M&T BANK CORP
For the period ended Sep 30, 2025. Filed Oct 27, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 27, 2025
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4. Loans and allowance for loan losses
- Loans and allowance for loan losses
A summary of current, past due and nonaccrual loans as of September 30, 2025 and December 31, 2024 follows:
| (Dollars in millions) | Current | 30-89 Days Past Due | Accruing Loans Past Due 90 Days or More | Nonaccrual | Total (a) (b) |
|---|---|---|---|---|---|
| Commercial and industrial | $60,952 | $172 | $3 | $760 | $61,887 |
| Real estate: | |||||
| Commercial (c) | 19,493 | 189 | 19 | 361 | 20,062 |
| Residential builder and developer (d) | 80 | 12 | — | — | 92 |
| Other commercial construction | 3,859 | 12 | — | 21 | 3,892 |
| Residential (e) | 23,395 | 615 | 402 | 250 | 24,662 |
| Consumer: | |||||
| Home equity lines and loans | 4,622 | 31 | — | 77 | 4,730 |
| Recreational finance | 14,032 | 91 | — | 29 | 14,152 |
| Automobile | 5,157 | 56 | — | 10 | 5,223 |
| Other | 2,240 | 22 | 8 | 4 | 2,274 |
| Total | $133,830 | $1,200 | $432 | $1,512 | $136,974 |
| December 31, 2024 | |||||
| Commercial and industrial | $60,374 | $399 | $12 | $696 | $61,481 |
| Real estate: | |||||
| Commercial (c) | 20,054 | 255 | 3 | 468 | 20,780 |
| Residential builder and developer | 830 | 3 | — | 2 | 835 |
| Other commercial construction | 5,018 | 65 | — | 66 | 5,149 |
| Residential (e) | 21,853 | 719 | 315 | 279 | 23,166 |
| Consumer: | |||||
| Home equity lines and loans | 4,482 | 29 | — | 81 | 4,592 |
| Recreational finance | 12,429 | 104 | — | 31 | 12,564 |
| Automobile | 4,724 | 58 | — | 12 | 4,794 |
| Other | 2,134 | 23 | 8 | 55 | 2,220 |
| Total | $131,898 | $1,655 | $338 | $1,690 | $135,581 |
(a)Balances include net discounts, comprised of unamortized premiums, discounts and net deferred loan fees and costs of $279 million and $277 million at September 30, 2025 and December 31, 2024, respectively.
(b)Balances exclude accrued interest receivable of $619 million and $628 million at September 30, 2025 and December 31, 2024, respectively, which is included in Accrued interest and other assets in the Company's Consolidated Balance Sheet.
(c)Commercial real estate loans held for sale were $278 million at September 30, 2025 and $310 million at December 31, 2024.
(d)In June 2025, the Company sold $661 million of residential builder and developer loans and recognized a gain on sale of $15 million, which is included in Other revenues from operations in the Consolidated Statement of Income for the nine months ended September 30, 2025.
(e)One-to-four family residential mortgage loans held for sale were $327 million at September 30, 2025 and $211 million at December 31, 2024.
The amount of foreclosed property held by the Company, predominantly consisting of residential real estate, was $37 million and $35 million at September 30, 2025 and December 31, 2024, respectively. There were $180 million and $173 million at September 30, 2025 and December 31, 2024, respectively, of loans secured by residential real estate that were in the process of foreclosure. At September 30, 2025, approximately 46% of those residential real estate loans in the process of foreclosure were government guaranteed.
- 14 -
At September 30, 2025, approximately $21.1 billion of commercial and industrial loans, $13.4 billion of commercial real estate loans, $19.3 billion of one-to-four family residential real estate loans, $2.9 billion of home equity loans and lines of credit and $13.7 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. At December 31, 2024, approximately $20.7 billion of commercial and industrial loans, $14.6 billion of commercial real estate loans, $18.6 billion of one-to-four family residential real estate loans, $2.7 billion of home equity loans and lines of credit and $13.1 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 further described in notes 5 and 12, loans totaling $2.3 billion and $1.5 billion at September 30, 2025 and December 31, 2024, respectively, were held in special purpose trusts to settle the obligations of certain asset-backed notes issued by those trusts which have been included in the Company's consolidated financial statements.
