M&T BANK CORP
For the period ended Dec 31, 2025. Filed Feb 18, 2026.
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FY2025 · Filed Feb 18, 2026
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4. Loans and
- Loans and allowance for loan losses
A summary of current, past due and nonaccrual loans as of December 31, 2025 and 2024 follows:
| (Dollars in millions) | Current | 30-89 DaysPast Due | AccruingLoans PastDue 90Days orMore | Nonaccrual | Total (a) (b) |
|---|---|---|---|---|---|
| Commercial and industrial | $62,626 | $390 | $5 | $527 | $63,548 |
| Real estate: | |||||
| Commercial (c) | 19,505 | 364 | 3 | 320 | 20,192 |
| Residential builder and developer (d) | 69 | — | — | — | 69 |
| Other commercial construction | 3,436 | 109 | — | 13 | 3,558 |
| Residential (e) | 23,410 | 657 | 543 | 264 | 24,874 |
| Consumer: | |||||
| Home equity lines and loans | 4,690 | 35 | — | 82 | 4,807 |
| Recreational finance | 13,946 | 116 | — | 30 | 14,092 |
| Automobile | 5,097 | 59 | — | 11 | 5,167 |
| Other | 2,357 | 23 | 10 | 5 | 2,395 |
| Total | $135,136 | $1,753 | $561 | $1,252 | $138,702 |
| 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 $276 million and $277 million at December 31, 2025 and 2024, respectively.
(b)Balances exclude accrued interest receivable of $627 million and $628 million at December 31, 2025 and 2024, respectively, which is included in Accrued interest and other assets in the Consolidated Balance Sheet.
(c)Commercial real estate loans held for sale were $484 million at December 31, 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.
(e)Residential real estate loans held for sale were $441 million at December 31, 2025 and $211 million at December 31, 2024.
The amount of foreclosed property held by the Company, generally consisting of real estate and other assets, was $35 million at each of December 31, 2025 and 2024. There were $182 million and $173 million at December 31, 2025 and 2024, respectively, of loans secured by residential real estate that were in the process of foreclosure. At December 31, 2025, approximately 53% of those residential real estate loans in the process of foreclosure were government guaranteed.
Borrowings by directors and certain officers of M&T and its banking subsidiaries, and by associates of such persons, exclusive of loans aggregating less than $60,000, amounted to $64 million and $50 million at December 31, 2025 and 2024, respectively. During 2025, new borrowings by such persons amounted to $15 million (including any borrowings of new directors or officers that were outstanding at the time of their election) and repayments and other reductions (including reductions resulting from individuals ceasing to be directors or officers) were $1 million.
At December 31, 2025, approximately $20.7 billion of commercial and industrial loans, $13.4 billion of commercial real estate loans, $19.5 billion of one-to-four family residential real estate loans, $3.0 billion of home equity loans and lines of credit and $15.2 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 8 and 18, loans totaling $2.1 billion and $1.5 billion at December 31, 2025 and 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. Loans with a lower expectation of default are assigned one of ten possible "pass" loan grades and are generally ascribed lower loss factors when determining the allowance for loan losses. Loans with an elevated level of credit risk are designated as "criticized" and are ascribed a higher loss factor when determining the allowance for loan losses. Criticized loans may be designated as "nonaccrual" if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more.
Line of business personnel in different geographic locations with support from and review by the Company’s credit risk personnel review and reassign loan grades based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. Factors considered in assigning loan grades include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information. The Company’s policy is that, at least annually, updated financial information be obtained from commercial borrowers associated with pass grade loans and additional analysis performed. On a quarterly basis, the Company’s credit personnel reviews 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.
