M&T BANK CORP

The Company’s significant accounting policies conform with GAAP and are described in note 1 of Notes to Financial Statements. In applying certain of those accounting policies, management of the Company may be required to exercise judgment in determining many of the methodologies, assumptions and estimates to be utilized. Critical accounting estimates are more dependent on such judgment and may contribute to significant changes in the Company’s reported financial position or results of operations should the assumptions and estimates used change over time due to changes in circumstances. The significant areas in which management of the Company applies critical assumptions and estimates include the following:

The allowance for loan losses represents a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected at the balance sheet date. A provision for credit losses is recorded to adjust the level of the allowance for loan losses as deemed necessary by management. In estimating expected credit losses, borrower-specific financial data and forward-looking macroeconomic assumptions are utilized to project losses over a reasonable and supportable forecast period. For certain loan pools that share similar risk characteristics, the Company utilizes statistically developed models to estimate amounts and timing of expected future cash flows, collateral values and other factors used to determine the borrowers’ abilities to repay obligations. Such models consider historical correlations of credit losses with various macroeconomic assumptions including unemployment, GDP and real estate prices. Subsequent to the forecast period, the Company utilizes longer-term historical loss experience to estimate credit losses over the remaining contractual lives of the loans. These forecasts may be adjusted for inherent limitations or biases of the models as well as for other factors that may not be adequately considered in the Company’s quantitative methodologies. The methodologies, significant assumptions and estimated amount of the allowance for loan losses are subject to quarterly and periodic evaluations by independent risk management personnel and are approved by M&T's Allowance for Credit Losses Committee. A discussion of facts and circumstances considered by management in determining the allowance for loan losses is included herein under the heading "Provision for Credit Losses" and in note 4 of Notes to Financial Statements.

Changes in the circumstances considered when determining management’s estimates and assumptions could result in changes in those estimates and assumptions, which could result in adjustment of the allowance for loan losses in future periods. Forward-looking economic forecasts are subject to inherent imprecision and future outcomes may differ materially from forecasted events. A sensitivity analysis of forward-looking estimates of macroeconomic variables on modeled credit losses used in the determination of the allowance for loan losses is provided herein under the heading "Provision for Credit Losses."

Fair value measurement

As described in note 19 of Notes to Financial Statements, many of the Company’s assets and liabilities are measured at fair value on the Company’s Consolidated Balance Sheet on a recurring basis. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Management of the Company applies various valuation methodologies to assets and liabilities which may involve a significant degree of judgment, particularly when liquid markets do not exist for the particular items being valued. Significant assets and liabilities measured at fair value on a recurring basis are predominantly comprised of available-for-sale investment securities and interest rate swap agreements.

Available-for-sale investment securities are primarily comprised of U.S. Treasury securities and government issued or guaranteed commercial and residential mortgage-backed securities. Those securities are generally valued by a third-party pricing service through reference to quoted prices for the same or similar securities or through model-based techniques in which the significant inputs are observable. The Company generally determines the fair value of interest rate swap agreements using externally developed pricing models based on market observable inputs. The fair valuation of investment securities available for sale and interest swap agreements are independently reviewed and challenged by M&T’s Treasury Product Control Department, the results of which are reported to the Company’s Executive ALCO Committee. Further information on the fair value of investment securities and derivative financial instruments is included herein under the heading "Taxable-equivalent Net Interest Income” and in notes 3, 17 and 19 of Notes to Financial Statements.

Goodwill

Goodwill represents the excess of the consideration transferred to acquire an entity over the fair value of the identifiable net assets acquired. Goodwill is not amortized, but rather is tested for impairment at least annually at the reporting unit level. For purposes of testing for impairment the Company has assigned all recorded goodwill to the reporting units originally intended to benefit from past business combinations. To test for goodwill impairment, the Company compared the estimated fair value of each of its reporting units to the respective carrying amounts and certain other assets and liabilities assigned to the reporting unit, including goodwill and core deposit and other intangible assets. For the Company’s annual impairment test on October 1, 2025, the Company estimated the fair value of its reporting units using an income approach (weighted 75%) and a market approach (weighted 25%). The Company’s estimation of fair value under the income approach considered discounting projected cash flows for each reporting unit based on multi-year financial forecasts, and under the market approach considered certain valuation multiples for comparable financial institutions. Based on the results of the goodwill impairment test, the Company concluded that the amount of recorded goodwill was not impaired as of the testing date.

The Company’s reporting units are not readily marketable and market prices do not exist. The estimation of fair value of those reporting units includes many assumptions which are subjective and highly sensitive to changes in such assumptions. In estimating those values the Company has not attempted to market its reporting units to potential buyers, if any exist. Since negotiated prices in illiquid markets depend greatly upon the then present motivation of the buyer and seller, it is reasonable to assume that actual sales prices could vary widely from any estimate of fair value made without the benefit of negotiations. Additionally, changes in market conditions or other risk factors described in Part I, Item 1A, “Risk Factors” could materially impact the value of the Company’s reporting units. The Company has performed sensitivity analysis around its discount rate assumptions used in its valuations and estimated that a 100 basis-point increase to the discount rates used in the fair value estimation at October 1, 2025 would not have resulted in an impairment of goodwill assigned to any reporting unit.

Information regarding goodwill assigned to the Company’s operating segments is presented in note 7 in Notes to Financial Statements and a discussion of the treatment of goodwill for regulatory capital purposes is provided herein under the heading “Capital.”

Legal proceedings and other matters

Many aspects of the Company’s business and operations involve substantial risk of legal liability. M&T and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings and other matters for which monetary damages are asserted or unasserted. In addition, from time to time, the Company is, or may become, the subject of governmental and self-regulatory agency information-gathering requests, reviews, investigations and proceedings and other forms of regulatory inquiry, including by bank and other regulatory agencies, the SEC and law enforcement authorities.

Although the Company establishes accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated, the Company does not have accruals for all legal proceedings where it faces a risk of loss. In addition, due to the inherent subjectivity of the assessments and unpredictability of the outcome of legal proceedings, amounts accrued may not represent the ultimate loss to the Company from the legal proceedings in question. Thus, the Company’s ultimate losses may be higher, and possibly significantly so, than the amounts accrued for legal loss contingencies, which could adversely affect the Company’s financial condition and results of operations. Information regarding those contingencies and their potential effects on the Company’s results of operations and financial position is included in note 20 of Notes to Financial Statements.