		13,740
Total reclassifications		—			(25,750	)		19,214			(116	)		(6,652	)			2,615			(4,037	)
Total gain (loss) during the period		1,228			208,688			19,214			(2,952	)		226,178				(89,110	)		137,068
Balance — September 30, 2016	$	17,587			271,537			(470,446	)		(7,045	)	$	(188,367	)			73,808		$	(114,559	)

	Investment Securities						Defined Benefit
	With OTTI			All Other			Plans			Other			Total
	(In thousands)

Balance — December 31, 2016	$	28,338			(44,657	)		(272,874	)		(5,443	)	$	(294,636	)
Net gain (loss) during period		(4,496	)		38,330			12,496			391			46,721
Balance — September 30, 2017	$	23,842			(6,327	)		(260,378	)		(5,052	)	$	(247,915	)

					Weighted- Average Rate
	Notional Amount		Average Maturity		Fixed			Variable			Estimated Fair Value Gain (a)
	(In thousands)		(In years)								(In thousands)
September 30, 2017
Fair value hedges:
Fixed rate long-term borrowings (b)	$	4,950,000		2.9		2.63	%		2.04	%	$	697
Cash flow hedges:
Variable rate commercial real estate loans (b)		2,000,000		1.6		1.46	%		1.24	%		—
Total	$	6,950,000		2.5							$	697
December 31, 2016
Fair value hedges:
Fixed rate long-term borrowings (b)	$	900,000		1.1		3.75	%		2.08	%	$	11,892

	Fair Value Measurements		Level 1 (a)		Level 2 (a)		Level 3
	(In thousands)
September 30, 2017
Trading account assets	$	170,516		47,927		122,589		—
Investment securities available for sale:
U.S. Treasury and federal agencies		2,007,117		—		2,007,117		—
Obligations of states and political subdivisions		2,678		—		2,678		—
Mortgage-backed securities:
Government issued or guaranteed		9,184,483		—		9,184,483		—
Privately issued		30		—		—		30
Other debt securities		128,530		—		128,530		—
Equity securities		93,986		50,917		43,069		—
		11,416,824		50,917		11,365,877		30
Real estate loans held for sale		571,199		—		571,199		—
Other assets (b)		20,830		—		6,868		13,962
Total assets	$	12,179,369		98,844		12,066,533		13,992
Trading account liabilities	$	109,730		—		109,730		—
Other liabilities (b)		4,078		—		3,838		240
Total liabilities	$	113,808		—		113,568		240

December 31, 2016
Trading account assets	$	323,867		46,135		277,732		—
Investment securities available for sale:
U.S. Treasury and federal agencies		1,902,544		—		1,902,544		—
Obligations of states and political subdivisions		3,641		—		3,641		—
Mortgage-backed securities:
Government issued or guaranteed		10,954,861		—		10,954,861		—
Privately issued		44		—		—		44
Other debt securities		118,516		—		118,516		—
Equity securities		352,466		301,711		50,755		—
		13,332,072		301,711		13,030,317		44
Real estate loans held for sale		1,056,180		—		1,056,180		—
Other assets (b)		58,351		—		50,291		8,060
Total assets	$	14,770,470		347,846		14,414,520		8,104
Trading account liabilities	$	174,376		—		174,376		—
Other liabilities (b)		2,481		—		1,746		735
Total liabilities	$	176,857		—		176,122		735

	Investment Securities Available for Sale
	Privately Issued Mortgage-Backed Securities			Other Assets and Other Liabilities
	(In thousands)

Balance — June 30, 2017	$	35			12,425
Total gains (losses) realized/unrealized:
Included in earnings		—			22,313		(b)
Settlements		(5	)		—
Transfers in and/or out of Level 3 (a)		—			(21,016	)	(d)
Balance — September 30, 2017	$	30			13,722
Changes in unrealized gains included in earnings related to assets still held at September 30, 2017	$	—			12,659		(b)

	Investment Securities Available for Sale
	Privately Issued Mortgage-Backed Securities			Collateralized Debt Obligations				Other Assets and Other Liabilities
	(In thousands)

Balance — June 30, 2016	$	57			43,305				21,383
Total gains (losses) realized/unrealized:
Included in earnings		—			28,475				45,534		(b)
Included in other comprehensive income		—			(15,050	)	(c)		—
Sales		—			(56,730	)			—
Settlements		(6	)		—				—
Transfers in and/or out of Level 3 (a)		—			—				(37,117	)	(d)
Balance — September 30, 2016	$	51			—				29,800
Changes in unrealized gains included in earnings related to assets still held at September 30, 2016	$	—			—				27,663		(b)

