Item 8. Financial Statements and Supplementary Data.

Financial Statements and Supplementary Data consist of the financial statements as indexed and presented below and Table 22 “Quarterly Trends” presented in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Index to Financial Statements and Financial Statement Schedules
Report on Internal Control Over Financial Reporting	112
Report of Independent Registered Public Accounting Firm	113
Consolidated Balance Sheet — December 31, 2022 and 2021	117
Consolidated Statement of Income — Years ended December 31, 2022, 2021 and 2020	118
Consolidated Statement of Comprehensive Income — Years ended December 31, 2022, 2021 and 2020	119
Consolidated Statement of Cash Flows — Years ended December 31, 2022, 2021 and 2020	120
Consolidated Statement of Changes in Shareholders’ Equity — Years ended December 31, 2022, 2021 and 2020	121
Notes to Financial Statements	122

Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting at M&T Bank Corporation and subsidiaries (“the Company”). Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 based on criteria described in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, management concluded that the Company maintained effective internal control over financial reporting as of December 31, 2022. Management has excluded processes and controls of People’s United that have not yet been converted to M&T's systems or processes from its assessment of internal control over financial reporting for the year ended December 31, 2022. Assets and liabilities associated with those processes and procedures as of December 31, 2022 include loans and leases of $5.8 billion, other assets of $107 million and other liabilities of $184 million. Approximately $280 million of total revenues for the nine months ended December 31, 2022 was contributed from business activities of People's United that have not yet been converted to M&T's systems or processes.

The consolidated financial statements of the Company have been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, that was engaged to express an opinion as to the fairness of presentation of such financial statements. PricewaterhouseCoopers LLP was also engaged to assess the effectiveness of the Company’s internal control over financial reporting. The report of PricewaterhouseCoopers LLP follows this report.

	M&T BANK CORPORATION
	René F. Jones
	Chairman of the Board and Chief Executive Officer
	Darren J. King
	Senior Executive Vice President and Chief Financial Officer

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of M&T Bank Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of M&T Bank Corporation and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, of comprehensive income, of changes in shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for the allowance for credit losses as of January 1, 2020.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and

evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded certain elements of the internal control over financial reporting of People's United Financial, Inc. (“People’s United”) from its assessment of the Company’s internal control over financial reporting as of December 31, 2022 because it was acquired by the Company in a purchase business combination during 2022. Subsequent to the acquisition, certain elements of People's United’s internal control over financial reporting and related processes were integrated into the Company’s existing systems and internal control over financial reporting. Those controls that were not integrated have been excluded from management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2022. We have also excluded these elements of the internal control over financial reporting of People's United from our audit of the Company’s internal control over financial reporting. The excluded elements represent controls over approximately $5.9 billion of the Company's consolidated total assets of $200.7 billion, $184 million of the Company's consolidated total liabilities of $175.4 billion, and $280 million of the Company's consolidated total interest and other income of $8.6 billion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Acquisition of People's United Financial, Inc. - Fair Value of Acquired Commercial Real Estate Loans

As described in Note 2 to the consolidated financial statements, on April 1, 2022, the Company completed the acquisition of People's United Financial, Inc. (“People’s United”). The People’s United transaction has been accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and preferred stock converted were recorded at estimated fair value on the acquisition date. As disclosed by management, the fair value of loans acquired from People’s United totaled $35.8 billion as of April 1, 2022, of which $13.5 billion were commercial real estate loans. The fair values of loans were generally based on a discounted cash flow methodology that considered market interest rates, expected credit losses, prepayment assumptions and other market factors for loans with similar characteristics including loan type, collateral, fixed or variable interest rate and credit risk characteristics.

The principal considerations for our determination that performing procedures relating to the fair value of acquired commercial real estate loans in the acquisition of People’s United is a critical audit matter are (i) the significant judgment and estimation by management in developing the market interest rate, expected credit losses, and prepayment assumptions used in estimating the fair value of the acquired commercial real estate loans, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s development of market interest rates, expected credit losses, and prepayment assumptions, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s fair value of the acquired commercial real estate loans. These procedures also included, among others, testing the completeness and accuracy of the underlying acquired commercial real estate loan data provided by management that was used to develop the fair value of acquired commercial real estate loans, and the involvement of professionals with specialized skill and knowledge to assist in evaluating the reasonableness of management’s estimate by developing independent ranges of fair value for the acquired commercial real estate loans using independently developed market interest rates, expected credit losses, and prepayment assumptions and comparing the independent ranges to management’s estimate.

Allowance for Credit Losses – Adjustments to model forecasts

As described in Notes 1 and 5 to the consolidated financial statements, the Company’s allowance for credit losses of $1.9 billion reflects management's expected credit losses in the loan and lease portfolio of $131.6 billion as of December 31, 2022. For purposes of determining the level of the allowance for credit losses, management evaluates the Company’s loan and lease portfolio by type. Management utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and to determine estimated credit losses through a reasonable and supportable forecast period. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. Management also considered the impact of portfolio concentrations, changes in underwriting practices, product expansions into new markets, imprecision in its economic forecasts, geopolitical conditions and other risk factors that might influence the loss estimation process.

The principal considerations for our determination that performing procedures relating to the allowance for credit losses, specifically certain adjustments to model forecasts, is a critical audit matter are (i) the significant judgment by management in determining the adjustments to model forecasts, (ii) a high

degree of auditor judgment, subjectivity and effort in performing procedures and in evaluating audit evidence related to management’s determination of these adjustments to model forecasts, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company’s allowance for credit losses estimation process, including controls relating to the allowance for credit losses estimation process for certain adjustments to model forecasts. These procedures also included, among others, testing management’s process for determining the allowance for credit losses and these adjustments to model forecasts, including evaluating the appropriateness of management’s methodology, testing the data utilized by management and evaluating the reasonableness of significant assumptions relating to these adjustments to model forecasts. Evaluating significant assumptions relating to these adjustments to model forecasts involved evaluating portfolio composition and concentration, as well as relevant market data. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of management’s methodology and the reasonableness of significant assumptions relating to these adjustments to model forecasts.

Buffalo, New York

February 22, 2023

We have served as the Company’s auditor since 1984.

M&T BANK CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheet

		December 31,
(Dollars in thousands, except per share)		2022				2021
Assets
Cash and due from banks		$	1,517,244			$	1,337,577
Interest-bearing deposits at banks			24,958,719				41,872,304
Federal funds sold			3,000				—
Trading account			117,847				49,745
Investment securities
Available for sale (cost: $11,193,152 at December 31, 2022; $3,849,347 at December 31, 2021)			10,748,961				3,955,804
Held to maturity (fair value: $12,375,420 at December 31, 2022; $2,771,290 at December 31, 2021)			13,529,969				2,734,674
Equity and other securities (cost: $933,766 at December 31, 2022; $461,516 at December 31, 2021)			931,941				465,382
Total investment securities			25,210,871				7,155,860
Loans and leases			132,074,156				93,136,678
Unearned discount			(509,993	)			(224,226	)
Loans and leases, net of unearned discount			131,564,163				92,912,452
Allowance for credit losses			(1,925,331	)			(1,469,226	)
Loans and leases, net			129,638,832				91,443,226
Premises and equipment			1,653,628				1,144,765
Goodwill			8,490,089				4,593,112
Core deposit and other intangible assets			209,374				3,998
Accrued interest and other assets			8,930,237				7,506,573
Total assets		$	200,729,841			$	155,107,160
Liabilities
Noninterest-bearing deposits		$	65,501,860			$	60,131,480
Savings and interest-checking deposits			87,911,463				68,603,966
Time deposits			10,101,545				2,807,963
Total deposits			163,514,868				131,543,409
Short-term borrowings			3,554,951				47,046
Accrued interest and other liabilities			4,377,495				2,127,931
Long-term borrowings			3,964,537				3,485,369
Total liabilities			175,411,851				137,203,755
Shareholders' equity
Preferred stock, $1.00 par, 20,000,000 shares authorized; Issued and outstanding: Liquidation preference of $1,000 per share: 350,000 shares at December 31, 2022 and December 31, 2021; Liquidation preference of $10,000 per share: 140,000 shares at December 31, 2022 and 2021; Liquidation preference of $25 per share: 10,000,000 shares at December 31, 2022			2,010,600				1,750,000
Common stock, $.50 par, 250,000,000 shares authorized,179,436,779 shares issued at December 31, 2022 and159,741,898 shares issued at December 31, 2021			89,718				79,871
Common stock issuable, 14,031 shares at December 31, 2022;15,769 shares at December 31, 2021			1,112				1,212
Additional paid-in capital			10,002,891				6,635,000
Retained earnings			15,753,978				14,646,448
Accumulated other comprehensive income (loss), net			(790,030	)			(127,578	)
Treasury stock — common, at cost — 10,165,419 shares at December 31, 2022;31,052,845 shares at December 31, 2021			(1,750,279	)			(5,081,548	)
Total shareholders’ equity			25,317,990				17,903,405
Total liabilities and shareholders’ equity		$	200,729,841			$	155,107,160

See accompanying notes to financial statements.

M&T BANK CORPORATION AND SUBSIDIARIES

Consolidated Statement of Income

		Year Ended December 31,
(In thousands, except per share)		2022				2021				2020
Interest income
Loans and leases, including fees		$	5,237,405			$	3,748,988			$	3,975,053
Investment securities
Fully taxable			447,646				141,046				176,469
Exempt from federal taxes			51,113				116				183
Deposits at banks			509,030				47,491				32,956
Other			1,926				1,143				8,051
Total interest income			6,247,120				3,938,784				4,192,712
Interest expense
Savings and interest-checking deposits			270,765				32,998				146,701
Time deposits			23,867				18,635				66,280
Deposits at Cayman Islands office			—				201				4,054
Short-term borrowings			19,426				7				28
Long-term borrowings			111,106				62,165				109,332
Total interest expense			425,164				114,006				326,395
Net interest income			5,821,956				3,824,778				3,866,317
Provision for credit losses			517,000				(75,000	)			800,000
Net interest income after provision for credit losses			5,304,956				3,899,778				3,066,317
Other income
Mortgage banking revenues			356,636				571,329				566,641
Service charges on deposit accounts			446,604				402,113				370,788
Trust income			740,717				644,716				601,884
Brokerage services income			87,877				62,791				47,428
Trading account and non-hedging derivative gains			26,786				24,376				40,536
Gain (loss) on bank investment securities			(5,686	)			(21,220	)			(9,421	)
Other revenues from operations			703,669				482,889				470,588
Total other income			2,356,603				2,166,994				2,088,444
Other expense
Salaries and employee benefits			2,787,351				2,045,677				1,950,692
Equipment and net occupancy			474,316				326,698				322,037
Outside data processing and software			376,493				291,839				258,480
FDIC assessments			90,274				69,704				53,803
Advertising and marketing			90,748				64,428				61,904
Printing, postage and supplies			55,570				36,507				39,869
Amortization of core deposit and other intangible assets			55,624				10,167				14,869
Other costs of operations			1,120,060				766,603				683,586
Total other expense			5,050,436				3,611,623				3,385,240
Income before taxes			2,611,123				2,455,149				1,769,521
Income taxes			619,460				596,403				416,369
Net income		$	1,991,663			$	1,858,746			$	1,353,152
Net income available to common shareholders
Basic		$	1,891,469			$	1,776,977			$	1,279,066
Diluted			1,891,480				1,776,987				1,279,068
Net income per common share
Basic		$	11.59			$	13.81			$	9.94
Diluted			11.53				13.80				9.94

See accompanying notes to financial statements.

M&T BANK CORPORATION AND SUBSIDIARIES

C****onsolidated Statement of Comprehensive Income

		Year Ended December 31
(In thousands)		2022				2021				2020
Net income		$	1,991,663			$	1,858,746			$	1,353,152
Other comprehensive income (loss), net of tax and reclassification adjustments:
Net unrealized gains (losses) on investment securities			(406,793	)			(66,977	)			107,222
Cash flow hedges adjustments			(314,831	)			(210,626	)			172,787
Foreign currency translation adjustments			(5,787	)			(862	)			2,284
Defined benefit plans liability adjustments			64,959				213,919				(138,645	)
Total other comprehensive income (loss)			(662,452	)			(64,546	)			143,648
Total comprehensive income		$	1,329,211			$	1,794,200			$	1,496,800

See accompanying notes to financial statements.

M&T BANK CORPORATION AND SUBSIDIARIES

Consolidated Statement of Cash Flows

		Year Ended December 31
(In thousands)		2022				2021				2020
Cash flows from operating activities
Net income		$	1,991,663			$	1,858,746			$	1,353,152
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses			517,000				(75,000	)			800,000
Depreciation and amortization of premises and equipment			282,056				224,274				220,598
Amortization of capitalized servicing rights			96,463				89,767				84,821
Amortization of core deposit and other intangible assets			55,624				10,167				14,869
Provision for deferred income taxes			(29,987	)			87,159				(31,291	)
Asset write-downs			8,471				8,431				21,014
Net gain on sales of assets			(153,491	)			(10,308	)			(19,441	)
Net change in accrued interest receivable, payable			(122,755	)			65,724				(132,252	)
Net change in other accrued income and expense			(69,993	)			52,540				(418,752	)
Net change in loans originated for sale			771,458				(163,623	)			(542,078	)
Net change in trading account and non-hedging derivative assets and liabilities			1,227,231				567,082				(561,453	)
Net cash provided by operating activities			4,573,740				2,714,959				789,187
Cash flows from investing activities
Proceeds from sales of investment securities
Equity and other securities			242,596				17,654				67,036
Proceeds from maturities of investment securities
Available for sale			795,157				1,433,793				1,614,557
Held to maturity			1,515,623				615,201				911,555
Purchases of investment securities
Available for sale			(7,221,885	)			(677,916	)			(7,581	)
Held to maturity			(1,889,954	)			(1,601,698	)			(11,993	)
Equity and other securities			(456,024	)			(30,153	)			(29,004	)
Net (increase) decrease in loans and leases			(3,639,040	)			5,676,670				(7,231,694	)
Net (increase) decrease in interest-bearing deposits at banks			26,106,931				(18,208,494	)			(16,473,656	)
Capital expenditures, net			(214,388	)			(149,213	)			(172,289	)
Net (increase) decrease in loan servicing advances			1,578,825				(197,141	)			(754,823	)
Acquisition, net of cash consideration
Bank and bank holding company			393,923				—				—
Other, net			(619,028	)			(510,302	)			67,411
Net cash provided (used) by investing activities			16,592,736				(13,631,599	)			(22,020,481	)
Cash flows from financing activities
Net increase (decrease) in deposits			(20,993,952	)			11,737,671				25,037,167
Net increase (decrease) in short-term borrowings			2,613,036				(12,436	)			(2,881	)
Proceeds from long-term borrowings			998,540				9,500				—
Payments on long-term borrowings			(907,240	)			(853,091	)			(2,665,023	)
Purchases of treasury stock			(1,800,000	)			—				(373,750	)
Dividends paid — common			(784,089	)			(580,260	)			(568,112	)
Dividends paid — preferred			(96,927	)			(68,200	)			(68,256	)
Proceeds from issuance of Series I preferred stock			—				495,000				—
Other, net			(13,177	)			(26,710	)			(11,413	)
Net cash provided (used) by financing activities			(20,983,809	)			10,701,474				21,347,732
Net increase (decrease) in cash, cash equivalents and restricted cash			182,667				(215,166	)			116,438
Cash, cash equivalents and restricted cash at beginning of period			1,337,577				1,552,743				1,436,305
Cash, cash equivalents and restricted cash at end of period		$	1,520,244			$	1,337,577			$	1,552,743
Supplemental disclosure of cash flow information
Interest received during the period		$	6,134,684			$	3,976,804			$	4,135,990
Interest paid during the period			428,772				139,164				372,291
Income taxes paid during the period			487,618				314,295				275,558
Supplemental schedule of noncash investing and financing activities
Real estate acquired in settlement of loans		$	31,376			$	8,851			$	20,646
Additions to right-of-use assets under operating leases			137,998				57,760				70,754
Loans held for sale transferred to loans held for investment			—				330,188				—
Acquisition of bank and bank holding company
Common stock issued			8,286,515				—				—
Common stock awards converted			104,810				—				—
Fair value of
Assets acquired (noncash)			63,757,316				—				—
Liabilities assumed			55,499,314				—				—
Preferred stock converted			260,600				—				—

See accompanying notes to financial statements.

M&T BANK CORPORATION AND SUBSIDIARIES

Consolidated Statement of Changes in Shareholders’ Equity

Dollars in thousands, except****per share		Preferred Stock				Common Stock				Common Stock Issuable				Additional Paid-in Capital				Retained Earnings				Accumulated Other Comprehensive Income (Loss), Net				Treasury Stock				Total
2020
Balance — January 1, 2020		$	1,250,000				79,871				1,566				6,593,539				12,820,916				(206,680	)			(4,822,563	)		$	15,716,649
Cumulative effect of change in accounting principle — credit losses			—				—				—				—				(91,925	)			—				—				(91,925	)
Total comprehensive income			—				—				—				—				1,353,152				143,648				—				1,496,800
Preferred stock cash dividends			—				—				—				—				(68,228	)			—				—				(68,228	)
Purchases of treasury stock			—				—				—				—				—				—				(373,750	)			(373,750	)
Stock-based compensation transactions, net			—				—				(222	)			23,865				(411	)			—				53,581				76,813
Common stock cash dividends — $4.40 per share			—				—				—				—				(569,076	)			—				—				(569,076	)
Balance — December 31, 2020		$	1,250,000				79,871				1,344				6,617,404				13,444,428				(63,032	)			(5,142,732	)		$	16,187,283
2021
Total comprehensive income			—				—				—				—				1,858,746				(64,546	)			—				1,794,200
Preferred stock cash dividends			—				—				—				—				(72,915	)			—				—				(72,915	)
Issuance of Series I preferred stock			500,000				—				—				(5,000	)			—				—				—				495,000
Stock-based compensation transactions, net			—				—				(132	)			22,596				(844	)			—				61,184				82,804
Common stock cash dividends — $4.50 per share			—				—				—				—				(582,967	)			—				—				(582,967	)
Balance — December 31, 2021		$	1,750,000				79,871				1,212				6,635,000				14,646,448				(127,578	)			(5,081,548	)		$	17,903,405
2022
Total comprehensive income			—				—				—				—				1,991,663				(662,452	)			—				1,329,211
Acquisition of People's United Financial, Inc.:
Common stock issued			—				9,824				—				3,256,821				—				—				5,019,870				8,286,515
Common stock awards converted			—				—				—				104,810				—				—				—				104,810
Conversion of Series H preferred stock			260,600				—				—				—				—				—				—				260,600
Preferred stock cash dividends			—				—				—				—				(96,587	)			—				—				(96,587	)
Purchases of treasury stock			—				—				—				—				—				—				(1,800,000	)			(1,800,000	)
Stock-based compensation transactions, net			—				23				(100	)			6,260				(1,301	)			—				111,399				116,281
Common stock cash dividends — $4.80 per share			—				—				—				—				(786,245	)			—				—				(786,245	)
Balance — December 31, 2022		$	2,010,600				89,718				1,112				10,002,891				15,753,978				(790,030	)			(1,750,279	)		$	25,317,990

See accompanying notes to financial statements.

M&T BANK CORPORATION AND SUBSIDIARIES

Notes to Financial Statements

1. Significant accounting policies

M&T Bank Corporation (“M&T”) is a bank holding company headquartered in Buffalo, New York. Through subsidiaries, M&T provides individuals, corporations and other businesses, and institutions with commercial and retail banking services, including loans and deposits, trust, mortgage banking, asset management, insurance and other financial services. Banking activities are largely focused on consumers residing in New York State, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Massachusetts, Maine, Vermont, New Hampshire, Virginia, West Virginia, and the District of Columbia and on small and medium-size businesses based in those areas. Certain subsidiaries also conduct activities in other areas.

The accounting and reporting policies of M&T and subsidiaries (“the Company”) are in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. Following the acquisition of People's United Financial, Inc. ("People's United") on April 1, 2022 and conformance of financial statement presentation, certain reclassifications have been made to prior period amounts to conform with current period presentation. The reclassifications had no effect on the previously reported total assets, total liabilities, shareholders' equity or net income. Specifically, the fair values of interest rate and foreign exchange derivative contracts not designated as hedging instruments as presented in note 19 have been included in other assets and other liabilities rather than in trading account assets and liabilities. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant accounting policies are as follows:

Consolidation

The consolidated financial statements include M&T and all of its subsidiaries. All significant intercompany accounts and transactions of consolidated subsidiaries have been eliminated in consolidation. The financial statements of M&T included in note 26 report investments in subsidiaries under the equity method. Information about some limited purpose entities that are affiliates of the Company but are not included in the consolidated financial statements appears in note 20.

Consolidated Statement of Cash Flows

For purposes of this statement, cash and due from banks and federal funds sold are considered cash and cash equivalents.

Securities purchased under agreements to resell and securities sold under agreements to repurchase

Securities purchased under agreements to resell and securities sold under agreements to repurchase are treated as collateralized financing transactions and are recorded at amounts equal to the cash or other consideration exchanged. It is generally the Company’s policy to take possession of collateral pledged to secure agreements to resell.

Trading account

Financial instruments used for trading purposes are stated at fair value. Realized gains and losses and unrealized changes in fair value of financial instruments utilized in trading activities are included in “trading account and non-hedging derivative gains” in the consolidated statement of income.

Investment securities

Investments in debt securities are classified as held to maturity and stated at amortized cost when management has the positive intent and ability to hold such securities to maturity. Investments in other debt securities are classified as available for sale and stated at estimated fair value with unrealized changes in fair value included in “accumulated other comprehensive income (loss), net.” Investments in equity securities having readily determinable fair values are stated at fair value and unrealized changes in fair value are included in earnings. Investments in equity securities that do not have readily determinable fair values are stated at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Amortization of premiums and accretion of discounts for investment securities available for sale and held to maturity are included in interest income.

Other securities are stated at cost and include stock of the Federal Reserve Bank of New York and the Federal Home Loan Bank (“FHLB”) of New York.

GAAP requires an allowance for credit losses be deducted from the amortized cost basis of financial assets, including investment securities held to maturity, to present the net carrying value at the amount that is expected to be collected over the contractual term. In cases where fair value of an available-for-sale debt security is less than its amortized cost basis and the Company does not intend to sell the available-for-sale debt security and it is not more likely than not that the Company will be required to sell the security before recovery of the amortized cost basis, the difference between the fair value and the amortized cost basis is separated into (a) the amount representing the credit loss and (b) the amount related to all other factors. The amount related to the credit loss is recognized as an allowance for credit losses while the amount related to other factors is recognized in other comprehensive income, net of applicable income taxes. If the Company intends to sell the security or it is more likely than not to be required to sell the security before recovery of the amortized cost basis, the security is written down to fair value with the entire amount recognized in earnings. Subsequently, the Company accounts for the debt security as if the security had been purchased on the measurement date of the write down at an amortized cost basis equal to the previous amortized cost basis less the amount of the write down recognized in earnings. Realized gains and losses on the sales of investment securities are determined using the specific identification method.

Loans and leases

The Company’s accounting methods for loans depends on whether the loans were originated or acquired by the Company.

Originated loans and leases

Loan fees and certain direct loan origination costs are deferred and recognized as an interest yield adjustment over the life of the loan. Net deferred fees have been included in unearned discount as a reduction of loans outstanding. Interest income on loans is accrued on a level yield method. Loans are placed on nonaccrual status and previously accrued interest thereon is charged against income when it is probable that the Company will be unable to collect all amounts according to the contractual terms of the loan agreement or when principal or interest is delinquent 90 days. Certain loans greater than 90 days delinquent continue to accrue interest if they are well-secured and in the process of collection. Loans less than 90 days delinquent are deemed to have an insignificant delay in payment and generally continue to accrue interest. Interest received on loans placed on nonaccrual status is generally applied to reduce the carrying value of the loan or, if principal is considered fully collectable, recognized as interest income. Nonaccrual commercial loans and commercial real estate loans are returned to accrual status when borrowers have demonstrated an ability to repay their loans and there are no delinquent principal and interest payments. Loans secured by residential real estate are returned to accrual status when they are deemed to have an insignificant

delay in payments of 90 days or less. Consumer loans not secured by residential real estate are returned to accrual status when all past due principal and interest payments have been paid by the borrower. Loan balances are charged off when it becomes evident that such balances are not fully collectable. For commercial loans and commercial real estate loans, charge-offs are recognized after an assessment by credit personnel of the capacity and willingness of the borrower to repay, the estimated value of any collateral, and any other potential sources of repayment. A charge-off is recognized when, after such assessment, it becomes evident that the loan balance is not fully collectable. For loans secured by residential real estate, the excess of the loan balances over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. Consumer loans 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.