Credit quality indicators
The Company utilizes a loan grading system to differentiate risk amongst its commercial and industrial loans and commercial real estate loans. The following table summarizes the loan grades applied at September 30, 2025 to the various classes of the Company’s commercial and industrial loans and commercial real estate loans and gross charge-offs for those types of loans for the three-month and nine-month periods ended September 30, 2025 by origination year.
| Term Loans by Origination Year · RevolvingLoans · Revolving Loans Converted to TermLoans · Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) · 2025 · 2024 · 2023 · 2022 · 2021 · Prior | |||||||||
| Commercial and industrial: | |||||||||
| Pass | $6,980 | $7,252 | $4,626 | $4,526 | $2,445 | $5,346 | $26,722 | $97 | $57,994 |
| Criticized accrual | 115 | 272 | 492 | 440 | 120 | 427 | 1,232 | 35 | 3,133 |
| Criticized nonaccrual | 4 | 27 | 90 | 76 | 33 | 242 | 268 | 20 | 760 |
| Total commercial and industrial | $7,099 | $7,551 | $5,208 | $5,042 | $2,598 | $6,015 | $28,222 | $152 | $61,887 |
| Gross charge-offs three months ended September 30, 2025 | $3 | $21 | $12 | $6 | $2 | $3 | $42 | $— | $89 |
| Gross charge-offs nine months ended September 30, 2025 | $7 | $29 | $31 | $19 | $6 | $12 | $92 | $— | $196 |
| Real estate: | |||||||||
| Commercial: | |||||||||
| Pass | $2,675 | $408 | $1,548 | $1,610 | $1,205 | $9,538 | $393 | $— | $17,377 |
| Criticized accrual | — | 29 | 297 | 337 | 83 | 1,572 | 6 | — | 2,324 |
| Criticized nonaccrual | — | — | 7 | 36 | 50 | 268 | — | — | 361 |
| Total commercial real estate | $2,675 | $437 | $1,852 | $1,983 | $1,338 | $11,378 | $399 | $— | $20,062 |
| Gross charge-offs three months ended September 30, 2025 | $— | $— | $— | $11 | $— | $7 | $— | $— | $18 |
| Gross charge-offs nine months ended September 30, 2025 | $— | $— | $— | $15 | $— | $47 | $— | $— | $62 |
| Residential builder and developer: | |||||||||
| Pass | $3 | $— | $3 | $9 | $— | $5 | $51 | $— | $71 |
| Criticized accrual | — | — | — | 21 | — | — | — | — | 21 |
| Criticized nonaccrual | — | — | — | — | — | — | — | — | — |
| Total residential builder and developer | $3 | $— | $3 | $30 | $— | $5 | $51 | $— | $92 |
| Gross charge-offs three months ended September 30, 2025 | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| Gross charge-offs nine months ended September 30, 2025 | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| Other commercial construction: | |||||||||
| Pass | $138 | $205 | $1,265 | $652 | $78 | $339 | $38 | $— | $2,715 |
| Criticized accrual | — | 6 | 153 | 629 | 143 | 219 | 6 | — | 1,156 |
| Criticized nonaccrual | — | — | — | 10 | 4 | 7 | — | — | 21 |
| Total other commercial construction | $138 | $211 | $1,418 | $1,291 | $225 | $565 | $44 | $— | $3,892 |
| Gross charge-offs three months ended September 30, 2025 | $— | $— | $— | $4 | $— | $— | $— | $— | $4 |
| Gross charge-offs nine months ended September 30, 2025 | $— | $— | $— | $7 | $— | $— | $— | $— | $7 |
- 15 -
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 September 30, 2025 for the various classes of the Company’s residential real estate loans and consumer loans and gross charge-offs for those types of loans for the three-month and nine-month periods ended September 30, 2025 by origination year follows:
| Term Loans by Origination Year · RevolvingLoans · Revolving Loans Converted to TermLoans · Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) · 2025 · 2024 · 2023 · 2022 · 2021 · Prior | |||||||||
