Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and other information included in this Quarterly Report on Form 10-Q as well as with M&T's 2023 Annual Report. Information regarding the Company's business, its supervision and regulation and potential risks and uncertainties that may affect the Company's business, financial condition, liquidity and results of operations are also included in M&T's 2023 Annual Report.

As described in note 1 of Notes to Financial Statements in M&T's 2023 Annual Report, certain financial reporting changes became effective in the fourth quarter of 2023. Prior periods have been presented in conformity with the new classifications.

Overview

The Company's results of operations for the first quarter of 2024 reflect an elevated interest rate environment which has led to higher costs of interest-bearing liabilities that have modestly outpaced increased yields on the Company's earning assets and an elevated level of provision for credit losses. The FOMC hiked its federal funds target rate four times in the first three quarters of 2023, totaling 100 basis points, but has not adjusted that rate since. Included in each of the first quarters of 2024 and 2023 results were seasonal salaries and employee benefits expenses of $99 million. Results for the first quarter of 2024 also included a $29 million estimated increase in the Company's FDIC special assessment. In the fourth quarter of 2023, an estimate of the FDIC special assessment for M&T of $197 million was recorded in the Consolidated Statement of Income. Additional information about the FDIC special assessment is included in note 13 of Notes to Financial Statements. A summary of financial results for the Company is provided below:

SUMMARY OF FINANCIAL RESULTS

	Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions, except per share)	March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Net interest income	$	1,680			$	1,722			$	(42	)			-2	%		$	1,680			$	1,818			$	(138	)			-8	%
Taxable-equivalent adjustment (a)		12				13				(1	)			-2				12				14				(2	)			-6
Net interest income (taxable-equivalent basis) (a)		1,692				1,735				(43	)			-2				1,692				1,832				(140	)			-8
Provision for credit losses		200				225				(25	)			-11				200				120				80				67
Other income		580				578				2				—				580				587				(7	)			-1
Other expense		1,396				1,450				(54	)			-4				1,396				1,359				37				3
Net income		531				482				49				10				531				702				(171	)			-24
Per common share data:
Basic earnings		3.04				2.75				0.29				11				3.04				4.03				(0.99	)			-25
Diluted earnings		3.02				2.74				0.28				10				3.02				4.01				(0.99	)			-25
Performance ratios, annualized
Return on:
Average assets		1.01	%			.92	%											1.01	%			1.40	%
Average common shareholders’ equity	8.14				7.41												8.14				11.74
Net interest margin	3.52				3.61												3.52				4.04

(a)

Net interest income data are presented on a taxable-equivalent basis which is a non-GAAP measure. The taxable-equivalent adjustment represents additional income taxes that would be due if all interest income were subject to income taxes. This adjustment, which is related to interest received on qualified municipal securities, industrial revenue financings and preferred equity securities, is based on a composite income tax rate of approximately 25%.

The increase in net income in the recent quarter as compared with the fourth quarter of 2023 resulted from the following:

Net interest income on a taxable-equivalent basis declined $43 million reflecting a narrowing of the net interest margin by 9 basis points.

Provision for credit losses declined $25 million reflecting a modest improvement in economic forecasts, partially offset by an increase in criticized commercial and industrial loans.

Other expenses declined $54 million reflecting a $29 million FDIC assessment in the recent quarter as compared with $197 million in the fourth quarter of 2023, partially offset by seasonally higher salaries and employee benefits expenses.

- 39 -

The decrease in net income in the first quarter of 2024 as compared with 2023's initial quarter reflects the following:

Taxable-equivalent net interest income in the first quarter of 2024 declined $140 million, or 8%, when compared with the first quarter of 2023, reflecting a narrowing of the net interest margin by 52 basis points.

The comparatively higher provision for credit losses in the recent quarter as compared with the first quarter of 2023 reflects declines in commercial real estate values and higher interest rates contributing to a deterioration in the performance of loans to commercial borrowers, including nonautomotive finance dealers and healthcare facilities, and growth in loans to certain sectors of the Company's commercial and industrial and consumer loan portfolios.

Noninterest income in the first quarter of 2024 declined $7 million as compared with 2023's initial quarter. Lower trust income reflecting the CIT divestiture in April 2023 was partially offset by higher mortgage banking revenues and an increase in service charges on commercial deposit accounts.

Noninterest expenses, excluding the increased FDIC special assessment, rose modestly from 2023's initial quarter. Higher levels of salaries and employee benefits expense, outside data processing and software expense and other costs of operations were partially offset by lower professional and other services, reflecting the CIT divestiture, and lower advertising and marketing costs.

The Company's effective tax rate was 20.0% in the first quarter of 2024, compared with 22.9% in the fourth quarter of 2023 and 24.2% in the first quarter of 2023. The first quarter of 2024 income tax expense reflects a net discrete benefit related to the resolution of a tax matter inherited from the acquisition of People's United.

Supplemental Reporting of Non-GAAP Results of Operations

M&T consistently provides supplemental reporting of its results on a “net operating” or “tangible” basis, from which M&T excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and gains (when realized) and expenses (when incurred) associated with merging acquired operations into the Company, since such items are considered by management to be “nonoperating” in nature. Although “net operating income” as defined by M&T is not a GAAP measure, M&T’s management believes that this information helps investors understand the effect of acquisition activity in reported results.

SUPPLEMENTAL REPORTING OF NON-GAAP RESULTS OF OPERATIONS

	Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions, except per share data)	March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Net operating income	$	543			$	494			$	49				10	%		$	543			$	715			$	(172	)			-24	%
Diluted net operating earnings per share		3.09				2.81				0.28				10				3.09				4.09				(1.00	)			-24
Return on:
Average tangible assets		1.08	%			.98	%											1.08	%			1.49	%
Average tangible common equity		12.67				11.70												12.67				19.00
Efficiency ratio		60.8				62.1												60.8				55.5
Tangible equity per common share (a)	$	99.54			$	98.54			$	1.00				1	%		$	99.54			$	88.81			$	10.73				12	%

(a)

At the period end.

The efficiency ratio measures the relationship of noninterest operating expenses, which exclude expenses M&T considers to be "nonoperating" in nature consisting of amortization of core deposit and other intangible assets and merger-related expenses, to revenues. The calculations of the Company’s efficiency ratio, or noninterest operating expenses divided by the sum of taxable-equivalent net interest income and noninterest income (exclusive of gains and losses from bank investment securities), and reconciliations of GAAP amounts with corresponding non-GAAP amounts are presented in Table 2.

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Taxable-equivalent Net Interest Income

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

AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES

		2024 First Quarter												2023 Fourth Quarter												2023 Third Quarter
(Dollars in millions)		Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate
Assets
Earning assets:
Loans and leases, net of unearned discount (a):
Commercial and industrial		$	56,821			$	987				6.99	%		$	55,420			$	979				7.01	%		$	54,567			$	943				6.86	%
Commercial real estate			32,696				526				6.36				33,455				560				6.54				34,288				570				6.50
Residential real estate			23,136				247				4.28				23,339				248				4.25				23,573				244				4.14
Consumer			21,143				343				6.54				20,556				332				6.42				20,189				313				6.16
Total loans and leases, net			133,796				2,103				6.32				132,770				2,119				6.33				132,617				2,070				6.19
Interest-bearing deposits at banks			30,647				419				5.49				30,153				416				5.48				26,657				363				5.40
Trading account			105				1				3.42				123				1				3.80				136				1				4.05
Investment securities (b):
U.S. Treasury and federal agencies			24,625				191				3.11				23,675				173				2.90				24,166				177				2.90
Obligations of states and political subdivisions			2,489				23				3.77				2,507				24				3.75				2,527				24				3.70
Other			1,473				20				5.54				1,308				20				6.04				1,300				21				6.51
Total investment securities			28,587				234				3.30				27,490				217				3.13				27,993				222				3.14
Total earning assets			193,135				2,757				5.74				190,536				2,753				5.73				187,403				2,656				5.62
Allowance for credit losses			(2,156	)											(2,073	)											(1,998	)
Cash and due from banks			1,687												1,634												1,730
Other assets			18,812												18,655												18,656
Total assets		$	211,478											$	208,752											$	205,791
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Interest-bearing deposits:
Savings and interest-checking deposits		$	94,867			$	615				2.61	%		$	93,365			$	606				2.58	%		$	89,274			$	494				2.20	%
Time deposits			20,583				225				4.41				21,224				230				4.30				19,528				202				4.09
Total interest-bearing deposits			115,450				840				2.93				114,589				836				2.90				108,802				696				2.54
Short-term borrowings			6,228				84				5.42				5,156				69				5.27				5,346				69				5.16
Long-term borrowings			9,773				141				5.81				7,901				113				5.70				7,240				101				5.52
Total interest-bearing liabilities			131,451				1,065				3.26				127,646				1,018				3.17				121,388				866				2.83
Noninterest-bearing deposits			48,615												50,124												53,886
Other liabilities			4,393												4,482												4,497
Total liabilities			184,459												182,252												179,771
Shareholders’ equity			27,019												26,500												26,020
Total liabilities and shareholders’ equity		$	211,478											$	208,752											$	205,791
Net interest spread											2.48												2.56												2.79
Contribution of interest-free funds											1.04												1.05												1.00
Net interest income/margin on earning assets						$	1,692				3.52	%						$	1,735				3.61	%						$	1,790				3.79	%

(a)

Includes nonaccrual loans.

(b)

Includes available-for-sale securities at amortized cost.

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AVERAGE BALANCE SHEETS AND ANNUALIZED TAXABLE-EQUIVALENT RATES (continued)

		2023 Second Quarter												2023 First Quarter
(Dollars in millions)		Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate
Assets
Earning assets:
Loans and leases, net of unearned discount (a):
Commercial and industrial		$	54,572			$	901				6.63	%		$	52,510			$	816				6.30	%
Commercial real estate			34,903				563				6.38				35,245				519				5.89
Residential real estate			23,781				244				4.10				23,770				235				3.96
Consumer			20,289				298				5.88				20,487				287				5.67
Total loans and leases, net			133,545				2,006				6.02				132,012				1,857				5.70
Interest-bearing deposits at banks			23,617				302				5.14				24,312				277				4.64
Trading account			151				1				2.66				123				1				2.32
Investment securities (b):
U.S. Treasury and federal agencies			24,630				179				2.92				23,795				167				2.85
Obligations of states and political subdivisions			2,555				24				3.71				2,570				24				3.75
Other			1,438				18				4.83				1,257				15				4.38
Total investment securities			28,623				221				3.09				27,622				206				3.00
Total earning assets			185,936				2,530				5.46				184,069				2,341				5.16
Allowance for credit losses			(1,985	)											(1,938	)
Cash and due from banks			1,747												1,952
Other assets			18,678												18,516
Total assets		$	204,376											$	202,599
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Interest-bearing deposits:
Savings and interest-checking deposits		$	87,210			$	369				1.69	%		$	88,053			$	277				1.28	%
Time deposits			16,009				150				3.77				11,630				89				3.11
Total interest-bearing deposits			103,219				519				2.02				99,683				366				1.49
Short-term borrowings			7,539				96				5.11				4,994				58				4.69
Long-term borrowings			7,516				102				5.43				6,511				85				5.27
Total interest-bearing liabilities			118,274				717				2.43				111,188				509				1.86
Noninterest-bearing deposits			56,180												61,854
Other liabilities			4,237												4,180
Total liabilities			178,691												177,222
Shareholders’ equity			25,685												25,377
Total liabilities and shareholders’ equity		$	204,376											$	202,599
Net interest spread											3.03												3.30
Contribution of interest-free funds											.88												.74
Net interest income/margin on earning assets						$	1,813				3.91	%						$	1,832				4.04	%

(a)

Includes nonaccrual loans.

(b)

Includes available-for-sale securities at amortized cost.

Expressed on a taxable-equivalent basis net interest income was $1.69 billion in the first quarter of 2024, compared with $1.74 billion and $1.83 billion, respectively, in the fourth and first quarters of 2023. The decrease in net interest income in the recent quarter reflects a 9 basis point reduction from the fourth quarter of 2023 and a 52 basis point reduction from the year-earlier quarter of the net interest margin, or taxable-equivalent net interest income expressed as an annualized percentage of average earning assets, to 3.52% in the recent quarter. The lower net interest margin in the first quarter of 2024 compared with the fourth and first quarters of 2023 predominantly reflects a comparatively higher interest rate environment, which has resulted in increases in rates paid on interest-bearing deposit products and borrowings outpacing increases in yields on the Company's interest-earning assets. Although the FOMC has not raised its federal funds target rate since July 2023, interest rates have remained elevated and the Company has experienced increased competition for customer deposits in the marketplace and a mix shift in those deposits toward higher cost interest-bearing products, including time deposits. The Company has also altered its use of other funding sources including borrowings and placement of brokered deposits. Average short-term and long-term borrowings in the recent quarter collectively rose by $2.9 billion, or 23%, while average brokered deposits decreased $736 million, or 5%, from the fourth quarter of 2023. As compared with the first quarter of 2023, average short-term and long-term borrowings collectively rose by $4.5 billion, or 39%, and average brokered deposits increased $5.2 billion, or 64% in the recent quarter.

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Lending Activities

The following table summarizes average loans and leases outstanding in the first quarter of 2024 and percentage changes in the major components of the portfolio over comparable periods.

AVERAGE LOANS AND LEASES

						Percent Change from
(Dollars in millions)		First Quarter 2024				Fourth Quarter 2023				First Quarter 2023
Commercial and industrial		$	56,821				3	%			8	%
Commercial real estate			32,696				-2				-7
Residential real estate			23,136				-1				-3
Consumer:
Recreational finance			10,306				5				13
Automobile			4,177				6				-6
Home equity lines and loans			4,597				-1				-7
Other			2,063				-2				3
Total consumer			21,143				3				3
Total		$	133,796				1	%			1	%

Average loans and leases totaled $133.8 billion in the first quarter of 2024, up $1.0 billion or 1% from the fourth quarter of 2023.

