M&T BANK CORP

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 each of the third and second quarters of 2025. The provision for credit losses included $15 million and $20 million of provision for unfunded credit commitments in the third and second quarters of 2025, respectively. For the nine months ended September 30, 2025 and 2024, the Company recorded a provision for credit losses of $380 million and $470 million, respectively. The lower provision for credit losses in the first nine months of 2025 as compared with the similar 2024 period reflects improved credit performance of commercial real estate loans, partially offset by consumer loan growth.

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

NET CHARGE-OFF (RECOVERY) INFORMATION

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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

(a)Predominantly government-guaranteed residential real estate loans.

Nonaccrual loans decreased $61 million from June 30, 2025 to September 30, 2025 reflecting modest declines in commercial and industrial, commercial real estate and residential real estate nonaccrual loans. As compared with December 31, 2024, the $178 million decline in nonaccrual loans at September 30, 2025 reflects a $154 million, $59 million and $29 million reduction in commercial real estate, consumer and residential real estate nonaccrual loans, respectively. Partially offsetting those declines was a $64 million increase in commercial and industrial nonaccrual loans. Approximately 37% of commercial and industrial and commercial real estate nonaccrual loans were considered current with respect to their payment status at September 30, 2025.

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 $333 million at September 30, 2025, $377 million at June 30, 2025, $224 million at December 31, 2024 and $204 million at September 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.

Approximately 72% of loans 30 to 89 days past due were less than 60 days delinquent at September 30, 2025, compared with 70% at June 30, 2025 and 73% at December 31, 2024. Additional information about past due and nonaccrual loans at September 30, 2025 and December 31, 2024 is included in note 4 of Notes to Financial Statements.

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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 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. During 2025, the Company assessed loans to certain not-for-profit borrowers, government contractors and other commercial borrowers that may be impacted by immigration policies and enforcement, 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. The Company has considered the information gathered in such reviews in its assignment of loan grades.

The Company continues to monitor its commercial real estate loan portfolio. 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 investor-owned real estate has generally 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. 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 estimates of value.

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 128% of Tier 1 capital plus its allowable allowance for credit losses at September 30, 2025, compared with 129% at June 30, 2025, 136% at December 31, 2024 and 148% at September 30, 2024. The Company executed various strategies to lessen its relative concentration of investor-owned commercial real estate loans throughout 2024 and to reduce criticized loans in this category through 2025.

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The accompanying tables summarize the outstanding balances, and associated criticized balances, of commercial and industrial loans by industry and commercial real estate loans by property type, respectively, at September 30, 2025 and December 31, 2024.

CRITICIZED COMMERCIAL AND INDUSTRIAL LOANS

(a)Loans to the financial and insurance industry include credit facilities to investment funds, mortgage lenders, real estate investment trusts and corporate and institutional borrowers. Approximately 93% and 87% of outstanding financial and insurance loans were designated as loans to nondepository financial institutions as prescribed in regulatory guidance for the Company's consolidated financial report for bank holding companies at September 30, 2025 and December 31, 2024, respectively.

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CRITICIZED COMMERCIAL REAL ESTATE LOANS

Loans to financial and insurance companies, motor vehicle and recreational finance dealers and the retail industry contributed to the modest increase in commercial and industrial criticized loans from December 31, 2024 to September 30, 2025, partially offset by lower criticized loans to the health services, manufacturing and transportation, communications and utilities industries. The $2.2 billion decline in commercial real estate criticized loans from December 31, 2024 to September 30, 2025 spanned most property types and also reflected lower criticized construction and development loans. At September 30, 2025, approximately 96% of criticized accrual loans and 37% of criticized nonaccrual loans were considered current with respect to their payment status.

For loans secured by residential real estate, 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 those 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. Information about the location of nonaccrual loans secured by residential real estate at September 30, 2025 is presented in the following table.

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NONACCRUAL LOANS SECURED BY RESIDENTIAL REAL ESTATE

(a)Includes $697 million of limited documentation first lien mortgage loans with nonaccrual loan balances totaling $48 million.

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

(c)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.

Consumer loans not secured by residential real estate 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. A comparative summary of consumer loans in nonaccrual status by product is presented in the following table.

NONACCRUAL CONSUMER LOANS

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Allowance for loan losses

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

In establishing the allowance for loan 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 with similar risk characteristics on a collective basis. For purposes of determining the level of the allowance for loan losses, the Company evaluates its portfolio by loan type. At the time of the Company’s analysis regarding the determination of the allowance for loan losses as of September 30, 2025 concerns existed about the impact of potential inflationary pressures and increases in unemployment on the discretionary income and purchasing power of consumers, which could impact their ability to service existing debt obligations; slower economic growth in future quarters; the volatile nature of global markets and international economic conditions that could impact the U.S. economy, including the effect of international trade policies on domestic businesses and consumers; uncertainty related to Federal Reserve positioning of monetary policy; the potential for a prolonged period of U.S. federal government shutdown; downward pressures on commercial real estate values, especially in the office sector; the persistence of elevated interest rates impacting the ability of commercial borrowers to refinance maturing debt obligations; and the extent to which borrowers may be negatively affected by general economic conditions.

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 at each reporting date 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. 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 economic forecasts, geopolitical conditions and other risk factors that influence the loss estimation process. At each of September 30, 2025, June 30, 2025 and December 31, 2024, the Company qualitatively adjusted credit loss estimates for inherent limitations in the ability to assess real-time changes in commercial borrower performance and for environmental influences affecting certain loan portfolios. Qualitative adjustments, primarily related to portfolio exposures to certain commercial and industrial borrowers and commercial real estate loans, were modestly lower at September 30, 2025 as compared with June 30, 2025 and December 31, 2024.

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 weighted-average of macroeconomic assumptions utilized as of September 30, 2025, June 30, 2025 and December 31, 2024 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 LOAN LOSSES MACROECONOMIC ASSUMPTIONS

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With respect to economic forecasts, the Company assessed the likelihood of alternative economic scenarios during the two-year reasonable and supportable forecast 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 loan losses. Forward-looking economic forecasts are subject to inherent imprecision and future outcomes 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.

ALLOWANCE FOR LOAN LOSSES SENSITIVITIES

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 loan 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 loan 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.

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Management has assessed that the allowance for loan losses at September 30, 2025 appropriately reflected expected credit losses in the portfolio as of that date. A summary of the Company's allowance for loan losses by loan type and its reserve for unfunded credit commitments is presented in the following table.

ALLOWANCE FOR LOAN LOSSES AND RESERVE FOR UNFUNDED CREDIT COMMITMENTS

(a)Included in the allowance for loan losses were reserves allocated as a percent of commercial real estate loans secured by office properties of 4.65% at September 30, 2025, 4.54% at June 30, 2025 and 4.70% at December 31, 2024.

(b)Given the Company’s general position as a secured lender and its practice of charging off loan balances when collection is deemed doubtful, this ratio and changes in the ratio are generally not an indicative measure of the adequacy of the Company’s allowance for loan losses, nor does management rely upon this ratio in assessing the adequacy of the Company’s allowance for loan losses.

(c)Included in Accrued interest and other liabilities in the Consolidated Balance Sheet.

The lower ratio of the allowance for loan losses as a percent of loans outstanding at September 30, 2025 as compared with June 30, 2025 and December 31, 2024, reflects lower levels of criticized commercial real estate loans. The level of the allowance reflects management’s evaluation of the loan 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 loan losses change and should management’s assessment of losses in the loan portfolio also change, the level of the allowance as a percent of loans could increase or decrease in future periods. The reported level of the allowance for loan losses reflects management’s evaluation of the loan portfolio as of each respective date.