During the normal course of business, the Company modifies loans to maximize recovery efforts. If a borrower is experiencing financial difficulty and a concession to the terms of the loan agreement is granted that the Company would not otherwise consider, the modification is considered a troubled debt restructuring and such loans are classified as either nonaccrual or renegotiated loans. Due to the direct and indirect effects of the Coronavirus Disease 2019 (“COVID-19”) pandemic, a dramatic reduction in economic activity severely hampered the ability for businesses and consumers to meet their repayment obligations. The Coronavirus Aid, Relief, and Economic Security Act and the Consolidated Appropriations Act, 2021 (collectively “CARES Act”), in addition to providing financial assistance to both businesses and consumers, created a forbearance program for federally-backed mortgage loans, protected borrowers from negative credit reporting due to loan accommodations related to the pandemic, and provided financial institutions the option to temporarily suspend certain requirements under GAAP related to troubled debt restructurings to account for the effects of COVID-19. The bank regulatory agencies likewise issued guidance encouraging financial institutions to work prudently with borrowers who were unable to meet their contractual payment obligations because of the effects of COVID-19. The guidance, with concurrence of the Financial Accounting Standards Board, and provisions of the CARES Act allowed modifications made on a good faith basis in response to COVID-19 to borrowers who were current with their payments prior to any relief, to not be treated as troubled debt restructurings nor be reported as past due. Modifications included payment deferrals (including maturity extensions), covenant waivers and fee waivers. The Company worked with its customers affected by COVID-19 and granted modifications across many of its loan portfolios. To the extent that such modifications met the criteria described, the modified loans were not classified as troubled debt restructurings nor reported as past due.

Commitments to sell real estate loans are utilized by the Company to hedge the exposure to changes in fair value of real estate loans held for sale. The carrying value of hedged real estate loans held for sale recorded in the consolidated balance sheet includes changes in estimated fair value during the hedge period, typically from the date of close through the sale date. Valuation adjustments made on these loans and commitments are included in “mortgage banking revenues.”

Acquired loans and leases

Expected credit losses for purchased loans with credit deterioration are initially recognized as an allowance for credit losses and are added to the purchase price to determine the amortized cost basis of the loans. Any non-credit discount or premium resulting from acquiring such loans is recognized as an adjustment to interest income over the remaining lives of the loans. Subsequent changes in the amount of expected credit losses on such loans are recognized in the allowance for credit losses in the same manner as originated loans. For all other acquired loans, the difference between the fair value and outstanding principal balance of the loans is recognized as an adjustment to interest income over the lives of those loans. Those loans are then accounted for in a manner that is similar to originated loans.

Allowance for credit losses

On January 1, 2020, the Company adopted amended accounting guidance which requires an allowance for credit losses to be deducted from the amortized cost basis of financial assets to present the net carrying value at the amount that is expected to be collected over the contractual term of the asset considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In estimating expected losses in the loan and lease portfolio, borrower-specific financial data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. Assumptions and judgment are applied to measure amounts and timing of expected future cash flows, collateral values and other factors used to determine the borrowers’ abilities to repay obligations. Subsequent to the forecast period, the Company utilizes longer-term historical loss experience to estimate losses over the remaining contractual life of the loans.

Assets taken in foreclosure of defaulted loans

Assets taken in foreclosure of defaulted loans are primarily comprised of commercial and residential real property and are included in “other assets” in the consolidated balance sheet. An in-substance repossession or foreclosure occurs and a creditor is considered to have received physical possession of real estate property collateralizing a mortgage loan upon either (i) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (ii) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Upon acquisition of assets taken in satisfaction of a defaulted loan, the excess of the remaining loan balance over the asset’s estimated fair value less costs to sell is charged-off against the allowance for credit losses. Subsequent declines in value of the assets are recognized as “other costs of operations” in the consolidated statement of income.

Premises and equipment

Premises and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed principally using the straight-line method over the estimated useful lives of the assets.

Capitalized servicing rights

Capitalized servicing assets are included in “other assets” in the consolidated balance sheet. Separately recognized servicing assets are initially measured at fair value. The Company uses the amortization method to subsequently measure servicing assets. Under that method, capitalized servicing assets are charged to expense in proportion to and over the period of estimated net servicing income.

To estimate the fair value of servicing rights, the Company considers market prices for similar assets and the present value of expected future cash flows associated with the servicing rights calculated using assumptions that market participants would use in estimating future servicing income and expense. Such assumptions include estimates of the cost of servicing loans, loan default rates, an appropriate discount rate, and prepayment speeds. For purposes of evaluating and measuring impairment of capitalized servicing rights, the Company stratifies such assets based on the predominant risk characteristics of the underlying financial instruments that are expected to have the most impact on projected prepayments, cost of servicing and other factors affecting future cash flows associated with the servicing rights. Such factors may include financial asset or loan type, note rate and term. The amount of impairment recognized is the amount by which the carrying value of the capitalized servicing rights for a stratum exceeds estimated fair value. Impairment is recognized through a valuation allowance.

Sales and securitizations of financial assets

Transfers of financial assets for which the Company has surrendered control of the financial assets are accounted for as sales. Interests in a sale of financial assets that continue to be held by the Company, including servicing rights, are initially measured at fair value. The fair values of retained debt securities are generally determined through reference to independent pricing information. The fair values of retained servicing rights and any other retained interests are determined based on the present value of expected future cash flows associated with those interests and by reference to market prices for similar assets.

Securitization structures typically require the use of special-purpose trusts that are considered variable interest entities. A variable interest entity is included in the consolidated financial statements if the Company has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and has the obligation to absorb losses or the right to receive benefits of the variable interest entity that could potentially be significant to that entity.

Goodwill and core deposit and other intangible assets

Goodwill represents the excess of the cost of an acquired entity over the fair value of the identifiable net assets acquired. Goodwill is not amortized, but rather is tested for impairment at least annually at the reporting unit level, which is either at the same level or one level below an operating segment. Other acquired intangible assets with finite lives, such as core deposit intangibles, are initially recorded at estimated fair value and are amortized over their estimated lives. Core deposit and other intangible assets are generally amortized using accelerated methods over estimated useful lives, which are generally three to seven years. The Company periodically assesses whether events or changes in circumstances indicate that the carrying amounts of core deposit and other intangible assets may be impaired.

Derivative financial instruments

The Company accounts for derivative financial instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (i) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, (ii) a hedge of the exposure to variable cash flows of a forecasted transaction or (iii) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available-for-sale security, or a foreign currency denominated forecasted transaction.

The Company utilizes interest rate swap agreements as part of the management of interest rate risk to modify the repricing characteristics of certain portions of its portfolios of earning assets and interest-bearing liabilities. For such agreements, amounts receivable or payable are recognized as accrued under the terms of the agreement and the net differential is recorded as an adjustment to interest income or expense of the related asset or liability. Interest rate swap agreements may be designated as either fair value hedges or cash flow hedges. In a fair value hedge, the fair values of the interest rate swap agreements and changes in the fair values of the hedged items are recorded in the Company’s consolidated balance sheet with the corresponding gain or loss recognized in current earnings. The difference between changes in the fair values of interest rate swap agreements and the hedged items represents hedge ineffectiveness and is recorded in the same income statement line item that is used to present the earnings effect of the hedged item in the consolidated statement of income. In a cash flow hedge, the derivative’s unrealized gain or loss is initially recorded as a component of other comprehensive income and subsequently reclassified into earnings when the forecasted transaction affects earnings.

The Company utilizes commitments to sell real estate loans to hedge the exposure to changes in the fair value of real estate loans held for sale. Commitments to originate real estate loans to be held for sale and commitments to sell real estate loans are generally recorded in the consolidated balance

sheet at estimated fair value. Valuation adjustments made on these commitments are included in “mortgage banking revenues.”

Derivative instruments not related to mortgage banking activities, including financial futures commitments and interest rate swap agreements, that do not satisfy the hedge accounting requirements are recorded at fair value and are generally classified as other assets or other liabilities with resultant changes in fair value being recognized in “trading account and non-hedging derivative gains” in the consolidated statement of income.

Revenue from contracts with customers

A significant amount of the Company’s revenues are derived from net interest income on financial assets and liabilities, mortgage banking revenues, trading account and non-hedging derivative gains, investment securities gains, loan and letter of credit fees, income from bank-owned life insurance, and certain other revenues that are generally excluded from the scope of accounting guidance for revenue from contracts with customers. For other noninterest income revenue streams, the Company generally recognizes the expected amount of consideration as revenue when the performance obligations related to the services under the terms of a contract are satisfied. The Company’s contracts generally do not contain terms that necessitate significant judgment to determine the amount of revenue to recognize.

Stock-based compensation

Compensation expense is recognized over the vesting period of stock-based awards based on estimated grant date value, except that the recognition of compensation costs is accelerated for stock-based awards granted to retirement-eligible employees and employees who will become retirement-eligible prior to full vesting of the award because the Company’s incentive compensation plan allows for vesting at the time an employee retires.

Income taxes

Deferred tax assets and liabilities are recognized for the future tax effects attributable to differences between the financial statement value of existing assets and liabilities and their respective tax bases and carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates and laws.

The Company evaluates uncertain tax positions using the two-step process required by GAAP. The first step requires a determination of whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Under the second step, a tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.

The Company accounts for its investments in qualified affordable housing projects using the proportional amortization method. Under that method, the Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense.

Earnings per common share

Basic earnings per common share exclude dilution and are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding (exclusive of shares represented by the unvested portion of restricted stock and restricted stock unit grants) and common shares issuable under deferred compensation arrangements during the period. Diluted earnings per common share reflect shares represented by the unvested portion of restricted stock and restricted stock unit grants and the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in earnings. Proceeds assumed to have been received on such exercise

or conversion are assumed to be used to purchase shares of M&T common stock at the average market price during the period, as required by the “treasury stock method” of accounting.

GAAP requires that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) shall be considered participating securities and shall be included in the computation of earnings per common share pursuant to the two-class method. The Company has issued stock-based compensation awards in the form of restricted stock and restricted stock units that contain such rights and, accordingly, the Company’s earnings per common share are calculated using the two-class method.

Treasury stock

Repurchases of shares of M&T common stock are recorded at cost as a reduction of shareholders’ equity. Reissuances of shares of treasury stock are recorded at average cost.

2. Acquisition and divestitures

Acquisition

On April 1, 2022, M&T completed the acquisition of People's United. Through subsidiaries, People's United provided commercial banking, retail banking and wealth management services to individual, corporate and municipal customers through a network of branches located in Connecticut, southeastern New York, Massachusetts, Vermont, New Hampshire and Maine. Following the merger, People's United Bank, National Association, a national banking association and a wholly owned subsidiary of People's United, merged with and into Manufacturers and Traders Trust Company ("M&T Bank"), the principal banking subsidiary of M&T, with M&T Bank as the surviving entity. The results of operations acquired from People's United have been included in the Company's financial results since April 1, 2022.

Pursuant to the terms of the merger agreement dated February 22, 2021, People’s United shareholders received consideration valued at .118 of an M&T common share in exchange for each common share of People’s United. The purchase price totaled approximately $8.4 billion (with the price based on M&T’s closing price of $164.66 per share as of April 1, 2022). M&T issued 50,325,004 common shares in completing the transaction. Additionally, People’s United outstanding preferred stock was converted into new shares of Series H Preferred Stock of M&T. The acquisition of People's United expanded the Company's geographical footprint and management expects the Company will benefit from greater geographical diversity and the advantages of scale associated with a larger company.

The People’s United transaction has been accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and preferred stock converted were recorded at estimated fair value on the acquisition date. The consideration paid for People’s United common equity and the preliminary amounts of identifiable assets acquired, liabilities assumed and preferred stock converted as of the acquisition date follows.

		(In thousands)
Consideration:
Common stock issued (50,325,004 shares)		$	8,286,515
Common stock awards converted			104,810
Cash			1,824
Total consideration			8,393,149
Net assets acquired:
Identifiable assets
Cash and due from banks			395,747
Interest-bearing deposits at banks			9,193,346
Investment securities			11,574,689
Loans and leases			35,840,648
Core deposit and other intangible assets			261,000
Other assets			2,979,388
Total identifiable assets acquired			60,244,818
Liabilities and preferred stock
Deposits			52,967,915
Borrowings			1,389,012
Other liabilities			1,142,387
Total liabilities assumed			55,499,314
Preferred stock			260,600
Total liabilities and preferred stock			55,759,914
Net assets acquired			4,484,904
Goodwill		$	3,908,245

The following is a description of the methodologies used to estimate the fair values of the significant assets acquired, liabilities assumed and preferred stock converted at the acquisition date:

Cash and due from banks and interest-bearing deposits in banks: Given the short-term nature of these assets, the carrying amount was determined to be a reasonable estimate of fair value.

Investment securities: Investment securities have been determined using quoted market prices, if available. If quoted market prices were not available, investment securities were valued by reference to quoted prices for similar securities or through model-based techniques.

Loans and leases: The fair values of loans and leases were generally based on a discounted cash flow methodology that considered market interest rates, expected credit losses, prepayment assumptions and other market factors for loans with similar characteristics including loan type, collateral, fixed or variable interest rate and credit risk characteristics. Expected credit losses were determined based on credit characteristics and other factors such as default and recovery rates of similar products.

Core deposit and other intangible assets: The core deposit intangible asset represents the value of certain customer deposit relationships. The fair value of the core deposit intangible asset was based on a discounted cash flow methodology that considered expected customer attrition rates, costs associated with maintaining the deposit relationships and alternative funding costs. Other intangible assets were also valued using expected and contractual cash flows.

Deposits: The fair value of deposits with no maturity date was determined to be the amount payable on demand at the acquisition date. The fair value of time deposits was determined by discounting contractual cash flows using market interest rates for instruments with like remaining maturities.

Borrowings: The fair value of borrowings was determined using quoted market prices for the instrument, if available. If quoted market prices for the instrument were not available, similar instruments with quoted market prices were referenced.

Preferred stock: The fair value of preferred stock converted was determined using quoted market prices.

GAAP requires loans and leases obtained through an acquisition that have experienced a more-than-insignificant deterioration in credit quality since origination be considered purchased credit deteriorated (“PCD”). The Company considered several factors in the determination of PCD loans, including loan grades assigned to acquired commercial loans and leases and commercial real estate loans utilizing the Company's loan grading system and delinquency status and history for acquired loans backed by residential real estate. For PCD loans and leases the initial estimate of expected credit losses of $99 million was established through an adjustment to increase both the initial carrying value and allowance for credit losses. GAAP also provides that an allowance for credit losses on loans acquired, but not classified as PCD, also be recognized above and beyond the impact of forecasted losses used in determining fair value. Accordingly, the Company recorded $242 million of provision for credit losses for non-PCD acquired loans and leases at the acquisition date. The following table reconciles the unpaid principal balance to the fair value of loans and leases at April 1, 2022:

	PCD				Non-PCD
	(in thousands)
Unpaid principal balance	$	3,410,506		(a)	$	32,896,454
Allowance for credit losses at acquisition		(99,000	)	(a)		—
Other discount		(106,814	)			(260,498	)	(b)
Fair value	$	3,204,692			$	32,635,956

(a)

*The unpaid principal balance and allowance for credit losses at acquisition is net of charge-offs of $*33 million recognized on the PCD loans.

(b)

*Includes approximately $*242 million of principal balances not expected to be collected.

In connection with the acquisition, the Company recorded approximately $3.9 billion of goodwill, which represents the excess of the purchase price over the fair value of the net assets acquired, and $261 million of core deposit and other intangible assets. The core deposit and other intangible assets are being amortized over periods of three to seven years. Information regarding the allocation of goodwill recorded as a result of the acquisition to the Company’s reportable segments, as well as the carrying amounts and amortization of core deposit and other intangible assets, is provided in note 8.

Due to the integration of People's United operating systems and activities with those of the Company, the Company's ability to report on the former operations of People's United is inherently limited. The Company estimates that included in the Consolidated Statement of Income from the acquisition date through December 31, 2022 are total revenues of approximately $1.6 billion and net income of approximately $165 million related to the acquisition of People's United.

The following table presents certain pro forma information as if People’s United had been acquired on January 1, 2021. These results combine the historical results of People’s United into the Company’s consolidated statement of income and, while adjustments were made for the estimated impact of certain fair valuation adjustments and other acquisition-related activity, they are not indicative of what would have occurred had the acquisition taken place as indicated. For example, merger-related expenses noted below are included in the periods where such expenses were incurred. Additionally, the Company expects to achieve operating cost savings and other business synergies as a result of the acquisition which are not reflected in the pro forma amounts that follow:

		Pro forma (Unaudited)
		2022				2021
		(In thousands)
Total revenues (a)		$	8,631,283			$	8,075,955
Net income			2,158,047				2,391,034

(a)

Represents the total of net interest income and other income.

In connection with the People’s United acquisition, the Company incurred merger-related expenses related to systems conversions and other costs of integrating and conforming acquired operations with and into the Company. Those expenses consisted largely of professional services, temporary help fees and other costs associated with actual or planned systems conversions and/or integration of operations and the introduction of the Company to its new customers; costs related to termination of existing contractual arrangements for various services; initial marketing and promotion expenses designed to introduce M&T Bank to its new customers; severance (for former People’s United employees); travel costs; legal expenses; printing costs associated with communications with shareholders and customers; and other costs of completing the transaction and commencing operations in new markets and offices. The Company does not expect to incur any material People's United merger-related expenses during 2023. A summary of merger-related expenses included in the consolidated statement of income follows.

		2022				2021
		(In thousands)
Salaries and employee benefits		$	102,150			$	176
Equipment and net occupancy			6,709				341
Outside data processing software			5,438				1,119
Advertising and marketing			9,262				866
Printing, postage and supplies			6,786				2,965
Other cost of operations			207,976				38,393
Other expense		$	338,321			$	43,860

The Company also recognized a $242 million provision for credit losses on acquired loans that were not deemed to be PCD on April 1, 2022. GAAP requires that acquired loans be recorded at estimated fair value, which includes the use of interest rate and expected credit loss assumptions to forecast estimated cash flows. GAAP also provides that an allowance for credit losses on loans acquired, but not classified as PCD also be recognized above and beyond the impact of forecasted losses used in determining the fair value of acquired loans. Accordingly, the Company recorded a $242 million provision for credit losses related to such loans obtained in the People's United transaction.

Divestitures

On September 29, 2022 M&T Bank announced it had entered into a definitive agreement to sell M&T Insurance Agency, Inc. ("MTIA"), a wholly owned insurance agency subsidiary of M&T Bank to Arthur J. Gallagher & Co. The transaction was completed on October 31, 2022. The Company recognized a pre-tax gain on the sale of $136 million ($98 million after-tax). MTIA had assets of $18 million and shareholders' equity of $6 million at the time of the divestiture. Prior to the sale, MTIA recorded revenues of $34 million in 2022 and $37 million in each of 2021 and 2020. After considering expenses, the results of operations from MTIA were not material to the Company's consolidated results of operations in any of 2022, 2021 and 2020.

On December 19, 2022 Wilmington Trust, National Association, a wholly owned subsidiary of M&T, announced that it had entered into a definitive agreement to sell its Collective Investment Trust ("CIT") business to a private equity firm. That sale is expected to close in the first half of 2023 and result in recognition of a gain at that time. The Company estimated that the CIT business contributed approximately $165 million, $151 million and $105 million to trust income in 2022, 2021 and 2020, respectively. After considering expenses, the results of operations from the CIT business were not material to the Company's consolidated results of operations in any of 2022, 2021 and 2020.

3. Investment securities

The amortized cost and estimated fair value of investment securities were as follows:

		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
		(In thousands)
December 31, 2022
Investment securities available for sale:
U.S. Treasury and federal agencies		$	7,913,932			$	200			$	243,172			$	7,670,960
Mortgage-backed securities:
Government issued or guaranteed:
Commercial			594,779				—				20,480				574,299
Residential			2,501,334				65				171,281				2,330,118
Other debt securities			183,107				250				9,773				173,584
			11,193,152				515				444,706				10,748,961
Investment securities held to maturity:
U.S. Treasury and federal agencies			1,054,035				—				45,747				1,008,288
Obligations of states and political subdivisions			2,577,078				4				116,512				2,460,570
Mortgage-backed securities:
Government issued or guaranteed:
Commercial			912,431				—				103,528				808,903
Residential			8,934,918				1,451				891,063				8,045,306
Privately issued			49,742				8,833				7,987				50,588
Other debt securities			1,765				—				—				1,765
			13,529,969				10,288				1,164,837				12,375,420
Total debt securities		$	24,723,121			$	10,803			$	1,609,543			$	23,124,381
Equity and other securities:
Readily marketable equity — at fair value		$	153,283			$	2,120			$	3,945			$	151,458
Other — at cost			780,483				—				—				780,483
Total equity and other securities		$	933,766			$	2,120			$	3,945			$	931,941
December 31, 2021
Investment securities available for sale:
U.S. Treasury and federal agencies		$	682,267			$	229			$	3,806			$	678,690
Mortgage-backed securities:
Government issued or guaranteed:
Residential			3,042,771				113,102				561				3,155,312
Other debt securities			124,309				1,974				4,481				121,802
			3,849,347				115,305				8,848				3,955,804
Investment securities held to maturity:
U.S. Treasury and federal agencies			3,052				—				9				3,043
Obligations of states and political subdivisions			177				2				—				179
Mortgage-backed securities:
Government issued or guaranteed:
Residential			2,667,328				49,221				8,376				2,708,173
Privately issued			61,555				10,520				14,742				57,333
Other debt securities			2,562				—				—				2,562
			2,734,674				59,743				23,127				2,771,290
Total debt securities		$	6,584,021			$	175,048			$	31,975			$	6,727,094
Equity and other securities:
Readily marketable equity — at fair value		$	73,774			$	4,460			$	594			$	77,640
Other — at cost			387,742				—				—				387,742
Total equity and other securities		$	461,516			$	4,460			$	594			$	465,382

No investment in securities of a single non-U.S. Government, government agency or government guaranteed issuer exceeded ten percent of shareholders’ equity at December 31, 2022.

As of December 31, 2022, the latest available investment ratings of all obligations of states and political subdivisions, privately issued mortgage-backed securities and other debt securities were:

										Average Credit Rating of Fair Value Amount
		Amortized Cost				Estimated Fair Value				A or Better				BBB				BB				B or Less				Not Rated
		(In thousands)
Obligations of states and political subdivisions		$	2,577,078			$	2,460,570			$	2,450,795			$	—			$	—			$	—			$	9,775
Privately issued mortgage- backed securities			49,742				50,588				—				—				—				379				50,209
Other debt securities			184,872				175,349				15,044				63,361				35,741				—				61,203

The amortized cost and estimated fair value of collateralized mortgage obligations included in mortgage-backed securities were as follows:

		December 31
		2022				2021
		(In thousands)
Collateralized mortgage obligations:
Amortized cost		$	372,373			$	61,980
Estimated fair value			327,981				57,763

There were no significant gross realized gains or losses from sales of investment securities in 2022, 2021 or 2020.

At December 31, 2022, the amortized cost and estimated fair value of debt securities by contractual maturity were as follows:

		Amortized Cost				Estimated Fair Value
		(In thousands)
Debt securities available for sale:
Due in one year or less		$	131,291			$	126,611
Due after one year through five years			7,870,319				7,628,579
Due after five years through ten years			65,429				61,938
Due after ten years			30,000				27,416
			8,097,039				7,844,544
Mortgage-backed securities available for sale			3,096,113				2,904,417
		$	11,193,152			$	10,748,961
Debt securities held to maturity:
Due in one year or less		$	137,854			$	136,564
Due after one year through five years			1,057,311				1,011,114
Due after five years through ten years			1,092,875				1,068,369
Due after ten years			1,344,838				1,254,576
			3,632,878				3,470,623
Mortgage-backed securities held to maturity			9,897,091				8,904,797
		$	13,529,969			$	12,375,420

A summary of investment securities that as of December 31, 2022 and 2021 had been in a continuous unrealized loss position for less than twelve months and those that had been in a continuous unrealized loss position for twelve months or longer follows:

		Less Than 12 Months								12 Months or More
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
		(In thousands)
December 31, 2022
Investment securities available for sale:
U.S. Treasury and federal agencies		$	6,706,413			$	183,760			$	841,945			$	59,412
Mortgage-backed securities:
Government issued or guaranteed:
Commercial			574,299				20,480				—				—
Residential			2,295,873				169,489				28,305				1,792
Other debt securities			93,458				3,604				73,280				6,169
			9,670,043				377,333				943,530				67,373
Investment securities held to maturity:
U.S. Treasury and federal agencies			1,008,288				45,747				—				—
Obligations of states and political subdivisions			2,449,420				116,512				—				—
Mortgage-backed securities:
Government issued or guaranteed:
Commercial			808,903				103,528				—				—
Residential			6,292,462				619,403				1,319,300				271,660
Privately issued			—				—				35,661				7,987
			10,559,073				885,190				1,354,961				279,647
Total		$	20,229,116			$	1,262,523			$	2,298,491			$	347,020
December 31, 2021
Investment securities available for sale:
U.S. Treasury and federal agencies		$	598,566			$	3,806			$	—			$	—
Mortgage-backed securities:
Government issued or guaranteed:
Residential			10,111				54				20,824				507
Other debt securities			3,760				74				66,419				4,407
			612,437				3,934				87,243				4,914
Investment securities held to maturity:
U.S. Treasury and federal agencies			3,043				9				—				—
Mortgage-backed securities:
Government issued or guaranteed:
Residential			1,372,236				8,356				1,251				20
Privately issued			—				—				43,692				14,742
			1,375,279				8,365				44,943				14,762
Total		$	1,987,716			$	12,299			$	132,186			$	19,676

The Company owned 4,273 individual debt securities with aggregate gross unrealized losses of $1.6 billion at December 31, 2022. Based on a review of each of the securities in the investment securities portfolio at December 31, 2022, the Company concluded that it expected to recover the amortized cost basis of its investment. As of December 31, 2022, the Company does not intend to sell nor is it anticipated that it would be required to sell any of its impaired investment securities at a loss. At December 31, 2022, the Company has not identified events or changes in circumstances which may

have a significant adverse effect on the fair value of the $780 million of cost method investment securities.