Commercial and industrial loans and leases averaged $56.8 billion in the recent quarter, up $1.4 billion from the fourth quarter of 2023 reflecting growth which spanned most industry types.

Average commercial real estate loans were $32.7 billion in the first quarter of 2024, $759 million lower than the final quarter of 2023 reflecting declines of $296 million in average construction loans and $463 million in average permanent commercial real estate loans.

Average residential real estate loans decreased $203 million to $23.1 billion in the first quarter of 2024 as compared with the fourth quarter of 2023, largely attributable to customer payments on loans held for investment.

Consumer loans averaged $21.1 billion in the first quarter of 2024 or $587 million higher than the fourth quarter of 2023. That growth reflected an increase in average balances of $452 million and $247 million in M&T's portfolio of recreational finance loans and automobile loans, respectively.

Average loans and leases increased $1.8 billion or 1% from $132.0 billion in the similar quarter of 2023.

Average commercial and industrial loans and leases increased $4.3 billion from the year-earlier quarter predominantly reflecting growth in loans to financial and insurance industry customers and to motor vehicle and recreational finance dealers.

Average commercial real estate loans decreased $2.5 billion in the recent quarter as compared with the first quarter of 2023 reflecting decreases of $1.0 billion in average construction loans and $1.5 billion in average permanent commercial real estate loans.

Average residential real estate loans decreased $634 million in the first quarter of 2024 from the year-earlier quarter. That decrease was largely attributable to customer payments on loans held for investment. In the first quarter of 2023, the Company returned to originating for sale the majority of its newly originated residential mortgage loans.

Average consumer loans in the first quarter of 2024 increased $656 million from the year-earlier quarter. That growth reflected higher average balances of $1.2 billion of recreational finance loans, partially offset by declines of $252 million and $332 million in average balances of automobile loans and home equity loans and lines of credit, respectively.

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Investing Activities

The investment securities portfolio averaged $28.6 billion in the first quarter of 2024, up $1.1 billion and $965 million from the fourth and first quarters of 2023, respectively. The higher average balance in the recent quarter when compared with the fourth quarter of 2023 and year-earlier quarter reflects the purchase of $4.1 billion of debt securities during the three-month period ended March 31, 2024. Those purchases were predominantly U.S. Treasury notes and fixed rate government issued or guaranteed mortgage-backed securities. There were no significant sales of investment securities during the three months ended March 31, 2024, December 31, 2023 and March 31, 2023. The Company routinely increases and decreases its holdings of capital stock of the FHLB of New York and the FRB of New York based on amounts of outstanding borrowings and available lines of credit with those entities.

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

The Company regularly reviews its debt investment securities for declines in value below amortized cost that might be indicative of credit-related losses. In light of such reviews, there were no credit-related losses on debt investment securities recognized in any of the three months ended March 31, 2024, December 31, 2023 and March 31, 2023. A further discussion of fair values of investment securities is included herein under the heading "Capital." Additional information about the investment securities portfolio is included in notes 3 and 12 of Notes to Financial Statements.

Other earning assets include interest-bearing deposits at banks, trading account assets, federal funds sold and agreements to resell securities. Those other earning assets in the aggregate averaged $30.8 billion in the recently completed quarter, compared with $30.3 billion and $24.4 billion during the three months ended December 31, 2023 and March 31, 2023, respectively. Interest-bearing deposits at banks averaged $30.6 billion, $30.2 billion and $24.3 billion during the three months ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively. The amounts of interest-bearing deposits at banks at those respective dates were predominantly comprised of deposits held at the FRB of New York. In general, the levels of those deposits often fluctuate due to changes in deposits of retail and commercial customers, trust-related deposits and additions to or maturities of investment securities or borrowings.

Funding Activities - Deposits

The most significant source of funding for the Company is core deposits. The Company considers noninterest-bearing deposits, interest-bearing transaction accounts, savings deposits and time deposits of $250,000 or less as core deposits. The Company’s branch network is its principal source of core deposits, which generally carry lower interest rates than wholesale funds of comparable maturities. Average core deposits totaled $147.4 billion, or 76% of average earning assets, for the quarter ended March 31, 2024, compared with $147.6 billion, or 77%, and $152.0 billion, or 83%, for the quarters ended December 31, 2023 and March 31, 2023, respectively. The lower level of core deposits in the two most recent quarters as compared with the first quarter of 2023 reflects a shift in the mix of funding sources, including from other deposit sources such as branch-related time deposits over $250,000 and brokered deposits. Brokered savings and interest-bearing transaction accounts and brokered time deposit accounts averaged $8.0 billion and $5.2 billion, respectively, in the recent quarter, compared with $6.7 billion and $7.3 billion, respectively, in the fourth quarter of 2023 and $3.4 billion and $4.6 billion, respectively, in the first quarter of 2023. Additional brokered deposits may be added in the future depending on market conditions, including demand by customers and other investors for those deposits, and the cost of funds available from alternative sources at that time. The following table provides an analysis of quarterly changes in the components of average deposits.

- 44 -

AVERAGE DEPOSITS

						Percent Change from
(Dollars in millions)		First Quarter 2024				Fourth Quarter 2023				First Quarter 2023
Noninterest-bearing deposits		$	48,615				-3	%			-21	%
Savings and interest-checking deposits			86,837				—				3
Time deposits of $250,000 or less			11,985				11				117
Total core deposits			147,437				—			-3
Time deposits greater than $250,000			3,405				7				130
Brokered deposits			13,223			-5					64
Total deposits		$	164,065				—	%			2	%

Deposits averaged $164.1 billion in the recent quarter, a $648 million decline from $164.7 billion in the fourth quarter of 2023.

Average core deposits decreased nominally from the fourth quarter of 2023 reflecting a stabilization of customer deposits in the higher rate environment.

The decrease in average brokered deposits in the recent quarter reflected a mix shift in the Company's wholesale funding strategies. Average brokered time deposits decreased $2.1 billion to $5.2 billion in the recent quarter from $7.3 billion in the fourth quarter of 2023 and the rates paid on those deposits averaged 5.01% and 4.97%, respectively. Average brokered savings and interest-bearing transaction accounts increased $1.3 billion to $8.0 billion in the recent quarter from $6.7 billion in the fourth quarter of 2023 and the rates paid on those deposits averaged 4.78% and 4.66%, respectively. The rate paid on total non-brokered interest-bearing deposits was 2.67% in the first quarter of 2024, compared with 2.62% in the fourth quarter of 2023.

Average deposits increased $2.5 billion from $161.5 billion in the year-earlier quarter.

The decrease in average core deposits in the recent quarter as compared with the year-earlier quarter reflects the impact of an elevated interest rate environment that influenced customers to seek higher rate alternatives, including a shift from noninterest-bearing deposit accounts to commercial sweep products and time deposits over $250,000.

The increase in average brokered deposits in the recent quarter as compared with the first quarter of 2023 reflects the Company's liquidity management and funding strategies during a period of rising interest rates, partially offset by the maturity of some brokered time deposits in the recent quarter. The Company had brokered savings and interest-bearing transaction accounts and brokered time deposits that averaged $3.4 billion and $4.6 billion, respectively, in the year-earlier quarter and the rates paid on those deposits averaged 3.54% and 4.82%, respectively. The rate paid on total non-brokered interest-bearing deposits in the first quarter of 2023 was 1.24%.

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The accompanying table summarizes the components of average total deposits by segment for the quarters ended March 31, 2024, December 31, 2023 and March 31, 2023.

AVERAGE DEPOSITS BY SEGMENT

(Dollars in millions)		Commercial Bank				Retail Bank				Institutional Services and Wealth Management				All Other				Total
Three Months Ended March 31, 2024
Noninterest-bearing deposits		$	13,459			$	25,380			$	9,081			$	695			$	48,615
Savings and interest-checking deposits			29,721				51,274				7,131				6,741				94,867
Time deposits			353				14,995				37				5,198				20,583
Total		$	43,533			$	91,649			$	16,249			$	12,634			$	164,065
Three Months Ended December 31, 2023
Noninterest-bearing deposits		$	14,527			$	26,474			$	8,477			$	646			$	50,124
Savings and interest-checking deposits			28,702				51,941				6,728				5,994				93,365
Time deposits			425				13,507				31				7,261				21,224
Total		$	43,654			$	91,922			$	15,236			$	13,901			$	164,713
Three Months Ended March 31, 2023
Noninterest-bearing deposits		$	20,206			$	30,552			$	10,363			$	733			$	61,854
Savings and interest-checking deposits			22,263				54,650				7,957				3,183				88,053
Time deposits			330				6,667				13				4,620				11,630
Total		$	42,799			$	91,869			$	18,333			$	8,536			$	161,537

Funding Activities - Borrowings

The following table summarizes the average balances utilized from the Company's short-term and long-term borrowing facilities and note programs.

AVERAGE BORROWINGS

		Three Months Ended
		March 31,				December 31,				March 31,
(Dollars in millions)		2024				2023				2023
Short-term borrowings:
Federal funds purchased and repurchase agreements		$	307			$	404			$	364
FHLB advances			5,921				4,752				4,630
Total short-term borrowings		$	6,228			$	5,156			$	4,994
Long-term borrowings:
Senior notes		$	6,418			$	5,863			$	4,979
FHLB advances			1,323				5				5
Subordinated notes			977				989				980
Junior subordinated debentures			540				539				537
Asset-backed notes			505				495				—
Other			10				10				10
Total long-term borrowings			9,773				7,901				6,511
Total borrowed funds		$	16,001			$	13,057			$	11,505

The Company also uses borrowing capacity from banks, the FHLBs, the FRB of New York and others as sources of funding. Short-term borrowings represent arrangements that at the time they were entered into had a contractual maturity of one year or less. The higher levels of short-term borrowings in the first quarter of 2024 as compared with the fourth quarter of 2023 and year-earlier first quarter reflect the Company's management of liquidity.

Long-term borrowings averaged $9.8 billion, $7.9 billion and $6.5 billion in the three-month periods ending March 31, 2024, December 31, 2023 and March 31, 2023, respectively. In February 2024, M&T Bank advanced $2.0 billion from the FHLB of New York which matures in February 2025 at a variable rate of SOFR plus 25 basis points payable quarterly until maturity. In March 2024, M&T issued $850 million of senior notes that mature in March 2032 and pay a 6.08% fixed rate semi-annually until March 2031 after which SOFR plus 2.26% will be paid quarterly until maturity. Also in March 2024, M&T Bank issued $511 million of asset-backed notes secured by automobile loans with a weighted-average estimated life of approximately two years and a weighted-average interest rate of 5.29% at the time

- 46 -

of securitization. The increased usage of borrowing facilities reflects the Company's strategies to diversify its wholesale funding options to provide long-term funding stabilization and prepare for proposed regulations enumerating certain long-term debt requirements as described in Part I, Item 1 of M&T's 2023 Annual Report.

Additional information regarding borrowings is provided in notes 5 and 11 of Notes to Financial Statements.

Net Interest Margin

Net interest income can be impacted by changes in the composition of the Company's earning assets and interest-bearing liabilities, as discussed herein, as well as changes in interest rates and spreads. Net interest spread, or the difference between the taxable-equivalent yield on earning assets and the rate paid on interest-bearing liabilities, was 2.48% in the recent quarter, down 8 basis points from 2.56% in the fourth quarter of 2023. The decline in the net interest spread from the fourth quarter of 2023 reflects higher levels of average borrowings, partially offset by higher rates earned on investment securities. The yield on earning assets during the first quarter of 2024 was 5.74%, up 1 basis point from 5.73% in the fourth quarter of 2023. The rate paid on interest-bearing liabilities was 3.26% in the recent quarter, compared with 3.17% in the final quarter of 2023. In the first quarter of 2023, the net interest spread was 3.30%, the yield on earning assets was 5.16% and the rate paid on interest-bearing liabilities was 1.86%. The decline in the net interest spread in the recent quarter as compared with the first quarter of 2023 reflects the impact of higher rates paid on interest-bearing liabilities (predominantly interest-bearing deposits) resulting from a general rise in interest rates during the first three quarters of 2023, which outpaced higher yields earned on loans and leases, deposits at the FRB of New York and investment securities.

Net interest-free funds consist largely of noninterest-bearing demand deposits and shareholders’ equity, partially offset by bank owned life insurance and non-earning assets, including goodwill and core deposit and other intangible assets. Net interest-free funds averaged $61.7 billion in the first quarter of 2024, compared with $62.9 billion in the fourth quarter of 2023 and $72.9 billion in the year-earlier quarter. The lower level of average net interest-free funds in the recent quarter as compared with the fourth and first quarters of 2023 is predominantly the result of a decline in the average balance of noninterest-bearing deposits, partially offset by increases in common shareholders equity from retained earnings, net of common and preferred stock dividends. Noninterest-bearing deposits averaged $48.6 billion in the first quarter of 2024, compared with $50.1 billion in the last quarter of 2023 and $61.9 billion in the first quarter of 2023. The decline in average noninterest-bearing deposits since the first quarter of 2023 reflects customer use of off-balance sheet investment products and a shift in deposits to interest-bearing accounts as interest rates rose. The contribution of net interest-free funds to net interest margin was 1.04% in the first quarter of 2024, compared with 1.05% in the fourth quarter of 2023 and .74% in the first quarter of 2023. The increased contribution of net interest-free funds to net interest margin in the two most recent quarters as compared with the first 2023 quarter reflects higher rates paid on interest-bearing liabilities used to value net interest-free funds.

