M&T BANK CORP

Previous wording

Effective January 1, 2026, the Company elected to prospectively measure its residential mortgage loan servicing right assets at fair value with changes in fair value reflected in mortgage banking revenues. As a result, amortization associated with residential mortgage loan servicing right assets previously recognized in other costs of operations is no longer recorded. Instead, beginning in 2026, fair value changes in the mortgage loan servicing right assets, inclusive of the realization of expected net servicing revenues over time, are included in mortgage banking revenues. On December 31, 2025, the Company began economically hedging the risk of fair value changes in these assets through the use of various interest rate derivative contracts, for which changes in fair value are also reflected in mortgage banking revenues. As a result of the Company's election on January 1, 2026 to prospectively measure residential mortgage loan servicing right assets at fair value, the Company recorded an increase in capitalized servicing assets included in accrued interest and other assets of $263 million and a corresponding after-tax increase to retained earnings of $197 million, representing an 8 basis-point increase to CET1 capital on the election date.

Current wording

Effective January 1, 2026, the Company elected to prospectively measure its residential mortgage loan servicing right assets at fair value with changes in fair value reflected in mortgage banking revenues. As a result, amortization associated with residential mortgage loan servicing right assets previously recognized in other costs of operations is no longer recorded. Instead, beginning in 2026, fair value changes in the mortgage loan servicing right assets, inclusive of the realization of expected net servicing revenues over time, are included in mortgage banking revenues. On December 31, 2025, the Company began economically hedging the risk of fair value changes in these assets through the use of various interest rate and other derivative contracts, for which changes in fair value are also reflected in mortgage banking revenues. As a result of the Company's election on January 1, 2026 to prospectively measure residential mortgage loan servicing right assets at fair value, the Company recorded an increase in capitalized servicing assets included in accrued interest and other assets of $263 million and a corresponding after-tax increase to retained earnings of $197 million, representing an 8 basis-point increase to the CET1 capital ratio on the election date.

Previous wording

The decrease in net income in the recent quarter as compared with the fourth quarter of 2025 resulted from the following:

Current wording

The increase in net income in the recent quarter as compared with the first quarter of 2026 resulted from the following:

Previous wording

•Net interest income on a taxable-equivalent basis increased $56 million reflecting growth in average loans and investment securities and favorable earning asset and interest-bearing liability repricing, including an improved impact from interest rate swap agreements. The Company's net interest margin expanded 5 basis points as reductions in deposit and borrowing costs outpaced a decline in yields received on earning assets.

Current wording

•Net interest income on a taxable-equivalent basis increased $138 million reflecting higher average earning assets and a 6 basis-point expansion of the net interest margin as reductions in deposit and borrowing costs outpaced a decline in yields received on earning assets.

Previous wording

•The provision for credit losses increased $15 million reflecting the potential negative impact of global conflicts on economic forecasts and a higher provision for unfunded credit commitments, partially offset by a decrease in the level of criticized loans.

Current wording

•The provision for credit losses rose modestly as loan growth and the potential negative impact of global conflicts on economic forecasts was largely offset by a decline in the level of criticized loans.

Previous wording

•Noninterest expense increased $23 million reflecting higher levels of salaries and employee benefits expense, outside data processing and software costs and professional and other services expense, partially offset by lower other costs of operations. Other costs of operations in the first quarter of 2025 included amortization of residential mortgage loan servicing right assets.

Current wording

•Noninterest expense increased $36 million reflecting higher levels of salaries and employee benefits expense, outside data processing and software costs and professional and other services expense, partially offset by lower other costs of operations. Other costs of operations in the first half of 2025 included amortization of residential mortgage loan servicing right assets of $51 million.

Previous wording

Under programs authorized by the Board of Directors, M&T repurchased 5.5 million shares of its common stock during the recent quarter at a total cost of $1.25 billion, compared with 2.7 million shares at a total cost of $507 million in the fourth quarter of 2025 and 3.4 million shares of its common stock at a total cost of $662 million during the first three months of 2025. On March 30, 2026, M&T's Board of Directors authorized a program under which $5.0 billion of common shares may be repurchased. That authorization replaced and terminated the previous authorized share repurchase program effective as of the same date. On February 1, 2026, M&T redeemed all 40,000 outstanding shares of its Perpetual Fixed Rate Reset Non-Cumulative Preferred Stock, Series G, for $400 million.