The Company estimated no material allowance for credit losses for its investment securities classified as held-to-maturity at December 31, 2022 or December 31, 2021.

At December 31, 2022 and 2021, investment securities with carrying values of $7.9 billion (including $567 million related to repurchase transactions) and $5.1 billion (including $96 million related to repurchase transactions), respectively, were pledged to secure borrowings, lines of credit and governmental deposits as described in note 9.

4. Loans and leases

Total loans and leases outstanding were comprised of the following:

		December 31
		2022				2021
		(In thousands)
Loans
Commercial, financial, etc.		$	39,695,189			$	22,524,542
Commercial real estate			45,444,010				35,473,884
Residential real estate			23,773,842				16,077,275
Consumer			20,579,263				17,964,331
Total loans			129,492,304				92,040,032
Leases
Commercial			2,581,852				1,096,646
Total loans and leases			132,074,156				93,136,678
Less: unearned discount			(509,993	)			(224,226	)
Total loans and leases, net of unearned discount		$	131,564,163			$	92,912,452

One-to-four family residential mortgage loans held for sale were $32 million at December 31, 2022 and $474 million at December 31, 2021. Commercial real estate loans held for sale were $131 million at December 31, 2022 and $425 million at December 31, 2021.

The amount of foreclosed property held by the Company, predominantly consisting of residential real estate, was $41 million and $24 million at December 31, 2022 and 2021, respectively. There were $201 million and $151 million at December 31, 2022 and 2021, respectively, in loans secured by residential real estate that were in the process of foreclosure. Of all loans in the process of foreclosure at December 31, 2022, approximately 42% were government guaranteed.

Borrowings by directors and certain officers of M&T and its banking subsidiaries, and by associates of such persons, exclusive of loans aggregating less than $60,000, amounted to $102 million and $113 million at December 31, 2022 and 2021, respectively. During 2022, new borrowings by such persons amounted to $7 million (including any borrowings of new directors or officers that were outstanding at the time of their election) and repayments and other reductions (including reductions resulting from individuals ceasing to be directors or officers) were $18 million.

At December 31, 2022, approximately $10.5 billion of commercial loans and leases, $16.3 billion of commercial real estate loans, $19.5 billion of one-to-four family residential real estate loans, $2.4 billion of home equity loans and lines of credit and $10.7 billion of other consumer loans were pledged to secure outstanding borrowings and available lines of credit from the FHLB and the Federal Reserve Bank of New York as described in note 9.

A summary of current, past due and nonaccrual loans as of December 31, 2022 and 2021 follows:

		Current				30-89 Days Past Due				Accruing Loans Past Due 90 Days or More				Nonaccrual				Total
		(In thousands)
December 31, 2022
Commercial, financial, leasing, etc.		$	40,982,398			$	448,462			$	72,502			$	347,204			$	41,850,566
Real estate:
Commercial			34,972,627				311,188				67,696				1,396,662				36,748,173
Residential builder and developer			1,304,798				8,703				—				1,229				1,314,730
Other commercial construction			6,936,661				239,521				549				124,937				7,301,668
Residential			21,491,506				595,897				345,402				272,090				22,704,895
Residential — limited documentation			950,782				22,456				—				77,814				1,051,052
Consumer:
Home equity lines and loans			4,891,311				30,787				—				84,788				5,006,886
Recreational finance			8,974,171				54,593				—				44,630				9,073,394
Automobile			4,393,206				44,486				—				39,584				4,477,276
Other			1,958,196				22,961				4,869				49,497				2,035,523
Total		$	126,855,656			$	1,779,054			$	491,018			$	2,438,435			$	131,564,163
December 31, 2021
Commercial, financial, leasing, etc.		$	23,101,810			$	142,208			$	8,284			$	221,022			$	23,473,324
Real estate:
Commercial			24,712,643				319,099				31,733				1,069,280				26,132,755
Residential builder and developer			1,400,437				2,904				—				3,005				1,406,346
Other commercial construction			7,722,049				17,175				—				111,405				7,850,629
Residential			13,294,872				239,561				920,080				355,858				14,810,371
Residential — limited documentation			1,124,520				16,666				—				122,888				1,264,074
Consumer:
Home equity lines and loans			3,476,617				15,486				—				70,488				3,562,591
Recreational finance			7,985,173				40,544				—				27,811				8,053,528
Automobile			4,604,772				40,064				—				34,037				4,678,873
Other			1,620,147				12,223				3,302				44,289				1,679,961
Total		$	89,043,040			$	845,930			$	963,399			$	2,060,083			$	92,912,452

At December 31, 2022 and 2021, the Company had $19 million and $1.2 billion, respectively, of outstanding loan balances, consisting predominantly of residential real estate loans, for which COVID-19 related payment deferrals were granted. Those loans meet the criteria described in note 1 and, as such, are not considered past due or otherwise in default of loan terms as of the dates presented. Included in those loan balances were $8 million and $974 million of government-guaranteed loans at December 31, 2022 and 2021, respectively.

During the normal course of business, the Company modifies loans to maximize recovery efforts. If the borrower is experiencing financial difficulty and a concession is granted, the Company considers

such modifications as troubled debt restructurings and classifies those loans as either nonaccrual loans or renegotiated loans. The types of concessions that the Company grants typically include principal deferrals and interest rate concessions, but may also include other types of concessions.

The tables that follow summarize the Company’s loan modification activities that were considered troubled debt restructurings for the years ended December 31, 2022, 2021 and 2020:

										Post-modification (a)
Year Ended December 31, 2022		Number				Pre- modification Recorded Investment				Principal Deferral				Interest Rate Reduction				Other				Combination of Concession Types				Total
		(Dollars in thousands)
Commercial, financial, leasing, etc.			193			$	87,873			$	53,219			$	455			$	983			$	34,791				89,448
Real estate:
Commercial			50				34,972				14,037				—				2,223				18,358				34,618
Residential builder and developer			1				60				57				—				—				—				57
Other commercial construction			1				100				—				—				—				100				100
Residential			274				71,165				54,519				—				—				19,022				73,541
Residential — limited documentation			8				1,398				1,216				—				—				193				1,409
Consumer:
Home equity lines and loans			144				10,146				9,372				—				—				841				10,213
Recreational finance			729				27,517				27,510				—				—				—				27,510
Automobile			2,092				41,540				41,510				—				—				—				41,510
Other			149				1,426				1,426				—				—				—				1,426
Total			3,641			$	276,197			$	202,866			$	455			$	3,206			$	73,305			$	279,832
Year Ended December 31, 2021
Commercial, financial, leasing, etc.			284			$	185,458			$	46,806			$	—			$	40,558			$	95,516			$	182,880
Real estate:
Commercial			99				202,878				67,387				—				31,202				102,248				200,837
Residential builder and developer			1				3				3				—				—				—				3
Other commercial construction			3				542				532				—				—				—				532
Residential			373				108,325				95,769				—				—				12,866				108,635
Residential — limited documentation			21				2,920				2,865				—				—				—				2,865
Consumer:
Home equity lines and loans			89				6,430				6,054				—				—				321				6,375
Recreational finance			281				9,931				9,931				—				—				—				9,931
Automobile			807				14,668				14,654				—				—				14				14,668
Other			362				2,597				2,597				—				—				—				2,597
Total			2,320			$	533,752			$	246,598			$	—			$	71,760			$	210,965			$	529,323
Year Ended December 31, 2020
Commercial, financial, leasing, etc.			394			$	246,479			$	70,671			$	298			$	31,605			$	97,344			$	199,918
Real estate:
Commercial			161				310,578				204,591				505				4,874				85,261				295,231
Residential builder and developer			1				91				—				—				—				90				90
Other commercial construction			2				13,602				13,573				—				—				—				13,573
Residential			631				202,985				183,878				—				—				23,639				207,517
Residential — limited documentation			30				7,413				7,100				—				—				1,232				8,332
Consumer:
Home equity lines and loans			259				17,228				5,882				—				—				11,372				17,254
Recreational finance			428				16,392				16,388				—				—				4				16,392
Automobile			2,249				39,951				39,949				—				—				2				39,951
Other			1,095				7,788				3,383				—				—				4,405				7,788
Total			5,250			$	862,507			$	545,415			$	803			$	36,479			$	223,349			$	806,046

(a)

Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages. The present value of interest rate concessions, discounted at the effective rate of the original loan, was not material.

Loans that were modified as troubled debt restructurings during the years ended December 31, 2022, 2021 and 2020 and for which there was a subsequent payment default during the respective year were not material.

The Company’s loan and lease portfolio includes commercial lease financing receivables consisting of direct financing and leveraged leases for machinery and equipment, railroad equipment, commercial trucks and trailers, and aircraft. Certain leases contain payment schedules that are tied to variable interest rate indices. In general, early termination options are provided if the lessee is not in default, returns the leased equipment and pays an early termination fee. Additionally, options to purchase the underlying asset by the lessee are generally at the fair market value of the equipment. A summary of lease financing receivables follows:

		December 31,
		2022				2021
		(In thousands)
Commercial leases:
Direct financings:
Lease payments receivable		$	2,174,730			$	873,089
Estimated residual value of leased assets			262,354				75,140
Unearned income			(144,916	)			(68,456	)
Investment in direct financings			2,292,168				879,773
Leveraged leases:
Lease payments receivable			71,371				75,003
Estimated residual value of leased assets			73,397				73,414
Unearned income			(21,689	)			(25,374	)
Investment in leveraged leases			123,079				123,043
Total investment in leases		$	2,415,247			$	1,002,816
Deferred taxes payable arising from leveraged leases		$	51,974			$	56,759

Included within the estimated residual value of leased assets at December 31, 2022 and 2021 were $93 million and $29 million, respectively, in residual value associated with direct financing leases that are guaranteed by the lessees or others.

At December 31, 2022, the minimum future lease payments to be received from lease financings were as follows:

		(In thousands)
Year ending December 31:
2023		$	756,544
2024			621,629
2025			410,540
2026			255,292
2027			129,624
Later years			72,472
		$	2,246,101

5. Allowance for credit losses

Effective January 1, 2020 the Company adopted amended accounting guidance which requires an allowance for credit losses be deducted from the amortized cost basis of financial assets to present the net carrying value at the amount that is expected to be collected over the contractual term of the asset considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The new guidance replaced the previous incurred loss model for determining the allowance for credit losses.

Changes in the allowance for credit losses for the years ended December 31, 2022, 2021 and 2020 were as follows:

	Commercial, Financial,				Real Estate
	Leasing, etc.				Commercial				Residential				Consumer				Unallocated				Total
	(In thousands)
2022
Beginning balance	$	283,899			$	557,239			$	71,726			$	556,362			$	—				1,469,226
Allowance on acquired PCD loans		41,003				55,812				1,833				352				—				99,000
Provision for credit losses (a)		235,702				100,445				43,574				137,279				—				517,000
Net charge-offs
Charge-offs (b)		(117,223	)			(61,641	)			(11,783	)			(112,310	)			—				(302,957	)
Recoveries		58,772				24,829				9,742				49,719				—				143,062
Net charge-offs		(58,451	)			(36,812	)			(2,041	)			(62,591	)			—				(159,895	)
Ending balance	$	502,153			$	676,684			$	115,092			$	631,402			$	—			$	1,925,331
2021
Beginning balance	$	405,846			$	670,719			$	103,590			$	556,232			$	—			$	1,736,387
Provision for credit losses		(40,378	)			(42,825	)			(29,817	)			38,020				—				(75,000	)
Net charge-offs
Charge-offs		(122,651	)			(101,306	)			(10,904	)			(103,293	)			—				(338,154	)
Recoveries		41,082				30,651				8,857				65,403				—				145,993
Net charge-offs		(81,569	)			(70,655	)			(2,047	)			(37,890	)			—				(192,161	)
Ending balance	$	283,899			$	557,239			$	71,726			$	556,362			$	—			$	1,469,226
2020
Beginning balance	$	366,094			$	322,201			$	56,033			$	229,118			$	77,625			$	1,051,071
Adoption of new accounting standard		(61,474	)			23,656				53,896				194,004				(77,625	)			132,457
Provision for credit losses		220,544				356,203				(3,172	)			226,425				—				800,000
Net charge-offs
Charge-offs		(135,083	)			(35,891	)			(10,283	)			(152,250	)			—				(333,507	)
Recoveries		15,765				4,550				7,116				58,935				—				86,366
Net charge-offs		(119,318	)			(31,341	)			(3,167	)			(93,315	)			—				(247,141	)
Ending balance	$	405,846			$	670,719			$	103,590			$	556,232			$	—			$	1,736,387

________________________________________________

(a)

*Includes $*242 million related to non-PCD acquired loans recorded on April 1, 2022.

(b)

*For the year ended December 31, 2022, net charge-offs do not reflect $*33 million of charge-offs related to PCD loans acquired on April 1, 2022.

Despite the allocation in the preceding tables, the allowance for credit losses is general in nature and is available to absorb losses from any loan or lease type. In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. The Company utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators, including loan grade and borrower repayment performance, can inform the models, which have been statistically developed based on historical correlations of credit losses with prevailing economic metrics, including unemployment, gross domestic product and real estate prices. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. At each of December 31, 2022, 2021 and 2020, the Company utilized a reasonable and supportable forecast period of two years. Subsequent to this

forecast period the Company reverted, ratably over a one-year period, to historical loss experience to inform its estimate of losses for the remaining contractual life of each portfolio. The Company also considered the impact of portfolio concentrations, changes in underwriting practices, product expansions into new markets, imprecision in its economic forecasts, geopolitical conditions and other risk factors that might influence its loss estimation process.

The Company also estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes. The amounts of specific loss components in the Company’s loan and lease portfolios are determined through a loan-by-loan analysis of larger balance commercial loans and commercial real estate loans that are in nonaccrual status. Such loss estimates are typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to pay. To the extent that those loans are collateral-dependent, they are evaluated based on the fair value of the loan’s collateral as estimated at or near the financial statement date. As the quality of a loan deteriorates to the point of classifying the loan as “criticized,” 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, the characteristics of the collateral 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 loans and commercial real estate loans, estimated collateral values are based on current appraisals and estimates of value. For non-real estate loans, collateral is assigned a discounted estimated liquidation value and, depending on the nature of the collateral, is verified through field exams or other procedures. In assessing collateral, real estate and non-real estate values are reduced by an estimate of selling costs.

For residential real estate loans, including home equity loans and lines of credit, the excess of the loan balance over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. That charge-off is based on recent indications of value from external parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that file for bankruptcy are generally charged-off to estimated net collateral value shortly after the Company is notified of such filings. When evaluating individual home equity loans and lines of credit for charge off and for purposes of estimating losses in determining the allowance for credit losses, the Company gives consideration to the required repayment of any first lien positions related to collateral property. Modified loans, including smaller balance homogenous loans, that are considered to be troubled debt restructurings are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows.

Information with respect to loans and leases that were considered nonaccrual at the beginning and end of the reporting period and the interest income recognized on such loans for the years ended December 31, 2022, 2021 and 2020 follows.

		Amortized Cost with Allowance				Amortized Cost without Allowance				Total				Amortized Cost				Interest Income Recognized
		December 31, 2022												January 1, 2022				Year Ended December 31, 2022
		(In thousands)
Commercial, financial, leasing, etc.		$	173,350			$	173,854			$	347,204			$	221,022			$	22,336
Real estate:
Commercial			404,661				992,001				1,396,662				1,069,280				18,117
Residential builder and developer			1,229				—				1,229				3,005				2,195
Other commercial construction			58,834				66,103				124,937				111,405				3,411
Residential			147,461				124,629				272,090				355,858				25,146
Residential — limited documentation			47,711				30,103				77,814				122,888				557
Consumer:
Home equity lines and loans			42,699				42,089				84,788				70,488				4,333
Recreational finance			36,256				8,374				44,630				27,811				657
Automobile			35,139				4,445				39,584				34,037				144
Other			49,389				108				49,497				44,289				354
Total		$	996,729			$	1,441,706			$	2,438,435			$	2,060,083			$	77,250
		December 31, 2021												January 1, 2021				Year Ended December 31, 2021
Commercial, financial, leasing, etc.		$	110,790			$	110,232			$	221,022			$	306,827			$	11,865
Real estate:
Commercial			242,078				827,202				1,069,280				775,894				15,872
Residential builder and developer			613				2,392				3,005				1,094				973
Other commercial construction			30,229				81,176				111,405				114,039				596
Residential			198,560				157,298				355,858				365,729				23,772
Residential — limited documentation			79,777				43,111				122,888				147,170				528
Consumer:
Home equity lines and loans			32,269				38,219				70,488				79,392				3,780
Recreational finance			21,476				6,335				27,811				25,519				637
Automobile			29,314				4,723				34,037				39,404				186
Other			44,122				167				44,289				38,231				531
Total		$	789,228			$	1,270,855			$	2,060,083			$	1,893,299			$	58,740
		December 31, 2020												January 1, 2020				Year Ended December 31, 2020
Commercial, financial, leasing, etc.		$	226,897			$	79,930			$	306,827			$	346,743			$	11,269
Real estate:
Commercial			364,110				411,784				775,894				173,796				7,821
Residential builder and developer			1,094				—				1,094				4,708				1,694
Other commercial construction			20,992				93,047				114,039				35,881				8,457
Residential			159,006				206,723				365,729				322,504				18,069
Residential — limited documentation			84,568				62,602				147,170				114,667				634
Consumer:
Home equity lines and loans			61,031				18,361				79,392				65,039				4,092
Recreational finance			19,434				6,085				25,519				14,308				626
Automobile			34,044				5,360				39,404				21,293				186
Other			3,606				34,625				38,231				35,394				1,369
Total		$	974,782			$	918,517			$	1,893,299			$	1,134,333			$	54,217

The Company utilizes a loan grading system to differentiate risk amongst its commercial loans and commercial real estate loans. Loans with a lower expectation of default are assigned one of ten possible “pass” loan grades and are generally ascribed lower loss factors when determining the allowance for credit losses. Loans with an elevated level of credit risk are classified as “criticized” and are ascribed a higher loss factor when determining the allowance for credit losses. Criticized loans may be classified as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more.

Line of business personnel in different geographic locations with support from and review by the Company’s credit risk personnel review and reassign loan grades based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. Factors considered in assigning loan grades include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information. The Company’s policy is that, at least annually, updated financial information be obtained from commercial borrowers associated with pass grade loans and additional analysis performed. On a quarterly basis, the Company’s centralized credit risk department reviews all criticized commercial loans and commercial real estate loans greater than $1 million to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing.

The following table summarizes the loan grades applied at December 31, 2022 to the various classes of the Company’s commercial loans and commercial real estate loans by origination year.

		Term Loans by Origination Year																								Revolving				Revolving Loans Converted to Term
		2022				2021				2020				2019				2018				Prior				Loans				Loans				Total
		(In thousands)
Commercial, financial, leasing, etc.:
Loan grades:
Pass		$	8,575,130				4,952,758				2,024,603				1,796,047				817,569				1,970,947				19,444,247				40,471			$	39,621,772
Criticized accrual			247,626				222,861				190,368				116,881				71,485				246,846				768,497				17,026				1,881,590
Criticized nonaccrual			18,379				52,067				37,608				36,241				35,689				59,146				100,972				7,102				347,204
Total commercial, financial, leasing, etc.		$	8,841,135				5,227,686				2,252,579				1,949,169				924,743				2,276,939				20,313,716				64,599			$	41,850,566
Real estate:
Commercial:
Loan grades:
Pass		$	4,136,890				3,379,900				3,388,590				4,557,065				3,293,380				10,905,956				869,981				—			$	30,531,762
Criticized accrual			324,652				463,484				467,557				688,239				937,421				1,890,297				48,099				—				4,819,749
Criticized nonaccrual			11,541				22,459				183,986				297,106				170,382				688,079				23,109				—				1,396,662
Total commercial real estate		$	4,473,083				3,865,843				4,040,133				5,542,410				4,401,183				13,484,332				941,189				—			$	36,748,173
Residential builder and developer:
Loan grades:
Pass		$	680,705				230,079				11,280				22,111				12,812				9,865				150,404				—			$	1,117,256
Criticized accrual			2,969				28,472				9,952				108,968				15,069				—				30,815				—				196,245
Criticized nonaccrual			57				654				—				518				—				—				—				—				1,229
Total residential builder and developer		$	683,731				259,205				21,232				131,597				27,881				9,865				181,219				—			$	1,314,730
Other commercial construction:
Loan grades:
Pass		$	1,032,774				1,080,141				1,225,845				1,185,685				366,686				297,355				15,575				—			$	5,204,061
Criticized accrual			37,893				145,199				320,463				1,025,371				299,350				144,394				—				—				1,972,670
Criticized nonaccrual			—				9,992				44,037				35,841				10,542				22,099				2,426				—				124,937
Total other commercial construction		$	1,070,667				1,235,332				1,590,345				2,246,897				676,578				463,848				18,001				—			$	7,301,668

Increases to criticized commercial and commercial real estate loans since December 31, 2021 were predominantly attributable to the acquisition of People's United.

The Company considers repayment performance a significant indicator of credit quality for its residential real estate loan and consumer loan portfolios. A summary of loans in accrual and nonaccrual status at December 31, 2022 for the various classes of the Company’s residential real estate loans and consumer loans by origination year is as follows.

		Term Loans by Origination Year																								Revolving				Revolving Loans Converted to Term
		2022				2021				2020				2019				2018				Prior				Loans				Loans				Total
		(In thousands)
Residential:
Current		$	5,071,379				4,001,652				2,717,371				1,392,866				753,908				7,523,890				30,440				—			$	21,491,506
30-89 days past due			59,477				51,308				40,337				21,849				23,126				399,301				499				—				595,897
Accruing loans past due 90 days or more			12,012				39,934				20,067				14,050				14,007				245,332				—				—				345,402
Nonaccrual			5,686				10,865				2,583				9,860				4,650				231,093				7,353				—				272,090
Total residential		$	5,148,554				4,103,759				2,780,358				1,438,625				795,691				8,399,616				38,292				—			$	22,704,895
Residential - limited documentation:
Current		$	—				—				—				—				—				950,782				—				—			$	950,782
30-89 days past due			—				—				—				—				—				22,456				—				—				22,456
Accruing loans past due 90 days or more			—				—				—				—				—				—				—				—				—
Nonaccrual			—				—				—				—				—				77,814				—				—				77,814
Total residential - limited documentation		$	—				—				—				—				—				1,051,052				—				—			$	1,051,052
Consumer:
Home equity lines and loans:
Current		$	930				2,109				2,441				15,361				23,321				97,282				3,262,533				1,487,334			$	4,891,311
30-89 days past due			—				—				—				171				126				2,030				—				28,460				30,787
Accruing loans past due 90 days or more			—				—				—				—				—				—				—				—				—
Nonaccrual			—				15				—				536				334				6,458				2,799				74,646				84,788
Total home equity lines and loans		$	930				2,124				2,441				16,068				23,781				105,770				3,265,332				1,590,440			$	5,006,886
Recreational finance:
Current		$	2,842,091				2,280,627				1,587,629				963,907				486,964				812,953				—				—			$	8,974,171
30-89 days past due			8,648				9,525				12,412				8,387				5,202				10,419				—				—				54,593
Accruing loans past due 90 days or more			—				—				—				—				—				—				—				—				—
Nonaccrual			3,533				7,440				9,427				7,625				5,344				11,261				—				—				44,630
Total recreational finance		$	2,854,272				2,297,592				1,609,468				979,919				497,510				834,633				—				—			$	9,073,394
Automobile:
Current		$	1,491,076				1,557,676				702,711				378,962				167,438				95,343				—				—			$	4,393,206
30-89 days past due			6,926				13,324				7,284				7,239				5,464				4,249				—				—				44,486
Accruing loans past due 90 days or more			—				—				—				—				—				—				—				—				—
Nonaccrual			2,493				10,698				7,372				7,520				5,620				5,881				—				—				39,584
Total automobile		$	1,500,495				1,581,698				717,367				393,721				178,522				105,473				—				—			$	4,477,276
Other:
Current			274,530				172,238				58,339				38,439				8,217				23,163				1,375,049				8,221				1,958,196
30-89 days past due		$	3,783				1,450				326				386				141				569				15,655				651			$	22,961
Accruing loans past due 90 days or more			—				—				—				—				—				226				4,643				—				4,869
Nonaccrual			2,745				830				332				371				120				465				44,449				185				49,497
Total other		$	281,058				174,518				58,997				39,196				8,478				24,423				1,439,796				9,057			$	2,035,523
Total loans and leases at December 31, 2022		$	24,853,925				18,747,757				13,072,920				12,737,602				7,534,367				26,755,951				26,197,545				1,664,096			$	131,564,163

The following table summarizes the loan grades applied at December 31, 2021 to the various classes of the Company’s commercial loans and commercial real estate loans by origination year.