Reflecting the changes to the net interest spread and the contribution of net interest-free funds as described herein, the Company’s net interest margin was 3.52% in the first quarter of 2024, compared with 3.61% in the fourth quarter of 2023 and 4.04% in the year-earlier period. The higher interest rate environment has led to an increase in the rates paid on the Company's sources of funding which has outpaced the rise in yields on earning assets. Future changes in market interest rates or spreads, as well as changes in the composition of the Company’s portfolios of earning assets and interest-bearing liabilities that result in changes to spreads, could impact the Company’s net interest income and net interest margin.

Management assesses the potential impact of future changes in interest rates and spreads by projecting net interest income under several interest rate scenarios. In managing interest rate risk, the Company has utilized interest rate swap agreements to modify the repricing characteristics of certain portions of its earning assets and interest-bearing liabilities. Under the terms of those interest rate swap agreements, the Company received payments based on the outstanding notional amount at fixed rates and made payments at variable rates. Periodic settlement amounts arising from these agreements are reflected in either the yields on earning assets or the rates paid on interest-bearing liabilities. The Company enters into forward-starting interest rate swap agreements predominantly to hedge interest rate exposures expected in future periods. The following table summarizes information about interest rate swap agreements entered into for interest rate risk management purposes at March 31, 2024 and December 31, 2023.

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INTEREST RATE SWAP AGREEMENTS - DESIGNATED AS HEDGES

		Notional Amount												Average				Weighted-
						Forward-								Maturity				Average Rate
(Dollars in millions)		Active				Starting				Total				(In years)				Fixed				Variable
March 31, 2024
Fair value hedges:
Fixed rate long-term borrowings		$	2,000			$	1,850			$	3,850				5.9				3.48	%			5.51	%
Cash flow hedges:
Interest payments on variable rate commercial real estate loans			17,477				5,950				23,427				1.7			3.38				5.33
Total		$	19,477			$	7,800			$	27,277				2.3
December 31, 2023
Fair value hedges:
Fixed rate long-term borrowings		$	2,000			$	1,000			$	3,000				5.8				3.45	%			5.62	%
Cash flow hedges:
Interest payments on variable rate commercial real estate loans			14,977				9,000				23,977				1.7			3.45				5.36
Total		$	16,977			$	10,000			$	26,977				2.2

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

INTEREST RATE SWAP AGREEMENTS - EFFECT ON NET INTEREST INCOME

		Three Months Ended March 31,
.		2024								2023
(Dollars in millions)		Amount				Rate (a)				Amount				Rate (a)
Increase (decrease) in:
Interest income (cash flow hedges)		$	(87	)			-.18	%		$	(59	)			-.13	%
Interest expense (fair value hedges)			13				.04				10				.04
Net interest income/margin		$	(100	)			-.21	%		$	(69	)			-.15	%
Average notional amount (b)		$	19,202							$	11,069
Rate received (c)							3.32	%							2.68	%
Rate paid (c)							5.38								5.17

(a)

Computed as an annualized percentage of average earning assets or interest-bearing liabilities.

(b)

Excludes forward-starting interest rate swap agreements not in effect during the period.

(c)

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

Provision for Credit Losses

A provision for credit losses is recorded to adjust the level of the allowance to reflect expected credit losses that are based on economic forecasts as of each reporting date. A provision for credit losses of $200 million was recorded in the first quarter of 2024, compared with $225 million in the fourth quarter of 2023 and $120 million in the year-earlier quarter. The comparatively higher provisions for credit losses in the most recent two quarters as compared with the first quarter of 2023 reflect declines in commercial real estate values and higher interest rates contributing to a deterioration in the performance of loans to commercial borrowers, including nonautomotive dealers and healthcare facilities, as well as growth in certain sectors of M&T's commercial and industrial and consumer loan portfolios. Net charge-offs totaled $138 million in 2024's first quarter as compared with $148 million in 2023's final quarter and $70 million in the year-earlier quarter. The lower level of net charge-offs in the first quarter of 2024 as compared with the preceding quarter included a decline in commercial real estate loan net charge-offs, partially offset by an increase in net charge-offs of commercial and industrial and consumer loans. As compared with year-earlier first quarter, the recent quarter net charge-offs reflect higher levels of commercial and industrial and consumer loan net charge-offs.

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A summary of net charge-offs by loan type and as an annualized percentage of such average loans is presented in the table that follows.

NET CHARGE-OFF (RECOVERY) INFORMATION

		First Quarter 2024								Fourth Quarter 2023								First Quarter 2023
(Dollars in millions)		Net Charge-Offs (Recoveries)				Annualized Percentage of Average Loans				Net Charge-Offs (Recoveries)				Annualized Percentage of Average Loans				Net Charge-Offs (Recoveries)				Annualized Percentage of Average Loans
Commercial and industrial		$	73				.51	%		$	42				.30	%		$	10				.08	%
Real estate:
Commercial			8				.13				63				.98				28				.43
Residential builder and developer			—				.03				—				.10				2				.48
Other commercial construction			11				.69				7				.39				(2	)			-.09
Residential			—				-.01				3				.07				1				.01
Residential - limited documentation			—				—				—				-.01				—				—
Consumer:
Home equity lines and loans			—				.02				—				.04				—				.04
Recreational finance			21				.80				18				.72				11				.50
Automobile			5				.46				3				.32				2				.21
Other			20				4.03				12				2.14				18				3.51
Total		$	138				.42	%		$	148				.44	%		$	70				.22	%

Asset Quality

A summary of nonperforming assets and certain past due loan data and credit quality ratios is presented in the accompanying table.

NONPERFORMING ASSET AND PAST DUE LOAN DATA

(Dollars in millions)		March 31, 2024				December 31, 2023				March 31, 2023
Nonaccrual loans		$	2,302			$	2,166			$	2,557
Real estate and other foreclosed assets			38				39				44
Total nonperforming assets		$	2,340			$	2,205			$	2,601
Accruing loans past due 90 days or more (a)		$	297			$	339			$	407
Government-guaranteed loans included in totals above:
Nonaccrual loans		$	62			$	53			$	42
Accruing loans past due 90 days or more (a)			244				298				306
Loans 30-89 days past due			1,410				1,724				1,892
Nonaccrual loans to total net loans and leases			1.71	%			1.62	%			1.92	%
Nonperforming assets to total net loans and leases and real estate and other foreclosed assets			1.73				1.64				1.96
Accruing loans past due 90 days or more to total net loans and leases			.22				.25				.31
Loans 30-89 days past due to total net loans and leases			1.04				1.29				1.42

(a)

Predominantly residential real estate loans.

Nonaccrual loans were $2.3 billion at March 31, 2024, $136 million higher than December 31, 2023 and $255 million lower than March 31, 2023. The higher level of nonaccrual loans at the recent quarter end as compared with the immediately preceding quarter end was largely attributable to an increase in commercial and industrial nonaccrual loans, most notably loans to nonautomotive finance dealers and the manufacturing and services industries, partially offset by a decrease in commercial real estate nonaccrual loans. The decrease in nonaccrual loans at March 31, 2024 as compared with year-earlier quarter was predominantly due to lower levels of commercial real estate nonaccrual loans, including net charge-offs, and residential real estate nonaccrual loans, partially offset by a rise in commercial and industrial nonaccrual loans.

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Government-guaranteed loans classified as accruing loans past due 90 days or more included one-to-four family residential mortgage loans serviced by the Company that were repurchased to reduce associated servicing costs, including a requirement to advance principal and interest payments that had not been received from individual mortgagors. Despite the loans being purchased by the Company, the insurance or guarantee by the applicable government-related entity remains in force. The outstanding principal balances of the repurchased loans included in the amounts noted herein that are guaranteed by government-related entities totaled $195 million at March 31, 2024, $228 million at December 31, 2023 and $242 million at March 31, 2023. The remaining accruing loans past due 90 days or more not guaranteed by government-related entities were loans considered to be with creditworthy borrowers that were in the process of collection or renewal.

Approximately 73% of loans 30 to 89 days past due were less than 60 days delinquent at each of March 31, 2024 and December 31, 2023. Information about past due and nonaccrual loans at March 31, 2024 and December 31, 2023 is also included in note 4 of Notes to Financial Statements.

During the normal course of business, the Company modifies loans to maximize recovery efforts. The types of modifications that the Company grants typically include principal deferrals and interest rate reductions but may also include other types of modifications. The Company may offer such modified terms to borrowers experiencing financial difficulty. Such modified loans may be considered nonaccrual if the Company does not expect to collect the contractual cash flows owed under the loan agreement. Information about modifications of loans to borrowers experiencing financial difficulty is included in note 4 of Notes to Financial Statements.

The Company utilizes a loan grading system to differentiate risk amongst its commercial and industrial loans and commercial real estate loans. Loans with a lower expectation of default are assigned one of ten possible “pass” loan grades while specific loans determined to have an elevated level of credit risk are classified as “criticized.” A criticized loan 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. The Company’s policy is that, at least annually, updated financial information is obtained from commercial borrowers associated with pass grade loans and additional analysis performed. On a quarterly basis, the Company’s centralized credit risk department personnel reviews all criticized commercial and industrial loans and commercial real estate loans greater than $5 million to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing. For criticized nonaccrual loans, additional meetings are held with loan officers and their managers, workout specialists and senior management to discuss each of the relationships. In analyzing criticized loans, borrower-specific information is reviewed, including operating results, future cash flows, recent developments and the borrower’s outlook, and other pertinent data. The timing and extent of potential losses, considering collateral valuation and other factors, and the Company’s potential courses of action are contemplated.

Targeted loan reviews have periodically been performed over segments of loan portfolios that are experiencing heightened credit risk due to current or anticipated economic conditions. The intention of such reviews is to identify trends across such portfolios and inform portfolio risk limits and loss mitigation strategies. The business climate in the first quarter of 2024 has continued to be subjected to inflationary pressures and elevated interest rates. These conditions have impacted many borrowers, particularly those with investor-owned commercial real estate loans in the hotel, office, retail, multifamily and healthcare sectors, including construction-related financing, and commercial and industrial loans to nonautomotive dealers and manufacturing and transportation industries. In 2023 and 2024, the Company completed targeted loan reviews covering the majority of its investor-owned commercial real estate portfolio, inclusive of construction loans, with a focus on criticized loans and loans with maturities in the next twelve months. The primary source of repayment of these loans is typically tenant lease payments to the investor/borrower. Vacancies, which have been influenced by certain demographic changes, and higher interest rates have contributed to lower current and anticipated future debt service coverage ratios, which has and could continue to influence the ability of borrowers to make existing loan payments. Lower debt service coverage ratios and reduced commercial real estate values also impact the ability of borrowers to refinance their obligations at loan maturity. As a result, criticized

- 50 -

investor-owned commercial real estate loans have remained elevated at $8.5 billion or 26% of such loans at March 31, 2024 and $8.8 billion or 27% of such loans at December 31, 2023. Investor-owned commercial real estate loans comprised 66% and 70% of total criticized loans at March 31, 2024 and December 31, 2023, respectively. The weighted-average LTV ratios for investor-owned commercial real estate loans was approximately 56% at each of March 31, 2024 and December 31, 2023. Criticized loans secured by investor-owned commercial real estate had a weighted-average LTV ratio of approximately 62% at March 31, 2024 and 61% at December 31, 2023.

The Company monitors its concentration of commercial real estate lending as a percentage of its Tier 1 capital plus its allowable allowance for credit losses, consistent with a metric utilized to differentiate such concentrations amongst regulated financial institutions. This metric, as prescribed in supervisory guidance, excludes loans secured by commercial real estate considered to be owner-occupied, but includes certain other loans, such as loans to real estate investment trusts, that are classified as commercial and industrial loans. The Company's commercial real estate loan concentration approximated 176% of Tier 1 capital plus its allowable allowance for credit losses at March 31, 2024, compared with 183% at December 31, 2023. The Company has reduced its relative concentration of investor-owned commercial real estate loans throughout 2023 and the first quarter of 2024.

The accompanying tables summarize the outstanding balances, and associated criticized balances, of commercial and industrial loans and leases by industry and commercial real estate loans by property type, respectively, at March 31, 2024 and December 31, 2023.