Current wording

Under programs authorized by the Board of Directors, M&T repurchased 2.1 million shares of its common stock during the recent quarter at a total cost of $465 million, compared with 5.5 million shares at a total cost of $1.25 billion in the first quarter of 2026. During the six months ended June 30, 2026, M&T repurchased 7.6 million shares of its common stock at a total cost of $1.71 billion, compared with 9.5 million shares at a total cost of $1.74 billion during the first six months of 2025.

Previous wording

Interest income earned on certain of the Company's assets is exempt from federal income tax. Taxable-equivalent net interest income is a non-GAAP measure that adjusts income earned on a tax-exempt asset to present it on an equivalent basis to interest income earned on a fully taxable asset.

Current wording

Interest income earned on certain of the Company's assets is exempt from federal income tax. Taxable-equivalent net interest income is a non-GAAP measure that adjusts income earned on a tax-exempt asset to present it on an equivalent basis to interest income earned on a fully taxable asset. The Company's average balance sheets accompanied by the taxable-equivalent interest income and expense and the annualized average rate on the Company's earning assets and interest-bearing liabilities are presented as follows.

Previous wording

Taxable-equivalent net interest income can be impacted by changes in the composition of the Company's earning assets and interest-bearing liabilities, as discussed herein, as well as changes in interest rates and spreads. The FOMC lowered its federal funds target interest rate by a total of 100 basis points in the last four months of 2024 and by a total of 75 basis points in the last four months of 2025.

Current wording

Taxable-equivalent net interest income can be impacted by changes in the composition of the Company's earning assets and interest-bearing liabilities, as discussed herein, as well as changes in interest rates and spreads. The FOMC lowered its federal funds target interest rate by a total of 75 basis points in the last four months of 2025 and maintained its target through the second quarter of 2026.

Previous wording

Taxable-equivalent net interest income for the first three months of 2026 increased $56 million as compared with the same 2025 period. That increase reflects a 5 basis-point widening of the net interest margin driven by a 37 basis-point decrease in the cost of interest-bearing liabilities, partially offset by a 16 basis-point decline in yields received on earning assets. Contributing to those changes was the aforementioned FOMC interest rate reductions in 2025. The yields received on earning assets in the recent quarter reflect a comparatively favorable impact from interest rate swap agreements entered into for interest rate risk purposes on yields received on commercial and industrial and commercial real estate loans. Partially offsetting the overall decline in yields received on earning assets was an increase in the yields received on investment securities from the deployment of liquidity into fixed rate investment securities throughout 2025 and the first three months of 2026 that yielded higher rates than investment securities that matured or were sold. The 21 basis-point increase in net interest spread was partially offset by a 16 basis-point reduction in the contribution of interest-free funds, reflecting lower average balances of noninterest-bearing deposits and a lower rate environment.

Current wording

Taxable-equivalent net interest income for the first six months of 2026 increased $138 million as compared with the same 2025 period. That increase reflects a 6 basis-point widening of the net interest margin driven by a 35 basis-point decrease in the cost of interest-bearing liabilities, partially offset by a 13 basis-point decline in yields received on earning assets. Contributing to those changes was the aforementioned FOMC interest rate reductions in 2025. The yields received on earning assets in the first six months of 2026 reflect a comparatively favorable impact from interest rate swap agreements entered into for interest rate risk purposes on yields received on commercial and industrial and commercial real estate loans. Partially offsetting the overall decline in yields received on earning assets was an increase in the yields received on investment securities from the deployment of liquidity into fixed rate investment securities throughout 2025 and the first six months of 2026 that yielded higher rates than investment securities that matured or were sold. The 22 basis-point increase in net interest spread was partially offset by a 16 basis-point reduction in the contribution of interest-free funds, reflecting a lower rate environment.

Previous wording

Information regarding the fair value of interest rate swap agreements designated as fair value hedges and cash flow hedges is presented in note 10 of Notes to Financial Statements. The average notional amounts of interest rate swap agreements entered into for interest rate risk management purposes (excluding forward-starting interest rate swap agreements not in effect during the quarter), the related effect on net interest income and margin, and the weighted-average interest rates paid or received on those swap agreements are presented in the table that follows.

Current wording

Information regarding the fair value of interest rate swap agreements designated as fair value hedges and cash flow hedges is presented in note 11 of Notes to Financial Statements. The average notional amounts of interest rate swap agreements entered into for interest rate risk management purposes (excluding forward-starting interest rate swap agreements not in effect during the quarter), the related effect on net interest income and margin, and the weighted-average interest rates received or paid on those swap agreements are presented in the table that follows.

