M&T BANK CORP

Previous wording

The Company's results of operations in the first quarter of 2025 as compared with the fourth quarter of 2024 reflect lower net interest income from two less calendar days in the recent quarter, seasonal salaries and employee benefits expense of $110 million and lower other income, partially offset by a modest improvement in provision for credit losses. The fourth quarter of 2024 results included a distribution from M&T's investment in BLG, net gains on the sale of bank investment securities and a pension-related distribution benefit, partially offset by losses resulting from the redemption of certain of M&T's trust preferred obligations and vacated facility write-downs. The first quarter of 2024 results included $99 million of seasonal salaries and employee benefits expense and a $29 million FDIC special assessment expense. A summary of financial results for the Company is provided below:

Current wording

The Company's results of operations in the second quarter of 2025 as compared with the first quarter of 2025 reflected higher taxable-equivalent net interest income and a rise in noninterest income, including favorable residential mortgage banking activities and gains on the sales of an out-of-footprint loan portfolio and a subsidiary that specialized in institutional services. The results of operations for each of the first quarters of 2025 and 2024 included seasonal salaries and employee benefits expense of $110 million and $99 million, respectively. The first six months of 2024 results included a $25 million distribution from M&T's investment in BLG and $34 million of FDIC special assessment expense. A summary of financial results for the Company is provided below:

Previous wording

The decrease in net income in the recent quarter as compared with the fourth quarter of 2024 resulted from the following:

Current wording

The increase in net income in the recent quarter as compared with the first quarter of 2025 resulted from the following:

Previous wording

•Noninterest expense increased $52 million reflecting seasonal salaries and employee benefits expense in the recent quarter and higher outside data processing and software costs, partially offset by a decline in other costs of operations. That decline reflects lower costs associated with the Company's supplemental executive retirement savings plan and activity in the fourth quarter of 2024 including losses resulting from the redemption of certain of M&T's trust preferred obligations and vacated facility write-downs, partially offset by a pension-related distribution benefit.

Current wording

•Noninterest expense decreased $79 million reflecting seasonal salaries and employee benefits expense in the first quarter of 2025.

Previous wording

The increase in net income in the first quarter of 2025 as compared with 2024's initial quarter reflects the following:

Current wording

The increase in net income in the six months ended June 30, 2025 as compared with the same 2024 period reflected the following:

Previous wording

•Net interest income on a taxable-equivalent basis declined $33 million, largely reflective of two less calendar days in the recent quarter. The Company's net interest margin widened 8 basis points reflecting a reduction in the rates paid on interest-bearing liabilities that outpaced a decline in yields received on earning assets. That increase in net interest spread was partially offset by a decrease in the contribution of interest-free funds.

Current wording

•Net interest income on a taxable-equivalent basis increased $6 million reflecting a widening of the net interest margin by 8 basis points as an increase in the Company's net interest spread was partially offset by a decline in contribution from net interest-free funds.

Previous wording

•Noninterest income increased $31 million reflecting higher mortgage banking revenues, service charges on deposit accounts and trust income, partially offset by lower other revenues from operations.

Current wording

•Noninterest income increased $130 million reflecting higher mortgage banking revenues, trust income, service charges on deposit accounts and other revenues from operations.

Previous wording

•Noninterest expense rose $19 million from 2024's initial quarter reflecting higher levels of salaries and employee benefits expense and outside data processing and software costs, partially offset by a $29 million FDIC special assessment expense in the first quarter of 2024.

Current wording

•Noninterest expense rose $58 million reflecting higher levels of salaries and employee benefits expense and outside data processing and software costs, partially offset by lower FDIC assessments, including $34 million of FDIC special assessment expense in the first half of 2024, and lower other costs of operations.

Previous wording

The Company's effective income tax rates were 23.2%, 22.8% and 20.0% for the quarters ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively. The first quarter of 2024 income tax expense reflected a $17 million net discrete tax benefit related to the resolution of an income tax matter inherited from the acquisition of People's United.

Current wording

The Company's effective income tax rates were 23.4% and 23.2% for the second and first quarters of 2025, respectively, and 23.3% and 21.9% for the six months ended June 30, 2025 and 2024, respectively. The first half of 2024 income tax expense reflected a $17 million net discrete tax benefit related to the resolution of an income tax matter inherited from the acquisition of People's United.

