M&T BANK CORP

12. Pension plans and other postretirement benefits

The Company provides pension and other postretirement benefit plans (including health care and life insurance benefits) to eligible retired employees. The Company uses a December 31 measurement date for all of its plans.

Net periodic pension and net other postretirement benefits expenses for defined benefit plans consisted of the following:

Service cost is reflected in Salaries and employee benefits and the other components of net periodic benefit cost are reflected in Other costs of operations in the Consolidated Statement of Income. In 2025, the Company recognized an $8 million settlement gain resulting from the purchase of annuities for certain plan participants in the Company's defined benefit pension plan. In 2024, the Company recognized a $12 million settlement gain associated with the solicited election of certain participants in the Company's defined benefit pension plan to accept a lump-sum distribution in lieu of future retirement benefit payments. Those transactions reduced each of the plan's assets and its benefit obligations by $263 million in 2025 and $171 million in 2024.

Data relating to the funding position of the defined benefit plans were as follows:

(a)The Company has an unfunded supplemental pension plan for certain key executives and others. The projected benefit obligation and accumulated benefit obligation included in the table related to such plan were $127 million as of December 31, 2025 and $132 million as of December 31, 2024.

GAAP requires an employer to recognize in its balance sheet as an asset or liability the overfunded or underfunded status of a defined benefit postretirement plan, measured as the difference between the fair value of plan assets and the benefit obligation. For a pension plan, the benefit obligation is the projected benefit obligation; for any other postretirement benefit plan, such as a retiree health care plan, the benefit obligation is the accumulated postretirement benefit obligation. Gains or losses and prior service costs or credits that arise during the period, but are not included as components of net periodic benefit expense, are recognized as a component of other comprehensive income. Amortization of net gains and losses is included in annual net periodic benefit expense if, as of the beginning of the year, the net gain or loss exceeds 10% of the greater of the benefit obligation or the market-related fair value of the plan assets. The net loss in 2025 was mainly the result of a decrease to the assumed discount rate used to value plan liabilities. The table below reflects the changes in plan assets and benefit obligations recognized in other comprehensive income related to the Company’s postretirement benefit plans.

Assumptions

The assumed weighted-average rates used to determine benefit obligations at December 31 were:

The assumed weighted-average rates used to determine net benefit expense for the years ended December 31 were:

The discount rate used by the Company to determine the present value of the Company’s future benefit obligations reflects specific market yields for a hypothetical portfolio of highly rated corporate bonds that would produce cash flows similar to the Company’s benefit plan obligations and the level of market interest rates in general as of the year-end.

The expected long-term rate of return assumption as of each measurement date was developed through analysis of historical market returns, current market conditions, anticipated future asset allocations and expectations on potential future market returns. The expected rate of return assumption represents a long-term average view of the performance of the plan assets, a return that may or may not be achieved during any one calendar year.

The Company’s defined benefit pension plan is sensitive to the long-term rate of return on plan assets and the discount rate. To demonstrate the sensitivity of the net periodic pension benefit for 2025 to changes in these assumptions, with all other assumptions held constant,25 basis-point increases in: the rate of return on plan assets would have resulted in an increase in the net periodic pension benefit of approximately $8 million; and the discount rate would have resulted in a decrease in net periodic pension benefit of approximately $1 million. Decreases of 25 basis points in those assumptions would have resulted in similar changes in amount, but in the opposite direction from the changes presented in the preceding sentence. Additionally, an increase of 25 basis points in the discount rate would have decreased the benefit obligation by $43 million and a decrease of 25 basis points in the discount rate would have increased the benefit obligation by $45 million at December 31, 2025.

For measurement of other postretirement benefits, a 6.75% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2025. The rate was assumed to decrease to 5.00% over eight years.

Plan assets

The Company’s policy is to invest the pension plan assets in a prudent manner for the purpose of providing benefit payments to participants and mitigating reasonable expenses of administration. The Company’s investment strategy is designed to provide a total return that, over the long-term, places an emphasis on the preservation of capital for satisfaction of the plan's benefit obligations. The strategy attempts to minimize changes in the plan's funded status and maximize investment returns on assets at a level of risk deemed appropriate by the Company while complying with applicable regulations and laws. The investment strategy utilizes liability hedging and asset diversification as a principal determinant for establishing an appropriate risk profile while emphasizing total return realized from capital appreciation, dividends and interest income. Assets are managed by a combination of internal and external investment managers. Returns on invested assets are periodically compared with target market indices for each asset type to aid management in evaluating such returns. Furthermore, management regularly reviews the investment policy and may, if deemed appropriate, make changes to target investment allocations. The fair values of the Company’s pension plan assets at December 31, 2025 and 2024, by asset category, were as follows:

(a)Target allocations could be more or less than the above general guidelines based on market conditions at the time and actions taken or recommended by the investment managers providing advice to the Company.

(b)No investment in securities of a non-U.S. Government or government agency issuer exceededten percent of plan assets at each of December 31, 2025 and 2024.

(c)This category is comprised of equities in companies within the small-cap, mid-cap and large-cap sectors of the U.S. economy and range across diverse industries as well as equities in companies primarily within the mid-cap and large-cap sectors of international markets mainly in developed and emerging markets in Europe and the Pacific Rim.

(d)This category is comprised of investment grade bonds of U.S. issuers from diverse industries, mortgage-backed securities guaranteed by the government agencies and U.S. Treasury securities through individual securities and mutual funds with holdings across industries.

(e)Certain real estate partnerships, private equity, debt and hedge fund investments that were measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The Company makes contributions to its qualified defined benefit pension plan as required by government regulation or as deemed appropriate by management after considering factors such as the fair value of plan assets, expected returns on such assets and the present value of benefit obligations of the plan. The Company is not required to make contributions to the qualified defined benefit plan in 2026, however, subject to the impact of actual events and circumstances that may occur in 2026, the Company may make contributions, but the amount of any such contributions has not been determined. The Company regularly funds the payment of benefit obligations for the supplemental defined benefit pension and postretirement benefit plans because such plans do not hold assets for investment. Payments for supplemental pension and other postretirement benefits for 2026 are not expected to differ from those made in 2025 by an amount that will be material to the Company’s consolidated financial position.

Estimated benefits expected to be paid in future years related to the Company’s defined benefit pension and other postretirement benefits plans are as follows:

The Company also provides a qualified defined contribution pension plan to eligible employees who were not participants in the defined benefit pension plan as of December 31, 2005 and to other employees who have elected to participate in the defined contribution plan. The Company makes contributions to the defined contribution plan each year in an amount that is based on an individual participant’s total compensation (generally defined as total wages, incentive compensation, commissions and bonuses) and years of service. Company contributions to the plan are discretionary for participants for which eligibility occurred after January 1, 2020. Participants do not contribute to the defined contribution pension plan. Pension expense recorded in 2025, 2024 and 2023 associated with the defined contribution pension plan was $56 million, $62 million and $56 million, respectively.

The Company has a retirement savings plan that is a defined contribution plan in which eligible employees of the Company may defer up to 50% of qualified compensation via contributions to the plan. The retirement savings plan provides for employer matching contributions of 100% of an employee's qualified compensation up to 5%. Employees’ accounts, including employee contributions, employer matching contributions and accumulated earnings thereon, are at all times fully vested and nonforfeitable. Employee benefits expense resulting from the Company’s contributions to the retirement savings plan totaled $107 million, $100 million and $96 million in 2025, 2024 and 2023, respectively.