The following table summarizes the loan grades applied at December 31, 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 year then ended 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 | $9,462 | $6,640 | $4,075 | $4,086 | $2,203 | $5,059 | $28,124 | $95 | $59,744 |
| Criticized accrual | 216 | 337 | 479 | 390 | 116 | 348 | 1,355 | 36 | 3,277 |
| Criticized nonaccrual | 8 | 49 | 72 | 65 | 25 | 155 | 136 | 17 | 527 |
| Total commercial and industrial | $9,686 | $7,026 | $4,626 | $4,541 | $2,344 | $5,562 | $29,615 | $148 | $63,548 |
| Gross charge-offs year ended December 31, 2025 | $9 | $39 | $41 | $26 | $8 | $22 | $164 | $— | $309 |
| Real estate: | |||||||||
| Commercial: | |||||||||
| Pass | $3,757 | $400 | $1,535 | $1,681 | $1,121 | $8,970 | $367 | $— | $17,831 |
| Criticized accrual | — | 29 | 283 | 244 | 80 | 1,404 | 1 | — | 2,041 |
| Criticized nonaccrual | 24 | — | 4 | 25 | 49 | 218 | — | — | 320 |
| Total commercial real estate | $3,781 | $429 | $1,822 | $1,950 | $1,250 | $10,592 | $368 | $— | $20,192 |
| Gross charge-offs year ended December 31, 2025 | $44 | $— | $— | $16 | $— | $48 | $— | $— | $108 |
| Residential builder and developer: | |||||||||
| Pass | $9 | $1 | $2 | $2 | $— | $5 | $38 | $— | $57 |
| Criticized accrual | — | — | — | 12 | — | — | — | — | 12 |
| Criticized nonaccrual | — | — | — | — | — | — | — | — | — |
| Total residential builder and developer | $9 | $1 | $2 | $14 | $— | $5 | $38 | $— | $69 |
| Gross charge-offs year ended December 31, 2025 | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| Other commercial construction: | |||||||||
| Pass | $313 | $221 | $1,031 | $606 | $63 | $198 | $45 | $— | $2,477 |
| Criticized accrual | — | 8 | 251 | 493 | 136 | 174 | 6 | — | 1,068 |
| Criticized nonaccrual | — | — | — | 8 | 1 | 4 | — | — | 13 |
| Total other commercial construction | $313 | $229 | $1,282 | $1,107 | $200 | $376 | $51 | $— | $3,558 |
| Gross charge-offs year ended December 31, 2025 | $— | $— | $— | $7 | $— | $— | $— | $— | $7 |
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 December 31, 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 year then ended 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 | $3,769 | $1,797 | $1,188 | $4,040 | $3,433 | $9,056 | $127 | $— | $23,410 |
| 30-89 days past due | 10 | 11 | 19 | 117 | 93 | 407 | — | — | 657 |
| Accruing loans past due 90 days or more | 1 | 8 | 21 | 126 | 90 | 297 | — | — | 543 |
| Nonaccrual | — | 4 | 3 | 40 | 19 | 197 | 1 | — | 264 |
| Total residential real estate | $3,780 | $1,820 | $1,231 | $4,323 | $3,635 | $9,957 | $128 | $— | $24,874 |
| Gross charge-offs year ended December 31, 2025 | $— | $— | $— | $1 | $— | $4 | $— | $— | $5 |
| Consumer: | |||||||||
| Home equity lines and loans: | |||||||||
| Current | $— | $— | $— | $— | $1 | $76 | $3,362 | $1,251 | $4,690 |
| 30-89 days past due | — | — | — | — | — | 2 | — | 33 | 35 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | — | — | — |
| Nonaccrual | — | — | — | — | — | 2 | 1 | 79 | 82 |
| Total home equity lines and loans | $— | $— | $— | $— | $1 | $80 | $3,363 | $1,363 | $4,807 |
| Gross charge-offs year ended December 31, 2025 | $— | $— | $— | $— | $— | $— | $— | $4 | $4 |
| Recreational finance: | |||||||||
| Current | $4,081 | $3,052 | $1,729 | $1,673 | $1,345 | $2,066 | $— | $— | $13,946 |
| 30-89 days past due | 10 | 20 | 25 | 17 | 15 | 29 | — | — | 116 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | — | — | — |
| Nonaccrual | 2 | 5 | 6 | 4 | 4 | 9 | — | — | 30 |
| Total recreational finance | $4,093 | $3,077 | $1,760 | $1,694 | $1,364 | $2,104 | $— | $— | $14,092 |
| Gross charge-offs year ended December 31, 2025 | $8 | $26 | $29 | $27 | $23 | $38 | $— | $— | $151 |
| Automobile: | |||||||||
| Current | $1,933 | $1,690 | $561 | $473 | $336 | $104 | $— | $— | $5,097 |
| 30-89 days past due | 8 | 17 | 13 | 10 | 7 | 4 | — | — | 59 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | — | — | — |
| Nonaccrual | 2 | 3 | 1 | 2 | 2 | 1 | — | — | 11 |
| Total automobile | $1,943 | $1,710 | $575 | $485 | $345 | $109 | $— | $— | $5,167 |
| Gross charge-offs year ended December 31, 2025 | $4 | $16 | $9 | $10 | $5 | $3 | $— | $— | $47 |
| Other: | |||||||||
| Current | $312 | $155 | $89 | $56 | $42 | $22 | $1,680 | $1 | $2,357 |
| 30-89 days past due | 3 | 2 | 1 | 1 | — | — | 15 | 1 | 23 |
| Accruing loans past due 90 days or more | — | — | — | — | — | — | 10 | — | 10 |
| Nonaccrual | 2 | 1 | 1 | — | — | 1 | — | — | 5 |
| Total other | $317 | $158 | $91 | $57 | $42 | $23 | $1,705 | $2 | $2,395 |
| Gross charge-offs year ended December 31, 2025 | $18 | $13 | $9 | $4 | $1 | $1 | $69 | $— | $115 |
| Total loans at December 31, 2025 | $23,922 | $14,450 | $11,389 | $14,171 | $9,181 | $28,808 | $35,268 | $1,513 | $138,702 |
| Total gross charge-offs for the year ended December 31, 2025 | $83 | $94 | $88 | $91 | $37 | $116 | $233 | $4 | $746 |
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 and gross charge-offs for those types of loans for the year then ended by origination year.
| Term Loans by Origination Year · RevolvingLoans · Revolving Loans Converted to Term Loans · Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) · 2024 · 2023 · 2022 · 2021 · 2020 · Prior | |||||||||
| 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 |
| Gross charge-offs year ended December 31, 2024 | $7 | $33 | $60 | $23 | $30 | $37 | $126 | $— | $316 |
| 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 |
| Gross charge-offs year ended December 31, 2024 | $— | $4 | $— | $1 | $5 | $104 | $— | $— | $114 |
| 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 |
| Gross charge-offs year ended December 31, 2024 | $— | $— | $— | $— | $— | $3 | $— | $— | $3 |
| 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 |
| Gross charge-offs year ended December 31, 2024 | $— | $— | $2 | $— | $— | $13 | $2 | $— | $17 |
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 and gross charge-offs for those types of loans for the year then ended by origination year follows.
| Term Loans by Origination Year · RevolvingLoans · Revolving Loans Converted to Term Loans | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions) · 2024 · 2023 · 2022 · 2021 · 2020 · Prior · Total | |||||||||
| 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 |
| Gross charge-offs year ended December 31, 2024 | $— | $— | $— | $— | $— | $6 | $— | $— | $6 |
| 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 |
| Gross charge-offs year ended December 31, 2024 | $— | $— | $— | $— | $— | $— | $— | $4 | $4 |
| 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 |
| Gross charge-offs year ended December 31, 2024 | $8 | $20 | $24 | $20 | $16 | $27 | $— | $— | $115 |
| 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 |
| Gross charge-offs year ended December 31, 2024 | $3 | $9 | $9 | $7 | $3 | $3 | $— | $— | $34 |
| 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 |
| Gross charge-offs year ended December 31, 2024 | $16 | $11 | $9 | $5 | $1 | $2 | $60 | $— | $104 |
| Total loans at December 31, 2024 | $19,234 | $15,083 | $17,786 | $11,704 | $8,328 | $28,783 | $33,120 | $1,543 | $135,581 |
| Total gross charge-offs for the year ended December 31, 2024 | $34 | $77 | $104 | $56 | $55 | $195 | $188 | $4 | $713 |
For purposes of determining the level of the allowance for loan losses, the Company evaluates its portfolios by loan type. Changes in the allowance for loan losses and the reserve for unfunded credit commitments for the years ended December 31, 2025, 2024 and 2023 were as follows:
| Allowance for Loan Losses · Reserve for Unfunded Credit Commitments (a) | ||||||
|---|---|---|---|---|---|---|
| Commercialand Industrial · Real Estate · Consumer · Total | ||||||
| (Dollars in millions) · Commercial · Residential | ||||||
| Beginning balance | $769 | $599 | $108 | $708 | $2,184 | $60 |