	Investment Securities Available for Sale
	Privately Issued Mortgage-Backed Securities			Collateralized Debt Obligations				Other Assets and Other Liabilities
				(In thousands)

Balance — January 1, 2016	$	74			47,393				9,879
Total gains (losses) realized/unrealized:
Included in earnings		—			28,475				104,862		(b)
Included in other comprehensive income		—			(18,268	)	(c)		—
Sales		—			(56,730	)			—
Settlements		(23	)		(870	)			—
Transfers in and/or out of Level 3 (a)		—			—				(84,941	)	(d)
Balance — September 30, 2016	$	51			—				29,800
Changes in unrealized gains included in earnings related to assets still held at September 30, 2016	$	—			—				29,288		(b)

	Three Months Ended September 30, 2016
	Total Revenues as Previously Reported		Impact of Changes			Total Revenues as Reclassified		Net Income (Loss) as Previously Reported			Impact of Changes			Net Income (Loss) as Reclassified
	(In thousands)

Business Banking	$	116,513		4,388			120,901	$	21,422			2,602			24,024
Commercial Banking		268,683		(155	)		268,528		102,796			(92	)		102,704
Commercial Real Estate		205,562		—			205,562		90,065			—			90,065
Discretionary Portfolio		114,391		(8,806	)		105,585		50,773			(5,222	)		45,551
Residential Mortgage Banking		108,576		(11,901	)		96,675		22,924			(7,059	)		15,865
Retail Banking		353,016		8,848			361,864		69,506			5,247			74,753
All Other		182,949		7,626			190,575		(7,502	)		4,524			(2,978	)
Total	$	1,349,690		—			1,349,690	$	349,984			—			349,984

	Nine Months Ended September 30, 2016
	Total Revenues as Previously Reported		Impact of Changes			Total Revenues as Reclassified		Net Income (Loss) as Previously Reported			Impact of Changes			Net Income (Loss) as Reclassified
	(In thousands)

Business Banking	$	344,562		13,022			357,584	$	69,617			7,723			77,340
Commercial Banking		787,781		(423	)		787,358		309,515			(251	)		309,264
Commercial Real Estate		575,117		—			575,117		254,682			—			254,682
Discretionary Portfolio		324,195		(28,575	)		295,620		151,522			(16,947	)		134,575
Residential Mortgage Banking		309,393		(28,539	)		280,854		59,981			(16,926	)		43,055
Retail Banking		1,037,727		25,196			1,062,923		204,291			14,943			219,234
All Other		575,885		19,319			595,204		(65,065	)		11,458			(53,607	)
Total	$	3,954,660		—			3,954,660	$	984,543			—			984,543

	Average Total Assets
	Nine Months Ended September 30				Year Ended December 31
	2017		2016		2016
	(In millions)

Business Banking	$	5,596		5,442		5,456
Commercial Banking		26,699		25,363		25,592
Commercial Real Estate		22,800		20,571		21,131
Discretionary Portfolio		37,807		41,253		40,867
Residential Mortgage Banking		2,335		2,578		2,569
Retail Banking		12,519		11,739		11,840
All Other		13,317		16,951		16,885
Total	$	121,073		123,897		124,340

			Percent Increase
			(Decrease) from
	3rd Qtr.		3rd Qtr.				2nd Qtr.
	2017		2016				2017
	(In millions)

Commercial, financial, etc.	$	21,734		1		%		(3	)	%
Real estate — commercial		33,257		6				—
Real estate — consumer		20,609		(14	)			(3	)
Consumer
Automobile		3,328		19				5
Home equity lines and loans		5,413		(6	)			(1	)
Other		4,045		19				9
Total consumer		12,786		7				3
Total	$	88,386		—		%		(1	)	%

	��	2017
		First Quarter		Second Quarter		Third Quarter			Year- to-date
		(In thousands)

Commercial, financial, leasing, etc.		$	11,896		21,814		5,291			39,001
Real estate:
Commercial			3,971		1,419		(5,637	)		(247	)
Residential			4,752		3,169		2,178			10,099
Consumer			21,948		18,803		23,067			63,818
		$	42,567		45,205		24,899			112,671

	Remaining balance
	September 30, 2017		December 31, 2016
	(In thousands)