Previous wording

(c)Weighted-average rate paid or received on interest rate swap agreements in effect during the period.

Current wording

(c)Weighted-average rate received or paid on interest rate swap agreements in effect during the period.

Previous wording

The following table summarizes changes in the components of average loans and reflects the Company's efforts to reduce its exposure to commercial real estate loans designated as criticized.

Current wording

The following table summarizes changes in the components of average loans.

Previous wording

Average loans totaled $138.4 billion in the first quarter of 2026, up $823 million from the fourth quarter of 2025.

Current wording

Average loans totaled $141.4 billion in the second quarter of 2026, up $3.0 billion from the first quarter of 2026.

Previous wording

In the first three months of 2026, average loans increased $3.6 billion from the corresponding 2025 period.

Current wording

In the first six months of 2026, average loans increased $4.8 billion from the corresponding 2025 period.

Previous wording

•Average commercial real estate loans declined $2.8 billion as the Company executed various strategies to reduce its relative concentration of such loans designated as criticized. Average permanent and construction commercial real estate loans decreased by $381 million and $2.4 billion, respectively. The decline in average commercial real estate construction loans reflects the sale of $661 million of out-of-footprint residential builder and developer loans in June 2025.

Current wording

•Average commercial real estate loans declined $2.3 billion as the Company executed various strategies to reduce its relative concentration of such loans designated as criticized. Average permanent and construction commercial real estate loans decreased by $134 million and $2.1 billion, respectively. The decline in average commercial real estate construction loans reflects the sale of $661 million of out-of-footprint residential builder and developer loans in June 2025.

Previous wording

•Average residential real estate loans increased $1.6 billion reflecting the retention of originated residential mortgage loans and purchases.

Current wording

•Average residential real estate loans increased $1.5 billion reflecting the retention of originated residential mortgage loans and purchases.

Previous wording

•Average consumer loans increased $2.0 billion reflecting growth in average recreational finance loans of $1.4 billion, home equity loans and lines of credit of $227 million and automobile loans of $188 million.

Current wording

•Average consumer loans increased $1.7 billion reflecting growth in average recreational finance loans of $1.3 billion and home equity loans and lines of credit of $237 million.

Previous wording

Borrowers in the financial and insurance industry include real estate investment trusts and other specialty lending businesses including fund banking companies and mortgage warehouse lending businesses. Approximately 89% of loans to the financial and insurance industry and 7% of loans to the services industry were designated as loans to NDFIs as prescribed in regulatory guidance applicable to the Company at March 31, 2026. The following table presents commercial and industrial commitments and outstanding balances of loans to NDFIs at March 31, 2026.

Current wording

Commercial and industrial borrowers in the financial and insurance industry include real estate investment trusts and other specialty lending businesses including fund banking companies and mortgage warehouse lending businesses. At June 30, 2026 and December 31, 2025, approximately 91% and 89% of loans to the financial and insurance industry, respectively, and 7% of loans to the services industry, at each of those dates, were designated as loans to NDFIs as prescribed in regulatory guidance applicable to the Company. The following table presents commercial and industrial commitments and outstanding balances of loans to NDFIs at June 30, 2026 and December 31, 2025.

Previous wording

The investment securities portfolio averaged $37.8 billion in the first quarter of 2026, up $1.1 billion and $3.4 billion from the fourth and first quarters of 2025, respectively. Those increases reflect the Company's deployment of liquidity into primarily fixed-rate mortgage-backed investment securities classified as available-for-sale. In the recent quarter the Company sold $2.5 billion of U.S. Treasury securities, all of which had maturity dates in 2026. As a result of the purchases of higher-yielding securities and sales, paydowns and maturities of lower-yielding securities, the weighted-average current yield for total investment securities available for sale increased to 4.71% at March 31, 2026 and 4.64% at December 31, 2025 from 4.42% at March 31, 2025. The weighted-average duration of that portfolio was 3.1 years at March 31, 2026 as compared with 2.4 years and 2.5 years at December 31, 2025 and March 31, 2025, respectively. The increase in the weighted-average duration in the recent quarter reflects the sale of U.S. Treasury securities near maturity and purchase of fixed rate mortgage-backed investment securities with longer maturity dates. The Company routinely adjusts its holdings of capital stock of the FHLB of New York and the FRB of New York based on amounts of outstanding borrowings and available lines of credit with those entities.