		Term Loans by Origination Year																								Revolving				Revolving Loans Converted to Term
		2021				2020				2019				2018				2017				Prior				Loans				Loans				Total
		(In thousands)
Commercial, financial, leasing, etc.:
Loan grades:
Pass		$	4,798,052				1,916,072				1,476,786				951,881				500,615				1,398,775				10,993,461				18,699			$	22,054,341
Criticized accrual			196,680				98,595				107,010				73,126				36,232				185,935				484,755				15,628				1,197,961
Criticized nonaccrual			19,462				23,229				17,114				39,908				20,927				33,698				60,175				6,509				221,022
Total commercial, financial, leasing, etc.		$	5,014,194				2,037,896				1,600,910				1,064,915				557,774				1,618,408				11,538,391				40,836			$	23,473,324
Real estate:
Commercial:
Loan grades:
Pass		$	3,413,587				2,662,999				3,682,178				2,648,388				2,076,155				5,232,790				728,948				—			$	20,445,045
Criticized accrual			133,133				480,146				685,701				1,068,552				468,530				1,743,798				38,570				—				4,618,430
Criticized nonaccrual			21,587				133,560				195,084				83,857				76,628				520,473				38,091				—				1,069,280
Total commercial real estate		$	3,568,307				3,276,705				4,562,963				3,800,797				2,621,313				7,497,061				805,609				—			$	26,132,755
Residential builder and developer:
Loan grades:
Pass		$	786,983				106,510				75,287				47,587				4,680				12,450				230,017				—			$	1,263,514
Criticized accrual			2,055				5,356				117,258				13,637				630				—				891				—				139,827
Criticized nonaccrual			—				—				2,910				—				—				95				—				—				3,005
Total residential builder and developer		$	789,038				111,866				195,455				61,224				5,310				12,545				230,908				—			$	1,406,346
Other commercial construction:
Loan grades:
Pass		$	957,947				1,781,603				2,022,276				832,547				152,669				273,556				38,781				—			$	6,059,379
Criticized accrual			24,103				54,191				675,226				583,428				228,739				114,158				—				—				1,679,845
Criticized nonaccrual			—				—				71,613				3,303				12,263				19,970				4,256				—				111,405
Total other commercial construction		$	982,050				1,835,794				2,769,115				1,419,278				393,671				407,684				43,037				—			$	7,850,629

A summary of loans in accrual and nonaccrual status at December 31, 2021 for the various classes of the Company’s residential real estate loans and consumer loans by origination year follows.

		Term Loans by Origination Year																								Revolving				Revolving Loans Converted to Term
		2021				2020				2019				2018				2017				Prior				Loans				Loans				Total
		(In thousands)
Residential:
Current		$	3,057,118				1,672,090				1,075,896				466,040				1,037,958				5,913,461				72,309				—			$	13,294,872
30-89 days past due			15,245				12,535				9,886				6,132				33,097				162,666				—				—				239,561
Accruing loans past due 90 days or more			10,924				100,581				28,512				31,996				205,318				542,749				—				—				920,080
Nonaccrual			3,359				19,858				7,119				4,577				5,890				314,792				263				—				355,858
Total residential		$	3,086,646				1,805,064				1,121,413				508,745				1,282,263				6,933,668				72,572				—			$	14,810,371
Residential - limited documentation:
Current		$	—				—				—				—				—				1,124,520				—				—			$	1,124,520
30-89 days past due			—				—				—				—				—				16,666				—				—				16,666
Accruing loans past due 90 days or more			—				—				—				—				—				—				—				—				—
Nonaccrual			—				—				—				—				—				122,888				—				—				122,888
Total residential - limited documentation		$	—				—				—				—				—				1,264,074				—				—			$	1,264,074
Consumer:
Home equity lines and loans:
Current		$	304				777				2,793				1,730				1,944				38,015				2,348,279				1,082,775			$	3,476,617
30-89 days past due			—				—				—				21				—				698				346				14,421				15,486
Accruing loans past due 90 days or more			—				—				—				—				—				—				—				—				—
Nonaccrual			—				—				—				—				—				5,750				4,951				59,787				70,488
Total home equity lines and loans		$	304				777				2,793				1,751				1,944				44,463				2,353,576				1,156,983			$	3,562,591
Recreational finance:
Current		$	2,890,111				2,088,342				1,267,929				646,883				445,868				646,040				—				—			$	7,985,173
30-89 days past due			5,929				8,912				8,317				5,074				5,189				7,123				—				—				40,544
Accruing loans past due 90 days or more			—				—				—				—				—				—				—				—				—
Nonaccrual			1,341				4,646				4,871				4,918				4,039				7,996				—				—				27,811
Total recreational finance		$	2,897,381				2,101,900				1,281,117				656,875				455,096				661,159				—				—			$	8,053,528
Automobile:
Current		$	2,220,061				1,097,684				662,000				341,655				211,774				71,598				—				—			$	4,604,772
30-89 days past due			8,508				6,615				8,936				7,161				5,715				3,129				—				—				40,064
Accruing loans past due 90 days or more			—				—				—				—				—				—				—				—				—
Nonaccrual			1,588				4,390				7,847				7,867				6,882				5,463				—				—				34,037
Total automobile		$	2,230,157				1,108,689				678,783				356,683				224,371				80,190				—				—			$	4,678,873
Other:
Current		$	244,346				96,945				73,586				24,424				16,924				14,321				1,148,096				1,505			$	1,620,147
30-89 days past due			2,937				404				472				255				101				5,712				1,908				434				12,223
Accruing loans past due 90 days or more			—				—				—				—				—				3,302				—				—				3,302
Nonaccrual			2,051				326				326				193				104				353				40,807				129				44,289
Total other		$	249,334				97,675				74,384				24,872				17,129				23,688				1,190,811				2,068			$	1,679,961
Total loans and leases at December 31, 2021		$	18,817,411				12,376,366				12,286,933				7,895,140				5,558,871				18,542,940				16,234,904				1,199,887			$	92,912,452

The Company’s reserve for off-balance sheet credit exposures was not material at December 31, 2022 and December 31, 2021.

6. Premises and equipment

The detail of premises and equipment was as follows:

	December 31
	2022				2021
	(In thousands)
Land	$	148,905			$	93,862
Buildings		653,983				512,988
Leasehold improvements		386,303				304,825
Furniture and equipment — owned		1,004,127				880,153
Furniture and equipment — capital leases		115				115
		2,193,433				1,791,943
Less: accumulated depreciation and amortization
Owned assets		1,155,811				1,026,842
Capital leases		76				38
		1,155,887				1,026,880
Right of use assets — operating leases		616,082				379,702
Premises and equipment, net	$	1,653,628			$	1,144,765

The right-of-use assets and lease liabilities relate to banking offices and other space occupied by the Company and use of certain equipment under noncancelable operating lease agreements. As of December 31, 2022 and 2021, the Company recognized $709 million and $431 million respectively, of operating lease liabilities as a component of “accrued interest and other liabilities” in the consolidated balance sheet. In calculating the present value of lease payments, the Company utilized its incremental secured borrowing rate based on lease term.

The Company’s noncancelable operating lease agreements expire at various dates over the next 19 years. Real estate leases generally consist of fixed monthly rental payments with certain leases containing escalation clauses. Any variable lease payments or payments for nonlease components are recognized in the consolidated statement of income as a component of “equipment and net occupancy” expense based on actual costs incurred. Some leases contain lessee options to extend the term. Those options are included in the lease term when it is determined that it is reasonably certain the option will be exercised.

The Company has noncancelable operating lease agreements for certain equipment related to ATMs, servers, printers and mail machines that are used in the normal course of operations. The ATM leases are either based on the rights to a specific square footage or a license agreement whereby the Company has the right to operate an ATM in a landlord's location. The lease terms generally contain both fixed payments and variable payments that are transaction-based. Given the transaction-based nature of the variable payments, such payments are excluded from the measurement of the right-of-use asset and lease liability and are recognized in the consolidated statement of income as a component of “equipment and net occupancy” expense when incurred.

The following table presents information about the Company’s lease costs for operating leases recorded in the consolidated balance sheet, cash paid toward lease liabilities, and the weighted-average remaining term and discount rates of the operating leases.

		Year Ended December 31,
		2022				2021				2020
Lease cost
Operating lease cost		$	138,836			$	101,353			$	104,158
Short-term lease cost			8,269				111				198
Variable lease cost			3,743				4,103				1,565
Total lease cost		$	150,848			$	105,567			$	105,921
Other information
Right-of-use assets:
Obtained in exchange for new operating lease liabilities		$	137,998			$	57,760			$	70,754
Acquired in business combination			226,037				—				—
Cash paid toward lease liabilities			143,029				106,586				104,396
Weighted-average remaining lease term		7 years				6 years				7 years
Weighted-average discount rate			2.97	%			2.51	%			2.74	%

Minimum lease payments under noncancelable operating leases are summarized in the following table.

	(In thousands)
Year ending December 31:
2023	$	149,061
2024		139,820
2025		118,110
2026		97,979
2027		75,220
Later years		212,036
Total lease payments		792,226
Less: imputed interest		83,025
Total	$	709,201

All other operating leasing activities were not material to the Company’s consolidated results of operations. Minimum lease payments required under capital leases are not material.

7. Capitalized servicing assets

Changes in capitalized servicing assets were as follows:

		Residential Mortgage Loans												Commercial Mortgage Loans
For the Year Ended December 31,		2022				2021				2020				2022				2021				2020
		(In thousands)
Beginning balance		$	241,053			$	231,204			$	244,411			$	132,604			$	133,429			$	130,636
Originations			6,998				65,723				45,101				24,401				33,068				29,306
Acquired in business combination			12,133				—				—				—				—				—
Amortization			(65,849	)			(55,874	)			(58,308	)			(30,614	)			(33,893	)			(26,513	)
			194,335				241,053				231,204				126,391				132,604				133,429
Valuation allowance			—				(24,000	)			(30,000	)			—				—				—
Ending balance, net		$	194,335			$	217,053			$	201,204			$	126,391			$	132,604			$	133,429

Residential mortgage loans serviced for others were $22.4 billion at December 31, 2022, $23.2 billion at December 31, 2021 and $26.3 billion at December 31, 2020. Excluded from residential mortgage loans serviced for others were loans sub-serviced for others of $96.0 billion, $74.7 billion and $68.1 billion at December 31, 2022, 2021, and 2020, respectively. In conjunction with the acquisition of People's United on April 1, 2022, the Company acquired servicing rights for residential real estate loans that had outstanding principal balances at that date of $1.1 billion. The fair value of such servicing rights at that date was $12 million. Commercial mortgage loans serviced for others were $22.2 billion at December 31, 2022, $20.2 billion at December 31, 2021 and $18.9 billion at December 31, 2020. Excluded from commercial mortgage loans serviced for others were loans sub-serviced for others of $3.8 billion at December 31, 2022, $3.5 billion at December 31, 2021 and $3.3 billion at December 31, 2020.

The estimated fair value of capitalized residential mortgage loan servicing assets was approximately $336 million at December 31, 2022 and $257 million at December 31, 2021. The fair value of capitalized residential mortgage loan servicing assets was estimated using weighted-average discount rates of 12.29% and 9.8% at December 31, 2022 and 2021, respectively, and contemporaneous prepayment assumptions that vary by loan type. At December 31, 2022 and 2021, the discount rate represented a weighted-average option-adjusted spread (“OAS”) of 881 basis points (hundredths of one percent) and 894 basis points, respectively, over market implied forward London Interbank Offered Rates (“LIBOR”). The estimated fair value of capitalized residential mortgage loan servicing rights may vary significantly in subsequent periods due to changing interest rates and the effect thereof on prepayment speeds. The estimated fair value of capitalized commercial mortgage loan servicing assets was approximately $156 million at December 31, 2022 and $160 million at December 31, 2021. An 18% discount rate was used to estimate the fair value of capitalized commercial mortgage loan servicing rights at December 31, 2022 and 2021 with no prepayment assumptions because, in general, the servicing agreements allow the Company to share in customer loan prepayment fees and thereby recover the remaining carrying value of the capitalized servicing rights associated with such loan. The Company’s ability to realize the carrying value of capitalized commercial mortgage servicing rights is more dependent on the borrowers’ abilities to repay the underlying loans than on prepayments or changes in interest rates.

The key economic assumptions used to determine the fair value of significant portfolios of capitalized servicing rights at December 31, 2022 and the sensitivity of such value to changes in those assumptions are summarized in the table that follows. Those calculated sensitivities are hypothetical and actual changes in the fair value of capitalized servicing rights may differ significantly from the amounts presented herein. The effect of a variation in a particular assumption on the fair value of the servicing rights is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another which may magnify or counteract the sensitivities. The changes in assumptions are presumed to be instantaneous.

		Residential				Commercial
		(Dollars in thousands)
Weighted-average prepayment speeds			7.27	%
Impact on fair value of 10% adverse change		$	(8,471	)
Impact on fair value of 20% adverse change			(16,417	)
Weighted-average OAS			8.81	%
Impact on fair value of 10% adverse change		$	(10,226	)
Impact on fair value of 20% adverse change			(19,830	)
Weighted-average discount rate							18.00	%
Impact on fair value of 10% adverse change						$	(6,467	)
Impact on fair value of 20% adverse change							(12,498	)

8. Goodwill and other intangible assets

The Company does not amortize goodwill, however, core deposit and other intangible assets are amortized over the estimated life of each respective asset. A summary of total amortizing intangible assets follows.

		Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
		(In thousands)
December 31, 2022
Core deposit		$	218,000			$	40,875			$	177,125
Other			43,000				10,751				32,249
Total		$	261,000			$	51,626			$	209,374
December 31, 2021
Core deposit		$	131,664			$	127,746			$	3,918
Other			6,757				6,677				80
Total		$	138,421			$	134,423			$	3,998

Amortization of core deposit and other intangible assets was generally computed using accelerated methods over original amortization periods of three to seven years. The weighted-average original amortization period was approximately six years. Amortization expense for core deposit and other intangible assets was $56 million, $10 million and $15 million for the years ended December 31, 2022, 2021 and 2020, respectively. Estimated amortization expense in future years for such intangible assets is as follows:

		(In thousands)
Year ending December 31:
2023		$	62,044
2024			52,992
2025			37,939
2026			26,887
2027			17,835
Later years			11,677
		$	209,374

The Company completed annual goodwill impairment tests as of October 1, 2022, 2021 and 2020. For purposes of testing for impairment, the Company assigned all recorded goodwill to the reporting units originally intended to benefit from past business combinations, which has historically been the Company’s core relationship business reporting units. Goodwill was generally assigned based on the implied fair value of the acquired goodwill applicable to the benefited reporting units at the time of each respective acquisition. The implied fair value of the goodwill was determined as the difference between the estimated incremental overall fair value of the reporting unit and the estimated fair value of the net assets assigned to the reporting unit as of each respective acquisition date. To test for goodwill impairment at each evaluation date, the Company compared the estimated fair value of each of its reporting units to their respective carrying amounts and certain other assets and liabilities assigned to the reporting unit, including goodwill and core deposit and other intangible assets. The methodologies used to estimate fair values of reporting units as of the acquisition dates and as of the evaluation dates were similar. For the Company’s core customer relationship business reporting units, fair value was estimated as the present value of the expected future cash flows of the reporting unit. Based on the results of the goodwill impairment tests, the Company concluded that the amount of recorded goodwill was not impaired at the respective testing dates.

A summary of goodwill assigned to each of the Company’s reportable segments as of December 31, 2022 and 2021 for purposes of testing for impairment is as follows:

	December 31, 2021				2022 Transactions (a)				December 31, 2022
	(In thousands)
Business Banking	$	864,366			$	693,905			$	1,558,271
Commercial Banking		1,401,873				2,686,253				4,088,126
Commercial Real Estate		654,389				291,217				945,606
Discretionary Portfolio		—				—				—
Residential Mortgage Banking		—				—				—
Retail Banking		1,309,191				221,196				1,530,387
All Other		363,293				4,406				367,699
Total	$	4,593,112			$	3,896,977			$	8,490,089

(a)

*All increases relate to the acquisition of People's United on April 1, 2022. The increase in "All Other" was partially offset by an $*11 million decrease representing goodwill allocated to the M&T Insurance Agency sold in October 2022. Further information regarding those transactions is provided in note 2.

9. Borrowings

The amounts and interest rates of short-term borrowings were as follows:

		Federal Funds Purchased and Repurchase Agreements				Other Short-term Borrowings				Total
		(Dollars in thousands)
At December 31, 2022
Amount outstanding		$	354,670			$	3,200,281			$	3,554,951
Weighted-average interest rate			1.01	%			4.59	%			4.24	%
For the year ended December 31, 2022
Highest amount at a month-end		$	633,684			$	3,200,283
Daily-average amount outstanding			368,326				567,654			$	935,980
Weighted-average interest rate			0.20	%			3.29	%			2.08	%
At December 31, 2021
Amount outstanding		$	47,046			$	—			$	47,046
Weighted-average interest rate			0.01	%			—				0.01	%
For the year ended December 31, 2021
Highest amount at a month-end		$	103,548			$	—
Daily-average amount outstanding			68,073				—			$	68,073
Weighted-average interest rate			0.01	%			—				0.01	%
At December 31, 2020
Amount outstanding		$	59,482			$	—			$	59,482
Weighted-average interest rate			0.01	%			—				0.01	%
For the year ended December 31, 2020
Highest amount at a month-end		$	82,893			$	—
Daily-average amount outstanding			61,551				—			$	61,551
Weighted-average interest rate			0.05	%			—				0.05	%

Short-term borrowings have a stated maturity of one year or less at the date the Company enters into the obligation. In general, federal funds and repurchase agreements mature on the next business day and other short-term borrowings are set to mature in February 2023.

At December 31, 2022, M&T Bank had lines of credit under formal agreements as follows:

		(In thousands)
Outstanding borrowings		$	3,205,807
Unused			34,250,872

At December 31, 2022, M&T Bank had borrowing facilities available with the FHLBs whereby M&T Bank could borrow up to approximately $23.1 billion. Additionally, M&T Bank had an available line of credit with the Federal Reserve Bank of New York totaling approximately $14.3 billion at December 31, 2022. M&T Bank is required to pledge loans and investment securities as collateral for these borrowing facilities.

Long-term borrowings were as follows:

		December 31,
		2022				2021
		(In thousands)
Senior notes of M&T:
Variable rate due 2023		$	249,961			$	249,893
3.55% due 2023			493,960				516,173
4.55% fixed/variable due 2028			477,044				—
Senior notes of M&T Bank:
Variable rate due 2022			—				249,961
2.50% due 2022			—				653,903
5.40% due 2025			499,317				—
2.90% due 2025			749,824				749,740
Advances from FHLB:
Fixed rates			5,183				1,578
Subordinated notes of M&T:
5.75% due 2024			77,337				—
Subordinated notes of M&T Bank:
4.00% due 2024			403,569				—
3.40% due 2027			462,727				522,867
Junior subordinated debentures of M&T associated with preferred capital securities:
Fixed rates:
BSB Capital Trust I — 8.125%, due 2028			15,798				15,775
Provident Trust I — 8.29%, due 2028			31,267				30,103
Southern Financial Statutory Trust I — 10.60%, due 2030			6,999				6,912
Variable rates:
First Maryland Capital I — due 2027			149,479				148,945
First Maryland Capital II — due 2027			151,932				151,270
Allfirst Asset Trust — due 2029			97,365				97,220
BSB Capital Trust III — due 2033			15,464				15,464
Provident Statutory Trust III — due 2033			59,132				57,547
Southern Financial Capital Trust III — due 2033			8,644				8,448
Other			9,535				9,570
		$	3,964,537			$	3,485,369

The variable rate senior notes of M&T pay interest quarterly at a rate that is indexed to the three-month LIBOR. The contractual interest rates for those notes were 5.00% at December 31, 2022 and .81% at December 31, 2021.

The variable rate senior notes of M&T Bank were repaid in 2022 and paid interest quarterly at a rate that was indexed to the three-month LIBOR. The contractual interest rate was .61% at December 31, 2021.

Long-term fixed rate advances from the FHLB had weighted-average contractual interest rates of 2.34% at December 31, 2022 and 5.82% at December 31, 2021. Advances from the FHLB outstanding at December 31, 2022 have maturity dates that range from 2023 to 2039 and are secured by residential real estate loans, commercial real estate loans and investment securities.

The fixed and variable rate junior subordinated deferrable interest debentures of M&T (“Junior Subordinated Debentures”) are held by various trusts and were issued in connection with the issuance by those trusts of preferred capital securities (“Capital Securities”) and common securities (“Common Securities”). The proceeds from the issuances of the Capital Securities and the Common Securities were used by the trusts to purchase the Junior Subordinated Debentures. The Common Securities of each of those trusts are wholly owned by M&T and are the only class of each trust’s securities possessing general voting powers. The Capital Securities represent preferred undivided interests in the assets of the corresponding trust. Under the Federal Reserve Board’s risk-based capital guidelines, the Capital Securities qualify for inclusion in Tier 2 regulatory capital. The variable rate Junior Subordinated Debentures pay interest quarterly at rates that are indexed to the three-month LIBOR or, upon the expected cessation of LIBOR after June 30, 2023, at rates that are indexed to the three-month Secured Overnight Financing Rate ("SOFR"). Those rates ranged from 5.08% to 7.69% at December 31, 2022 and from .98% to 3.47% at December 31, 2021. The weighted-average variable rates payable on those Junior Subordinated Debentures were 5.66% at December 31, 2022 and 1.53% at December 31, 2021.

Holders of the Capital Securities receive preferential cumulative cash distributions unless M&T exercises its right to extend the payment of interest on the Junior Subordinated Debentures as allowed by the terms of each such debenture, in which case payment of distributions on the respective Capital Securities will be deferred for comparable periods. During an extended interest period, M&T may not pay dividends or distributions on, or repurchase, redeem or acquire any shares of its capital stock. In general, the agreements governing the Capital Securities, in the aggregate, provide a full, irrevocable and unconditional guarantee by M&T of the payment of distributions on, the redemption of, and any liquidation distribution with respect to the Capital Securities. The obligations under such guarantee and the Capital Securities are subordinate and junior in right of payment to all senior indebtedness of M&T.

The Capital Securities will remain outstanding until the Junior Subordinated Debentures are repaid at maturity, are redeemed prior to maturity or are distributed in liquidation to the trusts. The Capital Securities are mandatorily redeemable in whole, but not in part, upon repayment at the stated maturity dates (ranging from 2027 to 2033) of the Junior Subordinated Debentures or the earlier redemption of the Junior Subordinated Debentures in whole upon the occurrence of one or more events set forth in the indentures relating to the Capital Securities, and in whole or in part at any time after an optional redemption prior to contractual maturity contemporaneously with the optional redemption of the related Junior Subordinated Debentures in whole or in part, subject to possible regulatory approval.

Long-term borrowings at December 31, 2022 mature as follows:

	(In thousands)
Year ending December 31:
2023	$	744,127
2024		490,411
2025		1,250,599
2026		628
2027		764,246
Later years		714,526
	$	3,964,537

10. Shareholders’ equity

M&T is authorized to issue 20,000,000 shares of preferred stock. Preferred shares outstanding rank senior to common shares both as to dividends and liquidation preference, but have no general voting rights.

Issued and outstanding preferred stock of M&T as of December 31, 2022 and 2021 is presented below:

		December 31, 2022								December 31, 2021
		Shares Issued and Outstanding				Carrying Value				Shares Issued and Outstanding				Carrying Value
		(Dollars in thousands)
Series E (a)
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock $1,000 liquidation preference per share			350,000			$	350,000				350,000			$	350,000
Series F (b)
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock $10,000 liquidation preference per share			50,000			$	500,000				50,000			$	500,000
Series G (c)
Fixed-Rate Reset Non-cumulative Perpetual Preferred Stock $10,000 liquidation preference per share			40,000			$	400,000				40,000			$	400,000
Series H (d)
Fixed-to-Floating Rate Non-cumulative Perpetual Preferred Stock $25 liquidation preference per share			10,000,000			$	260,600				—				—
Series I (e)
Fixed-Rate Reset Non-cumulative Perpetual Preferred Stock $10,000 liquidation preference per share			50,000			$	500,000				50,000			$	500,000

(a)

Dividends, if declared, are paid semi-annually at a rate of 6.45*% through* February 14, 2024 and thereafter will be paid quarterly at a rate of the three-month LIBOR plus 361 basis points. Upon the expected cessation of LIBOR after June 30, 2023 dividends are estimated to be paid quarterly at a rate of three-month SOFR plus 387 basis points. The shares are redeemable in whole or in part on or after February 15, 2024*. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within* 90 *days following that occurrence. Declared dividends per share were $*64.50 in each of 2022, 2021 and 2020.

(b)

Dividends, if declared, are paid semi-annually at a rate of 5.125*% through* October 31, 2026 and thereafter will be paid quarterly at a rate of the three-month LIBOR plus 352 basis points. Upon the expected cessation of LIBOR after June 30, 2023 dividends are estimated to be paid quarterly at a rate of three-month SOFR plus 378 basis points. The shares are redeemable in whole or in part on or after November 1, 2026*. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within* 90 *days following that occurrence. Declared dividends per share were $*512.50 in each of 2022, 2021 and 2020.

(c)

Dividends, if declared, are paid semi-annually at a rate of 5.0*% through* July 31, 2024 and thereafter will be paid semi-annually at a rate of the five-year U.S. Treasury rate plus 3.174*%. The shares are redeemable in whole or in part on or after* August 1, 2024*. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within* 90 *days following that occurrence. Declared dividends per share were $*500.00 *in each of 2022 and 2021, and $*500.694 in 2020.