| Provision for credit losses | 237 | (34) | (8) | 290 | 485 | 20 |
| Net charge-offs: | ||||||
| Charge-offs | (309) | (115) | (5) | (317) | (746) | — |
| Recoveries | 74 | 22 | 5 | 92 | 193 | — |
| Net charge-offs | (235) | (93) | — | (225) | (553) | — |
| Ending balance | $771 | $472 | $100 | $773 | $2,116 | $80 |
| Beginning balance | $620 | $764 | $116 | $629 | $2,129 | $60 |
| Provision for credit losses | 429 | (89) | (8) | 278 | 610 | — |
| Net charge-offs: | ||||||
| Charge-offs | (316) | (134) | (6) | (257) | (713) | — |
| Recoveries | 36 | 58 | 6 | 58 | 158 | — |
| Net charge-offs | (280) | (76) | — | (199) | (555) | — |
| Ending balance | $769 | $599 | $108 | $708 | $2,184 | $60 |
| Beginning balance | $568 | $611 | $115 | $631 | $1,925 | $60 |
| Provision for credit losses | 132 | 394 | 4 | 115 | 645 | — |
| Net charge-offs: | ||||||
| Charge-offs | (132) | (253) | (10) | (175) | (570) | — |
| Recoveries | 52 | 12 | 7 | 58 | 129 | — |
| Net charge-offs | (80) | (241) | (3) | (117) | (441) | — |
| Ending balance | $620 | $764 | $116 | $629 | $2,129 | $60 |
(a)Further information about unfunded credit commitments is included in note 20.
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 evaluated collectively, generally through the use of statistically developed credit models or other quantitative methodologies. The statistically developed models project principal balances over the remaining contractual lives of the loan portfolios and 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 December 31, 2025 and 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.
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.
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 years ended December 31, 2025, 2024 and 2023 follows.
| Amortized Cost with Allowance | Amortized Cost without Allowance | Total | Amortized Cost | Interest Income Recognized | |
|---|---|---|---|---|---|
| (Dollars in millions) · December 31, 2025 · January 1, 2025 · Year Ended December 31, 2025 | |||||
| Commercial and industrial | $443 | $84 | $527 | $696 | $28 |
| Real estate: | |||||
| Commercial | 215 | 105 | 320 | 468 | 33 |
| Residential builder and developer | — | — | — | 2 | — |
| Other commercial construction | 5 | 8 | 13 | 66 | 3 |
| Residential | 116 | 148 | 264 | 279 | 15 |
| Consumer: | |||||
| Home equity lines and loans | 41 | 41 | 82 | 81 | 7 |
| Recreational finance | 20 | 10 | 30 | 31 | 1 |
| Automobile | 9 | 2 | 11 | 12 | — |
| Other | 5 | — | 5 | 55 | — |
| Total | $854 | $398 | $1,252 | $1,690 | $87 |
| December 31, 2024 · January 1, 2024 · Year Ended December 31, 2024 | |||||
| Commercial and industrial | $516 | $180 | $696 | $670 | $23 |
| Real estate: | |||||
| Commercial | 328 | 140 | 468 | 869 | 43 |
| Residential builder and developer | 2 | — | 2 | 3 | 1 |
| Other commercial construction | 60 | 6 | 66 | 171 | 4 |
| Residential | 137 | 142 | 279 | 270 | 15 |
| Consumer: | |||||
| Home equity lines and loans | 36 | 45 | 81 | 81 | 6 |
| Recreational finance | 21 | 10 | 31 | 36 | — |
| Automobile | 9 | 3 | 12 | 14 | — |
| Other | 54 | 1 | 55 | 52 | — |
| Total | $1,163 | $527 | $1,690 | $2,166 | $92 |
| December 31, 2023 · January 1, 2023 · Year Ended December 31, 2023 | |||||
| Commercial and industrial | $397 | $273 | $670 | $504 | $22 |
| Real estate: | |||||
| Commercial | 288 | 581 | 869 | 1,240 | 29 |
| Residential builder and developer | 3 | — | 3 | 1 | — |
| Other commercial construction | 71 | 100 | 171 | 125 | 2 |
| Residential | 100 | 170 | 270 | 350 | 17 |
| Consumer: | |||||
| Home equity lines and loans | 42 | 39 | 81 | 85 | 7 |
| Recreational finance | 24 | 12 | 36 | 45 | 1 |
| Automobile | 9 | 5 | 14 | 40 | — |
| Other | 52 | — | 52 | 49 | — |
| Total | $986 | $1,180 | $2,166 | $2,439 | $78 |
Loan modifications
The table that follows summarizes the Company’s loan modification activities to borrowers experiencing financial difficulty for the years ended December 31, 2025, 2024 and 2023.