| Residential real estate: | |||||||||
| Current | $2,985 | $1,927 | $1,232 | $4,206 | $3,517 | $9,409 | $119 | $— | $23,395 |
| 30-89 days past due | 4 | 8 | 17 | 107 | 76 | 403 | — | — | 615 |
| Accruing loans past due 90 days or more | — | 4 | 13 | 55 | 80 | 250 | — | — | 402 |
| Nonaccrual | — | 2 | 5 | 37 | 18 | 187 | 1 | — | 250 |
| Total residential real estate | $2,989 | $1,941 | $1,267 | $4,405 | $3,691 | $10,249 | $120 | $— | $24,662 |
| Gross charge-offs three months ended September 30, 2025 | $— | $— | $— | $— | $— | $1 | $— | $— | $1 |
| Gross charge-offs nine months ended September 30, 2025 | $— | $— | $— | $1 | $— | $3 | $— | $— | $4 |
| Consumer: | |||||||||
| Home equity lines and loans: | |||||||||
| Current | $— | $— | $— | $— | $1 | $80 | $3,269 | $1,272 | $4,622 |
| 30-89 days past due | — | — | — | — | — | 1 | — | 30 | 31 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | — | — | — |
| Nonaccrual | — | — | — | — | — | 3 | 1 | 73 | 77 |
| Total home equity lines and loans | $— | $— | $— | $— | $1 | $84 | $3,270 | $1,375 | $4,730 |
| Gross charge-offs three months ended September 30, 2025 | $— | $— | $— | $— | $— | $— | $— | $1 | $1 |
| Gross charge-offs nine months ended September 30, 2025 | $— | $— | $— | $— | $— | $— | $— | $3 | $3 |
| Recreational finance: | |||||||||
| Current | $3,597 | $3,236 | $1,836 | $1,753 | $1,419 | $2,191 | $— | $— | $14,032 |
| 30-89 days past due | 5 | 16 | 17 | 14 | 13 | 26 | — | — | 91 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | — | — | — |
| Nonaccrual | 2 | 5 | 6 | 6 | 4 | 6 | — | — | 29 |
| Total recreational finance | $3,604 | $3,257 | $1,859 | $1,773 | $1,436 | $2,223 | $— | $— | $14,152 |
| Gross charge-offs three months ended September 30, 2025 | $3 | $7 | $7 | $6 | $5 | $8 | $— | $— | $36 |
| Gross charge-offs nine months ended September 30, 2025 | $4 | $18 | $21 | $19 | $17 | $30 | $— | $— | $109 |
| Automobile: | |||||||||
| Current | $1,555 | $1,868 | $633 | $547 | $409 | $145 | $— | $— | $5,157 |
| 30-89 days past due | 6 | 14 | 13 | 11 | 8 | 4 | — | — | 56 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | — | — | — |
| Nonaccrual | 1 | 3 | 1 | 1 | 3 | 1 | — | — | 10 |
| Total automobile | $1,562 | $1,885 | $647 | $559 | $420 | $150 | $— | $— | $5,223 |
| Gross charge-offs three months ended September 30, 2025 | $2 | $5 | $3 | $2 | $1 | $1 | $— | $— | $14 |
| Gross charge-offs nine months ended September 30, 2025 | $2 | $12 | $8 | $8 | $4 | $3 | $— | $— | $37 |
| Other: | |||||||||
| Current | $270 | $176 | $103 | $65 | $50 | $24 | $1,551 | $1 | $2,240 |
| 30-89 days past due | 2 | 2 | 2 | 1 | — | — | 14 | 1 | 22 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | 8 | — | 8 |
| Nonaccrual | 2 | — | 1 | — | — | — | 1 | — | 4 |
| Total other | $274 | $178 | $106 | $66 | $50 | $24 | $1,574 | $2 | $2,274 |
| Gross charge-offs three months ended September 30, 2025 | $5 | $3 | $2 | $1 | $— | $— | $16 | $— | $27 |
| Gross charge-offs nine months ended September 30, 2025 | $12 | $11 | $7 | $3 | $1 | $1 | $53 | $— | $88 |
| Total loans at September 30, 2025 | $18,344 | $15,460 | $12,360 | $15,149 | $9,759 | $30,693 | $33,680 | $1,529 | $136,974 |
| Total gross charge-offs for the three months ended September 30, 2025 | $13 | $36 | $24 | $30 | $8 | $20 | $58 | $1 | $190 |