Previous wording

Under approved capital plans and programs authorized by the Board of Directors, M&T repurchased 3,415,303 shares of its common stock during the recent quarter at an average cost per share of $192.06 resulting in a total cost, including the share repurchase excise tax, of $662 million, compared with 957,988 shares at an average price of $206.70 resulting in a total cost, including the share repurchase excise tax, of $200 million in the fourth quarter of 2024. No share repurchases occurred in the first quarter of 2024. On January 22, 2025, M&T's Board of Directors authorized a program under which $4.0 billion of common shares may be repurchased. That authorization replaced and terminated the previous authorized share repurchase program effective as of the same date.

Current wording

Under approved capital plans and programs authorized by the Board of Directors, M&T repurchased 6,073,957 shares of its common stock during the recent quarter at a total cost of $1.1 billion, compared with 3,415,303 shares at a total cost of $662 million in the first quarter of 2025. No share repurchases occurred in the first half of 2024.

Previous wording

Taxable-equivalent net interest income was $1.71 billion in the first quarter of 2025, compared with $1.74 billion and $1.69 billion, respectively, in the fourth and first quarters of 2024. The decrease in taxable-equivalent net interest income from the fourth quarter of 2024 largely reflects the impact from two less calendar days in the recent quarter. The net interest margin, or taxable-equivalent net interest income expressed as an annualized percentage of average earning assets, expanded 8 basis points from the fourth quarter of 2024 to 3.66% in the recent quarter. That expansion reflects a decrease in the cost of the Company's sources of funding, including interest-bearing deposits and short-term borrowings, which outpaced a decline in the yields received on certain earning assets, including average interest-bearing deposits at banks and average loans and leases. The increase in taxable-equivalent net interest income from the year-earlier first quarter reflects a 14 basis-point widening of the net interest margin driven by a decrease of 56 basis points in the cost of interest-bearing liabilities, partially offset by a 22 basis-point decline in the yield received on earning assets. Contributing to the decline in yields received on earning assets and rates paid on interest-bearing liabilities in the recent quarter as compared with the earlier periods was a reduction by the FOMC of its federal funds target interest rate by a total of 1.00% in the last four months of 2024. The Company continues to adjust its funding sources in consideration of the competitive landscape for customer deposits and maintenance of its liquidity profile. 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.

Current wording

Taxable-equivalent net interest income in the first six months of 2025 was $3.43 billion, compared with $3.42 billion in the corresponding 2024 period. That increase reflects an 8 basis-point widening of the net interest margin driven by a decrease of 55 basis points in the cost of interest-bearing liabilities, partially offset by a 27 basis-point decline in the yield received on earning assets. Contributing to the decrease in yields received on earning assets and rates paid on interest-bearing liabilities in the first half of 2025 as compared with the first half of 2024 was a reduction by the FOMC of its federal funds target interest rate by a total of 1.00% in the last four months of 2024. Partially offsetting the decline in yields received on earning assets was an increase in the yields received on investment securities from the deployment of liquidity into fixed rate investment securities from early 2024 through June 2025 that yielded higher rates than maturing investment securities. The Company continues to adjust its funding sources in consideration of the competitive landscape for customer deposits and maintenance of its liquidity profile. 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.

Previous wording

The Company's lending activities reflect a portfolio composition shift as the Company executed various strategies to reduce its relative concentration of commercial real estate loans throughout 2024. The following table summarizes changes in the components of average loans and leases.

Current wording

The Company's lending activities reflect a portfolio composition shift as the Company executed various strategies to reduce its relative concentration of commercial real estate loans throughout 2024. The following table summarizes changes in the components of average loans.

Previous wording

•Commercial real estate loans averaged $26.3 billion in the first quarter of 2025, down $1.6 billion from the fourth quarter of 2024, reflecting decreases of $1.3 billion and $294 million of average permanent and construction commercial real estate loans, respectively. Higher payoffs and increased market competition resulted in lower average commercial real estate loan balances in the recent quarter.

Current wording

•Commercial real estate loans averaged $25.3 billion in the second quarter of 2025, down $926 million from the first quarter of 2025, reflecting decreases of $247 million and $679 million of average permanent and construction commercial real estate loans, respectively. Contributing to the decline were payoffs and the sale of $661 million of out-of-footprint residential builder and developer loans.

Previous wording

•Average consumer loans in the first quarter of 2025 increased $318 million from the fourth quarter of 2024 to $24.4 billion reflecting higher average balances of recreational finance loans and automobile loans of $181 million and $103 million, respectively.