| Amortized Cost (a) | |||||
|---|---|---|---|---|---|
| (Dollars in millions) | Term Extension | Other (b) | Combination of ModificationTypes (c) | Total (d) (e) | Percent of Total Loan Class |
| Commercial and industrial | $171 | $15 | $38 | $224 | .35% |
| Real estate: | |||||
| Commercial | 436 | 3 | 39 | 478 | 2.37 |
| Residential builder and developer | 4 | — | — | 4 | 5.30 |
| Other commercial construction | 340 | — | — | 340 | 9.57 |
| Residential | 154 | 6 | 33 | 193 | .78 |
| Consumer: | |||||
| Home equity lines and loans | — | — | 1 | 1 | .01 |
| Recreational finance | 1 | — | — | 1 | — |
| Automobile | 1 | — | — | 1 | .01 |
| Other | 10 | — | — | 10 | .40 |
| Total | $1,117 | $24 | $111 | $1,252 | .90% |
| Commercial and industrial | $212 | $84 | $7 | $303 | .49% |
| Real estate: | |||||
| Commercial | 509 | 2 | 4 | 515 | 2.48 |
| Residential builder and developer | 2 | — | — | 2 | .29 |
| Other commercial construction | 130 | — | — | 130 | 2.53 |
| Residential | 146 | 14 | 17 | 177 | .76 |
| Consumer: | |||||
| Home equity lines and loans | 1 | — | 1 | 2 | .04 |
| Recreational finance | 1 | — | — | 1 | .01 |
| Automobile | — | — | — | — | — |
| Other | — | — | — | — | — |
| Total | $1,001 | $100 | $29 | $1,130 | .83% |
| Commercial and industrial | $169 | $27 | $2 | $198 | .35% |
| Real estate: | |||||
| Commercial | 610 | — | 41 | 651 | 2.57 |
| Residential builder and developer | 69 | 2 | — | 71 | 6.63 |
| Other commercial construction | 480 | — | 8 | 488 | 7.34 |
| Residential | 148 | 23 | 6 | 177 | .76 |
| Consumer: | |||||
| Home equity lines and loans | — | — | 1 | 1 | .03 |
| Recreational finance | — | — | — | — | — |
| Automobile | — | — | — | — | — |
| Other | — | — | — | — | — |
| Total | $1,476 | $52 | $58 | $1,586 | 1.18% |
(a)As of the respective year end.
(b)Primarily payment deferrals or interest rate reductions.
(c)Primarily term extensions combined with payment deferrals or interest rate reductions.
(d)Includes approximately $165 million, $143 million and $124 million of loans guaranteed by government-related entities (primarily first lien residential mortgage loans) at December 31, 2025, 2024 and 2023, respectively.
(e)Excludes unfunded commitments to extend credit totaling $55 million, $69 million and $128 million at December 31, 2025, 2024 and 2023, respectively.
The following table summarizes the payment status, at December 31, 2025, 2024 and 2023, of loans to borrowers experiencing financial difficulty that were modified during 2025, 2024 and 2023.