(d)

Dividends, if declared, are paid quarterly at a rate of 5.625*% through* December 14, 2026 and thereafter will be paid quarterly at a rate of the three-month LIBOR plus 402 basis points. Upon the expected cessation of LIBOR after June 30, 2023 dividends are estimated to be paid quarterly at a rate of three-month SOFR plus 428 basis points. The shares are redeemable in whole or in part on or after April 1, 2027*. Notwithstanding M&T's option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within* 90 *days following that occurrence. Dividends declared per share were $*1.0547 in 2022.

(e)

Dividends, if declared, are paid semi-annually at a rate of 3.5*% through* August 31, 2026 and thereafter will be paid semi-annually at a rate of the five-year U.S. Treasury rate plus 2.679*%. The shares are redeemable in whole or in part on or after* September 1, 2026*. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within* 90 *days following that occurrence. Dividends declared per share were $*356.806 *in 2022 and $*94.306 in 2021.

11. Revenue from contracts with customers

The Company generally charges customer accounts or otherwise bills customers upon completion of its services. Typically the Company’s contracts with customers have a duration of one year or less and payment for services is received at least annually, but oftentimes more frequently as services are provided. At December 31, 2022 and 2021, the Company had $74 million and $68 million, respectively, of amounts receivable related to recognized revenue from the sources in the accompanying tables. Such amounts are classified in “accrued interest and other assets” in the consolidated balance sheet. In certain situations the Company is paid in advance of providing services and defers the recognition of revenue until its service obligation is satisfied. At December 31, 2022 and 2021, the Company had deferred revenue of $48 million and $45 million, respectively, related to the sources in the accompanying tables recorded in “accrued interest and other liabilities” in the consolidated balance sheet. The following tables summarize sources of the Company’s noninterest income during 2022, 2021 and 2020 that are subject to the revenue recognition guidance.

	Business Banking				Commercial Banking				Commercial Real Estate				Discretionary Portfolio				Residential Mortgage Banking				Retail Banking				All Other				Total
Year Ended December 31, 2022	(In thousands)
Classification in consolidated statement of income
Service charges on deposit accounts	$	71,057				111,238				14,569				—				—				243,871				5,869			$	446,604
Trust income		6				—				—				—				—				—				740,711				740,717
Brokerage services income		—				—				—				—				—				—				87,877				87,877
Other revenues from operations:
Merchant discount and credit card fees		62,040				67,433				3,924				—				—				24,454				1,405				159,256
Other		—				14,358				10,183				91				3,401				23,796				38,118				89,947
	$	133,103				193,029				28,676				91				3,401				292,121				873,980			$	1,524,401
Year Ended December 31, 2021
Classification in consolidated statement of income
Service charges on deposit accounts	$	53,816				98,880				11,853				—				—				232,279				5,285			$	402,113
Trust income		—				—				—				—				—				—				644,716				644,716
Brokerage services income		—				—				—				—				—				—				62,791				62,791
Other revenues from operations:
Merchant discount and credit card fees		52,343				55,164				2,661				—				—				20,850				387				131,405
Other		—				5,968				7,304				1,359				6,166				22,878				39,973				83,648
	$	106,159				160,012				21,818				1,359				6,166				276,007				753,152			$	1,324,673
Year Ended December 31, 2020
Classification in consolidated statement of income
Service charges on deposit accounts	$	50,119				92,720				10,252				—				—				211,858				5,839			$	370,788
Trust income		18				442				—				—				—				—				601,424				601,884
Brokerage services income		—				—				—				—				—				—				47,428				47,428
Other revenues from operations:
Merchant discount and credit card fees		40,475				45,528				2,221				—				—				13,481				767				102,472
Other		—				9,408				6,218				1,625				4,732				20,813				41,815				84,611
	$	90,612				148,098				18,691				1,625				4,732				246,152				697,273			$	1,207,183

Service charges on deposit accounts include fees deducted directly from customer account balances, such as account maintenance, insufficient funds and other transactional service charges, and also include debit card interchange revenue resulting from customer initiated transactions. Account

maintenance charges are generally recognized as revenue on a monthly basis, whereas other fees are recognized after the respective service is provided.

Trust income includes fees related to the Institutional Client Services (“ICS”) business and the Wealth Advisory Services (“WAS”) business. Revenues from the ICS business are largely derived from a variety of trustee, agency, investment, cash management and administrative services, whereas revenues from the WAS business are mainly derived from asset management, fiduciary services, and family office services. Trust fees may be billed in arrears or in advance and are recognized as revenues as the Company’s performance obligations are satisfied. Certain fees are based on a percentage of assets invested or under management and are recognized as the service is performed and constraints regarding the uncertainty of the amount of fees are resolved.

Brokerage services income includes revenues from the sale of mutual funds and annuities and securities brokerage fees. Such revenues are generally recognized at the time of transaction execution. Mutual fund and other distribution fees are recognized upon initial placement of customer funds as well as in future periods as such customers continue to hold amounts in those mutual funds.

Other revenues from operations include merchant discount and credit card fees that are generally recognized when the cardholder’s transaction is approved and settled. Also included in other revenues from operations are insurance commissions, ATM surcharge fees, and advisory fees. Insurance commissions are recognized at the time the insurance policy is executed with the customer. Insurance renewal commissions are recognized upon subsequent renewal of the policy. ATM surcharge fees are included in revenue at the time of the respective ATM transaction. Advisory fees are generally recognized at the conclusion of the advisory engagement when the Company has satisfied its service obligation.

12. Stock-based compensation plans

Stock-based compensation expense was $111 million in 2022, $85 million in 2021 and $80 million in 2020. The Company recognized income tax benefits related to stock-based compensation of $26 million in 2022, $16 million in 2021 and $17 million in 2020.

The Company’s equity incentive compensation plan allows for the issuance of various forms of stock-based compensation, including stock options, restricted stock and restricted stock units, including performance-based awards. At December 31, 2022 and 2021, respectively, there were 1,650,696 and 2,299,502 shares available for future grant under the Company’s equity incentive compensation plan.

Stock awards

Stock awards granted to employees are comprised of restricted stock and restricted stock units. Stock awards generally vest over three years. The Company may issue shares from treasury stock to the extent available or issue new shares. There were no restricted shares issued in 2022, 2021 or 2020. The number of restricted stock units issued was 548,926 in 2022, 636,956 in 2021 and 480,949 in 2020, with a weighted-average grant date fair value of $93 million, $84 million and $81 million, respectively. Unrecognized compensation expense associated with restricted stock and restricted stock units, inclusive of those awards assumed in the acquisition of People's United, was $38 million as of December 31, 2022 and is expected to be recognized over a weighted-average period of approximately one year.

A summary of restricted stock and restricted stock unit activity follows:

		Restricted Stock Units Outstanding				Weighted- Average Grant Price				Restricted Stock Outstanding				Weighted- Average Grant Price
Unvested at January 1, 2022			1,038,692			$	147.32				4,076			$	162.35
Granted			548,926				169.13				—				—
Assumed in business combination			252,820				164.66				173,204				164.66
Vested			(628,130	)			156.21				(100,017	)			164.57
Cancelled			(44,726	)			155.72				(2,257	)			164.66
Unvested at December 31, 2022			1,167,582				156.23				75,006			$	164.65

Stock option awards

Stock options granted to employees generally vest over three years and are exercisable over terms not exceeding ten years and one day. The Company granted 138,825, 178,441 and 187,088 stock options in 2022, 2021 and 2020, respectively. The weighted-average grant date fair value of options granted was $6 million in 2022 and $5 million in each of 2021 and 2020. The Company used an option pricing model to estimate the grant date present value of stock options granted.

A summary of stock option activity follows:

						Weighted-Average
		Stock Options Outstanding				Exercise Price				Life (In Years)				Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2022			635,864			$	162.73
Granted			138,825				169.38
Assumed in business combination			1,857,739				141.58
Exercised			(278,336	)			142.36
Expired			(14,030	)			157.47
Outstanding at December 31, 2022			2,340,062			$	148.78				5.9			$	18,797
Exercisable at December 31, 2022			1,840,243			$	147.61				5.2			$	15,797

For 2022, 2021 and 2020 M&T received $37 million, $305,000 and $3 million, respectively, in cash from the exercise of stock options. The intrinsic value of stock options exercised and the related tax benefit realized by the Company were not material in any of those three years. As of December 31, 2022, the amount of unrecognized compensation cost related to non-vested stock options was not material. The total grant date fair value of stock options vested during 2022, 2021 and 2020 was not material. Upon the exercise of stock options, the Company may issue shares from treasury stock to the extent available or issue new shares.

Stock purchase plan

The stock purchase plan provides eligible employees of the Company with the right to purchase shares of M&T common stock at a discount through accumulated payroll deductions. In connection with the employee stock purchase plan, shares of M&T common stock issued were 75,232 in 2022, 95,147 in 2021 and 77,170 in 2020. As of December 31, 2022, there were 2,063,202 shares available for issuance under the plan. M&T received cash for shares purchased through the employee stock purchase plan of $11 million in each of 2022 and 2021, and $12 million in 2020. Compensation expense recognized for the stock purchase plan was not material in 2022, 2021 or 2020.

Deferred bonus plan

The Company provided a deferred bonus plan pursuant to which eligible employees could elect to defer all or a portion of their annual incentive compensation awards and allocate such awards to several

investment options, including M&T common stock. Participants could elect the timing of distributions from the plan. Such distributions are payable in cash with the exception of balances allocated to M&T common stock which are distributable in the form of M&T common stock. Shares of M&T common stock distributable pursuant to the terms of the deferred bonus plan were 11,725 and 13,319 at December 31, 2022 and 2021, respectively. The obligation to issue shares is included in “common stock issuable” in the consolidated balance sheet.

Directors’ stock compensation programs

The Company maintains compensation programs for members of the Company’s boards of directors and its regional director advisory councils that provides for a portion of their compensation to be received in shares or restricted stock units. In 2022 and 2021, 22,068 and 28,646 shares, respectively, were granted under such programs.

Through acquisitions, the Company assumed obligations to issue shares of M&T common stock related to deferred directors' compensation plans. Shares of common stock issuable under such plans were 2,306 and 2,450 at December 31, 2022 and 2021, respectively. The obligation to issue shares is included in “common stock issuable” in the consolidated balance sheet.

13. Pension plans and other postretirement benefits

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

Net periodic pension expense for defined benefit plans consisted of the following:

		Year Ended December 31
		2022				2021				2020
		(In thousands)
Service cost		$	17,660			$	20,513			$	19,944
Interest cost on benefit obligation			82,467				61,873				71,421
Expected return on plan assets			(187,609	)			(143,448	)			(125,512	)
Amortization of prior service cost			516				553				557
Recognized net actuarial loss			19,895				89,017				58,096
Net periodic pension cost (benefit)		$	(67,071	)		$	28,508			$	24,506

Net other postretirement benefits expense for defined benefit plans consisted of the following:

		Year Ended December 31
		2022				2021				2020
		(In thousands)
Service cost		$	2,604			$	1,014			$	970
Interest cost on benefit obligation			2,188				1,311				1,741
Amortization of prior service credit			(2,772	)			(4,738	)			(4,738	)
Recognized net actuarial gain			(1,481	)			(1,295	)			(1,236	)
Net other postretirement benefits		$	539			$	(3,708	)		$	(3,263	)

Service cost is reflected in salaries and employee benefits expense. The other components of net periodic benefit expense are reflected in other costs of operations.

Prior to 2022, net actuarial losses were generally amortized over the average remaining service periods of active participants in the Company’s defined benefit pension plan. If all or substantially all of the plan’s participants are inactive, GAAP provides for the average remaining life expectancy of the participants to be used instead of average remaining service period in determining such amortization. Substantially all of the participants in the Company’s defined benefit pension plan were inactive and beginning in 2022 the average remaining life expectancy is now utilized prospectively to amortize the

net unrecognized losses. The change increased the amortization period by approximately sixteen years and reduced the amount of amortization of unrecognized losses recorded for the year ended December 31, 2022 from what would have been recorded without such change in amortization period by $36 million.

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

		Pension Benefits								Other Postretirement Benefits
		2022				2021				2022				2021
		(In thousands)
Change in benefit obligation:
Benefit obligation at beginning of year		$	2,420,213			$	2,521,292			$	51,846			$	55,281
Service cost			17,660				20,513				2,604				1,014
Interest cost			82,467				61,873				2,188				1,311
Plan participants’ contributions			—				—				2,433				2,553
Actuarial (gain) loss			(636,220	)			(69,230	)			(21,735	)			(2,232	)
Plan amendment			—				—				13,260				—
Business combinations			632,855				—				14,859				—
Medicare Part D reimbursement			—				—				506				540
Benefits paid			(137,987	)			(114,235	)			(5,600	)			(6,621	)
Benefit obligation at end of year			2,378,988				2,420,213				60,361				51,846
Change in plan assets:
Fair value of plan assets at beginning of year			2,595,838				2,420,582				—				—
Actual return on plan assets			(385,823	)			278,260				—				—
Employer contributions			14,397				11,231				2,661				3,528
Business combinations			855,555				—				—				—
Plan participants’ contributions			—				—				2,433				2,553
Medicare Part D reimbursement			—				—				506				540
Benefits paid			(137,987	)			(114,235	)			(5,600	)			(6,621	)
Fair value of plan assets at end of year			2,941,980				2,595,838				—				—
Funded status		$	562,992			$	175,625			$	(60,361	)		$	(51,846	)
Prepaid asset recognized in the consolidated balance sheet			715,418				332,197				—				—
Accrued liability recognized in the consolidated balance sheet			(152,426	)			(156,572	)			(60,361	)			(51,846	)
Net accrued asset (liability) recognized in the consolidated balance sheet		$	562,992			$	175,625			$	(60,361	)		$	(51,846	)
Amounts recognized in accumulated other comprehensive income (“AOCI”) were:
Net loss (gain)		$	309,039			$	391,721			$	(34,892	)		$	(14,638	)
Net prior service cost (credit)			208				724				(1,499	)			(17,531	)
Pre-tax adjustment to AOCI			309,247				392,445				(36,391	)			(32,169	)
Taxes			(80,095	)			(101,447	)			9,425				8,316
Net adjustment to AOCI		$	229,152			$	290,998			$	(26,966	)		$	(23,853	)

The Company has an unfunded supplemental pension plan for certain key executives and others. The projected benefit obligation and accumulated benefit obligation included in the preceding data related to such plan were $152 million as of December 31, 2022 and $157 million as of December 31, 2021.

The accumulated benefit obligation for all defined benefit pension plans was $2.4 billion at each of December 31, 2022 and 2021.

GAAP requires an employer to recognize in its balance sheet as an asset or liability the overfunded or underfunded status of a defined benefit postretirement plan, measured as the difference between the fair value of plan assets and the benefit obligation. For a pension plan, the benefit obligation is the projected benefit obligation; for any other postretirement benefit plan, such as a retiree health care plan, the benefit obligation is the accumulated postretirement benefit obligation. Gains or losses and prior service costs or credits that arise during the period, but are not included as components of net periodic benefit expense, are recognized as a component of other comprehensive income. Amortization of net gains and losses is included in annual net periodic benefit expense if, as of the beginning of the year, the net gain or loss exceeds 10% of the greater of the benefit obligation or the market-related fair value of the plan assets. As indicated in the preceding table, as of December 31, 2022 the Company recorded a minimum liability adjustment of $273 million ($309 million related to pension plans and ($36 million) related to other postretirement benefits) with a corresponding reduction of shareholders’ equity, net of applicable deferred taxes, of $202 million. In aggregate, the benefit plans realized a net gain during 2022 that resulted in a decrease to the minimum liability adjustment from that which was recorded at December 31, 2021 of $87 million. The net gain in 2022 was mainly the result of increasing the discount rate used to measure the benefit obligation of all plans to 5.00% at December 31, 2022 from 2.75% used at the prior year-end offset, in part, by a return on plan assets that was lower than the assumed expected return and by the amortization of actuarial losses. The table below reflects the changes in plan assets and benefit obligations recognized in other comprehensive income related to the Company’s postretirement benefit plans.

		Pension Plans				Other Postretirement Benefit Plans				Total
		(In thousands)
2022
Net loss (gain)		$	(62,787	)		$	(21,735	)		$	(84,522	)
Net prior service cost			—				13,260				13,260
Amortization of prior service (cost) credit			(516	)			2,772				2,256
Amortization of actuarial (loss) gain			(19,895	)			1,481				(18,414	)
Total recognized in other comprehensive income, pre-tax		$	(83,198	)		$	(4,222	)		$	(87,420	)
2021
Net loss (gain)		$	(204,042	)		$	(2,232	)		$	(206,274	)
Amortization of prior service (cost) credit			(553	)			4,738				4,185
Amortization of actuarial (loss) gain			(89,017	)			1,295				(87,722	)
Total recognized in other comprehensive income, pre-tax		$	(293,612	)		$	3,801			$	(289,811	)

The Company also provides a qualified defined contribution pension plan to eligible employees who were not participants in the defined benefit pension plan as of December 31, 2005 and to other employees who have elected to participate in the defined contribution plan. The Company makes contributions to the defined contribution plan each year in an amount that is based on an individual participant’s total compensation (generally defined as total wages, incentive compensation, commissions and bonuses) and years of service. Company contributions to the plan are discretionary for participants for which eligibility occurred after January 1, 2020. Participants do not contribute to the defined contribution pension plan. Pension expense recorded in 2022, 2021 and 2020 associated with the defined contribution pension plan was $45 million, $40 million and $35 million, respectively.

Assumptions

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

		Pension Benefits								Other Postretirement Benefits
		2022				2021				2022				2021
Discount rate			5.00	%			2.75	%			5.00	%			2.75	%
Rate of increase in future compensation levels			3.33	%			3.35	%			—				—

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

		Pension Benefits												Other Postretirement Benefits
		2022				2021				2020				2022				2021				2020
Discount rate			2.75	%			2.50	%			3.25	%			2.75	%			2.50	%			3.25	%
Long-term rate of return on plan assets			6.25	%			6.25	%			6.50	%			—				—				—
Rate of increase in future compensation levels			3.35	%			3.37	%			4.29	%			—				—				—

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

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

The Company’s defined benefit pension plan is sensitive to the long-term rate of return on plan assets and the discount rate. To demonstrate the sensitivity of pension expense to changes in these assumptions, with all other assumptions held constant, 25 basis point increases in: the rate of return on plan assets would have resulted in a decrease in pension expense of approximately $6 million; and the discount rate would have resulted in a decrease in pension expense of approximately $2 million. Decreases of 25 basis points in those assumptions would have resulted in similar changes in amount, but in the opposite direction from the changes presented in the preceding sentence. Additionally, an increase of 25 basis points in the discount rate would have decreased the benefit obligation by $64 million and a decrease of 25 basis points in the discount rate would have increased the benefit obligation by $67 million at December 31, 2022.

For measurement of other postretirement benefits, a 6.50% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2022. The rate was assumed to decrease to 5.00% over six years.

Plan assets

The Company’s policy is to invest the pension plan assets in a prudent manner for the purpose of providing benefit payments to participants and mitigating reasonable expenses of administration. The Company’s investment strategy is designed to provide a total return that, over the long-term, places an emphasis on the preservation of capital. The strategy attempts to maximize investment returns on assets at a level of risk deemed appropriate by the Company while complying with applicable regulations and laws. The investment strategy utilizes asset diversification as a principal determinant for establishing an appropriate risk profile while emphasizing total return realized from capital appreciation, dividends and interest income. The target allocations for plan assets are generally 25 to 60 percent equity

securities, 10 to 65 percent debt securities, and 5 to 60 percent money-market investments/cash equivalents and other investments, although holdings could be more or less than these general guidelines based on market conditions at the time and actions taken or recommended by the investment managers providing advice to the Company. Assets are managed by a combination of internal and external investment managers. Equity securities may include investments in domestic and international equities, through individual securities, mutual funds and exchange-traded funds. Debt securities may include investments in corporate bonds of companies from diversified industries, mortgage-backed securities guaranteed by government agencies and U.S. Treasury securities through individual securities and mutual funds. Additionally, the Company’s defined benefit pension plan held $633 million (22% of total assets) of real estate funds, private investments, hedge funds and other investments at December 31, 2022. Returns on invested assets are periodically compared with target market indices for each asset type to aid management in evaluating such returns. Furthermore, management regularly reviews the investment policy and may, if deemed appropriate, make changes to the target allocations noted above.

The fair values of the Company’s pension plan assets at December 31, 2022 and 2021, by asset category, were as follows:

		Fair Value Measurement of Plan Assets At December 31, 2022
		Total				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(In thousands)
Asset category:
Money-market investments		$	89,829			$	52,005			$	37,824			$	—
Equity securities:
M&T			118,285				118,285				—				—
Domestic (a)			449,466				449,466				—				—
International (b)			18,510				18,510				—				—
Mutual funds:
Domestic (a)			279,299				279,299				—				—
International (b)			477,194				477,194				—				—
			1,342,754				1,342,754				—				—
Debt securities:
Corporate (c)			199,728				—				199,728				—
Government			236,199				—				236,199				—
International			14,777				—				14,777				—
Mutual funds:
Domestic (d)			422,615				422,615				—				—
			873,319				422,615				450,704				—
Other:
Diversified mutual fund			108,483				108,483				—				—
Real estate partnerships			26,953				6,651				—				20,302
Private equity / debt			211,098				—				—				211,098
Hedge funds			276,367				108,957				—				167,410
Guaranteed deposit fund			9,601				—				—				9,601
			632,502				224,091				—				408,411
Total (e)		$	2,938,404			$	2,041,465			$	488,528			$	408,411

		Fair Value Measurement of Plan Assets At December 31, 2021
		Total				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(In thousands)
Asset category:
Money-market investments		$	82,751			$	43,616			$	39,135			$	—
Equity securities:
M&T			134,447				134,447				—				—
Domestic (a)			369,283				369,283				—				—
International (b)			14,835				14,835				—				—
Mutual funds:
Domestic (a)			280,347				280,347				—				—
International (b)			461,304				461,304				—				—
			1,260,216				1,260,216				—				—
Debt securities:
Corporate (c)			178,528				—				178,528				—
Government			206,540				—				206,540				—
International			12,933				—				12,933				—
Mutual funds:
Domestic (d)			315,424				315,424				—				—
			713,425				315,424				398,001				—
Other:
Diversified mutual fund			108,239				108,239				—				—
Real estate partnerships			16,620				5,264				—				11,356
Private equity / debt			151,550				—				—				151,550
Hedge funds			250,691				74,599				—				176,092
Guaranteed deposit fund			10,041				—				—				10,041
			537,141				188,102				—				349,039
Total (e)		$	2,593,533			$	1,807,358			$	437,136			$	349,039

(a)

This category is mainly comprised of equities of companies primarily within the small-cap, mid-cap and large-cap sectors of the U.S. economy and range across diverse industries.

(b)

This category is comprised of equities in companies primarily within the mid-cap and large-cap sectors of international markets mainly in developed and emerging markets in Europe and the Pacific Rim.

(c)

This category represents investment grade bonds of U.S. issuers from diverse industries.

(d)

Approximately 73*% of the mutual funds were invested in investment grade bonds and* 27*% in high-yielding bonds at* December 31, 2022*. Approximately* 72*% of the mutual funds were invested in investment grade bonds and* 28*% in high-yielding bonds at* December 31, 2021. The holdings within the funds were spread across diverse industries.

(e)

*Excludes dividends and interest receivable totaling $*4 million and $2 million at December 31, 2022 and 2021, respectively.

Pension plan assets included common stock of M&T with a fair value of $118 million (4% of total plan assets) at December 31, 2022 and $134 million (5% of total plan assets) at December 31, 2021. No investment in securities of a non-U.S. Government or government agency issuer exceeded ten percent of plan assets at December 31, 2022.

The changes in Level 3 pension plan assets measured at estimated fair value on a recurring basis during the year ended December 31, 2022 were as follows:

		Balance – January 1, 2022				Net Purchases (Sales)				Total Realized/ Unrealized Gains (Losses)				Balance – December 31, 2022
		(In thousands)
Other
Real estate partnerships		$	11,356			$	6,062			$	2,884			$	20,302
Private equity/debt			151,550				66,393				(6,845	)			211,098
Hedge funds			176,092				(2,714	)			(5,968	)			167,410
Guaranteed deposit fund			10,041				819				(1,259	)			9,601
Total		$	349,039			$	70,560			$	(11,188	)		$	408,411

The Company makes contributions to its funded qualified defined benefit pension plan as required by government regulation or as deemed appropriate by management after considering factors such as the fair value of plan assets, expected returns on such assets and the present value of benefit obligations of the plan. The Company is not required to make contributions to the qualified defined benefit plan in 2023, however, subject to the impact of actual events and circumstances that may occur in 2023, the Company may make contributions, but the amount of any such contributions has not been determined. The Company regularly funds the payment of benefit obligations for the supplemental defined benefit pension and postretirement benefit plans because such plans do not hold assets for investment. Payments made by the Company for supplemental pension benefits were $14 million and $11 million in 2022 and 2021, respectively. Payments made by the Company for postretirement benefits were $3 million and $4 million in 2022 and 2021, respectively. Payments for supplemental pension and other postretirement benefits for 2023 are not expected to differ from those made in 2022 by an amount that will be material to the Company’s consolidated financial position.