Current wording

The investment securities portfolio averaged $38.7 billion in the second quarter of 2026, up $883 million from the first quarter of 2026, and $38.3 billion for the six months ended June 30, 2026, an increase of $3.4 billion from the similar 2025 period. Those increases reflect the Company's deployment of liquidity into primarily fixed-rate mortgage-backed investment securities classified as available for sale. In the first quarter of 2026 the Company sold $2.5 billion of U.S. Treasury securities, all of which had maturity dates in 2026. There were no significant sales of debt investment securities in the second quarter of 2026. As a result of the purchases of higher-yielding securities and sales, paydowns and maturities of lower-yielding securities, the weighted-average current yield for total investment securities available for sale increased to 4.73% and 4.71% at June 30, 2026 and March 31, 2026, respectively, from 4.50% at June 30, 2025. The weighted-average duration of that portfolio was 3.1 years at each of June 30, 2026 and March 31, 2026 as compared with 2.6 years at June 30, 2025. The increase in the weighted-average duration from June 30, 2025 reflects the sale of U.S. Treasury securities near maturity and purchase of fixed-rate mortgage-backed investment securities with longer maturity dates. In July 2026, the Company transferred $8.3 billion of residential mortgage-backed securities from the available-for-sale portfolio to the held-to-maturity portfolio with gross unrealized gains of $32 million and gross unrealized losses of $24 million at the time of transfer. The Company routinely adjusts its holdings of capital stock of the FHLB of New York and the FRB of New York based on amounts of outstanding borrowings and available lines of credit with those entities.

Previous wording

The Company regularly reviews its debt investment securities for declines in value below amortized cost that might be indicative of credit-related losses. There were no credit-related losses on debt investment securities recognized in each of the three months ended March 31, 2026, December 31, 2025 and March 31, 2025. Additional information about the investment securities portfolio is included in notes 2 and 12 of Notes to Financial Statements.

Current wording

The Company regularly reviews its debt investment securities for declines in value below amortized cost that might be indicative of credit-related losses. There were no credit-related losses on debt investment securities recognized in each of the six months ended June 30, 2026 and June 30, 2025. Additional information about the investment securities portfolio is included in notes 3 and 13 of Notes to Financial Statements.

Previous wording

Other earning assets include interest-bearing deposits at banks and trading account assets. Those other earning assets in the aggregate averaged $16.3 billion in the recent quarter, compared with $18.1 billion and $19.8 billion during the three months ended December 31, 2025 and March 31, 2025, respectively, and were primarily comprised of deposits held at the FRB of New York. The Company considers such deposits to be an immediate source of funds in its liquidity management processes. In general, the levels of those deposits often fluctuate due to changes in deposits of retail and commercial customers, trust-related deposits and brokered deposits, lending activities and additions to or maturities of investment securities or borrowings.

Current wording

Other earning assets are comprised primarily of interest-bearing deposits at banks. Other earning assets averaged $15.1 billion and $16.3 billion during the three months ended June 30, 2026 and March 31, 2026, respectively, and $15.7 billion and $19.8 billion during the six months ended June 30, 2026 and 2025, respectively. The amounts of other earning assets at those respective dates were primarily comprised of deposits held at the FRB of New York. The Company considers such deposits to be an immediate source of funds in its liquidity management processes. In general, the levels of those deposits often fluctuate due to changes in deposits of retail and commercial customers, trust-related deposits and brokered deposits, lending activities and additions to or maturities of investment securities or borrowings.

Previous wording

The most significant source of funding for the Company is core deposits from its customer base. The Company considers noninterest-bearing deposits, savings and interest-checking deposits and time deposits of $250,000 or less as core deposits. The Company’s domestic banking network is its principal source of core deposits, which generally carry lower interest rates than wholesale funds of comparable maturities. Average core deposits represented 79% of average earning assets at each of the quarters ended March 31, 2026 and December 31, 2025, compared with 78% for the quarter ended March 31, 2025. The Company also utilizes brokered deposits as a component of its wholesale funding strategy. Depending on market conditions, including demand by customers and other investors, and the cost of funds available from alternative sources, the Company may change the amount or composition of brokered deposits in the future. The following table provides an analysis of changes in the components of average deposits.

