M&T BANK CORP

Previous wording

In conjunction with the implementation of a new general ledger platform during the second quarter of 2026, the Company modified its methodology for calculating annualized taxable-equivalent rates for certain earning assets and interest-bearing liabilities, including certain average deposit balances. Previously reported amounts have been adjusted to conform to the current presentation.

Current wording

As reported on M&T's Form 8-K dated September 28, 2026, effective for the third quarter of 2026 M&T made certain changes and reclassifications to other income categories presented in its Consolidated Statement of Income. Also effective for the third quarter of 2026, M&T began separately presenting loans held for sale from loans held for investment in its Consolidated Balance Sheet and its Average Balance Sheet and Annualized Taxable-equivalent Rates disclosures. Accordingly, annualized taxable-equivalent rates for each impacted loan category and certain loan-based credit quality ratios exclude loans held for sale. Additionally, as reported in M&T's Form 10-Q for the quarter ended June 30, 2026, in conjunction with the implementation of a new general ledger platform during the second quarter of 2026, the Company modified its methodology for calculating annualized taxable-equivalent rates for certain earning assets and interest-bearing liabilities, including certain average deposit balances. All periods presented herein reflect those changes.

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 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.

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

Current wording

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

Previous wording

•Net interest income on a taxable-equivalent basis increased $41 million reflecting an additional calendar day in the recent quarter, higher interest income on nonaccrual loans and growth in average earning assets. The Company's net interest margin was unchanged.

Current wording

•Net interest income on a taxable-equivalent basis increased nominally reflecting an additional day, partially offset by lower interest income on nonaccrual loans. The Company's net interest margin declined 5 basis points from the second quarter of 2026 as the increase in rates paid on interest-bearing liabilities outpaced the growth in yields on earning assets.

Previous wording

The increase in net income in the six months ended June 30, 2026 as compared with the same 2025 period reflected the following:

Current wording

The increase in net income in the nine months ended September 30, 2026 as compared with the same 2025 period reflected the following:

Previous 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.

Current wording

•Net interest income on a taxable-equivalent basis increased $170 million reflecting higher average earning assets and interest-bearing liabilities. A 3 basis-point expansion of the Company's net interest margin reflects reductions in deposit and borrowing costs that outpaced a decline in yields received on earning assets and lower contribution from net interest-free funds.

Previous 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.

Current wording

•Noninterest expense increased $66 million reflecting a rise in 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 nine months of 2025 included amortization of residential mortgage loan servicing right assets of $75 million.

Previous 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.

Current wording

Under programs authorized by the Board of Directors, M&T repurchased 1.3 million shares of its common stock in the recent quarter at a total cost of $323 million, compared with 2.1 million shares at a total cost of $465 million in the second quarter of 2026. During the nine months ended September 30, 2026, M&T repurchased 8.9 million shares of its common stock at a total cost of $2.0 billion, compared with 11.6 million shares at a total cost of $2.2 billion during the first nine months of 2025. In July 2026, M&T issued 60,000 shares of Perpetual Fixed Rate Non-Cumulative Preferred Stock, Series L, with a liquidation preference of $10,000 per share. On November 1, 2026, M&T redeemed all 50,000 outstanding shares of its Perpetual Fixed-to-Floating Rate Non-cumulative Preferred Stock, Series F, for $500 million.

Previous wording

(d)The yield on state and political subdivision investment securities for the six-month period ended June 30, 2025 reflects $18 million of lower taxable-equivalent interest income resulting from an alignment of amortization periods for certain municipal bonds obtained from the acquisition of People's United Financial, Inc.

Current wording

(d)The yield on state and political subdivision investment securities for the nine-month period ended September 30, 2025 reflects $18 million of lower taxable-equivalent interest income resulting from an alignment of amortization periods for certain municipal bonds obtained from the acquisition of People's United Financial, Inc.

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 75 basis points in the last four months of 2025 and maintained its target through the second quarter of 2026.

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 raised its federal funds target interest rate by 25 basis points in September 2026. The FOMC lowered its federal funds target interest rate by a total of 75 basis points in the last four months of 2025 and then maintained its target interest rate until that aforementioned increase.

Previous wording

Taxable-equivalent net interest income increased $41 million in the recent quarter as compared with the first quarter of 2026 reflective of an additional calendar day in the recent quarter, an increase in interest income on nonaccrual loans and higher average earning assets. The net interest margin remained unchanged at 3.70% reflecting a 5 basis-point increase in yields received on earning assets offset by a 4 basis-point increase in rates paid on interest-bearing liabilities and a 1 basis-point decrease in the contribution of interest-free funds.

