M&T BANK CORP

The components of other expense are presented in Table 32.

Table 32

OTHER EXPENSE

(a)Includes merger-related expenses considered "nonoperating" in nature totaling $338 million in 2022. Table 3 provides a summary of merger-related expenses in the reconciliation of GAAP amounts to non-GAAP measures. No merger-related expenses were incurred in 2024 and 2023.

Salaries and employee benefits

Salaries and employee benefits expense increased $165 million in 2024 as compared with 2023 reflecting higher salaries expense from annual merit and other increases and a rise in incentive compensation, partially offset by lower average staffing levels. The average number of full-time equivalent employees was 22,027 in 2024 as compared with 22,664 in 2023, whereas full-time equivalent employees totaled 22,101 and 21,980 at December 31, 2024 and 2023, respectively. Stock-based compensation expense totaled $116 million in 2024 as compared with $118 million in 2023.

The Company provides pension, retirement savings and other postretirement benefits for its employees. Expenses related to such benefits totaled $71 million in 2024 and $74 million in 2023. The amounts recorded in salaries and employee benefits expense and other costs of operations, respectively, from the preceding sentence were as follows: $173 million and ($102 million) in 2024; and $164 million and ($90 million) in 2023. The Company sponsors both defined benefit and defined contribution pension plans. Pension expense for those plans was a net benefit of $28 million in 2024 and $21 million in 2023. Components of pension expense included in other costs of operations reflect the amortization of net unrecognized gains and losses included in accumulated other comprehensive income. In the recent year, the Company recognized a $12 million benefit in other costs of operations associated with the solicited election of certain participants in M&T's defined benefit pension plan to accept a lump-sum distribution in the fourth quarter of 2024 in lieu of future retirement benefit payments. Approximately $171 million of lump-sum settlements were distributed from the pension plan in December 2024, representing approximately 8% of the plan's accumulated benefit obligation at that time. The Company does not expect that such distribution will have a material impact on its noninterest expense in 2025. Information about the Company’s pension plans, including significant assumptions utilized in completing actuarial calculations for the plans, is included in note 12 of Notes to Financial Statements. The Company’s retirement savings plan is a defined contribution plan in which eligible employees of the Company may defer up to 50% of qualified compensation via contributions to the plan. Retirement savings plan expense reflecting the Company’s employer matching contribution was $100 million in 2024 and $96 million in 2023.

Nonpersonnel expenses

As described herein within Part I, Item 1, "Business," on November 16, 2023, the FDIC finalized a rule that imposes a special assessment to recover the costs to the DIF resulting from the FDIC’s use in 2023 of the systemic risk exception to the least-cost resolution test under the FDIA in connection with the receiverships of certain failed banks. Based on estimates at the time the rule was finalized and subsequent information provided by the FDIC regarding the estimated costs of resolution, the Company recognized expense for the special assessment of $34 million in 2024 and $197 million in 2023 in the Consolidated Statement of Income.

After considering FDIC assessments, the $16 million decrease in nonpersonnel expenses in 2024 as compared with 2023 reflects a decline in professional and other services expense of $69 million, predominantly from lower sub-advisory fees as a result of the sale of the CIT business in April 2023 and a decline in management consulting costs, a decrease in losses associated with certain retail banking activities and a benefit related to voluntary lump-sum distributions to certain M&T pension plan participants. Partially offsetting those favorable factors were higher outside data processing and software costs of $55 million, vacated facility write-downs of $27 million in 2024 and losses on the redemption of certain issuances of M&T's Junior Subordinated Debentures of $20 million in 2024 as described in note 8 of Notes to Financial Statements.