| Total gross charge-offs for the nine months ended September 30, 2025 | $25 | $70 | $67 | $72 | $28 | $96 | $145 | $3 | $506 |
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The following table summarizes the loan grades applied at December 31, 2024 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 · RevolvingLoans · Revolving Loans Converted to TermLoans | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) · 2024 · 2023 · 2022 · 2021 · 2020 · Prior · Total | |||||||||
| Commercial and industrial: | |||||||||
| Pass | $9,021 | $6,454 | $5,845 | $3,258 | $1,534 | $5,147 | $26,262 | $79 | $57,600 |
| Criticized accrual | 189 | 385 | 402 | 210 | 75 | 528 | 1,359 | 37 | 3,185 |
| Criticized nonaccrual | 11 | 56 | 98 | 41 | 59 | 220 | 194 | 17 | 696 |
| Total commercial and industrial | $9,221 | $6,895 | $6,345 | $3,509 | $1,668 | $5,895 | $27,815 | $133 | $61,481 |
| Real estate: | |||||||||
| Commercial: | |||||||||
| Pass | $674 | $1,477 | $1,358 | $1,222 | $1,774 | $9,611 | $413 | $— | $16,529 |
| Criticized accrual | 39 | 389 | 665 | 253 | 591 | 1,839 | 7 | — | 3,783 |
| Criticized nonaccrual | 1 | 1 | 53 | 26 | 17 | 369 | 1 | — | 468 |
| Total commercial real estate | $714 | $1,867 | $2,076 | $1,501 | $2,382 | $11,819 | $421 | $— | $20,780 |
| Residential builder and developer: | |||||||||
| Pass | $380 | $236 | $40 | $12 | $4 | $10 | $60 | $— | $742 |
| Criticized accrual | 15 | 42 | 34 | — | — | — | — | — | 91 |
| Criticized nonaccrual | 1 | — | — | — | — | 1 | — | — | 2 |
| Total residential builder and developer | $396 | $278 | $74 | $12 | $4 | $11 | $60 | $— | $835 |
| Other commercial construction: | |||||||||
| Pass | $108 | $1,395 | $1,091 | $269 | $175 | $379 | $42 | $— | $3,459 |
| Criticized accrual | 42 | 104 | 687 | 346 | 297 | 145 | 3 | — | 1,624 |
| Criticized nonaccrual | — | — | 17 | 33 | — | 16 | — | — | 66 |
| Total other commercial construction | $150 | $1,499 | $1,795 | $648 | $472 | $540 | $45 | $— | $5,149 |
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A summary of loans in accrual and nonaccrual status at December 31, 2024 for the various classes of the Company’s residential real estate loans and consumer loans by origination year follows:
| Term Loans by Origination Year · RevolvingLoans · Revolving Loans Converted to TermLoans · Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) · 2024 · 2023 · 2022 · 2021 · 2020 · Prior | |||||||||
| Residential real estate: | |||||||||
| Current | $2,264 | $1,354 | $4,394 | $3,488 | $2,376 | $7,874 | $103 | $— | $21,853 |
| 30-89 days past due | 12 | 9 | 111 | 77 | 38 | 472 | — | — | 719 |
| Accruing loans past due 90 days or more | 1 | 7 | 39 | 47 | 20 | 201 | — | — | 315 |
| Nonaccrual | — | 2 | 27 | 16 | 5 | 226 | 3 | — | 279 |
| Total residential real estate | $2,277 | $1,372 | $4,571 | $3,628 | $2,439 | $8,773 | $106 | $— | $23,166 |
| Consumer: | |||||||||
| Home equity lines and loans: | |||||||||
| Current | $— | $— | $— | $2 | $2 | $91 | $3,085 | $1,302 | $4,482 |
| 30-89 days past due | — | — | — | — | — | 2 | — | 27 | 29 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | — | — | — |
| Nonaccrual | — | — | — | — | — | 2 | — | 79 | 81 |
| Total home equity lines and loans | $— | $— | $— | $2 | $2 | $95 | $3,085 | $1,408 | $4,592 |
| Recreational finance: | |||||||||
| Current | $3,918 | $2,203 | $2,044 | $1,661 | $1,100 | $1,503 | $— | $— | $12,429 |
| 30-89 days past due | 13 | 18 | 15 | 20 | 15 | 23 | — | — | 104 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | — | — | — |
| Nonaccrual | 3 | 6 | 6 | 5 | 4 | 7 | — | — | 31 |
| Total recreational finance | $3,934 | $2,227 | $2,065 | $1,686 | $1,119 | $1,533 | $— | $— | $12,564 |
| Automobile: | |||||||||
| Current | $2,264 | $775 | $740 | $632 | $220 | $93 | $— | $— | $4,724 |
| 30-89 days past due | 11 | 13 | 13 | 12 | 5 | 4 | — | — | 58 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | — | — | — |
| Nonaccrual | 2 | 2 | 3 | 2 | 1 | 2 | — | — | 12 |
| Total automobile | $2,277 | $790 | $756 | $646 | $226 | $99 | $— | $— | $4,794 |
| Other: | |||||||||
| Current | $259 | $152 | $102 | $71 | $16 | $18 | $1,515 | $1 | $2,134 |
| 30-89 days past due | 4 | 2 | 1 | 1 | — | — | 14 | 1 | 23 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | 8 | — | 8 |
| Nonaccrual | 2 | 1 | 1 | — | — | — | 51 | — | 55 |
| Total other | $265 | $155 | $104 | $72 | $16 | $18 | $1,588 | $2 | $2,220 |
| Total loans at December 31, 2024 | $19,234 | $15,083 | $17,786 | $11,704 | $8,328 | $28,783 | $33,120 | $1,543 | $135,581 |
- 18 -
Allowance for loan losses
For purposes of determining the level of the allowance for loan losses, the Company evaluates its portfolio by loan type. Changes in the allowance for loan losses and the reserve for unfunded credit commitments for the three-month and nine-month periods ended September 30, 2025 and 2024 were as follows:
| Allowance for Loan Losses | ||||||
|---|---|---|---|---|---|---|
| Commercial and Industrial · Real Estate · Reserve for Unfunded Credit Commitments (a) | ||||||
| (Dollars in millions) · Commercial · Residential · Consumer · Total | ||||||
| Beginning balance | $793 | $544 | $110 | $750 | $2,197 | $80 |
| Provision for credit losses | 82 | (47) | (3) | 78 | 110 | 15 |
| Net charge-offs: | ||||||
| Charge-offs | (89) | (22) | (1) | (78) | (190) | — |
| Recoveries | 17 | 1 | 1 | 25 | 44 | — |
| Net charge-offs | (72) | (21) | — | (53) | (146) | — |
| Ending balance | $803 | $476 | $107 | $775 | $2,161 | $95 |
| Beginning balance | $790 | $658 | $110 | $646 | $2,204 | $60 |
| Provision for credit losses | 52 | 1 | (5) | 72 | 120 | — |
| Net charge-offs: | ||||||
| Charge-offs | (64) | (24) | (1) | (65) | (154) | — |
| Recoveries | 14 | 4 | 1 | 15 | 34 | — |
| Net charge-offs | (50) | (20) | — | (50) | (120) | — |
| Ending balance | $792 | $639 | $105 | $668 | $2,204 | $60 |
| Beginning balance | $769 | $599 | $108 | $708 | $2,184 | $60 |
|---|---|---|---|---|---|---|
| Provision for credit losses | 173 | (60) | (1) | 233 | 345 | 35 |
| Net charge-offs: | ||||||
| Charge-offs | (196) | (69) | (4) | (237) | (506) | — |
| Recoveries | 57 | 6 | 4 | 71 | 138 | — |
| Net charge-offs | (139) | (63) | — | (166) | (368) | — |
| Ending balance | $803 | $476 | $107 | $775 | $2,161 | $95 |
| Beginning balance | $620 | $764 | $116 | $629 | $2,129 | $60 |
| Provision for credit losses | 365 | (60) | (11) | 176 | 470 | — |
| Net charge-offs: | ||||||
| Charge-offs | (220) | (92) | (4) | (181) | (497) | — |
| Recoveries | 27 | 27 | 4 | 44 | 102 | — |
| Net charge-offs | (193) | (65) | — | (137) | (395) | — |
| Ending balance | $792 | $639 | $105 | $668 | $2,204 | $60 |
(a)Further information about unfunded credit commitments is included in note 14.
- 19 -