Commercial, financial, leasing, etc.	$	4,606		4,794
Commercial real estate		31,524		39,867
Residential real estate		36,128		59,657
Consumer		8,484		11,275
Total	$	80,742		115,593

								Quarter Ended
	September 30, 2017							September 30, 2017
			Nonaccrual					Net Charge-offs (Recoveries)
	Outstanding Balances(b)		Balances		Percent of Outstanding Balances			Balances			Annualized Percent of Average Outstanding Balances
	(Dollars in thousands)

New York	$	430,628	$	382		.09	%	$	(33	)		(.03	)	%
Pennsylvania		100,932		263		.26			(3,608	)		(13.13	)
Mid-Atlantic (a)		469,064		1,691		.36			(249	)		(.21	)
Other		663,269		1,187		.18			(13	)		(.01	)
Total	$	1,663,893	$	3,523		.21	%	$	(3,903	)		(.93	)	%

	September 30, 2017							Quarter Ended September 30, 2017
			Nonaccrual					Net Charge-offs (Recoveries)
											Annualized Percent of
					Percent of						Average
	Outstanding				Outstanding						Outstanding
	Balances		Balances		Balances			Balances			Balances
	(Dollars in thousands)
Residential mortgages:
New York	$	5,749,347	$	77,500		1.35	%	$	1,023			.07	%
Pennsylvania		1,449,304		15,090		1.04			50			.01
Maryland		1,149,341		13,122		1.14			(412	)		(.14	)
New Jersey		4,472,114		58,123		1.30			1,014			.09
Other Mid-Atlantic (a)		1,004,391		10,438		1.04			(11	)		(.01	)
Other		3,283,823		61,418		1.87			573			.07
Total	$	17,108,320	$	235,691		1.38	%	$	2,237			.05	%
Residential construction loans:
New York	$	5,032	$	—		—	%	$	—			—	%
Pennsylvania		1,936		343		17.74			(66	)		(16.23	)
Maryland		1,376		—		—			—			—
New Jersey		1,984		—		—			—			—
Other Mid-Atlantic (a)		3,742		—		—			—			—
Other		8,232		329		3.99			(17	)		(.90	)
Total	$	22,302	$	672		3.01	%	$	(83	)		(1.55	%)
Limited documentation first mortgages:
New York	$	1,351,590	$	40,086		2.97	%	$	39			.01	%
Pennsylvania		65,542		5,333		8.14			(112	)		(.66	)
Maryland		38,316		2,605		6.80			20			.21
New Jersey		1,207,609		25,694		2.13			158			.05
Other Mid-Atlantic (a)		31,445		2,210		7.03			84			1.00
Other		440,038		25,990		5.91			(165	)		(.14	)
Total	$	3,134,540	$	101,918		3.25	%	$	24			—	%
First lien home equity loans and lines of credit:
New York	$	1,293,963	$	15,927		1.23	%	$	699			.22	%
Pennsylvania		809,772		8,772		1.08			92			.05
Maryland		668,522		6,544		.98			468			.28
New Jersey		60,068		351		.58			43			.31
Other Mid-Atlantic (a)		207,006		1,701		.82			11			.02
Other		28,365		915		3.22			53			.82
Total	$	3,067,696	$	34,210		1.12	%	$	1,366			.18	%
Junior lien home equity loans and lines of credit:
New York	$	835,542	$	20,598		2.47	%	$	634			.30	%
Pennsylvania		326,133		3,844		1.18			(75	)		(.09	)
Maryland		719,782		11,402		1.58			287			.16
New Jersey		117,989		1,196		1.01			142			.47
Other Mid-Atlantic (a)		280,435		2,089		.74			204			.28
Other		41,420		1,761		4.25			(200	)		(1.92	)
Total	$	2,321,301	$	40,890		1.76	%	$	992			.17	%
Limited documentation junior lien:
New York	$	753	$	—		—	%	$	(1	)		(.48	%)
Pennsylvania		324		—		—			—			—
Maryland		1,373		91		6.64			—			—
New Jersey		382		—		—			—			—
Other Mid-Atlantic (a)		643		—		—			—			—
Other		4,190		393		9.38			19			1.77
Total	$	7,665	$	484		6.31	%	$	18			.92	%