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

		Pension Benefits				Other Postretirement Benefits
		(In thousands)
Year ending December 31:
2023		$	145,705			$	3,910
2024			150,676				3,925
2025			155,164				4,342
2026			158,433				4,278
2027			163,737				4,226
2028 through 2032			833,186				19,943

The Company has a retirement savings plan (“RSP”) that is a defined contribution plan in which eligible employees of the Company may defer up to 50% of qualified compensation via contributions to the plan. The RSP provides for employer matching contributions of 100% of an employee's qualified compensation up to 5%. Employees’ accounts, including employee contributions, employer matching contributions and accumulated earnings thereon, are at all times fully vested and nonforfeitable. Employee benefits expense resulting from the Company’s contributions to the RSP totaled $84 million, $63 million and $62 million in 2022, 2021 and 2020, respectively.

14. Income taxes

The components of income tax expense were as follows:

		Year Ended December 31
		2022				2021				2020
		(In thousands)
Current
Federal		$	367,028			$	331,714			$	267,550
State and local			143,012				85,354				98,431
Total current			510,040				417,068				365,981
Deferred
Federal			(18,444	)			71,880				(22,894	)
State and local			(11,543	)			15,279				(8,397	)
Total deferred			(29,987	)			87,159				(31,291	)
Amortization of investments in qualified affordable housing projects			139,407				92,176				81,679
Total income taxes applicable to pre-tax income		$	619,460			$	596,403			$	416,369

The Company files a consolidated federal income tax return reflecting taxable income earned by all domestic subsidiaries. In prior years, applicable federal tax law allowed certain financial institutions the option of deducting as bad debt expense for tax purposes amounts in excess of actual losses. In accordance with GAAP, such financial institutions were not required to provide deferred income taxes on such excess. Recapture of the excess tax bad debt reserve established under the previously allowed method will result in taxable income if M&T Bank fails to maintain bank status as defined in the Internal Revenue Code or charges are made to the reserve for other than bad debt losses. At December 31, 2022, M&T Bank’s tax bad debt reserve for which no federal income taxes have been provided was $137 million. No actions are planned that would cause this reserve to become wholly or partially taxable.

Income taxes attributable to gains or losses on bank investment securities were not material in any of 2022, 2021 and 2020.

Total income taxes differed from the amount computed by applying the statutory federal income tax rate to pre-tax income as follows:

		Year Ended December 31
		2022				2021				2020
		(In thousands)
Income taxes at statutory federal income tax rate		$	548,336			$	515,581			$	371,599
Increase (decrease) in taxes:
Tax-exempt income			(37,170	)			(20,605	)			(22,806	)
State and local income taxes, net of federal income tax effect			109,903				101,046				71,127
Qualified affordable housing project tax credits, net			(22,524	)			(14,542	)			(14,826	)
Other			20,915				14,923				11,275
		$	619,460			$	596,403			$	416,369

Deferred tax assets (liabilities) were comprised of the following at December 31:

	2022				2021				2020
	(In thousands)
Losses on loans and other assets	$	640,520			$	395,784			$	471,767
Operating lease liabilities		182,638				110,023				121,216
Retirement benefits		—				—				26,185
Postretirement and other employee benefits		—				31,760				28,004
Incentive and other compensation plans		33,936				24,713				18,984
Unrealized losses		115,024				—				—
Interest on loans		53,792				—				—
Losses on cash flow hedges		87,164				—				—
Stock-based compensation		51,366				32,675				29,507
Other		81,498				52,351				66,763
Gross deferred tax assets		1,245,938				647,306				762,426
Right of use assets and other leasing transactions		(367,137	)			(249,209	)			(285,311	)
Unrealized gains		—				(27,066	)			(50,785	)
Retirement benefits		(87,486	)			(45,402	)			—
Capitalized servicing rights		(51,273	)			(53,219	)			(50,235	)
Postretirement and other employee benefits		(29,230	)			—				—
Depreciation and amortization		(155,048	)			(93,103	)			(95,684	)
Interest on loans		—				(6,690	)			(8,113	)
Gains on cash flow hedges		—				(22,820	)			(97,004	)
Other		(69,314	)			(88,053	)			(62,581	)
Gross deferred tax liabilities		(759,488	)			(585,562	)			(649,713	)
Net deferred tax asset	$	486,450			$	61,744			$	112,713

The Company believes that it is more likely than not that the deferred tax assets will be realized through taxable earnings or alternative tax strategies.

The income tax credits shown in the statement of income of M&T in note 26 arise principally from operating losses before dividends from subsidiaries.

A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:

		Federal, State and Local Tax				Accrued Interest				Unrecognized Income Tax Benefits
		(In thousands)
Gross unrecognized tax benefits at January 1, 2020		$	58,969			$	7,199			$	66,168
Increases as a result of tax positions taken in prior years			—				2,800				2,800
Decreases as a result of tax positions taken in prior years			(10,107	)			(2,384	)			(12,491	)
Gross unrecognized tax benefits at December 31, 2020			48,862				7,615				56,477
Increases as a result of tax positions taken in prior years			—				2,560				2,560
Decreases as a result of tax positions taken in prior years			(11,351	)			(2,766	)			(14,117	)
Gross unrecognized tax benefits at December 31, 2021			37,511				7,409				44,920
Increases as a result of tax positions taken in prior years			—				3,090				3,090
Unrecognized tax benefits assumed in a business combination			3,788				1,205				4,993
Decreases as a result of tax positions taken in prior years			(11,090	)			(3,958	)			(15,048	)
Gross unrecognized tax benefits at December 31, 2022		$	30,209			$	7,746				37,955
Less: Federal, state and local income tax benefits											(7,285	)
Net unrecognized tax benefits at December 31, 2022 that, if recognized, would impact the effective income tax rate										$	30,670

The Company’s policy is to recognize interest and penalties, if any, related to unrecognized tax benefits in income taxes in the consolidated statement of income. The balance of accrued interest at December 31, 2022 is included in the table above. The Company’s federal, state and local income tax returns are routinely subject to examinations from various governmental taxing authorities. Such examinations may result in challenges to the tax return treatment applied by the Company to specific transactions. Management believes that the assumptions and judgment used to record tax-related assets or liabilities have been appropriate. Should determinations rendered by tax authorities ultimately indicate that management’s assumptions were inappropriate, the result and adjustments required could have a material effect on the Company’s results of operations. Examinations by the Internal Revenue Service of the Company’s federal income tax returns have been largely concluded through 2021, although under statute the income tax returns from 2018 through 2021 could be adjusted. The Company also files income tax returns in over forty states and numerous local jurisdictions. Substantially all material state and local matters have been concluded for years through 2014. It is not reasonably possible to estimate when examinations for any subsequent years will be completed.

15. Earnings per common share

The computations of basic earnings per common share follow:

		Year Ended December 31
		2022				2021				2020
		(In thousands, except per share)
Income available to common shareholders:
Net income		$	1,991,663			$	1,858,746			$	1,353,152
Less: Preferred stock dividends			(96,587	)			(72,915	)			(68,228	)
Net income available to common equity			1,895,076				1,785,831				1,284,924
Less: Income attributable to unvested stock-based compensation awards			(3,607	)			(8,854	)			(5,858	)
Net income available to common shareholders		$	1,891,469			$	1,776,977			$	1,279,066
Weighted-average shares outstanding:
Common shares outstanding (including common stock issuable) and unvested stock-based compensation awards			163,489				129,539				129,404
Less: Unvested stock-based compensation awards			(315	)			(890	)			(766	)
Weighted-average shares outstanding			163,174				128,649				128,638
Basic earnings per common share		$	11.59			$	13.81			$	9.94

The computations of diluted earnings per common share follow:

		Year Ended December 31
		2022				2021				2020
		(In thousands, except per share)
Net income available to common equity		$	1,895,076			$	1,785,831			$	1,284,924
Less: Income attributable to unvested stock-based compensation awards			(3,596	)			(8,844	)			(5,856	)
Net income available to common shareholders		$	1,891,480			$	1,776,987			$	1,279,068
Adjusted weighted-average shares outstanding:
Common and unvested stock-based compensation awards			163,489				129,539				129,404
Less: Unvested stock-based compensation awards			(315	)			(890	)			(766	)
Plus: Incremental shares from assumed conversion of stock-based compensation awards and warrants to purchase common stock			856				163				66
Adjusted weighted-average shares outstanding			164,030				128,812				128,704
Diluted earnings per common share		$	11.53			$	13.80			$	9.94

GAAP defines unvested share-based awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities that shall be included in the computation of earnings per common share pursuant to the two-class method. The Company has issued stock-based compensation awards in the form of restricted stock and restricted stock units, which, in accordance with GAAP, are considered participating securities.

Stock-based compensation awards and warrants to purchase common stock of M&T representing common shares of 453,000 in 2022, 461,000 in 2021 and 474,000 in 2020 were not included in the computations of diluted earnings per common share because the effect on those years would have been antidilutive.

16. Comprehensive income

The following tables display the components of other comprehensive income (loss) and amounts reclassified from accumulated other comprehensive income (loss) to net income:

		Investment				Defined Benefit								Total Amount					Income
		Securities				Plans				Other				Before Tax					Tax				Net
		(In thousands)
Balance — January 1, 2022		$	104,691			$	(360,276	)		$	83,531			$	(172,054	)			$	44,476			$	(127,578	)
Other comprehensive income before reclassifications:
Unrealized holding losses, net			(550,648	)			—				—				(550,648	)				142,546				(408,102	)
Foreign currency translation adjustment			—				—				(7,845	)			(7,845	)				2,058				(5,787	)
Unrealized losses on cash flow hedges			—				—				(461,033	)			(461,033	)				119,360				(341,673	)
Current year benefit plans gains			—				71,262				—				71,262					(18,309	)			52,953
Total other comprehensive income (loss) before reclassifications			(550,648	)			71,262				(468,878	)			(948,264	)				245,655				(702,609	)
Amounts reclassified from accumulated other comprehensive income that (increase) decrease net income:
Amortization of unrealized holding losses on held-to-maturity securities			1,765				—				—				1,765		(a)			(456	)			1,309
Accretion of net gain on terminated cash flow hedges			—				—				(120	)			(120	)	(c)			31				(89	)
Net yield adjustment from cash flow hedges currently in effect			—				—				36,338				36,338		(a)			(9,407	)			26,931
Amortization of prior service credit			—				(2,256	)			—				(2,256	)	(d)			579				(1,677	)
Amortization of actuarial losses			—				18,414				—				18,414		(d)			(4,731	)			13,683
Total other comprehensive income (loss)			(548,883	)			87,420				(432,660	)			(894,123	)				231,671				(662,452	)
Balance — December 31, 2022		$	(444,192	)		$	(272,856	)		$	(349,129	)		$	(1,066,177	)			$	276,147			$	(790,030	)
Balance — January 1, 2021		$	195,386			$	(650,087	)		$	369,558			$	(85,143	)			$	22,111			$	(63,032	)
Other comprehensive income before reclassifications:
Unrealized holding losses, net			(95,114	)			—				—				(95,114	)				24,870				(70,244	)
Foreign currency translation adjustment			—				—				(1,218	)			(1,218	)				356				(862	)
Unrealized losses on cash flow hedges			—				—				(32,292	)			(32,292	)				8,410				(23,882	)
Current year benefit plans gains			—				206,274				—				206,274					(54,016	)			152,258
Total other comprehensive income (loss) before reclassifications			(95,114	)			206,274				(33,510	)			77,650					(20,380	)			57,270
Amounts reclassified from accumulated other comprehensive income that (increase) decrease net income:
Amortization of unrealized holding losses on held-to-maturity securities			4,427				—				—				4,427		(a)			(1,154	)			3,273
Gains realized in net income			(8	)			—				—				(8	)	(b)			2				(6	)
Accretion of net gain on terminated cash flow hedges			—				—				(120	)			(120	)	(c)			32				(88	)
Net yield adjustment from cash flow hedges currently in effect			—				—				(252,397	)			(252,397	)	(a)			65,741				(186,656	)
Amortization of prior service credit			—				(4,185	)			—				(4,185	)	(d)			1,095				(3,090	)
Amortization of actuarial losses			—				87,722				—				87,722		(d)			(22,971	)			64,751
Total other comprehensive income (loss)			(90,695	)			289,811				(286,027	)			(86,911	)				22,365				(64,546	)
Balance — December 31, 2021		$	104,691			$	(360,276	)		$	83,531			$	(172,054	)			$	44,476			$	(127,578	)

		Investment				Defined Benefit								Total Amount					Income
		Securities				Plans				Other				Before Tax					Tax				Net
		(In thousands)
Balance — January 1, 2020		$	50,701			$	(464,548	)		$	133,888			$	(279,959	)			$	73,279			$	(206,680	)
Other comprehensive income before reclassifications:
Unrealized holding gains, net			141,081				—				—				141,081					(36,498	)			104,583
Foreign currency translation adjustment			—				—				2,724				2,724					(440	)			2,284
Unrealized gains on cash flow hedges			—				—				505,042				505,042					(130,432	)			374,610
Current year benefit plans losses			—				(238,218	)			—				(238,218	)				60,208				(178,010	)
Total other comprehensive income (loss) before reclassifications			141,081				(238,218	)			507,766				410,629					(107,162	)			303,467
Amounts reclassified from accumulated other comprehensive income that (increase) decrease net income:
Amortization of unrealized holding losses on held-to-maturity securities			3,606				—				—				3,606		(a)			(966	)			2,640
Gains realized in net income			(2	)			—				—				(2	)	(b)			1				(1	)
Accretion of net gain on terminated cash flow hedges			—				—				(125	)			(125	)	(c)			34				(91	)
Net yield adjustment from cash flow hedges currently in effect			—				—				(271,971	)			(271,971	)	(a)			70,239				(201,732	)
Amortization of prior service credit			—				(4,181	)			—				(4,181	)	(d)			1,057				(3,124	)
Amortization of actuarial losses			—				56,860				—				56,860		(d)			(14,371	)			42,489
Total other comprehensive income (loss)			144,685				(185,539	)			235,670				194,816					(51,168	)			143,648
Balance — December 31, 2020		$	195,386			$	(650,087	)		$	369,558			$	(85,143	)			$	22,111			$	(63,032	)

(a)

Included in interest income.

(b)

Included in gain (loss) on bank investment securities.

(c)

Included in interest expense.

(d)

Included in other costs of operations.

Accumulated other comprehensive income (loss), net consisted of the following:

		Investment Securities				Defined Benefit Plans				Other				Total
		(In thousands)
Balance at January 1, 2020		$	37,380			$	(342,419	)		$	98,359			$	(206,680	)
Net gain (loss) during 2020			107,222				(138,645	)			175,071				143,648
Balance at December 31, 2020			144,602				(481,064	)			273,430				(63,032	)
Net gain (loss) during 2021			(66,977	)			213,919				(211,488	)			(64,546	)
Balance at December 31, 2021			77,625				(267,145	)			61,942				(127,578	)
Net gain (loss) during 2022			(406,793	)			64,959				(320,618	)			(662,452	)
Balance at December 31, 2022		$	(329,168	)		$	(202,186	)		$	(258,676	)		$	(790,030	)

17. Other income and other expense

The following items, which exceeded 1% of total interest income and other income in the respective period, were included in either “other revenues from operations” or “other costs of operations” in the consolidated statement of income:

		Year Ended December 31
		2022				2021				2020
		(In thousands)
Other income:
Gain on MTIA divestiture		$	136,331
Credit-related fee income			129,833			$	90,816			$	70,387
Credit card interchange fee income							69,963
Merchant discount fee income							61,442
Other expense:
Professional services			469,776				348,360				240,047
Charitable contributions			178,137
Amortization of capitalized mortgage servicing rights			96,463				89,767				84,821

18. International activities

The Company engages in limited international activities including certain trust-related services in Europe, foreign currency transactions associated with customer activity, providing credit to support the international activities of domestic companies, holding certain loans to foreign borrowers and, prior to June 2021, collecting Eurodollar deposits for a Cayman Islands office. Assets and revenues associated with international activities represent less than 1% of the Company’s consolidated assets and revenues. International assets included $319 million and $197 million of loans to foreign borrowers at December 31, 2022 and 2021, respectively. Deposits at M&T Bank’s office in Ontario, Canada were $34 million at December 31, 2022 and $32 million at December 31, 2021. Revenues from providing international trust-related services were approximately $36 million in each of 2022 and 2020, compared with $38 million in 2021.

19. Derivative financial instruments

As part of managing interest rate risk, the Company enters into interest rate swap agreements to modify the repricing characteristics of certain portions of the Company’s portfolios of earning assets and interest-bearing liabilities. The Company designates interest rate swap agreements utilized in the management of interest rate risk as either fair value hedges or cash flow hedges. Interest rate swap agreements are generally entered into with counterparties that meet established credit standards and most contain master netting, collateral and/or settlement provisions protecting the at-risk party. Based on adherence to the Company’s credit standards and the presence of the netting, collateral or settlement provisions, the Company believes that the credit risk inherent in these contracts was not material as of December 31, 2022.

The net effect of interest rate swap agreements was to decrease net interest income by $26 million in 2022 and to increase net interest income by $287 million in 2021 and $312 million in 2020.

Information about interest rate swap agreements entered into for interest rate risk management purposes summarized by type of financial instrument the swap agreements were intended to hedge follows:

										Weighted-								Estimated
		Notional				Average				Average Rate								Fair Value
		Amount				Maturity				Fixed				Variable				Gain (Loss) (a)
		(In thousands)				(In years)												(In thousands)
December 31, 2022
Fair value hedges:
Fixed rate long-term borrowings (b)		$	1,500,000				3.3				2.98	%			4.52	%		$	(833	)
Cash flow hedges:
Interest payments on variable rate commercial real estate loans (b) (c)			15,900,000				1.4				1.91	%			4.38	%			(7,059	)
Total		$	17,400,000				1.6											$	(7,892	)
December 31, 2021
Fair value hedges:
Fixed rate long-term borrowings (b)		$	1,650,000				2.3				2.86	%			0.74	%		$	41
Cash flow hedges:
Interest payments on variable rate commercial real estate loans (b) (d)			21,700,000				0.6				1.24	%			0.09	%			(248	)
Total		$	23,350,000				0.7											$	(207	)

(a)

C*ertain clearinghouse exchanges consider payments by counterparties for variation margin on derivative instruments to be settlements of those positions. The impact of such payments for interest rate swap agreements designated as fair value hedges was a net settlement of losses of $*65.0 *million at December 31, 2022 and a net settlement of gains of $*43.5 *million at December 31, 2021. The impact of such payments on interest rate swap agreements designated as cash flow hedges was a net settlement of losses of $*329.7 *million at December 31, 2022 and a net settlement of gains of $*88.2 million at December 31, 2021.

(b)

Under the terms of these agreements, the Company receives settlement amounts at a fixed rate and pays at a variable rate.

(c)

*Includes notional amount and terms of $*4.7 billion of forward-starting interest rate swap agreements that become effective in 2023.

(d)

*Includes notional amount and terms of $*8.4 billion of forward-starting interest rate swap agreements that became effective in 2022.

The notional amount of interest rate swap agreements entered into for risk management purposes that were outstanding at December 31, 2022 mature as follows:

		(In thousands)
Year ending December 31:
2023		$	7,350,000
2025			9,050,000
2027			1,000,000
		$	17,400,000

The Company utilizes commitments to sell residential and commercial real estate loans to hedge the exposure to changes in the fair value of real estate loans held for sale. Such commitments have generally been designated as fair value hedges. The Company also utilizes commitments to sell real estate loans to offset the exposure to changes in fair value of certain commitments to originate real estate loans for sale.

Other derivative financial instruments not designated as hedging instruments included interest rate contracts, foreign exchange and other option and futures contracts. Interest rate contracts not designated as hedging instruments had notional values of $45.1 billion and $32.6 billion at December 31, 2022 and 2021, respectively. The notional amounts of foreign currency and other option and futures contracts not designated as hedging instruments aggregated $1.7 billion and $1.1 billion at December 31, 2022 and 2021, respectively.

Information about the fair values of derivative instruments in the Company’s consolidated balance sheet and consolidated statement of income follows:

		Asset Derivatives								Liability Derivatives
		Fair Value								Fair Value
		December 31,				December 31,				December 31,				December 31,
		2022				2021				2022				2021
		(In thousands)
Derivatives designated and qualifying as hedging instruments (a)
Interest rate swap agreements		$	1,202			$	258			$	9,094			$	465
Commitments to sell real estate loans			3,037				4,044				9				548
			4,239				4,302				9,103				1,013
Derivatives not designated and qualifying as hedging instruments (a)
Mortgage banking:
Mortgage-related commitments to originate real estate loans for sale			452				11,728				46,025				5,288
Commitments to sell real estate loans			51,410				8,137				14				4,108
Other:
Interest rate contracts (b)			355,806				410,056				1,278,180				76,278
Foreign exchange and other option and futures contracts			24,062				8,230				22,004				7,156
			431,730				438,151				1,346,223				92,830
Total derivatives		$	435,969			$	442,453			$	1,355,326			$	93,843

(a)

Asset derivatives are reported in other assets and liability derivatives are reported in other liabilities.

(b)

The impact of variation margin payments at December 31, 2022 and December 31, 2021 *was a reduction of the estimated fair value of interest rate contracts not designated as hedging instruments in an asset position of $*1.1 *billion and $*54.4 *million, respectively, and in a liability position of $*29.2 *million and $*305.1 million, respectively.

		Amount of Gain (Loss) Recognized
		Year Ended December 31, 2022								Year Ended December 31, 2021								Year Ended December 31, 2020
		Derivative				Hedged Item				Derivative				Hedged Item				Derivative				Hedged Item
		(In thousands)
Derivatives in fair value hedging relationships
Interest rate swap agreements:
Fixed rate long-term borrowings (a)		$	(109,319	)		$	108,920			$	(58,599	)		$	57,716			$	57,611			$	(57,686	)
Derivatives not designated as hedging instruments
Interest rate contracts (b)		$	27,391							$	11,486							$	27,734
Foreign exchange and other option and futures contracts (b)			14,284								9,064								7,363
Total		$	41,675							$	20,550							$	35,097

(a)

Reported as an adjustment to interest expense.

(b)

Reported as trading account and non-hedging derivative gains.

		Carrying Amount of the Hedged Item								Cumulative Amount of Fair Value Hedging Adjustment Increasing (Decreasing) the Carrying Amount of the Hedged Item
		December 31, 2022				December 31, 2021				December 31, 2022				December 31, 2021
		(In thousands)
Location in the Consolidated Balance Sheet of the Hedged Items in Fair Value Hedges
Long-term debt		$	1,433,731			$	1,692,943			$	(65,310	)		$	43,610

The amount of interest income recognized in the consolidated statement of income associated with derivatives designated as cash flow hedges was a decrease of $36 million for 2022 and an increase of $252 million for 2021. As of December 31, 2022, the unrealized loss recognized in other comprehensive income related to cash flow hedges was $337 million, of which $33 million and $304 million relate to interest rate swap agreements maturing in 2023 and 2025, respectively.

The Company also has commitments to sell and commitments to originate residential and commercial real estate loans that are considered derivatives. The Company designates certain of the commitments to sell real estate loans as fair value hedges of real estate loans held for sale. The Company also utilizes commitments to sell real estate loans to offset the exposure to changes in the fair value of certain commitments to originate real estate loans for sale. As a result of these activities, net unrealized pre-tax gains related to hedged loans held for sale, commitments to originate loans for sale and commitments to sell loans were approximately $8 million and $24 million at December 31, 2022 and 2021, respectively. Changes in unrealized gains and losses are included in mortgage banking revenues and, in general, are realized in subsequent periods as the related loans are sold and commitments satisfied.

The Company does not offset derivative asset and liability positions in its consolidated financial statements. The Company’s exposure to credit risk by entering into derivative contracts is mitigated through master netting agreements and collateral posting or settlement requirements. Master netting agreements covering interest rate and foreign exchange contracts with the same party include a right to set-off that becomes enforceable in the event of default, early termination or under other specific conditions.

The aggregate fair value of derivative financial instruments in a liability position, which are subject to enforceable master netting arrangements, was less than $1 million and $35 million at December 31, 2022 and 2021, respectively. The Company was required to post $33 million as collateral as of December 31, 2021. No collateral was posted for those positions at December 31, 2022. Certain of the Company’s derivative financial instruments contain provisions that require the Company to maintain specific credit ratings from credit rating agencies to avoid higher collateral posting requirements. If the Company’s debt ratings were to fall below specified ratings, the counterparties of the derivative financial instruments could demand immediate incremental collateralization on those instruments in a net liability position. The aggregate fair value of all derivative financial instruments with such credit risk-related contingent features in a net liability position on December 31, 2022 was not material.

The aggregate fair value of derivative financial instruments in an asset position with counterparties, which are subject to enforceable master netting arrangements, was $314 million and $7 million at December 31, 2022 and 2021, respectively. Counterparties posted collateral relating to those positions of $312 million and $6 million at December 31, 2022 and 2021, respectively. Interest rate swap agreements entered into with customers are subject to the Company’s credit risk standards and often contain collateral provisions.

In addition to the derivative contracts noted above, the Company clears certain derivative transactions through a clearinghouse, rather than directly with counterparties. Those transactions cleared through a clearinghouse require initial margin collateral and variation margin payments depending on the contracts being in a net asset or liability position. The amount of initial margin collateral posted by the Company was $205 million and $132 million at December 31, 2022 and 2021, respectively. The fair value asset and liability amounts of derivative contracts have been reduced by variation margin payments treated as settlements as described herein. Variation margin on derivative contracts not treated as settlements continues to represent collateral posted or received by the Company.