Current wording

•Average consumer loans in the second quarter of 2025 increased $1.0 billion from the first quarter of 2025 to $25.4 billion reflecting higher average balances of recreational finance loans and automobile loans of $611 million and $329 million, respectively.

Previous wording

Average loans and leases totaled $134.8 billion in the first quarter of 2025, down $879 million or 1% from the fourth quarter of 2024.

Current wording

In the first six months of 2025, average loans increased $935 million or 1% from the corresponding 2024 period.

Previous wording

•Average commercial and industrial loans and leases were $61.1 billion in the recent quarter, up $352 million from the fourth quarter of 2024, reflecting continued growth in loans to customers in the financial and insurance industry. Borrowers in the financial and insurance industry include real estate investment trusts and other specialty lending businesses including fund banking companies and mortgage warehouse lending businesses.

Current wording

•Average commercial and industrial loans increased $3.6 billion reflecting growth that spanned most industry types and included growth in loans to customers in the financial and insurance industry. Borrowers in the financial and insurance industry include real estate investment trusts and other specialty lending businesses, including fund banking companies and mortgage warehouse lending businesses.

Previous wording

•Average commercial real estate loans decreased $6.4 billion in the recent quarter as compared with the first quarter of 2024, reflecting decreases of $4.8 billion and $1.6 billion of average permanent and construction commercial real estate loans, respectively.

Current wording

•Average commercial real estate loans decreased $6.3 billion in the six months ended June 30, 2025 from the first half of 2024 reflecting decreases of $4.6 billion and $1.7 billion of average permanent and construction commercial real estate loans, respectively.

Previous wording

•Average consumer loans in the first quarter of 2025 increased $3.2 billion from the first quarter of 2024. The higher average balances of consumer loans reflect recreational finance and automobile loan growth of $2.4 billion and $719 million, respectively.

Current wording

•Average consumer loans in the first half of 2025 increased $3.3 billion from the first half of 2024. The higher average balances of consumer loans reflect recreational finance and automobile loan growth of $2.4 billion and $775 million, respectively.

Previous wording

The investment securities portfolio averaged $34.5 billion in the first quarter of 2025, up $801 million and $5.9 billion from the fourth and first quarters of 2024, respectively. Those increases each reflect the deployment of liquidity into primarily fixed rate investment securities, including purchases of fixed rate agency mortgage-backed securities and U.S. Treasury securities of $1.9 billion and $667 million, respectively, in the recent quarter and $9.3 billion and $5.1 billion, respectively, in 2024 into the Company's available-for-sale investment securities portfolio. As a result of the elevated interest rate environment throughout much of 2024 and the maturities of lower-yielding securities, the weighted-average current yield for total investment securities available for sale increased to 4.42% at March 31, 2025 and 4.30% at December 31, 2024, as compared with 3.45% at March 31, 2024. The weighted-average duration of the available-for-sale investment securities portfolio was 2.5 years and 2.6 years at March 31, 2025 and December 31, 2024, respectively, compared with 2.0 years at March 31, 2024. There were no significant sales of investment securities during the three months ended March 31, 2025. In 2024, the Company sold $181 million of non-agency investment securities from its available-for-sale portfolio and its remaining equity investments in Fannie Mae and Freddie Mac preferred securities. The Company routinely adjusts 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.

Current wording

The investment securities portfolio averaged $35.3 billion in the second quarter of 2025, up $855 million from the first quarter of 2025. That increase reflects the deployment of liquidity into primarily fixed rate investment securities, including purchases of fixed rate agency mortgage-backed securities and U.S. Treasury securities of $1.2 billion and $638 million, respectively, in the recent quarter, into the Company's available-for-sale investment securities portfolio. In the first six months of 2025 and 2024, investment securities averaged $34.9 billion and $29.1 billion, respectively. The Company purchased fixed rate agency mortgage-backed securities and U.S. Treasury securities of $8.5 billion and $3.1 billion, respectively, since June 30, 2024. As a result of the elevated interest rate environment throughout much of 2024 and the maturities of lower-yielding securities, the weighted-average current yield for total investment securities available for sale increased to 4.50% at June 30, 2025 and 4.42% at March 31, 2025, compared with 3.83% at June 30, 2024. The weighted-average duration of the available-for-sale investment securities portfolio was 2.6 years at June 30, 2025, compared with 2.5 years and 2.1 years at March 31, 2025 and June 30, 2024, respectively. There were no significant sales of investment securities during the three and six months ended June 30, 2025. In 2024, the Company sold $181 million of non-agency investment securities from its available-for-sale portfolio and its remaining equity investments in Fannie Mae and Freddie Mac preferred securities. The Company routinely adjusts 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.