| Amortized Cost (a) | ||||
|---|---|---|---|---|
| (Dollars in millions) | Current | 30-89 Days Past Due | Past Due 90 Days or More (b) | Total |
| Commercial and industrial | $184 | $5 | $35 | $224 |
| Real estate: | ||||
| Commercial | 363 | 102 | 13 | 478 |
| Residential builder and developer | 4 | — | — | 4 |
| Other commercial construction | 339 | — | 1 | 340 |
| Residential (c) | 107 | 43 | 43 | 193 |
| Consumer: | ||||
| Home equity lines and loans | 1 | — | — | 1 |
| Recreational finance | 1 | — | — | 1 |
| Automobile | 1 | — | — | 1 |
| Other | 10 | — | — | 10 |
| Total | $1,010 | $150 | $92 | $1,252 |
| Commercial and industrial | $276 | $14 | $13 | $303 |
|---|---|---|---|---|
| Real estate: | ||||
| Commercial | 478 | 37 | — | 515 |
| Residential builder and developer | 1 | — | 1 | 2 |
| Other commercial construction | 101 | 25 | 4 | 130 |
| Residential (c) | 94 | 41 | 42 | 177 |
| Consumer: | ||||
| Home equity lines and loans | 2 | — | — | 2 |
| Recreational finance | 1 | — | — | 1 |
| Automobile | — | — | — | — |
| Other | — | — | — | — |
| Total | $953 | $117 | $60 | $1,130 |
| Commercial and industrial | $182 | $7 | $9 | $198 |
|---|---|---|---|---|
| Real estate: | ||||
| Commercial | 618 | 21 | 12 | 651 |
| Residential builder and developer | 71 | — | — | 71 |
| Other commercial construction | 440 | 48 | — | 488 |
| Residential (c) | 102 | 47 | 28 | 177 |
| Consumer: | ||||
| Home equity lines and loans | 1 | — | — | 1 |
| Recreational finance | — | — | — | — |
| Automobile | — | — | — | — |
| Other | — | — | — | — |
| Total | $1,414 | $123 | $49 | $1,586 |
(a)As of the respective year end.
(b)Predominantly loan modifications of term extensions or term extensions combined with interest rate reductions.
(c)Includes loans guaranteed by government-related entities classified as 30-89 days past due of $37 million, $34 million and $40 million and as past due 90 days or more of $39 million, $36 million and $24 million at December 31, 2025, 2024 and 2023, respectively.
The following table summarizes the financial effects of the modifications on the weighted-average remaining term of modified loans for the years ended December 31, 2025, 2024 and 2023.
| Year Ended December 31, | |||
|---|---|---|---|
| (In years) | 2025 | 2024 | 2023 |
| Increase to weighted-average remaining term | |||
| Commercial and industrial | 0.9 | 0.9 | 1.3 |
| Real estate: | |||
| Commercial (a) | 1.0 | 1.0 | 1.1 |
| Residential | 10.3 | 10.4 | 10.6 |
(a)Inclusive of residential builder and developer loans and other commercial construction loans.
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.
Leases
The Company provides financing and operating lease arrangements to commercial customers for construction and industrial equipment and machinery, railroad cars, commercial trucks and trailers, aircraft and other assets. Certain leases contain payment schedules that are tied to variable interest rate indices. In general, early termination options are provided if the lessee is not in default, returns the leased equipment and pays an early termination fee. Additionally, options to purchase the underlying asset by the lessee are generally at the fair market value of the equipment.
Commercial lease financing receivables are included in Loans in the Company's Consolidated Balance Sheet. Interest income recognized on finance lease receivables was $171 million, $158 million and $136 million in 2025, 2024 and 2023, respectively. A summary of commercial lease financing receivables follows.
| December 31, | ||
|---|---|---|
| (Dollars in millions) | 2025 | 2024 |
| Lease payments receivable | $2,798 | $2,751 |
| Estimated residual value of leased assets (a) | 316 | 339 |
| Amounts representing interest | (367) | (349) |
| Total | $2,747 | $2,741 |
(a)Includes $75 million and $89 million in residual values that are guaranteed by the lessees or others at December 31, 2025 and 2024, respectively.
Leased assets provided to customers under operating lease arrangements, net of accumulated depreciation, were $184 million at December 31, 2025 and $204 million at December 31, 2024, and were included in Accrued interest and other assets in the Company's Consolidated Balance Sheet. The Company, as a lessor, recognized operating lease income, inclusive of gains and losses on the disposal of leased assets, of $48 million, $44 million and $56 million for the years ended December 31, 2025, 2024 and 2023, respectively, in Other revenues from operations in the Consolidated Statement of Income.
At December 31, 2025, the minimum future lease payments to be received from lessor receivable arrangements were as follows:
| (Dollars in millions) | Financing Leases | Operating Leases |
|---|---|---|
| Year ending December 31: | ||
| 2026 | $965 | $36 |
| 2027 | 733 | 30 |
| 2028 | 513 | 24 |
| 2029 | 332 | 15 |
| 2030 | 145 | 11 |
| Later years | 110 | 12 |
| $2,798 | $128 | |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.