20. Variable interest entities and asset securitizations

The Company’s securitization activity has consisted of securitizing loans originated for sale into government issued or guaranteed mortgage-backed securities. The Company has not recognized any losses as a result of having securitized assets.

As described in note 9, M&T has issued junior subordinated debentures payable to various trusts that have issued Capital Securities. M&T owns the common securities of those trust entities. The Company is not considered to be the primary beneficiary of those entities and, accordingly, the trusts are not included in the Company’s consolidated financial statements. At each of December 31, 2022 and 2021, the Company included the junior subordinated debentures as “long-term borrowings” in its consolidated balance sheet and recognized $22 million and $23 million, respectively, in other assets for its “investment” in the common securities of the trusts that will be concomitantly repaid to M&T by the respective trust from the proceeds of M&T’s repayment of the junior subordinated debentures associated with preferred capital securities described in note 9.

The Company has invested as a limited partner in various partnerships that collectively had total assets of approximately $9.2 billion at December 31, 2022 and $3.0 billion at December 31, 2021. Those partnerships generally construct or acquire properties for which the investing partners are eligible to receive certain federal income tax credits in accordance with government guidelines. Such investments may also provide tax deductible losses to the partners. The partnership investments also assist the Company in achieving its community reinvestment initiatives. As a limited partner, there is no recourse to the Company by creditors of the partnerships. However, the tax credits that result from the Company’s investments in such partnerships are generally subject to recapture should a partnership fail to comply with the respective government regulations. The Company’s carrying amount of its

investments in such partnerships was $1.5 billion, including $545 million of unfunded commitments, at December 31, 2022 and $933 million, including $361 million of unfunded commitments, at December 31, 2021. Contingent commitments to provide additional capital contributions to these partnerships were not material at December 31, 2022. The Company has not provided financial or other support to the partnerships that was not contractually required. The Company’s maximum exposure to loss from its investments in such partnerships as of December 31, 2022 was $1.9 billion, including possible recapture of certain tax credits. Management currently estimates that no material losses are probable as a result of the Company’s involvement with such entities. The Company, in its position as limited partner, does not direct the activities that most significantly impact the economic performance of the partnerships and, therefore, in accordance with the accounting provisions for variable interest entities, the partnership entities are not included in the Company’s consolidated financial statements. The Company’s investment in qualified affordable housing projects is amortized to income taxes in the consolidated statement of income as tax credits and other tax benefits resulting from deductible losses associated with the projects are received.

The Company serves as investment advisor for certain registered money-market funds. The Company has no explicit arrangement to provide support to those funds, but may waive portions of its allowable management fees as a result of market conditions.

21. Fair value measurements

GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has not made any fair value elections at December 31, 2022.

Pursuant to GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy exists in GAAP for fair value measurements based upon the inputs to the valuation of an asset or liability.

Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities.

Level 2 — Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.

Level 3 — Valuation is derived from model-based and other techniques in which at least one significant input is unobservable and which may be based on the Company’s own estimates about the assumptions that market participants would use to value the asset or liability.

When available, the Company attempts to use quoted market prices in active markets to determine fair value and classifies such items as Level 1 or Level 2. If quoted market prices in active markets are not available, fair value is often determined using model-based techniques incorporating various assumptions including interest rates, prepayment speeds and credit losses. Assets and liabilities valued using model-based techniques are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation. The following is a description of the valuation methodologies used for the Company’s assets and liabilities that are measured on a recurring basis at estimated fair value.

Trading account

Mutual funds held in connection with deferred compensation and other arrangements have been classified as Level 1 valuations. Valuations of investments in municipal and other bonds can generally be obtained through reference to quoted prices in less active markets for the same or similar securities

or through model-based techniques in which all significant inputs are observable and, therefore, such valuations have been classified as Level 2.

Investment securities available for sale and equity securities

The majority of the Company’s available-for-sale investment securities have been valued by reference to prices for similar securities or through model-based techniques in which all significant inputs are observable and, therefore, such valuations have been classified as Level 2. Certain investments in mutual funds and equity securities are actively traded and, therefore, have been classified as Level 1 valuations.

Real estate loans held for sale

The Company utilizes commitments to sell real estate loans to hedge the exposure to changes in fair value of real estate loans held for sale. The carrying value of hedged real estate loans held for sale includes changes in estimated fair value during the hedge period. Typically, the Company attempts to hedge real estate loans held for sale from the date of close through the sale date. The fair value of hedged real estate loans held for sale is generally calculated by reference to quoted prices in secondary markets for commitments to sell real estate loans with similar characteristics and, accordingly, such loans have been classified as a Level 2 valuation.

Commitments to originate real estate loans for sale and commitments to sell real estate loans

The Company enters into various commitments to originate real estate loans for sale and commitments to sell real estate loans. Such commitments are accounted for as derivative financial instruments and, therefore, are carried at estimated fair value on the consolidated balance sheet. The estimated fair values of such commitments were generally calculated by reference to quoted prices in secondary markets for commitments to sell real estate loans to certain government-sponsored entities and other parties. The fair valuations of commitments to sell real estate loans generally result in a Level 2 classification. The estimated fair value of commitments to originate real estate loans for sale is adjusted to reflect the Company’s anticipated commitment expirations. The estimated commitment expirations are considered significant unobservable inputs contributing to the Level 3 classification of commitments to originate real estate loans for sale. Significant unobservable inputs used in the determination of estimated fair value of commitments to originate real estate loans for sale are included in the accompanying table of significant unobservable inputs to Level 3 measurements.

Interest rate swap agreements used for interest rate risk management

The Company utilizes interest rate swap agreements as part of the management of interest rate risk to modify the repricing characteristics of certain portions of its portfolios of earning assets and interest-bearing liabilities. The Company generally determines the fair value of its interest rate swap agreements using externally developed pricing models based on market observable inputs and, therefore, classifies such valuations as Level 2. The Company has considered counterparty credit risk in the valuation of its interest rate swap agreement assets and has considered its own credit risk in the valuation of its interest rate swap agreement liabilities.

Other non-hedging derivatives

Other non-hedging derivatives consist primarily of interest rate contracts and foreign exchange contracts with customers who require such services with offsetting positions with third parties to minimize the Company's risk with respect to such transactions. The Company generally determines the fair value of its other non-hedging derivative assets and liabilities using externally developed pricing models based on market observable inputs and, therefore, classifies such valuations as Level 2.

The following tables present assets and liabilities at December 31, 2022 and 2021 measured at estimated fair value on a recurring basis:

		Fair Value Measurements				Level 1				Level 2				Level 3
		(In thousands)
December 31, 2022
Trading account		$	117,847			$	117,847			$	—			$	—
Investment securities available for sale:
U.S. Treasury and federal agencies			7,670,960				—				7,670,960				—
Mortgage-backed securities:
Government issued or guaranteed
Commercial			574,299				—				574,299				—
Residential			2,330,118				—				2,330,118				—
Other debt securities			173,584				—				173,584				—
			10,748,961				—				10,748,961				—
Equity securities			151,458				145,289				6,169				—
Real estate loans held for sale			162,393				—				162,393				—
Other assets (a)			435,969				—				435,517				452
Total assets		$	11,616,628			$	263,136			$	11,353,040			$	452
Other liabilities (a)			1,355,326				—				1,309,301				46,025
Total liabilities		$	1,355,326			$	—			$	1,309,301			$	46,025
December 31, 2021
Trading account		$	49,745			$	49,545			$	200			$	—
Investment securities available for sale:
U.S. Treasury and federal agencies			678,690				—				678,690				—
Mortgage-backed securities:
Government issued or guaranteed
Residential			3,155,312				—				3,155,312				—
Other debt securities			121,802				—				121,802				—
			3,955,804				—				3,955,804				—
Equity securities			77,640				68,850				8,790				—
Real estate loans held for sale			899,282				—				899,282				—
Other assets (a)			442,453				—				430,725				11,728
Total assets		$	5,424,924			$	118,395			$	5,294,801			$	11,728
Other liabilities (a)			93,843				—				88,555				5,288
Total liabilities		$	93,843			$	—			$	88,555			$	5,288

(a)

Comprised predominantly of interest rate swap agreements used for interest rate risk management (Level 2), interest rate and foreign exchange contracts not designated as hedging instruments (Level 2), commitments to sell real estate loans (Level 2) and commitments to originate real estate loans to be held for sale (Level 3).

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the years ended December 31, 2022, 2021 and 2020 were as follows:

		Investment Securities Available for Sale
		Privately Issued Mortgage-Backed****Securities				Other Assets and Other Liabilities
		(In thousands)
2022
Balance — January 1, 2022		$	—			$	6,440
Total gains realized/unrealized:
Included in earnings			—				(34,396	)	(a)
Transfers out of Level 3			—				(17,617	)	(b)
Balance — December 31, 2022		$	—			$	(45,573	)
Changes in unrealized gains included in earnings related to assets still held at December 31, 2022		$	—			$	(45,758	)	(a)
2021
Balance — January 1, 2021		$	16			$	43,234
Total gains realized/unrealized:
Included in earnings			—				126,223		(a)
Settlements			(16	)			—
Transfers out of Level 3			—				(163,017	)	(b)
Balance — December 31, 2021		$	—			$	6,440
Changes in unrealized gains included in earnings related to assets still held at December 31, 2021		$	—			$	8,619		(a)
2020
Balance — January 1, 2020		$	16			$	10,740
Total gains realized/unrealized:
Included in earnings			—				194,469		(a)
Transfers out of Level 3			—				(161,975	)	(b)
Balance — December 31, 2020		$	16			$	43,234
Changes in unrealized gains included in earnings related to assets still held at December 31, 2020		$	—			$	42,597		(a)

(a)

Reported as mortgage banking revenues in the consolidated statement of income and includes the fair value of commitment issuances and expirations.

(b)

Transfers out of Level 3 consist of interest rate locks transferred to closed loans.

The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements. The more significant of those assets follow.

Loans

Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectable portions of those loans. Nonrecurring adjustments also include certain impairment amounts for collateral-dependent loans when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally

observable in the marketplace and the related nonrecurring fair value measurement adjustments have generally been classified as Level 2, unless significant adjustments have been made to the valuation that are not readily observable by market participants. Non-real estate collateral supporting commercial loans generally consists of business assets such as receivables, inventory and equipment. Fair value estimations are typically determined by discounting recorded values of those assets to reflect estimated net realizable value considering specific borrower facts and circumstances and the experience of credit personnel in their dealings with similar borrower collateral liquidations. Such discounts were generally in the range of 15% to 90% with a weighted-average of 39% at December 31, 2022. As these discounts are not readily observable and are considered significant, the valuations have been classified as Level 3. Automobile collateral is typically valued by reference to independent pricing sources based on recent sales transactions of similar vehicles and the related nonrecurring fair value measurement adjustments have been classified as Level 2. Collateral values for other consumer installment loans are generally estimated based on historical recovery rates for similar types of loans, which at December 31, 2022 was 62%. As these recovery rates are not readily observable by market participants, such valuation adjustments have been classified as Level 3. Loans subject to nonrecurring fair value measurement were $853 million at December 31, 2022 ($329 million and $524 million of which were classified as Level 2 and Level 3, respectively), $574 million at December 31, 2021 ($340 million and $234 million of which were classified as Level 2 and Level 3, respectively), and $652 million at December 31, 2020 ($339 million and $313 million of which were classified as Level 2 and Level 3, respectively). Changes in fair value recognized during the years ended December 31, 2022, 2021 and 2020 for partial charge-offs of loans and loan impairment reserves on loans held by the Company at the end of each of those years were decreases of $191 million, $53 million and $222 million, respectively.

Assets taken in foreclosure of defaulted loans

Assets taken in foreclosure of defaulted loans are primarily comprised of commercial and residential real property and are generally measured at the lower of cost or fair value less costs to sell. The fair value of the real property is generally determined using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace, and the related nonrecurring fair value measurement adjustments have generally been classified as Level 2. Assets taken in foreclosure of defaulted loans subject to nonrecurring fair value measurement were not material at December 31, 2022 and December 31, 2021. Changes in fair value recognized during the years ended December 31, 2022, 2021 and 2020 for foreclosed assets held by the Company at the end of each of those years were not material.

Capitalized servicing rights

Capitalized servicing rights are initially measured at fair value in the Company’s consolidated balance sheet. The Company utilizes the amortization method to subsequently measure its capitalized servicing assets. In accordance with GAAP, the Company must record impairment charges, on a nonrecurring basis, when the carrying value of certain strata exceed their estimated fair value. To estimate the fair value of servicing rights, the Company considers market prices for similar assets, if available, and the present value of expected future cash flows associated with the servicing rights calculated using assumptions that market participants would use in estimating future servicing income and expense. Such assumptions include estimates of the cost of servicing loans, loan default rates, an appropriate discount rate and prepayment speeds. For purposes of evaluating and measuring impairment of capitalized servicing rights, the Company stratifies such assets based on the predominant risk characteristics of the underlying financial instruments that are expected to have the most impact on projected prepayments, cost of servicing and other factors affecting future cash flows associated with the servicing rights. Such factors may include financial asset or loan type, note rate and term. The amount of impairment recognized is the amount by which the carrying value of the capitalized servicing rights for a stratum exceed estimated fair value. Impairment is recognized through a valuation allowance. The determination of fair value of capitalized servicing rights is considered a Level 3 valuation. Capitalized servicing rights related to residential mortgage loans of $138 million required a valuation allowance of $24 million at December 31, 2021. There was no valuation allowance required at December 31, 2022. Significant unobservable inputs used in this Level 3 valuation included weighted-average prepayment speeds of 14.64% and a weighted-average option-adjusted spread of 900 basis points at December 31, 2021. Changes in fair value recognized for impairment of capitalized servicing rights were decreases in the valuation allowance of $24 million in 2022 and $6 million in 2021, compared with an increase of $23 million in 2020.

Significant unobservable inputs to Level 3 measurements

The following tables present quantitative information about significant unobservable inputs used in the fair value measurements for Level 3 assets and liabilities at December 31, 2022 and 2021:

		Fair Value				Valuation Technique		Unobservable Inputs / Assumptions		Range (Weighted- Average)
		(In thousands)
December 31, 2022
Recurring fair value measurements
Net other assets (liabilities) (a)		$	(45,573	)		Discounted cash flow		Commitment expirations		0% - 97% (3%)
December 31, 2021
Recurring fair value measurements
Net other assets (liabilities) (a)		$	6,440			Discounted cash flow		Commitment expirations		0% - 80% (10%)

(a)

Other Level 3 assets (liabilities) consist of commitments to originate real estate loans.

Sensitivity of fair value measurements to changes in unobservable inputs

An increase (decrease) in the estimate of expirations for commitments to originate real estate loans would generally result in a lower (higher) fair value measurement. Estimated commitment expirations are derived considering loan type, changes in interest rates and remaining length of time until closing.

Disclosures of fair value of financial instruments

The carrying amounts and estimated fair value for financial instrument assets (liabilities) are presented in the following tables:

		December 31, 2022
		Carrying Amount				Estimated Fair Value				Level 1				Level 2				Level 3
		(In thousands)
Financial assets:
Cash and cash equivalents		$	1,517,244				1,517,244				1,371,688				145,556				—
Interest-bearing deposits at banks			24,958,719				24,958,719				—				24,958,719				—
Federal funds sold			3,000				3,000				—				3,000				—
Trading account			117,847				117,847				117,847				—				—
Investment securities			25,210,871				24,056,322				145,289				23,860,445				50,588
Loans and leases:
Commercial loans and leases			41,850,566				41,139,985				—				—				41,139,985
Commercial real estate loans			45,364,571				43,214,646				—				130,652				43,083,994
Residential real estate loans			23,755,947				21,780,214				—				7,049,540				14,730,674
Consumer loans			20,593,079				20,093,523				—				—				20,093,523
Allowance for credit losses			(1,925,331	)			—				—				—				—
Loans and leases, net			129,638,832				126,228,368				—				7,180,192				119,048,176
Accrued interest receivable			646,250				646,250				—				646,250				—
Financial liabilities:
Noninterest-bearing deposits		$	(65,501,860	)			(65,501,860	)			—				(65,501,860	)			—
Savings and interest-checking deposits			(87,911,463	)			(87,911,463	)			—				(87,911,463	)			—
Time deposits			(10,101,545	)			(10,143,110	)			—				(10,143,110	)			—
Short-term borrowings			(3,554,951	)			(3,554,951	)			—				(3,554,951	)			—
Long-term borrowings			(3,964,537	)			(3,926,489	)			—				(3,926,489	)			—
Accrued interest payable			(81,356	)			(81,356	)			—				(81,356	)			—
Other financial instruments:
Commitments to originate real estate loans for sale		$	(45,573	)			(45,573	)			—				—				(45,573	)
Commitments to sell real estate loans			54,424				54,424				—				54,424				—
Other credit-related commitments			(148,772	)			(148,772	)			—				—				(148,772	)
Interest rate swap agreements used for interest rate risk management			(7,892	)			(7,892	)			—				(7,892	)			—
Interest rate and foreign exchange contracts not designated as hedging instruments			(920,316	)			(920,316	)			—				(920,316	)			—

		December 31, 2021
		Carrying Amount				Estimated Fair Value				Level 1				Level 2				Level 3
						(In thousands)
Financial assets:
Cash and cash equivalents		$	1,337,577				1,337,577				1,205,269				132,308				—
Interest-bearing deposits at banks			41,872,304				41,872,304				—				41,872,304				—
Trading account			49,745				49,745				49,545				200				—
Investment securities			7,155,860				7,192,476				68,850				7,066,293				57,333
Loans and leases:
Commercial loans and leases			23,473,324				23,285,224				—				—				23,285,224
Commercial real estate loans			35,389,730				34,730,191				—				425,010				34,305,181
Residential real estate loans			16,074,445				16,160,799				—				4,524,018				11,636,781
Consumer loans			17,974,953				18,121,363				—				—				18,121,363
Allowance for credit losses			(1,469,226	)			—				—				—				—
Loans and leases, net			91,443,226				92,297,577				—				4,949,028				87,348,549
Accrued interest receivable			335,162				335,162				—				335,162				—
Financial liabilities:
Noninterest-bearing deposits		$	(60,131,480	)			(60,131,480	)			—				(60,131,480	)			—
Savings and interest-checking deposits			(68,603,966	)			(68,603,966	)			—				(68,603,966	)			—
Time deposits			(2,807,963	)			(2,810,143	)			—				(2,810,143	)			—
Short-term borrowings			(47,046	)			(47,046	)			—				(47,046	)			—
Long-term borrowings			(3,485,369	)			(3,562,223	)			—				(3,562,223	)			—
Accrued interest payable			(40,866	)			(40,866	)			—				(40,866	)			—
Other financial instruments:
Commitments to originate real estate loans for sale		$	6,440				6,440				—				—				6,440
Commitments to sell real estate loans			7,525				7,525				—				7,525				—
Other credit-related commitments			(123,032	)			(123,032	)			—				—				(123,032	)
Interest rate swap agreements used for interest rate risk management			(207	)			(207	)			—				(207	)			—
Interest rate and foreign exchange contracts not designated as hedging instruments			334,852				334,852				—				334,852				—

With the exception of marketable securities, certain off-balance sheet financial instruments and mortgage loans originated for sale, the Company’s financial instruments are not readily marketable and market prices do not exist. The Company, in attempting to comply with the provisions of GAAP that require disclosures of fair value of financial instruments, has not attempted to market its financial instruments to potential buyers, if any exist. Since negotiated prices in illiquid markets depend greatly upon the then present motivations of the buyer and seller, it is reasonable to assume that actual sales prices could vary widely from any estimate of fair value made without the benefit of negotiations. Additionally, changes in market interest rates can dramatically impact the value of financial instruments in a short period of time.

The Company does not believe that the estimated information presented herein is representative of the earnings power or value of the Company. The preceding analysis, which is inherently limited in depicting fair value, also does not consider any value associated with existing customer relationships nor the ability of the Company to create value through loan origination, deposit gathering or fee generating activities. Many of the estimates presented herein are based upon the use of highly subjective information and assumptions and, accordingly, the results may not be precise. Management believes that fair value estimates may not be comparable between financial institutions due to the wide range of permitted valuation techniques and numerous estimates which must be made. Furthermore, because the disclosed fair value amounts were estimated as of the balance sheet date, the amounts actually realized or paid upon maturity or settlement of the various financial instruments could be significantly different.

22. Commitments and contingencies

In the normal course of business, various commitments and contingent liabilities are outstanding. The following table presents the Company’s significant commitments. Certain of these commitments are not included in the Company’s consolidated balance sheet.

	December 31,				December 31,
	2022				2021
	(In thousands)
Commitments to extend credit
Home equity lines of credit	$	8,261,560			$	5,693,045
Commercial real estate loans to be sold		348,701				324,943
Other commercial real estate		5,776,116				4,998,631
Residential real estate loans to be sold		31,208				233,257
Other residential real estate		505,121				924,211
Commercial and other		32,625,840				22,145,057
Standby letters of credit		2,376,644				2,151,595
Commercial letters of credit		65,066				31,981
Financial guarantees and indemnification contracts		4,022,432				4,211,797
Commitments to sell real estate loans		533,458				1,367,523

Commitments to extend credit are agreements to lend to customers, generally having fixed expiration dates or other termination clauses that may require payment of a fee. In addition to the amounts presented in the preceding table, the Company had discretionary funding commitments to commercial customers of $11.7 billion and $10.8 billion at December 31, 2022 and 2021, respectively, that the Company had the unconditional right to cancel prior to funding. Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party, whereas commercial letters of credit are issued to facilitate commerce and typically result in the commitment being funded when the underlying transaction is consummated between the customer and a third party. The credit risk associated with commitments to extend credit and standby and commercial letters of credit is essentially the same as that involved with extending loans to customers and is subject to normal credit policies. Collateral may be obtained based on management’s assessment of the customer’s creditworthiness.

Financial guarantees and indemnification contracts are predominantly comprised of recourse obligations associated with sold loans and other guarantees and commitments. Included in financial guarantees and indemnification contracts are loan principal amounts sold with recourse in conjunction with the Company’s involvement in the Fannie Mae Delegated Underwriting and Servicing program. The Company’s maximum credit risk for recourse associated with loans sold under this program totaled approximately $3.9 billion and $4.0 billion at December 31, 2022 and December 31, 2021, respectively. At December 31, 2022, the Company estimated that the recourse obligations described above were not material to the Company’s consolidated financial position. There have been no material losses incurred as a result of those credit recourse arrangements.

Since many loan commitments, standby letters of credit, and guarantees and indemnification contracts expire without being funded in whole or in part, the contract amounts are not necessarily indicative of future cash flows.

The Company utilizes commitments to sell real estate loans to hedge exposure to changes in the fair value of real estate loans held for sale. Such commitments are accounted for as derivatives and along with commitments to originate real estate loans to be held for sale are recorded in the consolidated balance sheet at estimated fair market value.

The Company is contractually obligated to repurchase previously sold residential real estate loans that do not ultimately meet investor sale criteria related to underwriting procedures or loan

documentation. When required to do so, the Company may reimburse loan purchasers for losses incurred or may repurchase certain loans. The Company reduces residential mortgage banking revenues by an estimate for losses related to its obligations to loan purchasers. The amount of those charges is based on the volume of loans sold, the level of reimbursement requests received from loan purchasers and estimates of losses that may be associated with previously sold loans. At December 31, 2022, the Company believes that its obligation to loan purchasers was not material to the Company’s consolidated financial position.

M&T and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings and other matters in which claims for monetary damages are asserted. On an on-going basis management, after consultation with legal counsel, assesses the Company’s liabilities and contingencies in connection with such proceedings. For those matters where it is probable that the Company will incur losses and the amounts of the losses can be reasonably estimated, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent the pending or threatened litigation could result in exposure in excess of that liability, the amount of such excess is not currently estimable. Although not considered probable, the range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability, was between $0 and $25 million at December 31, 2022. Although the Company does not believe that the outcome of pending litigations will be material to the Company’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future.

23. Segment information

Reportable segments have been determined based upon the Company’s internal profitability reporting system, which is organized by strategic business unit. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer and the distribution of those products and services are similar. The reportable segments are Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking.

The financial information of the Company’s segments was compiled utilizing the accounting policies described in note 1 with certain exceptions. The more significant of these exceptions are described herein. The Company allocates interest income or interest expense using a methodology that charges users of funds (assets) interest expense and credits providers of funds (liabilities) with income based on the maturity, prepayment and/or repricing characteristics of the assets and liabilities. A provision for credit losses is allocated to segments in an amount based largely on actual net charge-offs incurred by the segment during the period plus or minus an amount necessary to adjust the segment’s allowance for credit losses due to changes in loan balances. In contrast, the level of the consolidated provision for credit losses is determined using the methodologies described in notes 1 and 5. The net effects of these allocations are recorded in the “All Other” category. Indirect fixed and variable expenses incurred by certain centralized support areas are allocated to segments based on actual usage (for example, volume measurements) and other criteria. Certain types of administrative expenses and bankwide expense accruals (including amortization of core deposit and other intangible assets associated with acquisitions of financial institutions) are generally not allocated to segments. Income taxes are allocated to segments based on the Company’s marginal statutory tax rate adjusted for any tax-exempt income or non-deductible expenses. Equity is allocated to the segments based on regulatory capital requirements and in proportion to an assessment of the inherent risks associated with the business of the segment (including interest, credit and operating risk).