Previous wording

The Company regularly reviews its debt investment securities for declines in value below amortized cost that might be indicative of credit-related losses. In light of such reviews, there were no credit-related losses on debt investment securities recognized in each of the three months ended March 31, 2025, December 31, 2024 and March 31, 2024. A

Current wording

The Company regularly reviews its debt investment securities for declines in value below amortized cost that might be indicative of credit-related losses. In light of such reviews, there were no credit-related losses on debt investment securities recognized in each of the six months ended June 30, 2025 and June 30, 2024. 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 13 of Notes to Financial Statements.

Previous wording

Other earning assets include interest-bearing deposits at banks and trading account assets. Those other earning assets in the aggregate averaged $19.8 billion in the recent quarter, compared with $23.7 billion and $30.8 billion during the three months ended December 31, 2024 and March 31, 2024, respectively. The amounts of other earning assets at those respective dates were primarily comprised of deposits held at the FRB of New York. In general, the levels of those deposits often fluctuate due to changes in deposits of retail and commercial customers, trust-related deposits, brokered deposits and additions to or maturities of investment securities or borrowings.

Current wording

Other earning assets include interest-bearing deposits at banks and trading account assets. Those other earning assets in the aggregate averaged $19.8 billion in each of the three-month periods ended June 30, 2025 and March 31, 2025, and $19.8 billion in the six months ended June 30, 2025, compared with $30.1 billion in the six months ended June 30, 2024. The amounts of other earning assets at those respective dates were primarily comprised of deposits held at the FRB of New York. In general, the levels of those deposits often fluctuate due to changes in deposits of retail and commercial customers, trust-related deposits, brokered deposits and additions to or maturities of investment securities or borrowings.

Previous wording

The most significant source of funding for the Company is core deposits. The Company considers noninterest-bearing deposits, savings and interest-checking 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 represented 78% of average earning assets for each of the quarters ended March 31, 2025 and December 31, 2024, compared with 76% for the quarter ended March 31, 2024. The Company also includes brokered deposits as a component of its wholesale funding strategy. Depending on market conditions, including demand by customers and other investors, and the cost of funds available from alternative sources, the Company may change the amount or composition of brokered deposits in the future. The following table provides an analysis of changes in the components of average deposits.

Current wording

The most significant source of funding for the Company is core deposits. The Company considers noninterest-bearing deposits, savings and interest-checking 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 represented 79% and 78% of average earning assets for the quarters ended June 30, 2025 and March 31, 2025, respectively, and 78% and 76% for the six months ended June 30, 2025 and 2024, respectively. The Company also includes brokered deposits as a component of its wholesale funding strategy. Depending on market conditions, including demand by customers and other investors, and the cost of funds available from alternative sources, the Company may change the amount or composition of brokered deposits in the future. The following table provides an analysis of changes in the components of average deposits.

Previous wording

Total deposits averaged $161.2 billion in the recent quarter, compared with $164.6 billion in the fourth quarter of 2024.

Current wording

Total deposits averaged $163.4 billion in the recent quarter, up from $161.2 billion in the first quarter of 2025.

Previous wording

•The $2.5 billion decrease in average brokered deposits as compared with the first quarter of 2024 reflects the maturity of brokered time deposits in the recent year, partially offset by higher average balances of brokered savings and interest-checking deposits. The Company's brokered savings and interest-bearing transaction accounts and brokered time deposits averaged $8.0 billion and $5.2 billion, respectively, in the year-earlier quarter.

Current wording

•The decrease in average brokered deposits from the first quarter of 2025 reflected maturities of brokered time deposits.

Previous wording

•Average core deposits were largely unchanged compared with the year-earlier quarter and reflected a shift in customer funds from noninterest-bearing accounts to interest-bearing products. Lower average balances of core time deposits in the recent quarter reflected comparatively lower rates paid on those products.

Current wording

•Average core deposits grew $1.0 billion due to higher average balances of savings and interest-checking deposits reflecting growth and a shift in customer funds from noninterest-bearing accounts to interest-bearing products. Lower average balances of core time deposits in the first half of 2025 reflected comparatively lower rates paid on those products.