Current wording

The most significant source of funding for the Company is core deposits from its customer base. The Company considers noninterest-bearing deposits, savings and interest-checking deposits and time deposits of $250,000 or less as core deposits. The Company’s domestic banking network is its principal source of core deposits, which generally carry lower interest rates than wholesale funds of comparable maturities. Average core deposits represented 79% of average earning assets for each of the quarters ended June 30, 2026 and March 31, 2026 and for the six months ended June 30, 2026 and 78% for the six months ended June 30, 2025. The Company also utilizes brokered deposits as a component of its wholesale funding strategy. Depending on market conditions, including demand by customers and other investors, and the cost of funds available from alternative sources, the Company may change the amount or composition of brokered deposits in the future. The following table provides an analysis of changes in the components of average deposits.

Previous wording

The accompanying table summarizes the components of average total deposits by reportable segment for the three months ended March 31, 2026, December 31, 2025 and March 31, 2025.

Current wording

The accompanying table summarizes the components of average total deposits by reportable segment for the three months ended June 30, 2026 and March 31, 2026 and the six months ended June 30, 2026 and 2025.

Previous wording

The Company uses borrowing capacity from banks, the FHLBs, the FRB of New York and others as sources of funding. Short-term borrowings represent arrangements that at the time they were entered into had a contractual maturity of one year or less. The higher levels of short-term borrowings in the first quarter of 2026 as compared with the fourth and first quarters of 2025 reflect the Company's management of liquidity.

Current wording

The Company uses borrowing capacity from banks, the FHLBs, the FRB of New York and others as sources of funding. Short-term borrowings represent arrangements that at the time they were entered into had a contractual maturity of one year or less. The higher levels of short-term borrowings in the second quarter of 2026 as compared with the first quarter of 2026, as well as for the six months ended June 30, 2026 as compared with the similar 2025 period reflect the Company's management of liquidity and growth in its earning assets.

Previous wording

The levels of long-term borrowings reflect the Company's strategies to diversify its wholesale funding sources to provide long-term funding stabilization. The following table provides a summary of the Company's issuances, maturities and redemptions of long-term borrowings in the recent quarter.

Current wording

The levels of long-term borrowings reflect the Company's strategies to diversify its wholesale funding sources to provide long-term funding stabilization. The following table provides a summary of the Company's issuances, maturities and redemptions of long-term borrowings in the recent quarter as well as for the six months ended June 30, 2026.

Previous wording

(b)Excludes paydowns of asset-backed notes. There were no maturities or redemptions of long-term borrowings in the first quarter of 2026.

Current wording

(b)Excludes paydowns of asset-backed notes. There were no significant maturities or redemptions of long-term borrowings in the first six months of 2026.

Previous wording

Additional information regarding borrowings is provided in notes 4 and 11 of Notes to Financial Statements.

Current wording

Additional information regarding borrowings is provided in notes 5 and 12 of Notes to Financial Statements.

Previous wording

A provision for credit losses is recorded to adjust the level of the allowance to reflect expected credit losses that are based on economic forecasts as of each reporting date. A provision for credit losses of $140 million was recorded in the first quarter of 2026, compared with $125 million and $130 million in the fourth and first quarters of 2025, respectively. The provision for credit losses included $15 million of provision for unfunded credit commitments in the first quarter of 2026, compared with a reduction of provision for unfunded credit commitments of $15 million in the fourth quarter of 2025. No provision for unfunded credit commitments was recorded in the first quarter of 2025.

Current wording

A provision for credit losses is recorded to adjust the level of the allowance to reflect expected credit losses that are based on economic forecasts as of each reporting date. A provision for credit losses of $120 million was recorded in the second quarter of 2026, compared with $140 million in the first quarter of 2026. The provision for credit losses included $15 million of provision for unfunded credit commitments in the first quarter of 2026. There was no provision for unfunded credit commitments in the recent quarter. The lower provision for credit losses in the second quarter of 2026 as compared with the first quarter of 2026 reflects improved performance of loans to commercial customers. For the six months ended June 30, 2026 and 2025, the Company recorded a provision for credit losses of $260 million and $255 million, respectively.

Previous wording

Nonaccrual loans at March 31, 2026 decreased $12 million from December 31, 2025, reflecting lower commercial real estate nonaccrual loans, and $300 million from March 31, 2025, predominantly driven by a $127 million reduction in commercial and industrial nonaccrual loans and a $119 million reduction in commercial real estate nonaccrual loans. Approximately 45% of nonaccrual commercial and industrial and commercial real estate loans were considered current with respect to their payment status at March 31, 2026.