CRITICIZED COMMERCIAL AND INDUSTRIAL LOANS

			March 31, 2024																December 31, 2023
(Dollars in millions)			Outstanding				Criticized Accrual				Criticized Nonaccrual				Total Criticized				Outstanding				Criticized Accrual				Criticized Nonaccrual				Total Criticized
Commercial and industrial excluding owner-occupied real estate by industry:
Financial and insurance			$	10,538			$	261			$	37			$	298			$	10,679			$	346			$	3			$	349
Services				7,180				260				130				390				6,715				295				100				395
Motor vehicle and recreational finance dealers				6,268				525				109				634				6,242				164				51				215
Manufacturing				6,226				616				122				738				5,981				549				65				614
Wholesale				3,955				268				34				302				3,803				180				45				225
Transportation, communications, utilities				3,525				233				70				303				3,342				195				71				266
Retail				2,893				83				41				124				2,727				102				35				137
Construction				2,089				176				68				244				2,092				173				62				235
Health services				1,991				286				34				320				1,950				297				28				325
Real estate investors				1,618				195				4				199				1,684				189				4				193
Other				1,676				100				54				154				1,889				123				50				173
Total commercial and industrial excluding owner-occupied real estate			$	47,959			$	3,003			$	703			$	3,706			$	47,104			$	2,613			$	514			$	3,127
Owner-occupied real estate by industry:
Services			$	2,122			$	140			$	51			$	191			$	2,162			$	154			$	51			$	205
Motor vehicle and recreational finance dealers				1,922				45				9				54				1,867				10				7				17
Retail				1,587				132				14				146				1,541				107				13				120
Wholesale				944				48				3				51				940				28				2				30
Manufacturing				837				58				29				87				842				64				24				88
Real estate investors				795				24				16				40				818				26				12				38
Health services				639				53				22				75				656				55				26				81
Other				1,092				33				17				50				1,080				32				21				53
Total owner-occupied real estate				9,938				533				161				694				9,906				476				156				632
Total			$	57,897			$	3,536			$	864			$	4,400			$	57,010			$	3,089			$	670			$	3,759

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CRITICIZED COMMERCIAL REAL ESTATE LOANS

			March 31, 2024																December 31, 2023
(Dollars in millions)			Outstanding				Criticized Accrual				Criticized Nonaccrual				Total Criticized				Outstanding				Criticized Accrual				Criticized Nonaccrual				Total Criticized
Permanent finance by property type:
Apartments/Multifamily			$	6,441			$	1,003			$	112			$	1,115			$	6,165			$	1,184			$	115			$	1,299
Retail/Service				5,795				1,039				229				1,268				5,912				1,075				227				1,302
Office				4,599				1,011				147				1,158				4,727				879				185				1,064
Health services				3,626				1,409				177				1,586				3,615				1,364				117				1,481
Hotel				2,485				485				175				660				2,510				496				210				706
Industrial/Warehouse				1,925				133				13				146				2,034				224				13				237
Other				297				45				2				47				314				28				2				30
Total permanent				25,168				5,125				855				5,980				25,277				5,250				869				6,119
Construction/Development				7,248				2,419				144				2,563				7,726				2,527				174				2,701
Total			$	32,416			$	7,544			$	999			$	8,543			$	33,003			$	7,777			$	1,043			$	8,820

Total criticized commercial and industrial loans and commercial real estate loans were $12.9 billion and $12.6 billion at March 31, 2024 and December 31, 2023, respectively. Criticized loans represented 14.3% of the total commercial and industrial and commercial real estate loans at March 31, 2024, compared with 14.0% at December 31, 2023. At March 31, 2024 and December 31, 2023, permanent finance commercial real estate loans comprised 46% and 49% of total criticized loans, respectively, whereas commercial and industrial loans represented 34% and 30%, respectively, and construction loans represented 20% and 21%, respectively. Loans to nonautomotive finance dealers and manufacturing, wholesale and transportation companies mainly contributed to the $641 million increase in commercial and industrial criticized loans from December 31, 2023 to March 31, 2024.

The Company’s loss identification and estimation techniques with respect to loans secured by residential real estate make reference to loan performance and house price data in specific areas of the country where collateral securing the Company’s residential real estate loans is located. For residential real estate-related 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. Limited documentation first lien mortgage loans represent loans secured by residential real estate that at origination typically included some form of limited borrower documentation requirements as compared with more traditional loans. The Company no longer originates limited documentation loans. With respect to junior lien loans, to the extent known by the Company, if a related senior lien loan would be on nonaccrual status because of payment delinquency, even if such senior lien loan was not owned by the Company, the junior lien loan or line that is owned by the Company is placed on nonaccrual status. In monitoring the credit quality of its home equity portfolio for purposes of determining the allowance for credit losses, the Company reviews delinquency and nonaccrual information and considers recent charge-off experience. When evaluating individual home equity loans and lines of credit for charge-off and for purposes of determining the allowance for credit losses, the Company considers the required repayment of any first lien positions related to collateral property. Information about the location of loans secured by residential real estate is presented in the following table.

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NONACCRUAL LOANS SECURED BY RESIDENTIAL REAL ESTATE

		March 31, 2024
						Nonaccrual
										Percent of
		Outstanding								Outstanding
(Dollars in millions)		Balances				Balances				Balances
Residential mortgage loans:
New York		$	6,625			$	85				1.28	%
Mid-Atlantic (a)			6,605				57				.86
New England (b)			6,010				43				.72
Other			2,952				17				.58
Total		$	22,192			$	202				.91	%
Limited documentation first lien mortgage loans:
New York		$	403			$	24				5.81	%
Mid-Atlantic (a)			361				20				5.52
New England (b)			84				7				8.76
Other			36				2				6.53
Total		$	884			$	53				6.00	%
First lien home equity loans and lines of credit:
New York		$	815			$	17				2.06	%
Mid-Atlantic (a)			967				23				2.43
New England (b)			456				6				1.25
Other			17				3				16.54
Total		$	2,255			$	49				2.16	%
Junior lien home equity loans and lines of credit:
New York		$	767			$	16				2.15	%
Mid-Atlantic (a)			910				15				1.64
New England (b)			600				7				1.11
Other			26				—				.52
Total		$	2,303			$	38				1.66	%

(a)

Includes Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia and the District of Columbia.

(b)

Includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

Factors that influence the Company’s credit loss experience include overall economic conditions affecting businesses and consumers, generally, but also residential and commercial real estate valuations, in particular, given the size of the Company’s real estate loan portfolios. Commercial real estate valuations can be highly subjective, as they are based upon many assumptions. Such valuations can be significantly affected over relatively short periods of time by changes in business climate, economic conditions, interest rates and, in many cases, the results of operations of businesses and other occupants of the real property. Similarly, residential real estate valuations can be impacted by housing trends, the availability of financing at reasonable interest rates and general economic conditions affecting consumers.

A comparative summary of consumer loans in nonaccrual status by product is presented in the following table.

NONACCRUAL CONSUMER LOANS

(Dollars in millions)		March 31, 2024				December 31, 2023
Home equity lines and loans		$	87			$	81
Recreational finance			30				36
Automobile			13				14
Other			54				52
Total		$	184			$	183

- 53 -

Allowance for Credit Losses

Management determines the allowance for credit losses under accounting guidance that requires estimating the amount of current expected credit losses over the remaining contractual term of the loan and lease portfolio. A description of the methodologies used by the Company to estimate its allowance for credit losses can be found in note 4 of Notes to Financial Statements.

In establishing the allowance for credit losses, the Company estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes and also estimates losses for other loans and leases with similar risk characteristics on a collective basis. For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by type. At the time of the Company’s analysis regarding the determination of the allowance for credit losses as of March 31, 2024 concerns existed about elevated levels of inflation; potential liquidity shortages and tightening credit in the financial services markets; a slowing economy or possible recession during the remainder of 2024; the volatile nature of global markets and international economic conditions that could impact the U.S. economy; Federal Reserve positioning of monetary policy; downward pressures on commercial and residential real estate values especially in the office, retail and healthcare sectors; higher interest rates and wage pressures impacting commercial borrowers, including nonautomotive finance dealers; the extent to which borrowers, in particular commercial real estate borrowers, may be negatively affected by general economic conditions; and continued stagnant population and economic growth in the upstate New York and central Pennsylvania regions (approximately 37% of the Company’s loans and leases are to customers in New York State and Pennsylvania) that historically lag other regions of the country.

The Company generally estimates current expected credit losses on loans with similar risk characteristics on a collective basis. To estimate expected losses, the Company utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and determine estimated credit losses through a reasonable and supportable forecast period. The Company’s approach for estimating current expected credit losses for loans and leases at March 31, 2024 and December 31, 2023 included utilizing macroeconomic assumptions to project losses over a two-year reasonable and supportable forecast period. Subsequent to the forecast period, the Company reverted to longer-term historical loss experience, over a period of one year, to estimate expected credit losses over the remaining contractual life. Forward-looking estimates of certain macroeconomic variables are determined by the M&T Scenario Review Committee, which is comprised of senior management business leaders and economists. The assumptions utilized as of March 31, 2024 and December 31, 2023 are presented in the following table and were based on information available at or near the time the Company was preparing its estimate of expected credit losses as of those dates.

ALLOWANCE FOR CREDIT LOSSES MACROECONOMIC ASSUMPTIONS

		March 31, 2024												December 31, 2023
		Year 1				Year 2				Cumulative				Year 1				Year 2				Cumulative
National unemployment rate			4.4	%			4.7	%							4.4	%			4.7	%
Real GDP growth rate			1.0			1.8					2.8	%			.9			1.9					2.8	%
Commercial real estate price index growth/decline rate		-6.9				5.5				-1.5				-9.1				4.8				-4.5
Home price index growth/ decline rate			-2.0				.4			-1.6				-3.2					-.1			-3.3

In establishing the allowance for credit losses, the Company also considers the impact of portfolio concentrations, imprecision in economic forecasts, geopolitical conditions and other risk factors that influence the loss estimation process. With respect to economic forecasts, the Company assessed the likelihood of alternative economic scenarios during the two-year reasonable and supportable time period. Generally, an increase in unemployment rate or a decrease in any of the rate of change in GDP, commercial real estate prices or home prices could have an adverse impact on expected credit losses and may result in an increase to the allowance for credit losses. Forward-looking economic forecasts are subject to inherent imprecision and future events may differ materially from forecasted events. In consideration of such uncertainty, the following alternative economic scenarios were considered to estimate the possible impact on modeled credit losses.

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ALLOWANCE FOR CREDIT LOSSES SENSITIVITIES

		March 31, 2024
		Year 1				Year 2				Cumulative
Potential downside economic scenario:
National unemployment rate			6.5	%			7.4	%
Real GDP growth/decline rate		-2.3				1.6					-.8	%
Commercial real estate price index decline rate			-18.0				-2.0			-19.6
Home price index growth/decline rate			-10.4				.5				-10.0
Potential upside economic scenario:
National unemployment rate		3.3				3.2
Real GDP growth rate		3.5				2.4					6.0
Commercial real estate price index growth/decline rate		-1.8				9.2					7.3
Home price index growth rate		2.7				2.2					5.0

(Dollars in millions)		Impact to Modeled Credit Losses Increase (Decrease)
Potential downside economic scenario		$	347
Potential upside economic scenario			(170	)

These examples are only a few of the numerous possible economic scenarios that could be utilized in assessing the sensitivity of expected credit losses. The estimated impacts on credit losses in such scenarios pertain only to modeled credit losses and do not include consideration of other factors the Company may evaluate when determining its allowance for credit losses. As a result, it is possible that the Company may, at another point in time, reach different conclusions regarding credit loss estimates. The Company’s process for determining the allowance for credit losses undergoes quarterly and periodic evaluations by independent risk management personnel, which among many other considerations, evaluate the reasonableness of management’s methodology and significant assumptions. Further information about the Company’s methodology to estimate expected credit losses is included in note 4 of Notes to Financial Statements.

Management has assessed that the allowance for credit losses at March 31, 2024 appropriately reflected expected credit losses inherent in the portfolio as of that date. The allowance for credit losses totaled $2.2 billion at March 31, 2024, compared with $2.1 billion at December 31, 2023. As a percentage of loans outstanding, the allowance was 1.62% at March 31, 2024 and 1.59% at December 31, 2023. The increase in the allowance for credit losses as a percentage of loans and leases outstanding reflects a higher level of credit losses expected on certain commercial borrowers, including nonautomotive dealers and healthcare facilities. Included in the allocation of the allowance for credit losses were reserves for loans secured by office properties of 4.37% at each of March 31, 2024 and December 31, 2023. The level of the allowance reflects management’s evaluation of the loan and lease portfolio using the methodology and considering the factors as described herein. Should the various economic forecasts and credit factors considered by management in establishing the allowance for credit losses change and should management’s assessment of losses in the loan portfolio also change, the level of the allowance as a percentage of loans could increase or decrease in future periods. The reported level of the allowance reflects management’s evaluation of the loan and lease portfolio as of each respective date. Furthermore, the Company's allowance is general in nature and is available to absorb losses from any loan or lease category.

The ratio of the allowance for credit losses to total nonaccrual loans at March 31, 2024 and December 31, 2023 was 95% and 98%, respectively. Given the Company’s general position as a secured lender and its practice of charging off loan balances when collection is deemed doubtful, that ratio and changes in the ratio are generally not an indicative measure of the adequacy of the Company’s allowance for credit losses, nor does management rely upon that ratio in assessing the adequacy of the Company’s allowance for credit losses.

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Other Income

The components of other income are presented in the accompanying table.

OTHER INCOME

		Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions)		March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Mortgage banking revenues		$	104			$	112			$	(8	)			-7	%		$	104			$	85			$	19				23	%
Service charges on deposit accounts			124				121				3				2				124				113				11				9
Trust income			160				159				1				1				160				194				(34	)			-17
Brokerage services income			29				26				3				10				29				24				5				20
Trading account and other non-hedging derivative gains			9				11				(2	)			-19				9				12				(3	)			-21
Gain (loss) on bank investment securities			2				4				(2	)			-35				2				—				2				—
Other revenues from operations			152				145				7				4				152				159				(7	)			-5
Total other income		$	580			$	578			$	2				—	%		$	580			$	587			$	(7	)			-1	%

Mortgage banking revenues

Mortgage banking revenues are comprised of both residential and commercial mortgage banking activities, which consist of realized gains and losses from sales of real estate loans and loan servicing rights, unrealized gains and losses on real estate loans held for sale and related commitments, real estate loan servicing fees, and other real estate loan related fees and income. The Company's involvement in commercial mortgage banking activities includes the origination, sales and servicing of loans under the multifamily loan programs of Fannie Mae, Freddie Mac, and the U.S. Department of Housing and Urban Development.

RESIDENTIAL MORTGAGE BANKING ACTIVITIES

		Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions)		March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Residential mortgage banking revenues
Gains on loans originated for sale		$	7			$	5			$	2				35	%		$	7			$	3			$	4				138	%
Loan servicing fees			39				38				1				2				39				20				19				100
Loan sub-servicing and other fees			32				31				1				5				32				32				—				1
Total loan servicing revenues			71				69				2				3				71				52				19				38
Total residential mortgage banking revenues		$	78			$	74			$	4				5	%		$	78			$	55			$	23				43	%
New commitments to originate loans for sale		$	288			$	243			$	45				18	%		$	288			$	276			$	12				5	%

(Dollars in millions)		March 31, 2024				December 31, 2023				March 31, 2023
Balances at period end
Loans held for sale		$	165			$	190			$	152
Commitments to originate loans for sale			211				163				199
Commitments to sell loans			315				295				284
Capitalized mortgage loan servicing assets			432				456				532
Loans serviced for others			39,598				40,021				41,547
Loans sub-serviced for others (a)			111,964				115,321				97,989
Total loans serviced for others		$	151,562			$	155,342			$	139,536

(a)

The contractual servicing rights associated with residential mortgage loans sub-serviced by the Company were predominantly held by affiliates of BLG. Information about the Company’s relationship with BLG and its affiliates is included in note 15 of Notes to Financial Statements.