Despite the allocation in the preceding tables, the allowance for loan losses is general in nature and is available to absorb losses from any loan or lease type. In determining the allowance for loan 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 September 30, 2025 and December 31, 2024, 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. In determining the allowance for loan losses, the Company may adjust forecasted loss estimates for inherent limitations or biases in the models as well as for other factors that may not be adequately considered in its quantitative methodologies including the impact of portfolio concentrations, imprecision in its economic forecasts, geopolitical conditions and other risk factors that might influence its loss estimation process.
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 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 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 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, 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 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 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 loan losses, the Company gives consideration to the required repayment of any first lien positions related to collateral property. Other consumer loans are generally charged-off when the loans are 91 to 180 days past due, depending on whether the loan is collateralized and the status of repossession activities with respect to such collateral.
Changes in the amount of the allowance for loan 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.
- 20 -
Information with respect to loans that were considered nonaccrual at the beginning and end of the reporting period and the interest income recognized on such loans for the three-month and nine-month periods ended September 30, 2025 and 2024 follows:
| Amortized Cost with Allowance · Amortized Cost without Allowance · Total · Amortized Cost · Interest Income Recognized | |||||||
|---|---|---|---|---|---|---|---|
| (Dollars in millions) · September 30, 2025 · June 30, 2025 · January 1, 2025 · Three MonthsEndedSeptember 30,2025 · Nine MonthsEndedSeptember 30,2025 | |||||||
| Commercial and industrial | $652 | $108 | $760 | $787 | $696 | $8 | $20 |
| Real estate: | |||||||
| Commercial | 217 | 144 | 361 | 376 | 468 | 11 | 28 |
| Residential builder and developer | — | — | — | 1 | 2 | — | — |
| Other commercial construction | 13 | 8 | 21 | 23 | 66 | 2 | 2 |
| Residential | 105 | 145 | 250 | 265 | 279 | 4 | 11 |
| Consumer: | |||||||
| Home equity lines and loans | 37 | 40 | 77 | 75 | 81 | 2 | 6 |
| Recreational finance | 20 | 9 | 29 | 25 | 31 | — | — |
| Automobile | 8 | 2 | 10 | 9 | 12 | — | — |
| Other | 4 | — | 4 | 12 | 55 | — | — |
| Total | $1,056 | $456 | $1,512 | $1,573 | $1,690 | $27 | $67 |
| September 30, 2024 · June 30, 2024 · January 1, 2024 · Three MonthsEndedSeptember 30,2024 · Nine MonthsEndedSeptember 30,2024 | |||||||
| Commercial and industrial | $610 | $200 | $810 | $805 | $670 | $5 | $14 |
| Real estate: | |||||||
| Commercial | 348 | 230 | 578 | 707 | 869 | 5 | 31 |
| Residential builder and developer | 2 | — | 2 | 2 | 3 | 1 | 1 |
| Other commercial construction | 21 | 63 | 84 | 77 | 171 | — | 3 |
| Residential | 135 | 141 | 276 | 260 | 270 | 4 | 11 |
| Consumer: | |||||||
| Home equity lines and loans | 39 | 43 | 82 | 79 | 81 | 2 | 4 |
| Recreational finance | 17 | 11 | 28 | 25 | 36 | — | — |
| Automobile | 8 | 3 | 11 | 11 | 14 | — | — |
| Other | 55 | — | 55 | 58 | 52 | — | — |
| Total | $1,235 | $691 | $1,926 | $2,024 | $2,166 | $17 | $64 |
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Loan modifications