Current wording

Taxable-equivalent net interest income increased nominally in the recent quarter as compared with the second quarter of 2026 reflective of an additional day, lower interest income on nonaccrual loans and loan growth that was funded by interest-bearing deposits as the Company reduced its average short-term borrowings. The net interest margin declined to 3.65% reflecting an 8 basis-point increase in rates paid on interest-bearing liabilities resulting from the growth and mix of deposits and the FOMC action in September, partially offset by a 1 basis-point increase in yields received on earning assets and a 2 basis-point increase in the contribution of net interest-free funds.

Previous 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.

Current wording

Taxable-equivalent net interest income for the first nine months of 2026 increased $170 million as compared with the same 2025 period. That increase reflects higher earning assets and a 3 basis-point widening of the net interest margin to 3.68% driven by a 33 basis-point decrease in the cost of interest-bearing liabilities, partially offset by a 15 basis-point decline in each of the yields received on earning assets and the contribution from net interest-free funds. The aforementioned FOMC interest rate reductions in 2025 contributed to those changes. The yields received on earning assets in the first nine 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 nine months of 2026 that yielded higher rates than investment securities that matured or were sold.

Previous wording

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

Current wording

Average loans totaled $143.3 billion in the third quarter of 2026, up $2.6 billion from the second quarter of 2026.

Previous wording

•Average residential real estate loans increased $269 million reflecting purchases in the second quarter of 2026 and the retention of originated residential mortgage loans.

Current wording

•Average residential real estate loans increased $367 million reflecting purchases in the second quarter of 2026 and the retention of originated residential mortgage loans.

Previous wording

•Average consumer loans increased $413 million reflecting higher average balances of recreational finance loans of $408 million.

Current wording

•Average consumer loans increased $634 million reflecting higher average balances of recreational finance loans of $561 million and modest growth in average balances of home equity loans and lines of credit.

Previous wording

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

Current wording

In the first nine months of 2026, average loans increased $5.6 billion from the corresponding 2025 period.

Previous 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.

Current wording

•Average commercial real estate loans declined $1.1 billion reflecting various strategies the Company executed to reduce its relative concentration of such loans designated as criticized, partially offset by increased originations in 2026. Average commercial real estate construction loans decreased $1.5 billion, partially offset by an increase of $429 million in average permanent commercial real estate loans. 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 $1.5 billion reflecting the retention of originated residential mortgage loans and purchases.

Current wording

•Average residential real estate loans increased $1.3 billion reflecting the retention of originated residential mortgage loans and purchases.

Previous 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.

Current wording

•Average consumer loans increased $1.5 billion primarily reflecting growth in average recreational finance loans of $1.2 billion and home equity loans and lines of credit of $243 million.

Previous 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.

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 September 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 date, 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 September 30, 2026 and December 31, 2025.

Previous wording

The Company's investment securities portfolio is primarily comprised of government-issued or guaranteed residential and commercial mortgage-backed securities and U.S. Treasury securities, but also includes municipal and other securities. When purchasing investment securities, the Company considers its liquidity position and its overall interest rate risk profile as well as the adequacy of expected returns relative to risks assumed, including prepayments. The Company may occasionally sell investment securities as a result of movements in interest rates and spreads, changes in liquidity needs, actual or anticipated prepayments, credit risk associated with a particular security, or as a result of restructuring its investment securities portfolio. The amounts of investment securities held by the Company are influenced by such factors as available yield in comparison with alternative investments, demand for loans, which generally yield more than investment securities, ongoing repayments, the levels of deposits, and management of liquidity and balance sheet size and resulting capital ratios. Information about the Company's average investment securities portfolio is presented in the following table.

Current wording

The Company's investment securities portfolio is primarily comprised of government-issued or guaranteed residential and commercial mortgage-backed securities and U.S. Treasury securities, but also includes municipal and other securities. When purchasing investment securities, the Company considers its liquidity position and its overall interest rate risk profile as well as the adequacy of expected returns relative to risks assumed, including prepayments. The Company may occasionally sell investment securities as a result of movements in interest rates and spreads, changes in liquidity needs, actual or anticipated prepayments, credit risk associated with a particular security, or as a result of restructuring its investment securities portfolio. The amounts of investment securities held by the Company are influenced by such factors as available yield in comparison with alternative investments, demand for loans, which generally yield more than investment securities, ongoing repayments, the levels of deposits, and management of liquidity and balance sheet size and resulting capital ratios.

Previous 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.

