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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Capitalized servicing assets
- Capitalized servicing assets
Changes in capitalized servicing assets were as follows:
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| Residential Mortgage Loans (a) | Commercial Mortgage Loans (a) | |||||
| (Dollars in millions) | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 |
| Beginning balance | $368 | $456 | $194 | $126 | $123 | $126 |
| Originations | 17 | 20 | 13 | 41 | 34 | 27 |
| Purchases (b) | — | — | 350 | — | — | — |
| Amortization | (98) | (108) | (101) | (35) | (31) | (30) |
| 287 | 368 | 456 | 132 | 126 | 123 | |
| Valuation allowance | — | — | — | — | — | — |
| Ending balance, net | $287 | $368 | $456 | $132 | $126 | $123 |
| Residential Mortgage Loans | Commercial Mortgage Loans | |||
|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | 2025 | 2024 |
| Balances at period end | ||||
| Loans serviced for others | $35,873 | $38,105 | $30,309 | $27,474 |
| Loans sub-serviced for others | 156,938 | 111,544 | 4,231 | 4,063 |
| Total loans serviced for others | $192,811 | $149,649 | $34,540 | $31,537 |
(a)Loan servicing fees related to capitalized mortgage loan servicing assets of $204 million,$213 million and $195 million were included in Mortgage banking revenues in the Consolidated Statement of Income in 2025, 2024 and 2023, respectively.
(b)During 2023, the Company completed a $350 million bulk purchase of residential mortgage loan servicing rights associated with $19.5 billion of residential real estate loans.
The fair value of capitalized residential mortgage loan servicing assets was approximately $550 million at December 31, 2025 and $612 million at December 31, 2024. The fair value of capitalized residential mortgage loan servicing assets was estimated using weighted-average discount rates of 11.17% and 11.64% at December 31, 2025 and 2024, respectively, and contemporaneous prepayment assumptions that vary by loan type. At December 31, 2025 and 2024, the discount rate represented a weighted-average OAS of 750 basis points and 758 basis points over market implied forward SOFR, respectively. The fair value of capitalized residential mortgage loan servicing rights may vary significantly in subsequent periods due to changing interest rates and the effect thereof on prepayment speeds. The fair value of capitalized commercial mortgage loan servicing assets was approximately $194 million at each of December 31, 2025 and 2024. Weighted-average discount rates of 11.97% and 12.80% were used to estimate the fair value of capitalized commercial mortgage loan servicing rights at December 31, 2025 and 2024, respectively. Estimated servicing revenues and expenses used to value such servicing rights considered historical payment performance trends and current market interest rates. In general, the servicing agreements allow the Company to share in customer loan prepayment fees and thereby recover the remaining carrying value of the capitalized servicing rights associated with such loans. The Company's ability to realize the carrying value of capitalized commercial mortgage loan servicing rights is more dependent on the borrowers' abilities to repay the underlying loans than it is on prepayments.
The key economic assumptions used to determine the fair value of significant portfolios of capitalized servicing rights at December 31, 2025 and the sensitivity of such value to changes in those assumptions are summarized in the table that follows. Those calculated sensitivities are hypothetical and actual changes in the fair value of capitalized servicing rights may differ significantly from the amounts presented herein. The effect of a variation in a particular assumption on the fair value of the servicing rights is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another which may magnify or counteract the sensitivities. The changes in assumptions are presumed to be instantaneous.
| (Dollars in millions) | Residential | Commercial |
|---|---|---|
| Weighted-average prepayment speeds | 7.78% | |
| Impact on fair value of 10% adverse change | $(16) | |
| Impact on fair value of 20% adverse change | (31) | |
| Weighted-average OAS | 7.50% | |
| Impact on fair value of 10% adverse change | $(16) | |
| Impact on fair value of 20% adverse change | (30) | |
| Weighted-average discount rate | 11.97% | |
| Impact on fair value of 10% adverse change | $(4) | |
| Impact on fair value of 20% adverse change | (9) |
Effective January 1, 2026, the Company elected to prospectively measure its residential mortgage loan servicing right assets at fair value, which resulted in an increase to capitalized servicing assets of $263 million and a corresponding increase to Retained earnings, after tax-effect, of $197 million on that date.
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