During the normal course of business, the Company modifies loans to maximize recovery efforts from borrowers experiencing financial difficulty. Such loan modifications typically include extensions of maturity dates but may also include other 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 and nine-month periods ended September 30, 2025 and 2024:
| Amortized Cost | |||||
|---|---|---|---|---|---|
| (Dollars in millions) | Term Extension | Other (a) | Combination of Modification Types (b) | Total (c) (d) | Percent of Total Loan Class |
| Commercial and industrial | $12 | $85 | $3 | $100 | .16% |
| Real estate: | |||||
| Commercial | 130 | — | 26 | 156 | .77 |
| Residential builder and developer | — | — | — | — | — |
| Other commercial construction | 52 | — | — | 52 | 1.33 |
| Residential | 36 | — | 10 | 46 | .18 |
| Consumer: | |||||
| Home equity lines and loans | — | — | 1 | 1 | — |
| Recreational finance | 1 | — | — | 1 | — |
| Automobile | — | — | — | — | — |
| Other | — | — | — | — | — |
| Total | $231 | $85 | $40 | $356 | .26% |
| Commercial and industrial | $104 | $90 | $81 | $275 | .44% |
| Real estate: | |||||
| Commercial | 324 | — | 26 | 350 | 1.74 |
| Residential builder and developer | — | — | — | — | — |
| Other commercial construction | 272 | — | — | 272 | 6.98 |
| Residential | 100 | 4 | 22 | 126 | .51 |
| Consumer: | |||||
| Home equity lines and loans | — | — | 1 | 1 | .02 |
| Recreational finance | 1 | — | — | 1 | — |
| Automobile | — | — | — | — | — |
| Other | 10 | — | — | 10 | .43 |
| Total | $811 | $94 | $130 | $1,035 | .76% |
(a)Primarily payment deferrals.
(b)Primarily term extensions combined with payment deferrals or interest rate reductions.
(c)Includes approximately $40 million and $109 million of loans guaranteed by government-related entities (predominantly first lien residential mortgage loans) for the three-month and nine-month periods ended September 30, 2025, respectively.
(d)Excludes unfunded commitments to extend credit totaling $53 million and $89 million for the three-month and nine-month periods ended September 30, 2025, respectively.
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| Amortized Cost | |||||
|---|---|---|---|---|---|
| (Dollars in millions) | Term Extension | Other (a) | Combination of Modification Types (b) | Total (c) (d) | Percent of Total Loan Class |
| Commercial and industrial | $92 | $23 | $2 | $117 | .19% |
| Real estate: | |||||
| Commercial | 163 | 1 | — | 164 | .73 |
| Residential builder and developer | 2 | — | — | 2 | .17 |
| Other commercial construction | 2 | — | — | 2 | .03 |
| Residential | 36 | 5 | 4 | 45 | .20 |
| Consumer: | |||||
| Home equity lines and loans | — | — | — | — | — |
| Recreational finance | — | — | — | — | — |
| Automobile | — | — | — | — | — |
| Other | — | — | — | — | — |
| Total | $295 | $29 | $6 | $330 | .24% |
| Commercial and industrial | $190 | $78 | $2 | $270 | .44% |
| Real estate: | |||||
| Commercial | 420 | 1 | 4 | 425 | 1.90 |
| Residential builder and developer | 13 | — | — | 13 | 1.27 |
| Other commercial construction | 139 | — | — | 139 | 2.62 |
| Residential | 128 | 12 | 6 | 146 | .63 |
| Consumer: | |||||
| Home equity lines and loans | 1 | — | 1 | 2 | .04 |
| Recreational finance | 1 | — | — | 1 | .01 |
| Automobile | — | — | — | — | — |
| Other | — | — | — | — | — |
| Total | $892 | $91 | $13 | $996 | .73% |
(a)Predominantly payment deferrals.