Current wording

The investment securities portfolio averaged $38.6 billion in the third quarter of 2026, a modest decline from the second quarter of 2026. Investment securities averaged $38.4 billion for the nine months ended September 30, 2026, an increase of $2.9 billion from the similar 2025 period. That increase reflects the Company's deployment of liquidity into predominantly fixed-rate mortgage-backed investment securities. 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 or third quarters of 2026 or the first three quarters of 2025. The weighted-average current yield for total investment securities available for sale was 4.48% at September 30, 2026, compared with 4.73% at June 30, 2026 and 4.65% at September 30, 2025. The weighted-average duration of that portfolio was 3.6 years and 3.1 years at September 30, 2026 and June 30, 2026, respectively, compared with 2.5 years at September 30, 2025. The increase in the weighted-average duration from September 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 and the impact of rising interest rates on fixed-rate mortgage-backed investment securities. 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 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.

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 nine months ended September 30, 2026 and September 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 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.

Current wording

Other earning assets are comprised primarily of interest-bearing deposits at banks. Other earning assets averaged $14.2 billion and $15.1 billion during the three months ended September 30, 2026 and June 30, 2026, respectively, and $15.2 billion and $19.1 billion during the nine months ended September 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 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.

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 September 30, 2026 and June 30, 2026 and for the nine months ended September 30, 2026, compared with 78% for the nine months ended September 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

(a)During the second quarter of 2026, certain savings and interest-checking deposit arrangements were redesignated as core deposits consistent with regulatory presentation. The resulting increase in average core deposits and decrease in average brokered deposits was $3.5 billion for the quarter ended June 30, 2026 and $1.8 billion for the six months ended June 30, 2026.

Current wording

(a)During the second quarter of 2026, certain savings and interest-checking deposit arrangements were redesignated as core deposits consistent with regulatory presentation. The resulting increase in average core deposits and decrease in average brokered deposits was $4.4 billion and $3.5 billion for the three months ended September 30, 2026 and June 30, 2026, respectively, and was $2.7 billion for the nine months ended September 30, 2026.

Previous wording

Total deposits averaged $163.5 billion in the recent quarter, down $652 million from the first quarter of 2026. Lower average noninterest-bearing deposits of $583 million and average brokered savings and interest-checking deposits were partially offset by an increase in average brokered time deposits of $682 million.

Current wording

Total deposits averaged $166.8 billion in the recent quarter, up $3.3 billion from the second quarter of 2026. The increase reflects higher average core savings and interest-checking deposits of $2.4 billion and average brokered time deposits of $1.2 billion.

Previous wording

In the first six months of 2026, total average deposits increased $1.7 billion from the corresponding 2025 period. Average core deposits increased $4.3 billion reflecting growth in average savings and interest-checking deposits from commercial customers and the redesignation of certain deposit arrangements in the second quarter of 2026. Partially offsetting that increase was lower average noninterest-bearing deposits predominantly from commercial customers.

Current wording

In the first nine months of 2026, total average deposits increased $2.5 billion from the first nine months of 2025. Average core deposits increased $5.3 billion reflecting growth in average savings and interest-checking deposits from commercial customers and the redesignation of certain deposit arrangements in the second quarter of 2026. Partially offsetting that increase was lower average noninterest-bearing deposits predominantly from commercial customers.

Previous 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.

Current wording

The accompanying table summarizes the components of average total deposits by reportable segment for the three months ended September 30, 2026 and June 30, 2026 and the nine months ended September 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 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.

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 levels of short-term borrowings in the third quarter of 2026 as compared with the second quarter of 2026, as well as for the nine months ended September 30, 2026 as compared with the similar 2025 period reflect the Company's management of liquidity.

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 as well as for the six months ended June 30, 2026.

Current wording

The levels of long-term borrowings reflect the Company's strategies to maintain diversified wholesale funding sources and 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 nine months ended September 30, 2026.

Previous 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.

Current wording

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

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 $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.

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 $135 million was recorded in the third quarter of 2026, compared with $120 million in the second quarter of 2026. A $5 million provision for unfunded credit commitments was recorded in the third quarter of 2026. There was no provision for unfunded credit commitments in the second quarter of 2026. The higher provision for credit losses in the third quarter of 2026 as compared with the second quarter of 2026 reflects loan growth. For the nine months ended September 30, 2026 and 2025, the Company recorded a provision for credit losses of $395 million and $380 million, respectively.

Previous 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.

Current wording

Nonaccrual loans at September 30, 2026 increased $90 million from June 30, 2026 reflecting a $47 million rise in commercial and industrial nonaccrual loans and a $41 million rise in commercial real estate nonaccrual loans. Nonaccrual loans declined $214 million from September 30, 2025, primarily driven by a $143 million reduction in commercial and industrial nonaccrual loans and an $89 million reduction in commercial real estate nonaccrual loans. Approximately 48% of nonaccrual commercial and industrial and commercial real estate loans were considered current with respect to their payment status at September 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 $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.