Current wording

Nonaccrual loans at June 30, 2026 decreased modestly from March 31, 2026 and $365 million from June 30, 2025, primarily driven by a $217 million reduction in commercial and industrial nonaccrual loans and a $148 million reduction in commercial real estate nonaccrual loans. Approximately 56% of nonaccrual commercial and industrial and commercial real estate loans were considered current with respect to their payment status at June 30, 2026.

Previous wording

Government-guaranteed loans designated as accruing loans past due 90 days or more included one-to-four family residential mortgage loans serviced by the Company that were repurchased to reduce associated servicing costs, including a requirement to advance principal and interest payments that had not been received from individual mortgagors. Despite the loans being purchased by the Company, the insurance or guarantee by the applicable government-related entity remains in force. The outstanding principal balances of the repurchased loans that are guaranteed by government-related entities included in accruing loans past due 90 days or more totaled $537 million at March 31, 2026, $459 million at December 31, 2025 and $240 million at March 31, 2025. Accruing loans past due 90 days or more not guaranteed by government-related entities were loans considered to be with creditworthy borrowers that were in the process of collection or renewal. Additional information about past due and nonaccrual loans is included in note 3 of Notes to Financial Statements.

Current wording

Government-guaranteed loans designated as accruing loans past due 90 days or more included one-to-four family residential mortgage loans serviced by the Company that were repurchased to reduce associated servicing costs, including a requirement to advance principal and interest payments that had not been received from individual mortgagors. Despite the loans being purchased by the Company, the insurance or guarantee by the applicable government-related entity remains in force. The outstanding principal balances of the repurchased loans that are guaranteed by government-related entities included in accruing loans past due 90 days or more totaled $489 million at June 30, 2026, $537 million at March 31, 2026, $459 million at December 31, 2025 and $377 million at June 30, 2025. Accruing loans past due 90 days or more not guaranteed by government-related entities were loans considered to be with creditworthy borrowers that were in the process of collection or renewal. Additional information about past due and nonaccrual loans is included in note 4 of Notes to Financial Statements.

Previous wording

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 while specific loans determined to have an elevated level of credit risk are designated as "criticized." A criticized loan may be designated as "nonaccrual" if the Company no longer expects to collect all amounts owed under the terms of the loan agreement or the loan is delinquent 90 days or more. Targeted reviews are periodically performed over segments of loan portfolios that may be experiencing heightened credit risk due to current or anticipated economic conditions. The intention of such reviews is to identify trends across such portfolios and inform portfolio risk limits and loss mitigation strategies. In the recent quarter the Company reviewed certain loans to borrowers in the energy sector as recent increases in energy and transportation costs have compressed operating margins and may do so in the future for these borrowers. The Company continues to monitor commercial borrowers in certain industry sectors that may be affected by international trade policy changes, such as tariffs, including retail and wholesale trade, manufacturing, packaging and construction companies. The Company has considered the information gathered in such reviews in the assignment of loan grades.

Current wording

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 while specific loans determined to have an elevated level of credit risk are designated as "criticized." A criticized loan may be designated as "nonaccrual" if the Company no longer expects to collect all amounts owed under the terms of the loan agreement or the loan is delinquent 90 days or more. Targeted reviews are periodically performed over segments of loan portfolios that may be experiencing heightened credit risk due to current or anticipated economic conditions. The intention of such reviews is to identify trends across such portfolios and inform portfolio risk limits and loss mitigation strategies. In the recent quarter, the Company continued to monitor commercial borrowers in certain industry sectors that may be affected by higher energy and transportation costs, international trade policy changes, such as tariffs, including retail and wholesale trade, manufacturing, packaging and engineering companies. The Company has considered the information gathered in such reviews in the assignment of loan grades.

Previous wording

The Company monitors its concentration of commercial real estate lending as a percent of its Tier 1 capital plus its allowable allowance for credit losses, consistent with a metric utilized to differentiate such concentrations amongst regulated financial institutions. This metric, as prescribed in supervisory guidance, excludes loans secured by commercial real estate considered to be owner-occupied, but includes certain other loans, such as loans to real estate investment trusts, that are classified as commercial and industrial loans. The Company's commercial real estate loan concentration approximated 129% of Tier 1 capital plus its allowable allowance for credit losses at March 31, 2026, compared with 124% at December 31, 2025 and 133% at March 31, 2025. The Company executed various strategies to reduce the amount of criticized loans in this category throughout 2025.