Previous wording

The accompanying table summarizes the components of average total deposits by reportable segment for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024.

Current wording

The accompanying table summarizes the components of average total deposits by reportable segment for the three months ended June 30, 2025 and March 31, 2025 and the six months ended June 30, 2025 and 2024.

Previous wording

The Company uses borrowing capacity from banks, the FHLBs, the FRB of New York and others as sources of funding. Short-term borrowings represent arrangements that at the time they were entered into had a contractual maturity of one year or less. The lower levels of average short-term borrowings in the first quarter of 2025 as compared with the first quarter of 2024 reflect the Company's management of liquidity, including reductions in short-term wholesale funding sources. Average short-term borrowings in the first quarter of 2025 were modestly higher as compared with the fourth quarter of 2024.

Current wording

The Company uses borrowing capacity from banks, the FHLBs, the FRB of New York and others as sources of funding. Short-term borrowings represent arrangements that at the time they were entered into had a contractual maturity of one year or less. Average short-term borrowings in the second quarter of 2025 as compared with the first quarter of 2025 were modestly higher. The lower levels of average short-term borrowings for the six months ended June 30, 2025 as compared with the similar 2024 period reflect the Company's management of liquidity, including reductions in short-term wholesale funding sources.

Previous wording

Long-term borrowings averaged $11.3 billion, $11.7 billion and $9.8 billion during the three-month periods ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively. The increased usage of borrowing facilities in the first quarter of 2025 and fourth quarter of 2024 as compared with the first quarter of 2024 reflects the Company's strategies to diversify its wholesale funding sources to provide long-term funding stabilization and prepare for proposed regulations enumerating certain long-term debt requirements as described in Part I, Item 1 "Resolution Planning and Resolution-Related Requirements" of M&T's 2024 Annual Report. The lower levels of average long-term borrowings in the first quarter of 2025 as compared with the final quarter of 2024 reflect maturities of long-term debt that outpaced issuances in the recent quarter. The following table provides a summary of the Company's issuances, maturities and redemptions of long-term borrowings in the recent quarter.

Current wording

The levels of long-term borrowings reflect the Company's strategies to diversify its wholesale funding sources to provide long-term funding stabilization and prepare for proposed regulations enumerating certain long-term debt requirements as described in Part I, Item 1, "Resolution Planning and Resolution-Related Requirements" of M&T's 2024 Annual Report. The following table provides a summary of the Company's issuances, maturities and redemptions of long-term borrowings for the three-month and six-month periods ended June 30, 2025.

Previous wording

Additional information regarding borrowings is provided in notes 4 and 11 of Notes to Financial Statements.

Current wording

Additional information regarding borrowings is provided in notes 5 and 12 of Notes to Financial Statements.

Previous wording

Taxable-equivalent net interest income can be impacted by changes in the composition of the Company's earning assets and interest-bearing liabilities, as discussed herein, as well as changes in interest rates and spreads. Net interest spread, or the difference between the yield on earning assets and the rate paid on interest-bearing liabilities, was 2.82% in the recent quarter, up from 2.66% and 2.48% in the fourth and first quarters of 2024, respectively. Those increases in the net interest spread reflect a decrease in the rates paid on the Company's interest-bearing liabilities, partially offset by a decline in the yield on earning assets. The yield on earning assets during the first quarter of 2025 was 5.52%, down 8 and 22 basis points from the fourth and first quarters of 2024, respectively, reflecting lower yields on interest-bearing deposits at the FRB of New York and loans and leases. That decrease was partially offset by a rise in yields received on investment securities which reflected purchases of investment securities since the beginning of 2024, inclusive of the recent quarter, with a higher yield than those that matured during those same periods. The rate paid on interest-bearing liabilities was 2.70%, down 24 and 56 basis points from the fourth and first quarters of 2024, respectively, reflecting a reduction in the cost of interest-bearing deposits and funding from short-term borrowings during each of those comparative periods. That reduction in the cost of interest-bearing liabilities reflects a lower FOMC federal funds target interest rate which was reduced by a total of 1.00% in the last four months of 2024.