The increase in residential mortgage loan servicing fees of $19 million in the three-month period ending March 31, 2024 as compared with the similar 2023 period primarily reflects a $350 million bulk purchase of residential mortgage loan servicing rights associated with $19.5 billion of residential real estate loans on March 31, 2023.

The lower balance of capitalized residential mortgage servicing rights at March 31, 2024 and December 31, 2023 as compared with March 31, 2023 reflects amortization of those servicing rights.

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COMMERCIAL MORTGAGE BANKING ACTIVITIES

		Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions)		March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Commercial mortgage banking revenues
Gains on loans originated for sale		$	8			$	20			$	(12	)			-62	%		$	8			$	14			$	(6	)			-45	%
Loan servicing fees and other			18				18				—				2				18				16				2				12
Total commercial mortgage banking revenues		$	26			$	38			$	(12	)			-32	%		$	26			$	30			$	(4	)			-14	%
Loans originated for sale to other investors		$	1,044			$	506			$	538				106	%		$	1,044			$	672			$	372				55	%

(Dollars in millions)		March 31, 2024				December 31, 2023				March 31, 2023
Balances at period end
Loans held for sale		$	563			$	189			$	321
Commitments to originate loans for sale			451				916				588
Commitments to sell loans			1,014				1,105				909
Capitalized mortgage loan servicing assets			122				123				124
Loans serviced for others (a)			24,771				24,157				22,389
Loans sub-serviced for others			3,906				3,873				3,786
Total loans serviced for others		$	28,677			$	28,030			$	26,175

(a)

Includes $4.0 billion, $3.9 billion and $3.8 billion of loan balances for which investors had recourse to the Company if such balances are ultimately uncollectible at March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

The decline in gains on commercial mortgage loans originated for sale in the first three months of 2024 as compared with the fourth quarter of 2023 and the corresponding 2023 period reflects lower volumes of new commitments to originate commercial real estate loans for sale, which were influenced by a higher interest rate environment.

Service charges on deposit accounts

Service charges on deposit accounts in the recent quarter increased $3 million from the fourth quarter of 2023 reflecting higher commercial service charges from pricing changes. The $11 million increase in the recent quarter as compared with the similar 2023 quarter also reflects the increased customer usage of sweep products.

Trust income

Trust income includes fees from two significant businesses managed within the Company's Institutional Services and Wealth Management segment. The Institutional Services business provides a variety of trustee, agency, investment management and administrative services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients who: (i) use capital markets financing structures; (ii) use independent trustees to hold assets (including retirement plan assets prior to the sale of CIT); and (iii) need investment and cash management services. The Wealth Management business offers personal trust, planning, fiduciary, asset management, family office and other services designed to help high net worth individuals and families grow, preserve and transfer wealth.

TRUST INCOME AND ASSETS UNDER MANAGEMENT

		Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions)		March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Trust income
Institutional Services		$	81			$	82			$	(1	)			-1	%		$	81			$	120			$	(39	)			-32	%
Wealth Management			78				76				2				3				78				74				4				4
Commercial			1				1				—				9				1				—				1				179
Total trust income		$	160			$	159			$	1				1	%		$	160			$	194			$	(34	)			-17	%

(Dollars in millions)		March 31, 2024				December 31, 2023				March 31, 2023
Assets under management at period end
Trust assets under management (excluding proprietary funds)		$	65,191			$	63,963			$	161,495
Proprietary mutual funds			15,280				14,772				14,124
Total assets under management		$	80,471			$	78,735			$	175,619

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In April 2023, M&T completed the divestiture of its CIT business to a private equity firm. Revenues associated with that business and included in Institutional Services trust income totaled $45 million in the first quarter of 2023. After considering expenses, the results of operations of that business were not material to M&T's net income in 2023's initial quarter.

Institutional Services trust income not related to the CIT business increased $6 million for the first three months of 2024 as compared with the similar 2023 period reflecting higher sales and fund management fees from its global capital markets business.

The lower assets under management at March 31, 2024 and December 31, 2023 as compared with March 31, 2023 reflects the sale of the CIT business in the second quarter of 2023.

Other revenues from operations

The components of other revenues from operations are presented in the accompanying table.

OTHER REVENUES FROM OPERATIONS

		Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions)		March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Letter of credit and other credit-related fees		$	44			$	54			$	(10	)			-19	%		$	44			$	43			$	1				1	%
Merchant discount and credit card fees			40				42				(2	)			-6				40				39				1				1
Bank owned life insurance revenue (a)			16				19				(3	)			-18				16				13				3				23
Equipment operating lease income			11				12				(1	)			-7				11				21				(10	)			-49
BLG income (b)			25				—				25				—				25				20				5				25
Other			16				18				(2	)			-7				16				23				(7	)			-26
Total other revenues from operations		$	152			$	145			$	7				4	%		$	152			$	159			$	(7	)			-5	%

(a)

Tax-exempt income earned from bank owned life insurance includes increases in the cash surrender value of life insurance policies and benefits received. The Company owns both general account and separate account life insurance policies. To the extent market conditions change such that the market value of assets in a separate account bank owned life insurance policy becomes less than the previously recorded cash surrender value, an adjustment is recorded as a reduction to other revenues from operations.

(b)

During 2017, the operating losses of BLG resulted in M&T reducing the carrying value of its investment in BLG to zero. Subsequently, M&T has received cash distributions when declared by BLG that result in the recognition of income by M&T. M&T expects cash distributions from BLG in the future, but the timing and amount of those distributions are not within M&T's control. BLG is entitled to receive distributions from its affiliates that provide asset management and other services that are available for distribution to BLG’s owners, including M&T. Information about the Company’s relationship with BLG and its affiliates is included in note 15 of Notes to Financial Statements.

The decrease in letter of credit and other credit-related fees of $10 million in the recent quarter as compared with the fourth quarter of 2023 was primarily the result of lower loan syndication fees.

Equipment operating lease income declined $10 million in 2024's first quarter as compared with the similar 2023 quarter reflecting lower gains on sales of leased equipment.

Distributions from M&T's investment in BLG were $25 million and $20 million for the quarters ended March 31, 2024 and 2023, respectively. There were no such distributions in the fourth quarter of 2023.

Other Expense

The components of other expense are presented in the accompanying table.

OTHER EXPENSE

		Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions)		March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Salaries and employee benefits		$	833			$	724			$	109				15	%		$	833			$	808			$	25				3	%
Equipment and net occupancy			129				134				(5	)			-4				129				127				2				2
Outside data processing and software			120				114				6				5				120				106				14				13
Professional and other services			85				99				(14	)			-13				85				125				(40	)			-31
FDIC assessments			60				228				(168	)			-74				60				30				30				101
Advertising and marketing			20				26				(6	)			-21				20				31				(11	)			-35
Amortization of core deposit and other intangible assets			15				15				—				—				15				17				(2	)			-13
Other costs of operations			134				110				24				21				134				115				19				16
Total other expense		$	1,396			$	1,450			$	(54	)			-4	%		$	1,396			$	1,359			$	37				3	%

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Salaries and employee benefits

The number of full time equivalent employees was 21,927 at March 31, 2024, compared with 21,980 at December 31, 2023 and 23,004 at March 31, 2023. Included in each of the first quarters of 2024 and 2023 was $99 million of seasonally higher stock-based compensation, medical plan costs, payroll-related taxes and unemployment insurance.

Salaries and employee benefits expenses increased $109 million in the recent quarter as compared with the fourth quarter of 2023 reflecting the aforementioned seasonal costs, annual merit increases and a rise in incentive compensation, partially offset by lower severance expense.

Salaries and employee benefits expenses increased $25 million in the recent quarter as compared with the year-earlier quarter reflecting annual merit increases in the first quarter of 2024, other pay increases in 2023 and higher incentive compensation, partially offset by lower employee staffing levels.

Nonpersonnel expenses

FDIC assessments reflect a $197 million estimated special assessment in the fourth quarter of 2023 and $29 million of estimated incremental special assessment expense recorded in the first quarter of 2024.

Nonpersonnel expenses aggregated $563 million in the recent quarter as compared with $726 million in the fourth quarter of 2023. After considering the FDIC special assessments, the $5 million increase in the recent quarter as compared with 2023's fourth quarter reflects an increase in other costs of operations of $24 million, including higher costs associated with the Company's supplemental executive retirement savings plan, losses on lease terminations related to certain vacated properties and incremental charitable contributions. Those unfavorable factors were partially offset by lower professional and other services expenses of $14 million, reflecting the timing and level of consulting and legal-related fees.

Nonpersonnel expenses increased $12 million in the recent quarter from $551 million in the year-earlier first quarter. That increase includes an FDIC special assessment of $29 million, higher outside data processing and software costs of $14 million and a rise in other costs of operations of $19 million, reflecting amortization of mortgage loan servicing rights obtained through a bulk purchase in March 2023. Those unfavorable factors were partially offset by lower professional and other services expenses of $40 million reflecting lower sub-advisory fees following the sale of the CIT business in April 2023 and a decline in advertising and marketing costs of $11 million.

Income Taxes

Income tax expense was $133 million in the first quarter of 2024, compared with $143 million in the fourth quarter of 2023 and $224 million in the year-earlier quarter. The effective tax rates were 20.0%, 22.9% and 24.2% for the quarters ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively. The first quarter of 2024 income tax expense included a net discrete benefit related to the resolution of a tax matter inherited from the acquisition of People's United. The effective tax rate is affected by the level of income earned that is exempt from tax relative to the overall level of pre-tax income, the amount of income allocated to the various state and local jurisdictions where the Company operates, because tax rates differ among such jurisdictions, and the impact of any large discrete or infrequently occurring items. The Company’s effective tax rate in future periods may also be affected by any change in income tax laws or regulations and interpretations of income tax regulations that differ from the Company’s interpretations by any of various tax authorities that may examine tax returns filed by M&T or any of its subsidiaries.

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Liquidity Risk

As a financial intermediary, the Company is exposed to various risks, including liquidity and market risk. Liquidity refers to the Company’s ability to ensure that sufficient cash flow and liquid assets are available to satisfy current and future obligations, including demands for loans and deposit withdrawals, funding operating costs and other corporate purposes. Liquidity risk arises whenever cash flows associated with financial instruments included in assets and liabilities differ.

The most significant source of funding for the Company is core deposits, which are generated from a large base of consumer, corporate and institutional customers. That customer base has, over the past several years, become more geographically diverse as a result of expansion of the Company’s businesses. Nevertheless, the Company faces competition in offering products and services from a large array of financial market participants, including banks, thrifts, mutual funds, securities dealers and others. Core deposits totaled $151.5 billion and $146.5 billion at March 31, 2024 and December 31, 2023, respectively. The increase in core deposits at March 31, 2024 as compared with December 31, 2023 reflects a higher level of trust customer deposits.

The Company supplements funding provided through deposits with various short-term and long-term wholesale borrowings, including overnight federal funds purchased, repurchase agreements, advances from FHLBs, brokered deposits and longer-term borrowings. M&T Bank has access to additional funding sources through secured borrowings from the FHLB of New York and the FRB of New York. Beginning in the first quarter of 2024, M&T Bank became a counterparty to the FRB of New York standing repurchase agreement facility, which allows it to enter into overnight repurchase transactions using eligible investment securities. The Company has, in the past, issued subordinated capital notes and junior subordinated debentures associated with trust preferred securities to provide liquidity and enhance regulatory capital ratios. At March 31, 2024 and December 31, 2023, long-term borrowings aggregated $11.5 billion and $8.2 billion, respectively and short-term borrowings aggregated $4.8 billion and $5.3 billion, respectively. Information about the Company's borrowings is presented in note 5 of Notes to Financial Statements.

The Company has benefited from the placement of brokered deposits. The Company had brokered savings and interest-checking deposit accounts which aggregated $7.9 billion at March 31, 2024 and $7.8 billion at December 31, 2023. Brokered time deposits totaled $4.7 billion at March 31, 2024 and $6.1 billion at December 31, 2023. Approximately 87% of brokered time deposits at March 31, 2024 have a contractual maturity date in the next 12 months.

Total uninsured deposits were estimated to be $71.9 billion at March 31, 2024 and $67.0 billion at December 31, 2023. Approximately $11.4 billion and $10.7 billion of those uninsured deposits were collateralized by the Company at March 31, 2024 and December 31, 2023, respectively. The Company maintains available liquidity sources which represent approximately 135% of uninsured deposits that are not collateralized by the Company at March 31, 2024.

The Company’s ability to obtain funding from these sources could be negatively impacted should the Company experience a substantial deterioration in its financial condition or its debt ratings or should the availability of funding become restricted due to a disruption in the financial markets. The Company attempts to quantify such risks by conducting scenario analyses that estimate the liquidity impact resulting from a debt ratings downgrade and other market events. Such impact is estimated by attempting to measure the effect on available unsecured lines of credit, available capacity from secured borrowing sources and securitizable assets.