The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, reported segment results are not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data. The Company continues to evaluate its indirect fixed and variable expenses included within the “All Other” category to determine if the expenses may be allocated to the Company’s various segments to support strategic business decisions by the Company’s executive leadership. As a result, in 2022 the Company performed the following: an allocation of incentive compensation; a refinement of consumption-driven services allocations including cybersecurity and modeling functions; an expanded allocation of franchise-type services such as risk management, data services and legal services; and a refinement in allocation of technology application costs in support of business activities. Additionally, certain lending relationships within the hospitality sector that had previously received oversight within the Commercial Banking segment were realigned to the Commercial Real Estate segment. Accordingly, financial information presented herein for 2021 and 2020 has been reclassified to provide segment information on a comparable basis, as noted in the following tables.

		For the Year Ended December 31, 2021
		Net Interest Income as Previously Reported				Impact of Changes				Net Interest Income as Reclassified				Provision for Credit Losses as Previously Reported				Impact of Changes				Provision for Credit Losses as Reclassified				Other Noninterest Expense as Previously Reported				Impact of Changes				Other Noninterest Expense as Reclassified				Net Income (Loss) as Previously Reported				Impact of Changes				Net Income (Loss) as Reclassified
		(In thousands)
Business Banking		$	518,940				—				518,940			$	10,928				—				10,928			$	341,751				8,514				350,265			$	213,464				(6,316	)			207,148
Commercial Banking			854,264				(21,605	)			832,659				101,060				(42,996	)			58,064				384,505				7,063				391,568				493,723				5,279				499,002
Commercial Real Estate			643,415				21,605				665,020				67,405				42,996				110,401				276,791				12,235				289,026				372,326				(18,684	)			353,642
Discretionary Portfolio			483,624				—				483,624				3,622				—				3,622				64,122				2,368				66,490				288,766				(1,757	)			287,009
Residential Mortgage Banking			92,706				—				92,706				(562	)			—				(562	)			332,491				5,907				338,398				172,960				(4,292	)			168,668
Retail Banking			1,125,953				—				1,125,953				55,692				—				55,692				804,762				24,120				828,882				341,486				(17,893	)			323,593
All Other			105,876				—				105,876				(313,145	)			—				(313,145	)			1,082,993				(60,207	)			1,022,786				(23,979	)			43,663				19,684
Total		$	3,824,778				—				3,824,778			$	(75,000	)			—				(75,000	)		$	3,287,415				—				3,287,415			$	1,858,746				—				1,858,746
		For the Year Ended December 31, 2020
		Net Interest Income as Previously Reported				Impact of Changes				Net Interest Income as Reclassified				Provision for Credit Losses as Previously Reported				Impact of Changes				Provision for Credit Losses as Reclassified				Other Noninterest Expense as Previously Reported				Impact of Changes				Other Noninterest Expense as Reclassified				Net Income (Loss) as Previously Reported				Impact of Changes				Net Income (Loss) as Reclassified
		(In thousands)
Business Banking		$	462,614				—				462,614			$	25,928				—				25,928			$	322,868				6,455				329,323			$	159,220				(4,765	)			154,455
Commercial Banking			864,149				(36,509	)			827,640				73,099				(4,867	)			68,232				375,769				7,053				382,822				508,472				(32,799	)			475,673
Commercial Real Estate			673,894				36,509				710,403				107,210				4,867				112,077				256,428				12,099				268,527				381,828				18,625				400,453
Discretionary Portfolio			486,831				—				486,831				1,508				—				1,508				54,339				8,516				62,855				327,291				(6,290	)			321,001
Residential Mortgage Banking			52,712				—				52,712				1,785				—				1,785				332,028				6,361				338,389				133,652				(4,700	)			128,952
Retail Banking			1,204,309				—				1,204,309				108,268				—				108,268				764,262				45,407				809,669				365,261				(33,531	)			331,730
All Other			121,808				—				121,808				482,202				—				482,202				959,258				(85,891	)			873,367				(522,572	)			63,460				(459,112	)
Total		$	3,866,317				—				3,866,317			$	800,000				—				800,000			$	3,064,952				—				3,064,952			$	1,353,152				—				1,353,152

Information about the Company’s segments is presented in the accompanying table. Income statement amounts are in thousands of dollars. Balance sheet amounts are in millions of dollars.

	For the Years Ended December 31, 2022, 2021 and 2020
	Business Banking												Commercial Banking												Commercial Real Estate												Discretionary Portfolio
	2022				2021				2020				2022				2021				2020				2022				2021				2020				2022				2021				2020
Net interest income (a)	$	712,207			$	518,940			$	462,614			$	1,338,552			$	832,659			$	827,640			$	736,791			$	665,020			$	710,403			$	163,695			$	483,624			$	486,831
Noninterest income (b)		150,298				123,854				103,837				406,708				294,172				270,772				207,280				226,991				214,386				(69,077	)			(38,638	)			(1,735	)
		862,505				642,794				566,451				1,745,260				1,126,831				1,098,412				944,071				892,011				924,789				94,618				444,986				485,096
Provision for credit losses		17,154				10,928				25,928				72,200				58,064				68,232				(5,621	)			110,401				112,077				5,156				3,622				1,508
Amortization of core deposit and other intangible assets		—				—				—				—				—				—				—				1,060				1,060				—				—				—
Depreciation and other amortization		1,097				1,106				1,482				5,638				2,362				2,421				32,900				35,623				28,187				111				194				285
Other noninterest expense		421,052				350,265				329,323				667,282				391,568				382,822				343,205				289,026				268,527				77,996				66,490				62,855
Income (loss) before taxes		423,202				280,495				209,718				1,000,140				674,837				644,937				573,587				455,901				514,938				11,355				374,680				420,448
Income tax expense (benefit)		110,575				73,347				55,263				270,323				175,835				169,264				127,604				102,259				114,485				(5,181	)			87,671				99,447
Net income (loss)	$	312,627			$	207,148			$	154,455			$	729,817			$	499,002			$	475,673			$	445,983			$	353,642			$	400,453			$	16,536			$	287,009			$	321,001
Average total assets (in millions) (b)	$	7,597			$	8,007			$	8,152			$	40,930			$	27,096			$	28,958			$	30,599			$	27,091			$	27,172			$	42,657			$	22,262			$	27,726
Capital expenditures (in millions)	$	—			$	1			$	—			$	1			$	1			$	—			$	—			$	—			$	—			$	—			$	—			$	—
	Residential Mortgage Banking												Retail Banking												All Other												Total
	2022				2021				2020				2022				2021				2020				2022				2021				2020				2022				2021				2020
Net interest income (a)	$	41,137			$	92,706			$	52,712			$	1,998,501			$	1,125,953			$	1,204,309			$	831,073			$	105,876			$	121,808			$	5,821,956			$	3,824,778			$	3,866,317
Noninterest income (b)		391,127				523,765				515,549				307,178				290,610				260,163				963,089				746,240				725,472				2,356,603				2,166,994				2,088,444
		432,264				616,471				568,261				2,305,679				1,416,563				1,464,472				1,794,162				852,116				847,280				8,178,559				5,991,772				5,954,761
Provision for credit losses		(1,569	)			(562	)			1,785				79,921				55,692				108,268				349,759				(313,145	)			482,202				517,000				(75,000	)			800,000
Amortization of core deposit and other intangible assets		—				—				—				—				—				—				55,624				9,107				13,809				55,624				10,167				14,869
Depreciation and other amortization		67,994				57,716				60,129				130,407				93,159				95,936				140,372				123,881				116,979				378,519				314,041				305,419
Other noninterest expense		343,947				338,398				338,389				1,240,805				828,882				809,669				1,522,006				1,022,786				873,367				4,616,293				3,287,415				3,064,952
Income (loss) before taxes		21,892				220,919				167,958				854,546				438,830				450,599				(273,599	)			9,487				(639,077	)			2,611,123				2,455,149				1,769,521
Income tax expense (benefit)		964				52,251				39,006				223,722				115,237				118,869				(108,547	)			(10,197	)			(179,965	)			619,460				596,403				416,369
Net income (loss)	$	20,928			$	168,668			$	128,952			$	630,824			$	323,593			$	331,730			$	(165,052	)		$	19,684			$	(459,112	)		$	1,991,663			$	1,858,746			$	1,353,152
Average total assets (in millions) (b)	$	3,986			$	6,463			$	4,038			$	20,312			$	17,897			$	16,438			$	44,171			$	43,853			$	22,996			$	190,252			$	152,669			$	135,480
Capital expenditures (in millions)	$	—			$	1			$	—			$	122			$	53			$	34			$	91			$	93			$	138			$	214			$	149			$	172

(a)

*Net interest income is the difference between actual taxable-equivalent interest earned on assets and interest paid on liabilities by a segment and a funding charge (credit) based on the Company’s internal funds transfer prici**ng methodology. Segments are charged a cost to fund any assets (e.g. loans) and are paid a funding credit for any funds provided (e.g. deposits). The taxable-equivalent adjustment aggregated $*39,172,000 in 2022 *, $*14,731,000 in 2021 *and $*17,288,000 in 2020 and is eliminated in “All Other” net interest income and income tax expense (benefit).

(b)

*Alignment of segment business activity also resulted in a reclassification of noninterest income from the Commercial Banking segment to the Commercial Real Estate segment of $*8.8 *million in 2021 and $*6.0 *million in 2020. Average total assets reclassified from the Commercial Banking segment to the Commercial Real Estate segment relating to lending relationships in the hospitality sector totaled $*1.46 *billion and $*1.38 billion in 2021 and 2020, respectively.

The Business Banking segment provides deposit, lending, cash management and other financial services to small businesses and professionals through the Company’s banking office network and several other delivery channels, including business banking centers, telephone banking, Internet banking and automated teller machines. The Commercial Banking segment provides a wide range of credit products and banking services to middle-market and large commercial customers, mainly within the markets the Company serves. Among the services provided by this segment are commercial lending and leasing, letters of credit, deposit products and cash management services. The Commercial Real Estate segment provides credit services which are secured by various types of multifamily residential and commercial real estate and deposit services to its customers. Activities of this segment include the origination, sales and servicing of commercial real estate loans. Commercial real estate loans held for sale are included in the Commercial Real Estate Segment. The Discretionary Portfolio segment includes securities; residential real estate loans and other assets; short-term and long-term borrowed funds; brokered deposits; and, through June 2021, Cayman Islands branch deposits. This segment also provides foreign exchange services to customers. The Residential Mortgage Banking segment originates and services residential real estate loans for consumers and sells substantially all originated loans in the secondary market to investors or to the Discretionary Portfolio segment. The segment periodically purchases servicing rights to loans that have been originated by other entities. Residential real estate loans held for sale are included in the Residential Mortgage Banking segment. The Retail Banking segment offers a variety of services to consumers through several delivery channels that include banking offices, automated teller machines, and telephone, mobile and Internet banking. The “All Other” category includes other operating activities of the Company that are not directly attributable to the reported segments; the difference between the provision for credit losses and the calculated provision allocated to the reportable segments; goodwill and core deposit and other intangible assets resulting from acquisitions of financial institutions; merger-related gains and expenses resulting from acquisitions; the net impact of the Company’s internal funds transfer pricing methodology; eliminations of transactions between reportable segments; certain nonrecurring transactions; and the residual effects of unallocated support systems and general and administrative expenses.

The amount of intersegment activity eliminated in arriving at consolidated totals was included in the “All Other” category as follows:

	Year Ended December 31
	2022				2021				2020
	(In thousands)
Revenues	$	(52,865	)		$	(55,556	)		$	(47,604	)
Expenses		(15,273	)			(13,599	)			(14,038	)
Income taxes		(9,736	)			(10,846	)			(8,824	)
Net income		(27,856	)			(31,111	)			(24,742	)

The Company conducts substantially all of its operations in the United States. There are no transactions with a single customer that in the aggregate result in revenues that exceed ten percent of consolidated total revenues.

24. Regulatory matters

Payment of dividends by M&T’s banking subsidiaries is restricted by various legal and regulatory limitations. Dividends from any banking subsidiary to M&T are limited by the amount of earnings of the banking subsidiary in the current year and the preceding two years. For purposes of this test, at December 31, 2022, approximately $1.07 billion was available for payment of dividends to M&T from banking subsidiaries. M&T may pay dividends and repurchase stock only in accordance with a capital plan that the Federal Reserve Board has not objected to.

Banking regulations prohibit extensions of credit by the subsidiary banks to M&T unless appropriately secured by assets. Securities of affiliates are not eligible as collateral for this purpose.

M&T and its subsidiary banks are required to comply with applicable capital adequacy regulations established by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a material effect on the Company’s financial statements. Pursuant to the rules in effect as of December 31, 2022, the required minimum and well capitalized capital ratios are as follows:

							Well
	Minimum						Capitalized
M&T (Consolidated)
Common equity Tier 1 ("CET1") to risk-weighted assets			4.5	%
Tier 1 capital to risk-weighted assets			6.0	%					6.0	%
Total capital to risk-weighted assets			8.0	%					10.0	%
Leverage — Tier 1 capital to average total assets, as defined			4.0	%
							Well
	Minimum						Capitalized
Bank Subsidiaries
CET1 to risk-weighted assets			4.5	%					6.5	%
Tier 1 capital to risk-weighted assets			6.0	%					8.0	%
Total capital to risk-weighted assets			8.0	%					10.0	%
Leverage — Tier 1 capital to average total assets, as defined			4.0	%					5.0	%

Capital regulations require buffers in addition to the minimum risk-based capital ratios noted above. M&T is subject to a stress capital buffer requirement that is determined through the Federal Reserve’s supervisory stress tests and M&T’s bank subsidiaries are subject to a 2.5% capital conservation buffer requirement. The buffer requirement must be composed entirely of CET1 and for each entity was 2.5% of risk-weighted assets through September 30, 2022. In June 2022, the Federal Reserve released the results of its most recent supervisory stress tests. Based on those results, on October 1, 2022, M&T's stress capital buffer of 4.7% became effective.

The capital ratios and amounts of the Company and its banking subsidiaries as of December 31, 2022 and 2021 are presented below:

		M&T (Consolidated)				M&T Bank				Wilmington Trust, N.A.
		(Dollars in thousands)
December 31, 2022:
CET1 capital
Amount		$	15,562,037			$	16,673,578			$	585,968
Ratio(a)			10.44	%			11.23	%			254.50	%
Tier 1 capital
Amount			17,572,586				16,673,578				585,968
Ratio(a)			11.79	%			11.23	%			254.50	%
Total capital
Amount			20,259,735				18,887,691				586,879
Ratio(a)			13.60	%			12.72	%			254.90	%
Leverage
Amount			17,572,586				16,673,578				585,968
Ratio(b)			9.23	%			8.77	%			85.73	%
December 31, 2021:
CET1 capital
Amount		$	11,844,833			$	12,378,354			$	779,521
Ratio(a)			11.42	%			11.98	%			31.22	%
Tier 1 capital
Amount			13,594,782				12,378,354				779,521
Ratio(a)			13.11	%			11.98	%			31.22	%
Total capital
Amount			15,902,833				14,170,434				780,791
Ratio(a)			15.33	%			13.71	%			31.27	%
Leverage
Amount			13,594,782				12,378,354				779,521
Ratio(b)			8.87	%			8.11	%			6.23	%

(a)

The ratio of capital to risk-weighted assets, as defined by regulation.

(b)

The ratio of capital to average assets, as defined by regulation.

25. Relationship with Bayview Lending Group LLC and Bayview Financial Holdings, L.P.

M&T holds a 20% minority interest in Bayview Lending Group LLC (“BLG”), a privately-held commercial mortgage company. That investment had no remaining carrying value at December 31, 2022 as a result of cumulative losses recognized and cash distributions received in prior years. Cash distributions now received from BLG are recognized as income by M&T and included in other revenues from operations. That income totaled $30 million in each of 2022 and 2021, compared with $53 million in 2020.

Bayview Financial Holdings, L.P. (together with its affiliates, “Bayview Financial”), a privately-held specialty financial company, is BLG’s majority investor. In addition to their common investment in BLG, the Company and Bayview Financial conduct other business activities with each other. The Company has obtained loan servicing rights for mortgage loans from BLG and Bayview Financial having outstanding principal balances of $1.4 billion and $1.6 billion at December 31, 2022 and 2021, respectively. Revenues from those servicing rights were $8 million, $9 million and $10 million during 2022, 2021 and 2020, respectively. The Company sub-services residential mortgage loans for Bayview

Financial having outstanding principal balances of $96.0 billion and $74.7 billion at December 31, 2022 and 2021, respectively. Revenues earned for sub-servicing loans for Bayview Financial were $154 million, $153 million and $129 million in 2022, 2021 and 2020, respectively. In addition, the Company held $50 million and $62 million of mortgage-backed securities in its held-to-maturity portfolio at December 31, 2022 and 2021, respectively, that were securitized by Bayview Financial. At December 31, 2022, the Company held $368 million of Bayview Financial’s $2.3 billion syndicated loan facility. In 2021 the Company purchased $965 million of delinquent FHA guaranteed mortgage loans, including past due accrued interest, from Bayview Financial for $1.0 billion. The servicing rights for such loans were retained by Bayview Financial, but the Company continues to sub-service the loans.

26. Parent company financial statements

Condensed Balance Sheet

		December 31
		2022				2021
		(In thousands)
Assets
Cash in subsidiary bank		$	130,311			$	92,836
Due from consolidated bank subsidiaries:
Money-market savings			1,690,157				1,335,857
Current income tax receivable			3,501				754
Total due from consolidated bank subsidiaries			1,693,658				1,336,611
Investments in consolidated subsidiaries:
Banks			25,005,239				17,533,772
Other			379,906				220,496
Investments in trust preferred entities (note 20)			22,457				22,672
Other assets			92,802				98,010
Total assets		$	27,324,373			$	19,304,397
Liabilities
Accrued expenses and other liabilities		$	172,001			$	103,242
Long-term borrowings			1,834,382				1,297,750
Total liabilities			2,006,383				1,400,992
Shareholders’ equity			25,317,990				17,903,405
Total liabilities and shareholders’ equity		$	27,324,373			$	19,304,397

Condensed Statement of Income

		Year Ended December 31
		2022				2021				2020
		(In thousands, except per share)
Income
Dividends from consolidated subsidiaries		$	2,508,083			$	1,025,000			$	708,500
Income from Bayview Lending Group LLC			30,000				30,000				52,940
Other income			(6,952	)			2,530				5,110
Total income			2,531,131				1,057,530				766,550
Expense
Interest on short-term borrowings			6,024				-				-
Interest on long-term borrowings			57,565				24,073				31,924
Other expense			50,016				35,406				33,704
Total expense			113,605				59,479				65,628
Income before income taxes and equity in undistributed income of subsidiaries			2,417,526				998,051				700,922
Income tax credits			22,477				6,052				1,984
Income before equity in undistributed income of subsidiaries			2,440,003				1,004,103				702,906
Equity in undistributed income of subsidiaries
Net income of subsidiaries			2,059,743				1,879,643				1,358,746
Less: dividends received			(2,508,083	)			(1,025,000	)			(708,500	)
Equity in undistributed income of subsidiaries			(448,340	)			854,643				650,246
Net income		$	1,991,663			$	1,858,746			$	1,353,152
Net income per common share
Basic		$	11.59			$	13.81			$	9.94
Diluted			11.53				13.80				9.94

Condensed Statement of Cash Flows

		Year Ended December 31
		2022				2021				2020
		(In thousands)
Cash flows from operating activities
Net income		$	1,991,663			$	1,858,746			$	1,353,152
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed income of subsidiaries			448,340				(854,643	)			(650,246	)
Provision for deferred income taxes			7,487				10,356				1,079
Net change in accrued income and expense			7,742				(23,047	)			(24,206	)
Net cash provided by operating activities			2,455,232				991,412				679,779
Cash flows from investing activities
Net investment in consolidated subsidiaries			53,958				(199,000	)			125,654
Acquisition, net of cash consideration			537,978				—				—
Other, net			24,401				(2,777	)			50,396
Net cash provided (used) by investing activities			616,337				(201,777	)			176,050
Cash flows from financing activities
Repayment of short-term borrowings assumed in acquisition			(500,000	)			—				—
Proceeds from long-term borrowings			499,250				—				—
Purchases of treasury stock			(1,800,000	)			—				(373,750	)
Dividends paid — common			(784,089	)			(580,260	)			(568,112	)
Dividends paid — preferred			(96,927	)			(68,200	)			(68,256	)
Proceeds from issuance of Series I preferred stock			—				495,000				—
Other, net			1,972				(7,551	)			(5,992	)
Net cash used by financing activities			(2,679,794	)			(161,011	)			(1,016,110	)
Net increase (decrease) in cash and cash equivalents			391,775				628,624				(160,281	)
Cash and cash equivalents at beginning of year			1,428,693				800,069				960,350
Cash and cash equivalents at end of year		$	1,820,468			$	1,428,693			$	800,069
Supplemental disclosure of cash flow information
Interest received during the year		$	1,332			$	1,165			$	1,493
Interest paid during the year			49,419				20,457				30,913
Income taxes received during the year			28,153				53,067				11,528

27. Recent accounting developments

The following table provides a description of accounting standards that were adopted by the Company in 2022 as well as standards that are not effective that could have an impact to M&T’s consolidated financial statements upon adoption.

	Standard			Description			Required date of adoption			Effect on consolidated financial statements
	Standards Adopted in 2022
	Changes to Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity			The amendments reduce the number of accounting models for convertible debt instruments and convertible preferred stock. The amendments also reduce form-over-substance-based guidance for the derivatives scope exception for contracts in an entity’s own equity.			January 1, 2022			At January 1, 2022 the Company did not have the types of instruments affected by the amended guidance and, therefore, the adoption had no impact on its consolidated financial statements.
	Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options			The amendments clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.			January 1, 2022			At January 1, 2022 the Company did not have the types of instruments affected by the amended guidance and, therefore, the adoption had no impact on its consolidated financial statements.
	Lessor’s Accounting for Certain Leases with Variable Lease Payments			The amendments update the classification guidance for lessors. Under the amended guidance lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if both of the following criteria are met: 1. The lease would have been classified as a sales-type lease or a direct financing lease. 2. The lessor would have otherwise recognized a day-one loss. When a lease is classified as operating, the lessor does not recognize a net investment in the lease, does not derecognize the underlying asset, and, therefore, does not recognize a selling profit or loss.			January 1, 2022			The Company adopted the amended guidance effective January 1, 2022 using a prospective transition method. The adoption did not have a material impact on the Company’s consolidated financial statements.

	Standard			Description			Required date of adoption			Effect on consolidated financial statements
	Standards Not Yet Adopted as of December 31, 2022
	Accounting for Contract Assets and Contract Liabilities from Contracts with Customers in a Business Combination			The amendments require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with specified revenue recognition guidance. At the acquisition date, an acquirer should account for the related revenue contracts as if it had originated the contracts and may assess how the acquiree applied the revenue guidance to determine what to record for such contracts. The guidance is generally expected to result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements.			January 1, 2023 Early adoption permitted			The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments. However, if early adoption is elected, the amendments should be applied (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The Company does not expect the guidance will have a material impact on its consolidated financial statements.
	Fair Value Hedging of Multiple Hedge Layers under Portfolio Layer Method			The amendments allow multiple hedged layers to be designated for a single closed portfolio of financial assets or one or more beneficial interests secured by a portfolio of financial instruments. If multiple hedged layers are designated, the amendments require an analysis to be performed to support the expectation that the aggregate amount of the hedged layers is anticipated to be outstanding for the designated hedge periods. Only closed portfolios may be hedged under the portfolio layer method (that is, no assets can be added to the closed portfolio once established), however designating new hedging relationships and dedesignating existing hedging relationships associated with the closed portfolio any time after the closed portfolio is established is permitted.			January 1, 2023 Early adoption permitted			The amendments should be applied on a modified retrospective basis by means of a cumulative-effect adjustment to the opening balance of retained earnings on the initial application date. The Company does not expect the guidance will have a material impact on its consolidated financial statements.
	Accounting for Troubled Debt Restructurings (TDRs) and Expansion of Vintage Disclosures Applicable to Credit Losses			The amendments (1) eliminate the accounting guidance for TDRs and require enhanced disclosure for certain loan refinancings by creditors when a borrower is experiencing financial difficulty and (2) require disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases within credit loss disclosures.			January 1, 2023 Early adoption permitted			The amendments should be applied prospectively, except for the amendments related to the recognition and measurement of TDRs for which an option is permitted to apply a modified retrospective transition method. Under the amended guidance the Company will no longer be required to identify TDRs and apply specialized accounting to such loans. The Company does not expect the guidance will have a material impact on its consolidated financial statements outside of the modified disclosure requirements.
	Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions			The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. In addition, the amendments require the following disclosures for equity securities subject to contractual sale restrictions: 1. The fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; 2. The nature and remaining duration of the restriction(s); and 3. The circumstances that could cause a lapse in the restriction(s).			January 1, 2024 Early adoption permitted			The amendments should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. The Company does not expect the guidance will have a material impact on its consolidated financial statements.