Current wording

Taxable-equivalent net interest income can be impacted by changes in the composition of the Company's earning assets and interest-bearing liabilities, as discussed herein, as well as changes in interest rates and spreads. Net interest spread, or the difference between the yield on earning assets and the rate paid on interest-bearing liabilities, was 2.80% in the recent quarter, down from 2.82% in the first quarter of 2025. The decrease in the net interest spread reflects an increase in the rates paid on the Company's interest-bearing liabilities and a decline in the yield on earning assets. The yield on earning assets declined 1 basis point in the second quarter of 2025 to 5.51%, reflecting lower taxable-equivalent interest income on investment securities resulting from an alignment of amortization periods for certain municipal bonds obtained from the acquisition of People's United. That decrease was partially offset by a rise in yields received on average loans. The rate paid on interest-bearing liabilities was 2.71%, up 1 basis point from the first quarter of 2025. Increases in the rates paid on the Company's average non-brokered interest-bearing deposits and average borrowings were partially offset by a reduction in the cost of brokered deposits. For the first six months of 2025 and 2024, net interest spread was 2.80% and 2.52%, respectively. Reductions to the rates paid on interest-bearing liabilities outpaced lower yields received on earning assets. Contributing to those decreases in the first half of 2025 as compared with the corresponding 2024 period was a reduction by the FOMC of its federal funds target interest rate by a total of 1.00% in the last four months of 2024.

Previous wording

Net interest-free funds consist largely of noninterest-bearing demand deposits and other liabilities 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 $59.2 billion in the first quarter of 2025, down from $60.8 billion and $61.7 billion in the fourth and first quarters of 2024, respectively. Noninterest-bearing deposits averaged $45.4 billion in the first quarter of 2025, compared with $46.6 billion in the fourth quarter of 2024, and $48.6 billion in 2024's initial quarter. The decline in average noninterest-bearing deposits in the recent quarter from the fourth quarter of 2024 reflects a seasonal decline in commercial customer deposits whereas the decline from the first quarter of 2024 reflects a shift in deposits to interest-bearing accounts in an elevated interest rate environment. The contribution of net interest-free funds to net interest margin was .84% in the first quarter of 2025, compared with .92% and 1.04% in the fourth and first quarters of 2024, respectively. The decreased contribution of net interest-free funds to the net interest margin in the first quarter of 2025 as compared with the fourth and first quarters of 2024 reflects lower rates paid on interest-bearing liabilities used to value net interest-free funds.

Current wording

Net interest-free funds consist largely of noninterest-bearing demand deposits and other liabilities 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 $58.0 billion in the second quarter of 2025, down from $59.2 billion in the first quarter of 2025. Net interest-free funds averaged $58.6 billion and $61.6 billion for the six months ended June 30, 2025 and 2024, respectively. Noninterest-bearing deposits averaged $45.2 billion and $45.4 billion in the second and first quarters of 2025, respectively, and $45.3 billion and $48.2 billion in the first half of 2025 and 2024, respectively. The decline in average noninterest-bearing deposits in the first six months of 2025 as compared with the similar 2024 period reflects a shift in deposits to interest-bearing accounts in an elevated interest rate environment. The contribution of net interest-free funds to net interest margin was .82% in the second quarter of 2025, compared with .84% in the first quarter of 2025. For the first six months of 2025 and 2024, the contribution of net interest-free funds was .84% and 1.04%, respectively. The decreased contribution of net interest-free funds to net interest margin in the first six months of 2025 as compared with the first six months of 2024 reflects lower rates paid, in the most recent six months, on interest-bearing liabilities used to value net interest-free funds.

Previous wording

49 - of 2024 and 3.52% in the year-earlier period. 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 changes to spreads, could impact the Company’s net interest income and net interest margin. Future changes in the levels of net interest-free funds and the interest rates used to value such funds could also impact the Company's net interest margin.

Current wording

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 3.62% in the second quarter of 2025, compared with 3.66% in the first quarter of 2025. During the first six months of 2025 and 2024, the net interest margin was 3.64% and 3.56%, respectively. 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 changes to spreads, could impact the Company’s net interest income and net interest margin. Future changes in the levels of net interest-free funds and the interest rates used to value such funds could also impact the Company's net interest margin.

Previous wording

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 $130 million and $140 million was recorded in the first quarter of 2025 and fourth quarter of 2024, respectively, compared with $200 million in the year-earlier quarter. The lower provision for credit losses in the most recent two quarters as compared with the first quarter of 2024 reflects improved performance of loans to commercial real estate borrowers, partially offset by commercial and industrial and consumer loan growth and, in the recent quarter, a modest deterioration of macroeconomic forecasts.