	2017 Quarters									2016 Quarters
	Third			Second			First			Fourth			Third
	(Dollars in thousands)

Nonaccrual loans	$	869,362			872,374			926,675			920,015			837,362
Real estate and other foreclosed assets		110,515			104,424			119,155			139,206			159,881
Total nonperforming assets	$	979,877			976,798			1,045,830			1,059,221			997,243
Accruing loans past due 90 days or more(a)	$	261,288			265,461			280,019			300,659			317,282
Government guaranteed loans included in totals above:
Nonaccrual loans	$	34,687			39,296			39,610			40,610			47,130
Accruing loans past due 90 days or more		252,072			235,227			252,552			282,659			282,077
Renegotiated loans	$	226,672			221,892			191,343			190,374			217,559
Acquired accruing loans past due 90 days or more(b)	$	56,225			57,498			63,732			61,144			65,182
Purchased impaired loans(c):
Outstanding customer balance	$	779,340			838,476			890,431			927,446			981,105
Carrying amount		466,943			512,393			552,935			578,032			616,991

Nonaccrual loans to total loans and leases, net of unearned discount		.99	%		.98	%		1.04	%		1.01	%		.93	%
Nonperforming assets to total net loans and leases and real estate and other foreclosed assets		1.11	%		1.10	%		1.17	%		1.16	%		1.11	%
Accruing loans past due 90 days or more (a) to total loans and leases, net of unearned discount		.30	%		.30	%		.31	%		.33	%		.35	%

	2017 Third Quarter								2017 Second Quarter								2017 First Quarter
	Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate
Average balance in millions; interest in thousands
Assets
Earning assets
Loans and leases, net of unearned discount*
Commercial, financial, etc.	$	21,734		$	217,953		3.98	%		22,350			213,840		3.84	%		22,290			201,126		3.66	%
Real estate — commercial		33,257			382,352		4.50			33,214			361,313		4.30			33,175			347,010		4.18
Real estate — consumer		20,609			204,008		3.96			21,318			210,152		3.94			22,179			217,263		3.92
Consumer		12,786			157,721		4.89			12,386			147,597		4.78			12,153			140,170		4.68
Total loans and leases, net		88,386			962,034		4.32			89,268			932,902		4.19			89,797			905,569		4.09
Interest-bearing deposits at banks		4,740			14,970		1.25			4,741			12,213		1.03			6,152			12,162		.80
Federal funds sold		—			1		1.58			1			3		1.44			—			—		—
Trading account		73			351		1.92			64			240		1.50			60			328		2.20
Investment securities**
U.S. Treasury and federal agencies		14,632			81,707		2.22			15,060			87,171		2.32			15,113			88,573		2.38
Obligations of states and political subdivisions		37			442		4.69			46			553		4.86			56			578		4.17
Other		774			6,533		3.35			807			6,067		3.02			830			6,822		3.33
Total investment securities		15,443			88,682		2.28			15,913			93,791		2.36			15,999			95,973		2.43
Total earning assets		108,642			1,066,038		3.89			109,987			1,039,149		3.79			112,008			1,014,032		3.67
Allowance for credit losses		(1,014	)							(1,011	)							(1,003	)
Cash and due from banks		1,297								1,257								1,283
Other assets		10,590								10,532								10,690
Total assets	$	119,515								120,765								122,978
Liabilities and shareholders’ equity
Interest-bearing liabilities
Interest-bearing deposits
Savings and interest-checking deposits	$	53,287			37,714		.28			53,611			30,543		.23			53,260			25,634		.20
Time deposits		7,673			13,992		.72			8,559			16,303		.76			9,561			18,998		.81
Deposits at Cayman Islands office		169			310		.73			163			281		.69			192			265		.56
Total interest-bearing deposits		61,129			52,016		.34			62,333			47,127		.30			63,013			44,897		.29
Short-term borrowings		244			554		.90			212			378		.71			184			216		.48
Long-term borrowings		8,033			47,506		2.35			8,292			44,708		2.16			8,423			46,660		2.25
Total interest-bearing liabilities		69,406			100,076		.57			70,837			92,213		.52			71,620			91,773		.52
Noninterest-bearing deposits		32,005								31,868								33,287
Other liabilities		1,803								1,775								1,748
Total liabilities		103,214								104,480								106,655
Shareholders’ equity		16,301								16,285								16,323
Total liabilities and shareholders’ equity	$	119,515								120,765								122,978
Net interest spread							3.32								3.27								3.15
Contribution of interest-free funds							.21								.18								.19
Net interest income/margin on earning assets				$	965,962		3.53	%					946,936		3.45	%					922,259		3.34	%