M&T’s primary source of funds to pay for operating expenses, shareholder dividends and treasury stock repurchases has historically been the receipt of dividends from its bank subsidiaries, which are subject to various regulatory limitations. Dividends from any bank subsidiary to M&T are limited by the amount of earnings of the subsidiary in the current year and the two preceding years. For purposes of that test, at March 31, 2024 approximately $1.2 billion was available for payment of dividends to M&T from bank subsidiaries. M&T also may obtain funding through long-term borrowings. Further information about the long-term outstanding borrowings of M&T is provided in note 5 of Notes to Financial Statements. As a bank holding company, M&T is obligated to serve as a managerial and financial source of strength to its bank subsidiaries as described in Part I, Item 1, "Business" in the 2023 Annual Report. As its ability to access the capital markets may be affected by market disruptions, M&T maintains sufficient cash resources at its parent company to satisfy projected cash outflows for an extended period without reliance on dividends from subsidiaries or external financing. As of March 31, 2024, M&T's parent company liquidity covered projected cash

- 60 -

outflows for more than 24 months, including dividends on common and preferred stock, debt service and scheduled debt maturities.

In addition to deposits and borrowings, other sources of liquidity include maturities and repayments of investment securities, loans and other earning assets, as well as cash generated from operations, such as fees collected for services. The Company also has the ability to securitize or sell certain financial assets, including various loan types, to provide other liquidity alternatives. U.S. Treasury and federal agency securities and government issued or guaranteed mortgage-backed securities comprised 90% of the Company's debt securities portfolio at March 31, 2024. The weighted-average durations of debt investment securities available for sale and held to maturity at March 31, 2024 were 2.0 years and 5.4 years, respectively.

The Company enters into contractual obligations in the normal course of business that require future cash payments. Such obligations include, among others, payments related to deposits, borrowings, leases and other contractual commitments. Off-balance sheet commitments to customers may impact liquidity, including commitments to extend credit, standby letters of credit, commercial letters of credit, financial guarantees and indemnification contracts, and commitments to sell real estate loans. Because many of these commitments or contracts expire without being funded in whole or in part, the contract amounts are not necessarily indicative of future cash flows. Further discussion of these commitments is provided in note 13 of Notes to Financial Statements.

The Company's Executive ALCO Committee closely monitors the Company’s liquidity position on an ongoing basis for compliance with internal policies and regulatory expectations. As a Category IV institution, the Company adheres to enhanced liquidity standards which require the performance of internal liquidity stress testing. The stress testing is designed to ensure the Company has sufficient liquidity to withstand both institution-specific and market-wide stress scenarios. For each scenario, the Company applies liquidity stress which may include deposit run-off, increased draws on unfunded loan commitments, increased collateral need for margin calls, increased haircuts on investment security-based funding and reductions in unsecured and secured borrowing capacity. Stress scenarios are measured over various time frames ranging from overnight to twelve months. As required by regulation, the Company maintains a liquidity buffer comprised of cash and highly liquid unencumbered securities to cover a 30-day stress horizon. Liquidity stress events occurring over longer time horizons can be mitigated by the availability of secured funding sources at the FHLB of New York and FRB of New York. The following table is a summary of the Company's available sources of liquidity at March 31, 2024.

AVAILABLE LIQUIDITY SOURCES

(Dollars in millions)		March 31, 2024
Deposits at the FRB of New York		$	32,033
Unused secured borrowing facilities:
FRB of New York			18,404
FHLB of New York			14,589
Unencumbered investment securities (after estimated haircuts)			16,506
Total		$	81,532

Management continuously evaluates the use and mix of its various available funding alternatives, including short-term borrowings, issuances of long-term debt, the placement of brokered deposits and the securitization of certain loan products. Management does not anticipate engaging in any activities, either currently or in the long term, for which adequate funding would not be available and would therefore result in a significant strain on liquidity at either M&T or its subsidiary banks. In accordance with liquidity regulations, the Company maintains a contingency funding plan to facilitate on-going liquidity management in times of liquidity stress. The plan outlines various funding options available during a liquidity stress event and establishes a clear escalation protocol to be followed within the Company's risk management framework. The plan sets forth funding strategies and procedures that management can quickly leverage to assist in decision-making and specifies roles and responsibilities for departments impacted by a potential liquidity stress event.

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Market Risk and Interest Rate Sensitivity

Market risk is the risk of loss from adverse changes in the market prices and/or interest rates of the Company’s financial instruments. The primary market risk the Company is exposed to is interest rate risk. Interest rate risk arises from the Company’s core banking activities of lending and deposit-taking, because assets and liabilities reprice at different times and by different amounts as interest rates change. As a result, net interest income earned by the Company is subject to the effects of changing interest rates. The Company measures interest rate risk by calculating the variability of net interest income in future periods under various interest rate scenarios using projected balances for earning assets, interest-bearing liabilities and derivatives used to hedge interest rate risk. Management’s philosophy toward interest rate risk management is to limit the variability of net interest income. The balances of financial instruments used in the projections are based on expected growth from forecasted business opportunities, anticipated prepayments of loans and investment securities, and expected maturities of investment securities, loans and deposits. The Company has entered into interest rate swap agreements to help manage exposure to interest rate risk. At March 31, 2024, the aggregate notional amount of interest rate swap agreements entered into for interest rate risk management purposes that were currently in effect was $19.5 billion. In addition, the Company has entered into $7.8 billion of forward-starting interest rate swap agreements predominantly related to cash flow hedges. Information about interest rate swap agreements entered into for interest rate risk management purposes is included herein under the heading “Net Interest Margin” and in note 10 of Notes to Financial Statements.

The Company’s Executive ALCO Committee monitors the sensitivity of the Company’s net interest income to changes in interest rates with the aid of a computer model that forecasts net interest income under different interest rate scenarios. In modeling changing interest rates, the Company considers different yield curve shapes that consider both parallel (that is, simultaneous changes in interest rates at each point on the yield curve) and non-parallel (that is, allowing interest rates at points on the yield curve to vary by different amounts) shifts in the yield curve. In utilizing the model, market-implied forward interest rates over the subsequent twelve months are generally used to determine a base interest rate scenario for the net interest income simulation. That calculated base net interest income is then compared with the income calculated under the varying interest rate scenarios. The model considers the impact of ongoing lending and deposit-gathering activities, as well as interrelationships in the magnitude and timing of the repricing of financial instruments, including the effect of changing interest rates on expected prepayments and maturities. When deemed prudent, management has taken actions to mitigate exposure to interest rate risk through the use of on- or off-balance sheet financial instruments and intends to do so in the future. Possible actions include, but are not limited to, changes in the pricing of loan and deposit products, modifying the composition of earning assets and interest-bearing liabilities, and adding to, modifying or terminating existing interest rate swap agreements or other financial instruments used for interest rate risk management purposes.

The accompanying table as of March 31, 2024 and December 31, 2023 displays the estimated impact on net interest income in the base scenario described above resulting from parallel changes in interest rates across repricing categories during the first modeling year.

SENSITIVITY OF NET INTEREST INCOME TO CHANGES IN INTEREST RATES

Changes in interest rates		Calculated Change in Projected Net Interest Income
(Dollars in millions)		March 31, 2024				December 31, 2023
+200 basis points		$	(50	)		$	(18	)
+100 basis points			5				20
-100 basis points			(18	)			(46	)
-200 basis points			(36	)			(83	)

The Company utilized many assumptions to calculate the impact that changes in interest rates may have on net interest income. The more significant of those assumptions included the rate of prepayments of mortgage-related assets, cash flows from derivative and other financial instruments, loan and deposit volumes, mix and pricing, and deposit maturities. In the scenarios presented, the Company also assumed gradual changes in interest rates during a twelve-month period as compared with the base scenario. Changes in amounts presented since December 31, 2023 reflect changes in portfolio composition (including shifts between noninterest-bearing and interest-bearing deposits and higher levels of borrowings), the level of market-implied forward interest rates and hedging actions taken by the

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Company. Amidst the rising interest rate environment since the first quarter of 2022, M&T's cumulative deposit pricing beta, which is the change in deposit pricing in response to a change in market interest rates, approximated 55 percent. Excluding brokered deposits that cumulative pricing beta approximated 50 percent. The cumulative deposit pricing beta (including and excluding brokered deposits) is assumed to approximate 50 to 55 percent in the interest rate scenarios presented. The assumptions used in interest rate sensitivity modeling are inherently uncertain and, as a result, the Company cannot precisely predict the impact of changes in interest rates on net interest income. Actual results may differ significantly from those presented due to the timing, magnitude and frequency of changes in interest rates and changes in market conditions and interest rate differentials (spreads) between maturity/repricing categories, as well as any actions, such as those previously described, which management may take to counter such changes. Management also uses an “economic value of equity” model to supplement the modeling technique described above and provide a long-term interest rate risk metric. Economic value of equity is a point-in-time analysis of the economic sensitivity of assets, liabilities and off-balance sheet positions that incorporates all cash flows over their estimated remaining lives. Management measures the impact of changes in market values due to interest rates under a number of scenarios, including immediate shifts of the yield curve.

In addition to the effect of interest rates, changes in fair value of the Company’s financial instruments can also result from a lack of trading activity for similar instruments in the financial markets. Information about the fair valuation of financial instruments is presented in note 12 of Notes to Financial Statements.

The Company enters into interest rate and foreign exchange contracts to meet the financial needs of customers that it includes in its financial statements as other non-hedging derivatives within other assets and other liabilities. Financial instruments utilized for such activities consist predominantly of interest rate swap agreements and forward and futures contracts related to foreign currencies. The Company generally mitigates the foreign currency and interest rate risk associated with customer activities by entering into offsetting positions with third parties that are also included in other assets and other liabilities. The fair values of non-hedging derivative positions associated with interest rate contracts and foreign currency and other option and futures contracts are presented in note 10 of Notes to Financial Statements. As with any non-government guaranteed financial instrument, the Company is exposed to credit risk associated with counterparties to the Company’s non-hedging derivative activities. Although the notional amounts of these contracts are not recorded in the Consolidated Balance Sheet, the unsettled fair values of such financial instruments are recorded in the Consolidated Balance Sheet. The fair values of such non-hedging derivative assets and liabilities recognized on the Consolidated Balance Sheet were $258 million and $1.0 billion, respectively, at March 31, 2024 and $256 million and $898 million, respectively, at December 31, 2023. The fair value asset and liability amounts at March 31, 2024 have been reduced by contractual settlements of $893 million and $16 million, respectively, and at December 31, 2023 have been reduced by contractual settlements of $783 million and $32 million, respectively. The amounts associated with the Company's non-hedging derivative activities at March 31, 2024 and December 31, 2023 reflect changes in values associated with interest rate swap agreements entered into with commercial customers that are not subject to periodic variation margin settlement payments.

Trading account assets were $99 million at March 31, 2024 and $106 million at December 31, 2023. Included in trading account assets were assets related to deferred compensation plans of $22 million at each of March 31, 2024 and December 31, 2023. Changes in the fair values of such assets are recorded as trading account and other non-hedging derivative gains in the Consolidated Statement of Income. Included in accrued interest and other liabilities in the Consolidated Balance Sheet was $27 million of liabilities related to deferred compensation plans at each of March 31, 2024 and December 31, 2023. Changes in the balances of such liabilities due to the valuation of allocated investment options to which the liabilities are indexed and recorded in other costs of operations in the Consolidated Statement of Income. Also included in trading account assets were investments in mutual funds and other assets that the Company was required to hold under terms of certain non-qualified supplemental retirement and other benefit plans that were assumed by the Company in various acquisitions. Those assets totaled $77 million at March 31, 2024 and $80 million at December 31, 2023.

Given the Company’s policies and positions, management believes that the potential loss exposure to the Company resulting from market risk associated with trading account and other non-hedging derivative activities was not material, however, as previously noted, the Company is exposed to credit risk associated with counterparties to transactions

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related to the Company’s actions to mitigate foreign currency and interest rate risk associated with customer activities. Information about the Company’s use of derivative financial instruments is included in note 10 of Notes to Financial Statements.

Capital

The following table presents components related to shareholders' equity and dividends. Reconciliations of total common shareholders’ equity and tangible common equity and total assets and tangible assets as of each of those dates are presented in Table 2.

SHAREHOLDERS' EQUITY, DIVIDENDS AND SELECT RATIOS

(Dollars in millions, except per share)	March 31, 2024				December 31, 2023				March 31, 2023
Shareholders' equity	$	27,169			$	26,957			$	25,377
Preferred stock		(2,011	)			(2,011	)			(2,011	)
Common shareholders' equity	$	25,158			$	24,946			$	23,366
Per share:
Common shareholders’ equity	$	150.90			$	150.15			$	140.88
Tangible common shareholders’ equity		99.54				98.54				88.81
Ratios:
Shareholder's equity to total assets		12.63	%			12.94	%			12.50	%
Tangible common shareholders' equity to tangible assets		8.03				8.20				7.58
Cash dividends declared for quarter ended:
Common stock	$	218			$	217			$	219
Common stock per share		1.30				1.30				1.30
Preferred stock		25				25				25

Shareholders’ equity reflects accumulated other comprehensive income or loss, which includes the net after-tax impact of unrealized gains or losses on investment securities classified as available for sale, gains or losses associated with interest rate swap agreements designated as cash flow hedges and adjustments to reflect the funded status of defined benefit pension and other postretirement plans. The components of other comprehensive income (loss) are presented in the following table.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - NET OF INCOME TAX

	March 31,				December 31,				March 31,
(Dollars in millions, except per share)	2024				2023				2023
Investment securities unrealized losses, net (a)	$	(197	)		$	(187	)		$	(264	)
Cash flow hedges unrealized losses, net (b)		(268	)			(151	)			(169	)
Defined benefit plans adjustments, net (c)		(116	)			(115	)			(204	)
Other, net		(8	)			(6	)			(8	)
Total	$	(589	)		$	(459	)		$	(645	)
Accumulated other comprehensive income (loss), net, per common share	$	(3.53	)		$	(2.76	)		$	(3.89	)

(a)

Refer to note 3 of Notes to Financial Statements.

(b)

Refer to note 10 of Notes to Financial Statements.

(c)

Refer to note 7 of Notes to Financial Statements.