Current wording

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 $125 million was recorded in the second quarter of 2025, compared with $130 million in the first quarter of 2025. In the recent quarter the provision for credit losses included $20 million of provision for unfunded credit commitments. For the six months ended June 30, 2025 and 2024, the Company recorded a provision for credit losses of $255 million and $350 million, respectively. The lower provision for credit losses in the first half of 2025 as compared with the similar 2024 period reflects improved performance of loans to commercial customers, partially offset by growth in M&T's consumer loan portfolio.

Previous wording

Nonaccrual loans declined $150 million from December 31, 2024 to March 31, 2025 reflecting a $113 million reduction in commercial real estate nonaccrual loans and a $34 million reduction in commercial and industrial nonaccrual loans. As compared with March 31, 2024, the $762 million decline in nonaccrual loans at March 31, 2025 reflects a $576 million reduction in commercial real estate nonaccrual loans and a $202 million reduction in commercial and industrial nonaccrual loans. Approximately 55% of nonaccrual commercial and industrial and commercial real estate loans were considered current with respect to their payment status at March 31, 2025.

Current wording

Nonaccrual loans increased $33 million from March 31, 2025 to June 30, 2025 reflecting a $125 million increase in commercial and industrial nonaccrual loans, partially offset by reductions of $50 million and $23 million in consumer nonaccrual loans and commercial real estate nonaccrual loans, respectively. As compared with December 31, 2024, the $117 million decline in nonaccrual loans at June 30, 2025 reflects a $136 million reduction in commercial real estate nonaccrual loans and a $58 million reduction in consumer nonaccrual loans, partially offset by a $91 million increase in commercial and industrial nonaccrual loans. Approximately 55% of nonaccrual commercial and industrial and commercial real estate loans were considered current with respect to their payment status at June 30, 2025.

Previous wording

Government-guaranteed loans designated 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 $240 million at March 31, 2025, $224 million at December 31, 2024 and $195 million at March 31, 2024. 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.

Current wording

Government-guaranteed loans designated 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 that are guaranteed by government-related entities included in accruing loans past due 90 days or more totaled $377 million at June 30, 2025, $240 million at March 31, 2025, $224 million at December 31, 2024 and $170 million at June 30, 2024. 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.

Previous wording

Approximately 76% of loans 30 to 89 days past due were less than 60 days delinquent at March 31, 2025, compared with 73% at December 31, 2024. Additional information about past due and nonaccrual loans at March 31, 2025 and December 31, 2024 is included in note 3 of Notes to Financial Statements.

Current wording

Approximately 70% of loans 30 to 89 days past due were less than 60 days delinquent at June 30, 2025, compared with 76% at March 31, 2025 and 73% at December 31, 2024. Additional information about past due and nonaccrual loans at June 30, 2025 and December 31, 2024 is included in note 4 of Notes to Financial Statements.

Previous wording

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 designated as “criticized.” A

Current wording

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

Previous wording

52 - criticized loan may be designated as “nonaccrual” if the Company no longer expects to collect all amounts owed under the terms of the loan agreement or the loan is delinquent 90 days or more.

Current wording

57 - grades while specific loans determined to have an elevated level of credit risk are designated as “criticized.” A criticized loan may be designated as “nonaccrual” if the Company no longer expects to collect all amounts owed under the terms of the loan agreement or the loan is delinquent 90 days or more.

Previous wording

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 greater than $1 million and additional analysis performed. On a quarterly basis, the Company’s centralized credit risk department personnel review 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 are periodically performed over segments of loan portfolios that may be 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. In the recent quarter, the Company began assessing loans to certain not-for-profit borrowers, government contractors and other commercial borrowers that may be impacted by changes to government funding and reductions in the federal workforce. The Company is also monitoring commercial borrowers in certain industry sectors that may be impacted by international trade policy changes, such as tariffs, including retail and wholesale trade, manufacturing and construction companies.

Current wording

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 greater than $1 million and additional analysis performed. On a quarterly basis, the Company’s centralized credit risk department personnel review 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 are periodically performed over segments of loan portfolios that may be 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. In 2025, the Company assessed loans to certain not-for-profit borrowers, government contractors and other commercial borrowers that may be impacted by changes to government funding and reductions in the federal workforce. The Company is monitoring commercial borrowers in certain industry sectors that may be impacted by international trade policy changes, such as tariffs, including retail and wholesale trade, manufacturing and construction companies. The Company has considered the information gathered in such reviews in its assignment of loan grades.

