M&T BANK CORP

The components of other expense are presented in Table 33.

Table 33

OTHER EXPENSE

Salaries and employee benefits

Salaries and employee benefits expense increased $180 million in 2025 as compared with 2024 reflecting annual merit and other increases, a rise in average staffing levels and an increase in medical benefits expense of $30 million, stock-based compensation expense of $20 million and severance-related costs of $10 million.

The Company provides pension, retirement savings and other postretirement benefits for its employees. Expenses related to such benefits totaled $81 million in 2025 and $71 million in 2024. The amounts recorded in salaries and employee benefits expense and other costs of operations, respectively, from the preceding sentence were as follows: $173 million and ($92 million) in 2025; and $173 million and ($102 million) in 2024. The Company sponsors both defined benefit and defined contribution pension plans. In the fourth quarter of 2025, the Company recognized an $8 million benefit in other costs of operations associated with the purchase of annuities for certain participants in the Company's defined benefit pension plan that represented approximately $263 million, or 14%, of the plan's accumulated benefit obligation at the time of purchase. In 2024, the Company recognized a $12 million benefit in other costs of operations associated with the solicited election of certain participants in that plan to accept a lump-sum distribution in the fourth quarter of 2024 in lieu of future retirement benefit payments. Approximately $171 million of lump-sum settlements were distributed from the pension plan, representing approximately 8% of the plan's accumulated benefit obligation at the time of the distribution. Information about the Company’s pension plans and other postretirement benefits is included in note 12 of Notes to Financial Statements.

Nonpersonnel expenses

As described herein within Part I, Item 1, "Business," in November 2023 the FDIC finalized a rule that imposes a special assessment to recover the costs to the DIF resulting from the FDIC’s use in 2023 of the systemic risk exception to the least-cost resolution test under the FDIA in connection with the receiverships of certain failed banks. The Company recognized a special assessment expense of $34 million in 2024 and a reduction of such expense of $37 million in 2025, bringing the total special assessment expense of the Company since the 2023 rule was enacted to $194 million.

After considering FDIC assessments, the $50 million increase in nonpersonnel expenses in 2025 as compared with 2024 reflects an increase in outside data processing and software costs of $66 million associated with enhancements to the Company's technology infrastructure, cybersecurity and financial recordkeeping and reporting systems, a $30 million contribution to The M&T Charitable Foundation in 2025, an increase in equipment and net occupancy expense of $13 million and a rise in professional and other services of $12 million reflecting higher legal and review costs. Those unfavorable factors were partially offset by vacated facility write-downs of $27 million and losses on the redemption of certain issuances of M&T's Junior Subordinated Debentures of $20 million each in 2024.