Reflected in the carrying amount of available-for-sale investment securities at March 31, 2024 were pre-tax effect unrealized gains of $1 million on securities with an amortized cost of $622 million and pre-tax effect unrealized losses of $264 million on securities with an amortized cost of $11.8 billion. Information concerning the Company’s fair valuations of investment securities is provided in notes 3 and 12 of Notes to Financial Statements. As also described in note 3 of Notes to Financial Statements, the Company does not expect any material credit-related losses with respect to its investment securities portfolio at March 31, 2024.

Pursuant to previously approved capital plans and authorizations approved by M&T's Board of Directors, M&T repurchased 3,838,157 shares of its common stock for a total cost of $600 million, including the share repurchase excise tax, under the program in the first quarter of 2023. There were no shares of common stock repurchased in the fourth quarter of 2023 and the first quarter of 2024.

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M&T and its subsidiary banks are required to comply with applicable Capital Rules. Pursuant to those regulations, the minimum capital ratios are as follows:

4.5% CET1 to RWA (each as defined in the Capital Rules);

6.0% Tier 1 capital (that is, CET1 plus additional Tier 1 capital) to RWA (each as defined in the Capital Rules);

8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to RWA (each as defined in the Capital Rules); and

4.0% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”), as defined in the Capital Rules.

Capital Rules require buffers in addition to the minimum risk-based capital ratios noted above. M&T is subject to a SCB 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. Based on the Federal Reserve's most recent supervisory stress tests M&T's SCB is 4.0%.

The regulatory capital ratios of the Company and its bank subsidiaries, M&T Bank and Wilmington Trust, N.A., as of March 31, 2024 are presented in the accompanying table.

REGULATORY CAPITAL RATIOS

March 31, 2024

	M&T				M&T				Wilmington
(Dollars in millions)	(Consolidated)				Bank				Trust, N.A.
CET1		11.08	%			11.66	%			260.57	%
Tier 1 capital		12.38				11.66				260.57
Total capital		14.04				13.11				260.98
Tier 1 leverage		9.47				8.90				86.02
RWA	$	155,338			$	154,730			$	227

Capital Rules generally require the deduction of goodwill and core deposit and other intangible assets, net of applicable deferred taxes, from the calculation of capital in the determination of the minimum capital ratios. As a result of previous business acquisitions, the Company recorded goodwill of $8.5 billion and core deposit and other intangible assets of $132 million at March 31, 2024. Goodwill, as required by GAAP, is not amortized, but rather is tested for impairment at least annually at the business reporting unit level. The Company completed its annual goodwill impairment test in the fourth quarter of 2023 and concluded the amount of goodwill was not impaired at the testing date. The Company has not identified events or circumstances that would more likely than not reduce the fair value of a business reporting unit below its carrying amount at March 31, 2024. Should a business reporting unit with assigned goodwill experience declines in revenue, increased credit losses or expenses, or other adverse developments due to economic, regulatory, competition or other factors, that would be material to that reporting unit, an impairment of goodwill could occur in a future period that could be material to the Company's Consolidated Balance Sheet and its Consolidated Statement of Income. Although a goodwill impairment charge would not have a significant impact on the Company's regulatory tangible capital ratios, it would reduce the capacity of its bank subsidiary, M&T Bank, to dividend earnings to M&T. As described herein under the heading "Liquidity Risk", M&T's parent company liquidity at March 31, 2024 covered projected cash outflows for more than 24 months, including dividends on common and preferred stock, debt service and scheduled debt maturities. Information concerning goodwill and other intangible assets is included in note 8 of Notes to Financial Statements in the 2023 Annual Report.

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The Company is subject to the comprehensive regulatory framework applicable to bank and financial holding companies and their subsidiaries, which includes examinations by a number of regulators. Regulation of financial institutions such as M&T and its subsidiaries is intended primarily for the protection of depositors, the DIF of the FDIC and the banking and financial system as a whole, and generally is not intended for the protection of shareholders, investors or creditors other than insured depositors. Changes in laws, regulations and regulatory policies applicable to the Company’s operations can increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive environment in which the Company operates, all of which could have a material effect on the business, financial condition or results of operations of the Company and in M&T’s ability to pay dividends. For additional information concerning this comprehensive regulatory framework, refer to Part I, Item 1 of the 2023 Annual Report.

On July 27, 2023, the federal banking agencies issued a notice of proposed rulemaking to modify the regulatory capital requirements applicable to large banking organizations with over $100 billion of total assets and their depository institution subsidiaries. The proposed rule would generally require banking organizations subject to Category III and IV standards, like the Company, to compute their regulatory capital consistent with Category I and II standards. Management is in the process of evaluating the impact of the proposed rule on the regulatory capital requirements of M&T and its subsidiary banks and currently estimates the proposed rules would increase the Company's RWA by a percentage in the mid-single digits.

Segment Information

Reportable segments have been determined based upon the Company's organizational structure and its internal profitability reporting system. Financial information about the Company's segments is presented in note 14 of Notes to Financial Statements. The reportable segments are Commercial Bank, Retail Bank, and Institutional Services and Wealth Management. All other business activities that are not included in the three reportable segment results have been included in the "All Other" category.

NET INCOME (LOSS) BY SEGMENT

		Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions)		March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Net income (loss)
Commercial Bank		$	201			$	220			$	(19	)			-9	%		$	201			$	333			$	(132	)			-40	%
Retail Bank			446				438				8				2				446				452				(6	)			-1
Institutional Services and Wealth Management			128				105				23				21				128				110				18				16
All Other			(244	)			(281	)			37				13				(244	)			(193	)			(51	)			-26
Total net income		$	531			$	482			$	49				10	%		$	531			$	702			$	(171	)			-24	%

Commercial Bank

The Commercial Bank segment provides a wide range of credit products and banking services to middle-market and large commercial customers, mainly within the markets served by the Company. Services provided by this segment include commercial lending and leasing, credit facilities which are secured by various types of commercial real estate, letters of credit, deposit products and cash management services. Commercial real estate loans may be secured by multifamily residential buildings, hotels, office, retail and industrial space or other types of collateral. Activities of this segment include the origination, sales and servicing of commercial real estate loans through the Fannie Mae DUS program and other programs. Commercial real estate loans held for sale are included in this segment.

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COMMERCIAL BANK SEGMENT FINANCIAL SUMMARY

		Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions)		March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Income Statement
Net interest income		$	548			$	583			$	(35	)			-6	%		$	548			$	649			$	(101	)			-16	%
Noninterest income			151				176				(25	)			-14				151				162				(11	)			-7
Total revenue			699				759				(60	)			-8				699				811				(112	)			-14
Provision for credit losses			77				113				(36	)			-31				77				34				43				129
Noninterest expense			345				344				1				—				345				322				23				7
Income before taxes			277				302				(25	)			-9				277				455				(178	)			-39
Income taxes			76				82				(6	)			-8				76				122				(46	)			-38
Net income		$	201			$	220			$	(19	)			-9	%		$	201			$	333			$	(132	)			-40	%
Average Balance Sheet
Loans and leases:
Commercial and industrial		$	49,048			$	47,717			$	1,331				3	%		$	49,048			$	44,655			$	4,393				10	%
Commercial real estate			30,747				31,489				(742	)			-2				30,747				33,280				(2,533	)			-8
Residential real estate			447				444				3				1				447				329				118				36
Consumer			25				21				4				14				25				25				—				-3
Total loans and leases, net		$	80,267			$	79,671			$	596				1	%		$	80,267			$	78,289			$	1,978				3	%
Deposits:
Noninterest-bearing			13,459				14,527				(1,068	)			-7				13,459				20,206				(6,747	)			-33
Interest-bearing			30,074				29,127				947				3				30,074				22,593				7,481				33
Total deposits		$	43,533			$	43,654			$	(121	)			—	%		$	43,533			$	42,799			$	734				2	%

The Commercial Bank segment’s net income was $201 million in the first quarter of 2024, compared with $220 million in the fourth quarter of 2023.

Net interest income declined $35 million reflecting a narrowing of the net interest margin on loans and deposits by 13 basis points and 4 basis points, respectively.

Noninterest income decreased $25 million reflecting lower commercial mortgage banking revenues and a decrease in credit-related fees (predominantly loan syndication fees).

The provision for credit losses decreased $36 million reflecting lower net charge-offs on loans secured by commercial real estate, partially offset by higher net charge-offs on commercial and industrial loans.

Average loans and leases increased $596 million reflecting $1.3 billion of growth in average commercial and industrial loans that spanned most industry types, partially offset by a reduction in average commercial real estate loans.

Average deposits in the recent quarter as compared with the final quarter of 2023 reflect a shift from noninterest-bearing accounts to interest-bearing products amidst an elevated interest rate environment.

Net income for the Commercial Bank segment declined $132 million in the first quarter of 2024 from $333 million in the year-earlier quarter.

Net interest income declined $101 million reflecting a narrowing of the net interest margin on loans and deposits of 37 basis points and 43 basis points, respectively, partially offset by a rise in average outstanding loan balances of $2.0 billion.

Noninterest income decreased $11 million due to lower gains on sales of leased equipment and lower gains on commercial mortgage loans originated for sale, partially offset by higher service charges on commercial deposit accounts.

The provision for credit losses increased $43 million reflecting higher net charge-offs on commercial and industrial loans, partially offset by lower net charge-offs on loans secured by commercial real estate.

Noninterest expense increased $23 million reflecting a rise in centrally-allocated costs associated with data processing, risk management and other support services provided to the Commercial Bank segment of $21 million.

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The increase in average loans from the first quarter of 2023 reflects higher average balances of commercial and industrial loans including growth in loans to financial and insurance industry customers and to motor-vehicle and recreational finance dealers, partially offset by a reduction in average permanent commercial real estate and average construction loans.

Average deposits grew $734 million from the year-earlier first quarter and reflected a shift in customer funds from noninterest-bearing accounts to interest-bearing products amidst an elevated interest rate environment.

Retail Bank

The Retail Bank segment provides a wide range of services to consumers and small businesses through the Company’s branch network and several other delivery channels such as telephone banking, internet banking and automated teller machines. The Company has branch offices in New York State, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Massachusetts, Maine, Vermont, New Hampshire, Virginia, West Virginia and the District of Columbia. The segment offers to its customers deposit products, including demand, savings and time accounts, and other services. Credit services offered by this segment include automobile and recreational finance loans (originated both directly and indirectly through dealers), home equity loans and lines of credit, credit cards and other loan products. This segment also originates and services residential mortgage loans and either sells those loans in the secondary market to investors or retains them for investment purposes. Residential mortgage loans are also originated and serviced on behalf of the Institutional Services and Wealth Management segment. The Company periodically purchases the rights to service residential real estate loans that have been originated by other entities and also sub-services residential real estate loans for others. Residential real estate loans held for sale are included in this segment. This segment also provides various business loans, including loans guaranteed by the SBA, business credit cards, deposit products and services such as cash management, payroll and direct deposit, merchant credit card and letters of credits to small businesses and professionals through the Company's branch network and other delivery channels.

RETAIL BANK SEGMENT FINANCIAL SUMMARY

		Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions)		March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Income Statement
Net interest income		$	1,071			$	1,083			$	(12	)			-1	%		$	1,071			$	1,064			$	7				1	%
Noninterest income			197				194				3				2				197				170				27				16
Total revenue			1,268				1,277				(9	)			-1				1,268				1,234				34				3
Provision for credit losses			68				56				12				22				68				43				25				61
Noninterest expense			599				629				(30	)			-5				599				580				19				3
Income before taxes			601				592				9				1				601				611				(10	)			-1
Income taxes			155				154				1				—				155				159				(4	)			-3
Net income		$	446			$	438			$	8				2	%		$	446			$	452			$	(6	)			-1	%
Average Balance Sheet
Loans and leases:
Commercial and industrial		$	6,874			$	6,766			$	108				2	%		$	6,874			$	6,819			$	55				1	%
Commercial real estate			1,904				1,908				(4	)			—				1,904				1,909				(5	)			—
Residential real estate			20,843				21,057				(214	)			-1				20,843				21,721				(878	)			-4
Consumer			20,387				19,762				625				3				20,387				19,645				742				4
Total loans and leases, net		$	50,008			$	49,493			$	515				1	%		$	50,008			$	50,094			$	(86	)			—	%
Deposits:
Noninterest-bearing			25,380				26,474				(1,094	)			-4				25,380				30,552				(5,172	)			-17
Interest-bearing			66,269				65,448				821				1				66,269				61,317				4,952				8
Total deposits		$	91,649			$	91,922			$	(273	)			—	%		$	91,649			$	91,869			$	(220	)			—	%

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The Retail Bank segment’s net income increased $8 million to $446 million in the first quarter of 2024 from $438 million in the final quarter of 2023.

Net interest income declined $12 million.

Noninterest income increased $3 million.

The provision for credit losses increased $12 million reflecting higher net charge-offs of recreational finance loans, indirect auto loans and business banking loans.

Noninterest expenses declined $30 million due to declines in equipment and net occupancy costs of $10 million, centrally-allocated costs associated with data processing, risk management, and other support services provided to the Retail Bank segment of $8 million and advertising and marketing expenses of $7 million.

Average loans increased $515 million reflecting growth in the segment's portfolio of recreational finance loans and automobile loans.

Average deposits in the recent quarter as compared with the final quarter of 2023 reflect a shift from noninterest-bearing accounts to interest-bearing products amidst an elevated interest rate environment.

Net income for the Retail Bank segment decreased $6 million in the recent quarter from $452 million in the first quarter of 2023.

Net interest income rose $7 million.

Noninterest income increased $27 million primarily due to higher residential mortgage banking revenues reflecting a rise in servicing income from the bulk purchase of residential mortgage loan servicing rights at the end of the first quarter of 2023 and an increase in service charges on deposit accounts.

The provision for credit losses increased $25 million reflecting higher net charge-offs of consumer loans.