Current wording

The Company monitors its concentration of commercial real estate lending as a percent of its Tier 1 capital plus its allowable allowance for credit losses, consistent with a metric utilized to differentiate such concentrations amongst regulated financial institutions. This metric, as prescribed in supervisory guidance, excludes loans secured by commercial real estate considered to be owner-occupied, but includes certain other loans, such as loans to real estate investment trusts, that are classified as commercial and industrial loans. The Company's commercial real estate loan concentration approximated 134% of Tier 1 capital plus its allowable allowance for credit losses at June 30, 2026, compared with 124% at December 31, 2025 and 129% at June 30, 2025. The Company executed various strategies to reduce the amount of criticized loans in this category throughout 2025.

Previous wording

The $306 million reduction in commercial and industrial criticized loans from December 31, 2025 to March 31, 2026 spanned most industry types. The $400 million decline in commercial real estate criticized loans from December 31, 2025 to March 31, 2026 predominantly reflected a decline in criticized construction and development loans and permanent loans secured by multifamily properties. At March 31, 2026, approximately 96% of criticized accrual loans and 45% of criticized nonaccrual loans were considered current with respect to their payment status.

Current wording

The $416 million reduction in commercial and industrial criticized loans from December 31, 2025 to June 30, 2026 spanned most industry types. The $990 million decline in commercial real estate criticized loans from December 31, 2025 to June 30, 2026 predominantly reflected a decline in criticized construction and development loans and permanent loans secured by multifamily and retail properties. At June 30, 2026, approximately 94% of criticized accrual loans and 56% of criticized nonaccrual loans were considered current with respect to their payment status.

Previous wording

(a)Includes $650 million and $673 million of limited documentation first lien mortgage loans with nonaccrual loan balances totaling $48 million and $50 million at March 31, 2026 and December 31, 2025, respectively.

Current wording

(a)Includes $625 million and $673 million of limited documentation first lien mortgage loans with nonaccrual loan balances totaling $41 million and $50 million at June 30, 2026 and December 31, 2025, respectively.

Previous wording

Consumer loans not secured by residential real estate are generally charged-off when the loans are 91 to 180 days past due, depending on whether the loan is collateralized and the status of repossession activities with respect to such collateral. The Company primarily originates recreational finance loans and automobile loans indirectly through dealerships across the U.S. At March 31, 2026, the percent of recreational finance loans and automobile loans with FICO scores of 700 or greater at origination date was 99% and 83%, respectively. A comparative summary of nonaccrual consumer loan balances and the respective percent of outstanding balances of each consumer loan product at March 31, 2026 and December 31, 2025 is presented in the following table.

Current wording

Consumer loans not secured by residential real estate are generally charged-off when the loans are 91 to 180 days past due, depending on whether the loan is collateralized and the status of repossession activities with respect to such collateral. The Company primarily originates recreational finance loans and automobile loans indirectly through dealerships across the U.S. At June 30, 2026, the percent of recreational finance loans and automobile loans with FICO scores of 700 or greater at origination date was 99% and 84%, respectively. A comparative summary of nonaccrual consumer loan balances and the respective percent of outstanding balances of each consumer loan product at June 30, 2026 and December 31, 2025 is presented in the following table.

Previous wording

In establishing the allowance for loan losses, the Company estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes and also estimates losses for other loans with similar risk characteristics on a collective basis, generally through the use of statistically developed credit models, which are required to achieve a satisfactory independent validation by the Company's Model Risk Management Department, or other quantitative methodologies. 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 economic forecasts, geopolitical conditions and other risk factors that influence the loss estimation process. At each of March 31, 2026 and December 31, 2025, the Company qualitatively adjusted credit loss estimates for inherent limitations in the ability to assess real-time changes in commercial borrower performance and for environmental influences affecting certain loan portfolios. Qualitative adjustments at March 31, 2026 as compared with December 31, 2025, were generally higher reflecting the potential negative impact of global conflicts on economic forecasts.