(b)Predominantly term extensions combined with interest rate reductions.
(c)Includes approximately $33 million and $117 million of loans guaranteed by government-related entities (predominantly first lien residential mortgage loans) for the three-month and nine-month periods ended September 30, 2024, respectively.
(d)Excludes unfunded commitments to extend credit totaling $8 million and $43 million for the three-month and nine-month periods ended September 30, 2024, respectively.
The following table summarizes the financial effects of the modifications on the weighted-average remaining term of modified loans for the three-month and nine-month periods ended September 30, 2025 and 2024.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| (In years) | 2025 | 2024 | 2025 | 2024 |
| Increase to weighted-average remaining term | ||||
| Commercial and industrial | 0.3 | 1.3 | 0.7 | 1.0 |
| Real estate: | ||||
| Commercial (a) | 0.7 | 0.6 | 0.8 | 0.8 |
| Residential | 9.9 | 9.1 | 10.1 | 9.9 |
(a)Inclusive of residential builder and developer loans and other commercial construction loans.
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Modified loans to borrowers experiencing financial difficulty are subject to the allowance for loan losses methodology described herein, including the use of models to inform credit loss estimates and, to the extent larger balance commercial and industrial loans and commercial real estate loans are in nonaccrual status, a loan-by-loan analysis of expected credit losses on those individual loans. The following table summarizes the payment status, at September 30, 2025 and 2024, of loans that were modified during the twelve-month periods ended September 30, 2025 and 2024.
| Payment Status (Amortized Cost) (a) | ||||
|---|---|---|---|---|
| (Dollars in millions) | Current | 30-89 Days Past Due | Past Due 90 Days or More (b) | Total |
| Commercial and industrial | $137 | $60 | $98 | $295 |
| Real estate: | ||||
| Commercial | 328 | 118 | 1 | 447 |
| Residential builder and developer | — | — | — | — |
| Other commercial construction | 337 | — | — | 337 |
| Residential (c) | 76 | 43 | 44 | 163 |
| Consumer: | ||||
| Home equity lines and loans | 1 | — | — | 1 |
| Recreational finance | 1 | — | — | 1 |
| Automobile | 1 | — | — | 1 |
| Other | 10 | — | — | 10 |
| Total | $891 | $221 | $143 | $1,255 |
| Commercial and industrial | $308 | $5 | $4 | $317 |
|---|---|---|---|---|
| Real estate: | ||||
| Commercial | 422 | 84 | 9 | 515 |
| Residential builder and developer | 13 | 1 | — | 14 |
| Other commercial construction | 141 | 74 | — | 215 |
| Residential (c) | 99 | 47 | 37 | 183 |
| Consumer: | ||||
| Home equity lines and loans | 2 | — | — | 2 |
| Recreational finance | 1 | — | — | 1 |
| Automobile | — | — | — | — |
| Other | — | — | — | — |
| Total | $986 | $211 | $50 | $1,247 |
(a) At the respective period end.
(b) Loan modifications predominantly comprised of payment deferrals, term extensions or term extensions combined with payment deferrals.
(c) Includes loans guaranteed by government-related entities classified as 30 to 89 days past due of $37 million and $39 million and as past due 90 days or more of $41 million and $34 million at September 30, 2025 and 2024, respectively.
- 24 -
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.