Previous wording

The Company continues to monitor its commercial real estate loan portfolio. Criticized investor-owned commercial real estate loans totaled $5.4 billion or 21% of such loans at March 31, 2025, improved from $6.0 billion or 23% at December 31, 2024. Investor-owned commercial real estate loans comprised 57% of total criticized loans at March 31, 2025, compared with 61% at December 31, 2024. The primary source of repayment of these loans is typically tenant lease payments to the investor/borrower. Elevated vacancies impacting some property types and higher interest rates have contributed to lower current and anticipated future debt service coverage ratios, which have and may 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, in particular those borrowers with loans secured by office properties, to refinance their obligations at loan maturity. Despite these challenges, the ability of borrowers to service loans secured by certain investor-owned real estate, including health services, hotel and multifamily properties, has improved in recent quarters. The LTV ratio is one of many factors considered in assessing overall portfolio risks and loss mitigation strategies for the investor-owned commercial real estate portfolio. The weighted-average LTV ratio for investor-owned commercial real estate loans was approximately 57% at March 31, 2025 and 56% at each of December 31, 2024 and March 31, 2024. Criticized loans secured by investor-owned commercial real estate had a weighted-average LTV ratio of approximately 66%, 63% and 62% at March 31, 2025, December 31, 2024 and March 31, 2024, respectively. In determining the LTV ratio, the Company considers cross-collateralization of all exposures secured by the supporting collateral and the estimated value of such collateral. Subsequent to the origination of commercial real estate loans, updated appraisals are obtained in the normal course of business for renewals, extensions and modifications to commitment levels. As the quality of a loan deteriorates to the point of designating the loan as "criticized nonaccrual," 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 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 credit risk personnel. Accordingly, for real estate collateral securing larger nonaccrual commercial and industrial loans and commercial real estate loans, estimated collateral values are generally based on current appraisals and estim…

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Current wording

The Company continues to monitor its commercial real estate loan portfolio. Criticized investor-owned commercial real estate loans totaled $4.6 billion or 19% of such loans at June 30, 2025, improved from $5.4 billion or 21% at March 31, 2025 and $6.0 billion or 23% at December 31, 2024. Investor-owned commercial real estate loans comprised 54% of total criticized loans at June 30, 2025, compared with 57% at March 31, 2025 and 61% at December 31, 2024. The primary source of repayment of these loans is typically tenant lease payments to the investor/borrower. Elevated vacancies impacting some property types and higher interest rates have contributed to lower current and anticipated future debt service coverage ratios, which have and may 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, in particular those borrowers with loans secured by office properties, to refinance their obligations at loan maturity. Despite these challenges, the ability of borrowers to service loans secured by certain investor-owned real estate, including health services, office and multifamily properties, has improved in recent quarters. The LTV ratio is one of many factors considered in assessing overall portfolio risks and loss mitigation strategies for the investor-owned commercial real estate portfolio. The weighted-average LTV ratio for investor-owned commercial real estate loans was approximately 56% at each of June 30, 2025, December 31, 2024 and June 30, 2024, compared with 57% at March 31, 2025. Criticized loans secured by investor-owned commercial real estate had a weighted-average LTV ratio of approximately 64%, 66%, 63% and 62% at June 30, 2025, March 31, 2025, December 31, 2024 and June 30, 2024, respectively. In determining the LTV ratio, the Company considers cross-collateralization of all exposures secured by the supporting collateral and the estimated value of such collateral. Subsequent to the origination of commercial real estate loans, updated appraisals are obtained in the normal course of business for renewals, extensions and modifications to commitment levels. As the quality of a loan deteriorates to the point of designating the loan as "criticized nonaccrual," 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 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 credit risk personnel. Accordingly, for real estate collateral securing larger nonaccrual commercial and industrial loans an…

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Previous wording

The Company monitors its concentration of commercial real estate lending as a percent 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 133% of Tier 1 capital plus its allowable allowance for credit losses at March 31, 2025 and 136% at December 31, 2024, compared with 176% at March 31, 2024. The Company intentionally reduced its relative concentration of investor-owned commercial real estate loans throughout 2024.

Current wording

The Company monitors its concentration of commercial real estate lending as a percent 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 129% of Tier 1 capital plus its allowable allowance for credit losses at June 30, 2025, compared with 133% at March 31, 2025, 136% at December 31, 2024 and 151% at June 30, 2024. The Company intentionally reduced its relative concentration of investor-owned commercial real estate loans throughout 2024.