Current wording

In establishing the allowance for loan losses, the Company estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes and also estimates losses for other loans with similar risk characteristics on a collective basis, generally through the use of statistically developed credit models, which are required to achieve a satisfactory independent validation by the Company's Model Risk Management Department, or other quantitative methodologies. 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 economic forecasts, geopolitical conditions and other risk factors that influence the loss estimation process. At each of June 30, 2026, March 31, 2026 and December 31, 2025, the Company qualitatively adjusted credit loss estimates for inherent limitations in the ability to assess real-time changes in commercial borrower performance and for environmental influences affecting certain loan portfolios. Qualitative adjustments at June 30, 2026 and December 31, 2025, primarily related to portfolio exposures to certain commercial and industrial borrowers, commercial real estate loans and consumer loans, were generally similar although such qualitative adjustments at March 31, 2026 were elevated reflective of the potential negative impact of global conflicts on economic forecasts utilized at that date.

Previous wording

(a)Included in the allowance for loan losses were reserves allocated as a percent of commercial real estate loans secured by office properties of 4.54% at March 31, 2026, 4.65% at December 31, 2025 and 4.37% at March 31, 2025.

Current wording

(a)Included in the allowance for loan losses were reserves allocated as a percent of commercial real estate loans secured by office properties of 3.91% at June 30, 2026, 4.54% at March 31, 2026 and 4.65% at December 31, 2025.

Previous wording

Management has assessed that the allowance for loan losses at March 31, 2026 appropriately reflected expected credit losses in the portfolio as of that date. The lower ratio of the allowance for loan losses as a percent of loans outstanding at March 31, 2026 and December 31, 2025 as compared with March 31, 2025, reflects lower levels of criticized commercial and industrial loans and commercial real estate loans. The level of the allowance reflects management’s evaluation of the loan portfolio as of each respective date using the methodology and considering the factors as described herein. Should the various economic forecasts and credit factors considered by management in establishing the allowance for loan losses change and should management’s assessment of losses in the loan portfolio also change, the level of the allowance as a percent of loans could increase or decrease in future periods.

Current wording

Management has assessed that the allowance for loan losses at June 30, 2026 appropriately reflected expected credit losses in the portfolio as of that date. The lower ratio of the allowance for loan losses as a percent of total loans outstanding at June 30, 2026 as compared with March 31, 2026 and December 31, 2025 reflects lower levels of criticized commercial and industrial loans and commercial real estate loans, partially offset by loan growth. The level of the allowance reflects management’s evaluation of the loan portfolio as of each respective date using the methodology and considering the factors as described herein. Should the various economic forecasts and credit factors considered by management in establishing the allowance for loan losses change and should management’s assessment of losses in the loan portfolio also change, the level of the allowance as a percent of loans could increase or decrease in future periods.

Previous wording

Effective January 1, 2026, the Company elected to prospectively measure its residential mortgage loan servicing right assets at fair value with changes in fair value reflected in mortgage banking revenues. As a result, fair value changes in the mortgage loan servicing right assets, inclusive of the realization of expected net servicing revenues over time, are included in mortgage banking revenues. On December 31, 2025, the Company began economically hedging the risk of fair value changes in these assets through the use of various interest rate derivative contracts, for which changes in fair value are also reflected in mortgage banking revenues.

Current wording

Effective January 1, 2026, the Company elected to prospectively measure its residential mortgage loan servicing right assets at fair value with changes in fair value reflected in mortgage banking revenues. As a result, fair value changes in the mortgage loan servicing right assets, inclusive of the realization of expected net servicing revenues over time, are included in mortgage banking revenues. On December 31, 2025, the Company began economically hedging the risk of fair value changes in these assets through the use of various interest rate and other derivative contracts, for which changes in fair value are also reflected in mortgage banking revenues.

Previous wording

The increase in residential mortgage banking revenues in the first three months of 2026 as compared with the corresponding 2025 period reflects higher sub-servicing revenues due to an arrangement effective February 2025 whereby the Company began sub-servicing $51.7 billion of additional residential mortgage loans with contractual servicing rights held by Bayview Financial, partially offset by the Company's accounting election described herein.

Current wording

The higher residential mortgage banking revenues for the three and six months ended June 30, 2026 as compared with the first quarter of 2026 and six months ended June 30, 2025, respectively, reflect increased sub-servicing revenues due to the net addition of sub-serviced loans. Partially offsetting the increase in residential mortgage banking revenues in the first half of 2026 as compared with the similar 2025 period was the impact of the Company's accounting election described herein.