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 $468 million at September 30, 2026, $489 million at June 30, 2026, $459 million at December 31, 2025 and $333 million at September 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 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.

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 rising interest rates, higher energy and transportation costs and international trade policy changes, such as tariffs, including retail and wholesale trade, manufacturing, food service and packaging companies. The Company has considered the information gathered in such reviews in the assignment of loan grades.

Previous wording

The Company continues to monitor its commercial real estate loan portfolio. The primary source of repayment of these loans is typically tenant lease payments to the investor/borrower. Elevated vacancies impacting some property types have contributed to lower current and anticipated future debt service coverage ratios, which have and may continue to influence the ability of borrowers to make existing loan payments. Lower debt service coverage ratios and reduced commercial real estate values also impact the ability of borrowers to refinance their obligations at loan maturity. Despite these challenges, the ability of borrowers to service loans secured by investor-owned real estate has generally improved in recent quarters. The LTV ratio is one of many factors considered in assessing overall portfolio risks and loss mitigation strategies for the investor-owned commercial real estate portfolio. In determining the LTV ratio, the Company considers cross-collateralization of all exposures secured by the supporting collateral and the estimated value of such collateral. Subsequent to the origination of commercial real estate loans, updated appraisals are obtained in the normal course of business for renewals, extensions and modifications to commitment levels. As the quality of a loan deteriorates to the point of designating the loan as "criticized nonaccrual," the process of obtaining updated collateral valuation information is usually initiated, unless it is not considered warranted given factors such as the relative size of the loan or the age of the last valuation. In those cases where current appraisals may not yet be available, prior appraisals are utilized with adjustments, as deemed necessary, for estimates of subsequent declines in values as determined by line of business and/or loan workout personnel. Those adjustments are reviewed and assessed for reasonableness by the Company’s credit risk personnel. Accordingly, for real estate collateral securing larger nonaccrual commercial and industrial loans and commercial real estate loans, estimated collateral values are generally based on current estimates of value.

Current wording

The Company continues to monitor its commercial real estate loan portfolio. The primary source of repayment of these loans is typically tenant lease payments to the investor/borrower. Elevated vacancies impacting some property types have contributed to lower current and anticipated future debt service coverage ratios, which have and may continue to influence the ability of borrowers to make existing loan payments. Lower debt service coverage ratios, reduced commercial real estate values and potentially higher interest rates could also impact the ability of borrowers to refinance their obligations at loan maturity. The Company actively monitors interest rate-sensitive borrowers to reassess loan grades. The LTV ratio is one of many factors considered in assessing overall portfolio risks and loss mitigation strategies for the investor-owned commercial real estate portfolio. In determining the LTV ratio, the Company considers cross-collateralization of all exposures secured by the supporting collateral and the estimated value of such collateral. Subsequent to the origination of commercial real estate loans, updated appraisals are obtained in the normal course of business for renewals, extensions and modifications to commitment levels. As the quality of a loan deteriorates to the point of designating the loan as "criticized nonaccrual," the process of obtaining updated collateral valuation information is usually initiated, unless it is not considered warranted given factors such as the relative size of the loan or the age of the last valuation. In those cases where current appraisals may not yet be available, prior appraisals are utilized with adjustments, as deemed necessary, for estimates of subsequent declines in values as determined by line of business and/or loan workout personnel. Those adjustments are reviewed and assessed for reasonableness by the Company’s credit risk personnel. Accordingly, for real estate collateral securing larger nonaccrual commercial and industrial loans and commercial real estate loans, estimated collateral values are generally based on current estimates of value.

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 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.

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 137% of Tier 1 capital plus its allowable allowance for credit losses at September 30, 2026, compared with 134% at June 30, 2026, 124% at December 31, 2025 and 128% at September 30, 2025.

Previous 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.

Current wording

The $203 million reduction in commercial and industrial criticized loans from December 31, 2025 to September 30, 2026 reflects lower criticized loans to motor vehicle and recreational finance dealers, wholesale and health services industries, partially offset by higher criticized loans predominantly to borrowers in the retail and financial and insurance industries. The $958 million decline in commercial real estate criticized loans from December 31, 2025 to September 30, 2026 reflects a $485 million decline in construction and development loans designated as criticized and a $473 million decline in criticized permanent loans secured by most property types. At September 30, 2026, approximately 97% of criticized accrual loans and 48% of criticized nonaccrual loans were considered current with respect to their payment status.

Previous 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.

Current wording

(a)Includes $598 million and $673 million of limited documentation first lien mortgage loans with nonaccrual loan balances totaling $39 million and $50 million at September 30, 2026 and December 31, 2025, respectively.