Noninterest expense rose $19 million predominantly due to higher centrally-allocated costs associated with data processing, risk management, and other support services provided to the Retail Bank segment of $22 million, partially offset by a decrease in personnel-related costs reflecting lower staffing levels.

Average loans in the recent quarter declined slightly from the first quarter of 2023, reflecting lower balances of residential real estate loans, partially offset by higher average consumer loans resulting from growth of recreational finance loan balances. In the first quarter of 2023, the Company returned to originating for sale the majority of its newly originated residential mortgage loans.

Average deposits in the recent quarter as compared with the first quarter of 2023 reflect a shift from noninterest-bearing accounts to interest-bearing products amidst an elevated interest rate environment.

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Institutional Services & Wealth Management

The Institutional Services and Wealth Management segment provides a variety of trustee, agency, investment management and administrative services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients, as well as personal trust, planning, fiduciary, asset management, family office and other services designed to help high net worth individuals and families grow, preserve and transfer wealth. This segment also provides investment products, including mutual funds and annuities and other services to customers.

INSTITUTIONAL SERVICES & WEALTH MANAGEMENT SEGMENT FINANCIAL SUMMARY

		Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions)		March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Income Statement
Net interest income		$	186			$	176			$	10				6	%		$	186			$	170			$	16				9	%
Noninterest income			191				186				5				3				191				220				(29	)			-13
Total revenue			377				362				15				4				377				390				(13	)			-4
Provision for credit losses			—				—				—				—				—				—				—				—
Noninterest expense			205				219				(14	)			-6				205				241				(36	)			-15
Income before taxes			172				143				29				21				172				149				23				15
Income taxes			44				38				6				19				44				39				5				14
Net income		$	128			$	105			$	23				21	%		$	128			$	110			$	18				16	%
Average Balance Sheet
Loans and leases:
Commercial and industrial		$	783			$	761			$	22				3	%		$	783			$	787			$	(4	)			-1	%
Commercial real estate			48				56				(8	)			-13				48				53				(5	)			-9
Residential real estate			1,846				1,838				8				—				1,846				1,720				126				7
Consumer			722				766				(44	)			-6				722				812				(90	)			-11
Total loans and leases, net		$	3,399			$	3,421			$	(22	)			-1	%		$	3,399			$	3,372			$	27				1	%
Deposits:
Noninterest-bearing			9,081				8,477				604				7				9,081				10,363				(1,282	)			-12
Interest-bearing			7,168				6,759				409				6				7,168				7,970				(802	)			-10
Total deposits		$	16,249			$	15,236			$	1,013				7	%		$	16,249			$	18,333			$	(2,084	)			-11	%

The Institutional Services and Wealth Management segment’s net income increased $23 million to $128 million in the first quarter of 2024 from $105 million in the last quarter of 2023.

Net interest income increased $10 million reflecting a widening of the net interest margin on deposits of 3 basis points and a $1.0 billion increase in average outstanding deposit balances.

Noninterest income increased $5 million reflecting higher brokerage fee and trust income.

Noninterest expenses decreased $14 million reflecting a decline in personnel-related costs and professional and other services.

Net income for the Institutional Services and Wealth Management segment increased $18 million in the recent quarter from $110 million in the year-earlier first quarter.

Net interest income increased $16 million reflecting a widening of the net interest margin on deposits of 80 basis points, partially offset by a $2.1 billion decline in average outstanding deposit balances.

Noninterest income decreased $29 million predominantly due to lower trust income of $34 million reflecting lower revenues associated with the CIT business of approximately $45 million following its sale in April 2023, partially offset by higher revenues from the segment’s global capital markets business. An increase in brokerage services income reflecting sales of annuity products partially offset the trust income decline.

Noninterest expenses decreased $36 million reflecting a $39 million decline in professional and other services due, in part, to lower sub-advisory fees as a result of the sale of the CIT business, partially offset by an increase in centrally-allocated costs associated with data processing, risk management and other support services provided to the Institutional Services and Wealth Management segment.

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All Other

The “All Other” category reflects other activities of the Company that are not directly attributable to the reported segments. Reflected in this category are 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 the acquisitions of financial institutions; merger-related gains and expenses related to acquisitions; the net impact of the Company’s internal funds transfer pricing methodology; eliminations of transactions between reportable segments; certain non-recurring transactions; and the residual effects of unallocated support systems and general and administrative expenses. The Company’s investment securities portfolio, brokered deposits and short-term and long-term borrowings are generally included in the “All Other” category. In its management of interest rate risk, the Company utilizes interest rate swap agreements to modify the repricing characteristics of certain portfolios of earning assets and interest-bearing liabilities. The results of such activities are captured in the "All Other" category.

ALL OTHER CATEGORY FINANCIAL SUMMARY

		Three Months Ended								Change								Three Months Ended								Change
(Dollars in millions)		March 31, 2024				December 31, 2023				Amount				%				March 31, 2024				March 31, 2023				Amount				%
Income Statement
Net interest income (expense)		$	(125	)		$	(120	)		$	(5	)			4	%		$	(125	)		$	(65	)		$	(60	)			91	%
Noninterest income			41				22				19				76				41				35				6				16
Total revenue (expense)			(84	)			(98	)			14				-13				(84	)			(30	)			(54	)			179
Provision for credit losses			55				56				(1	)			—				55				43				12				25
Noninterest expense			247				258				(11	)			-5				247				216				31				15
Income before taxes			(386	)			(412	)			26				-6				(386	)			(289	)			(97	)			34
Income taxes			(142	)			(131	)			(11	)			9				(142	)			(96	)			(46	)			49
Net income		$	(244	)		$	(281	)		$	37				-13	%		$	(244	)		$	(193	)		$	(51	)			26	%

The “All Other” category recorded a net loss in the first quarter of 2024 of $244 million, compared with a net loss of $281 million in the fourth quarter of 2023.

Net interest income decreased $5 million.

Noninterest income increased $19 million primarily reflecting BLG distributions of $25 million, partially offset by a decline in tax-exempt income earned from bank owned life insurance revenue.

Noninterest expense decreased $11 million reflecting a decline in FDIC assessment expense of $169 million due to the $197 million special assessment expense recorded in the fourth quarter of 2023, partially offset by the incremental special assessment expense of $29 million recorded in the first quarter of 2024. The decrease was partially offset by a rise in personnel-related costs of $109 million reflecting merit increases and seasonally higher stock-based compensation and employee benefits expenses; an increase in other costs of operations of $27 million reflecting higher costs associated with the Company's supplemental executive retirement savings plan, losses on lease terminations related to certain vacated properties and incremental charitable contributions as compared with the fourth quarter of 2023; and increased outside data processing and software expense of $8 million.

The net loss recorded for the “All Other” category was $193 million in the first quarter 2023.

Net interest income decreased $60 million reflecting higher net interest expense from interest rate swap agreements entered into for interest rate risk management purposes, as well as the unfavorable impact from the Company’s allocation methodologies for internal transfers related to funding charges and credits associated with earning assets and interest-bearing liabilities of the Company’s reportable segments.

Noninterest income increased $6 million reflecting an increase in BLG distributions of $5 million.

The $12 million increase in the provision for credit losses reflects the net impact of the allocation of provision to reportable segments.

Noninterest expense increased $31 million reflecting estimated incremental special FDIC assessment expense of $29 million recorded in the first quarter of 2024.

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Other Matters

On March 6, 2024, the SEC adopted a final rule to enhance and standardize climate-related disclosures by public companies. The final rule requires registrants, including the Company, to disclose their risk management processes for material climate-related risks, governance and oversight of material climate-risks and any risks that have materially impacted, or are reasonably likely to have a material impact on, its business strategy, results of operations or financial condition. Additionally, the final rule requires disclosure of material Scope 1 and Scope 2 greenhouse gas emissions, material climate targets and goals and certain disclosures related to severe weather events and other natural conditions. Such disclosures will be required in a registrant’s annual reporting under a phased-in approach beginning with annual reports for the year ending December 31, 2025 for calendar-year-end large accelerated filers, such as M&T. On April 4, 2024, the SEC issued an order to stay the final rule pending the completion of judicial review by the United States Court of Appeals for the Eighth Circuit.

Recent Accounting Developments

A discussion of the Company's significant accounting policies and critical accounting estimates can be found in the 2023 Annual Report. A summary of recent accounting developments is included in note 1 of Notes to Financial Statements.

Forward-Looking Statements

Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this quarterly report contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statement that does not describe historical or current facts is a forward-looking statement, including statements based on current expectations, estimates and projections about the Company’s business, and management's beliefs and assumptions.

Statements regarding the potential effects of events or factors specific to the Company and/or the financial industry as a whole, as well as national and global events generally, on the Company's business, financial condition, liquidity and results of operations may constitute forward-looking statements. Such statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the Company's control.

Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," or "potential," by future conditional verbs such as "will," "would," "should," "could," or "may," or by variations of such words or by similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and may cause actual outcomes to differ materially from what is expressed or forecasted.

While there can be no assurance that any list of risks and uncertainties is complete, important factors that could cause actual outcomes and results to differ materially from those contemplated by forward-looking statements include the following, without limitation: economic conditions and growth rates, including inflation and market volatility; events and developments in the financial services industry, including industry conditions; changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, loan concentrations by type and industry, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; levels of client deposits; ability to contain costs and expenses; changes in the Company's credit ratings; the impact of the People's United acquisition; domestic or international political developments and other geopolitical events, including international conflicts and hostilities; changes and trends in the securities markets; common shares outstanding, common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on trust-related revenues; federal, state or local legislation and/or regulations affecting the financial services industry, or M&T and its subsidiaries individually or collectively, including tax policy; regulatory supervision and oversight, including monetary policy and capital requirements; governmental and public policy changes; political conditions, either nationally or in the states in which M&T and its subsidiaries do business; the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters; changes in accounting policies or procedures as may be required

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by the Financial Accounting Standards Board, regulatory agencies or legislation; increasing price, product and service competition by competitors, including new entrants; technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products and services; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; continued availability of financing; financial resources in the amounts, at the times and on the terms required to support M&T and its subsidiaries' future businesses; and material differences in the actual financial results of merger, acquisition, divestment and investment activities compared with M&T's initial expectations, including the full realization of anticipated cost savings and revenue enhancements.

These are representative of the factors that could affect the outcome of the forward-looking statements. In addition, as noted, such statements could be affected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or in the states in which the Company does business, and other factors.

The Company provides further detail regarding these risks and uncertainties in the 2023 Annual Report, including in the Risk Factors section of such report, as well as in other SEC filings. Forward-looking statements speak only as of the date they are made, and the Company assumes no duty and does not undertake to update forward-looking statements.

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M&T BANK CORPORATION AND SUBSIDIARIES

Table 1

QUARTERLY TRENDS

	2024				2023 Quarters
(Dollars in millions, except per share, shares in thousands)	First Quarter				Fourth				Third				Second				First
Earnings and dividends
Interest income (taxable-equivalent basis)	$	2,757			$	2,753			$	2,656			$	2,530			$	2,341
Interest expense		1,065				1,018				866				717				509
Net interest income		1,692				1,735				1,790				1,813				1,832
Less: provision for credit losses		200				225				150				150				120
Other income		580				578				560				803				587
Less: other expense		1,396				1,450				1,278				1,293				1,359
Income before income taxes		676				638				922				1,173				940
Applicable income taxes		133				143				217				292				224
Taxable-equivalent adjustment		12				13				15				14				14
Net income	$	531			$	482			$	690			$	867			$	702
Net income available to common shareholders-diluted	$	505			$	457			$	664			$	841			$	676
Per common share data:
Basic earnings		3.04				2.75				4.00				5.07				4.03
Diluted earnings		3.02				2.74				3.98				5.05				4.01
Cash dividends		1.30				1.30				1.30				1.30				1.30
Average common shares outstanding:
Basic		166,460				165,985				165,909				165,842				167,732
Diluted		167,084				166,731				166,570				166,320				168,410
Performance ratios, annualized
Return on:
Average assets		1.01	%			.92	%			1.33	%			1.70	%			1.40	%
Average common shareholders’ equity		8.14				7.41				10.99				14.27				11.74
Net interest margin on average earning assets (taxable-equivalent basis)		3.52				3.61				3.79				3.91				4.04
Nonaccrual loans to total loans and leases, net of unearned discount		1.71				1.62				1.77				1.83				1.92
Net operating (tangible) results (a)
Net operating income	$	543			$	494			$	702			$	879			$	715
Diluted net operating income per common share	3.09					2.81				4.05				5.12				4.09
Annualized return on:
Average tangible assets		1.08	%			.98	%			1.41	%			1.80	%			1.49	%
Average tangible common shareholders’ equity		12.67				11.70			17.41				22.73					19.00
Efficiency ratio (b)		60.8				62.1				53.7				48.9				55.5
Balance sheet data
Average balances:
Total assets (c)	$	211,478			$	208,752			$	205,791			$	204,376			$	202,599
Total tangible assets (c)		202,906				200,172				197,199				195,764				193,957
Earning assets		193,135				190,536				187,403				185,936				184,069
Investment securities		28,587				27,490				27,993				28,623				27,622
Loans and leases, net of unearned discount		133,796				132,770				132,617				133,545				132,012
Deposits		164,065				164,713				162,688				159,399				161,537
Borrowings		16,001				13,057				12,585				15,055				11,505
Common shareholders’ equity (c)		25,008				24,489				24,009				23,674				23,366
Tangible common shareholders’ equity (c)		16,436				15,909				15,417				15,062				14,724
At end of quarter:
Total assets (c)		215,137				208,264				209,124				207,672				202,956
Total tangible assets (c)		206,574				199,689				200,538				199,074				194,321
Earning assets		195,712				189,140				189,942				188,504				183,853
Investment securities		28,496				26,897				27,336				27,916				28,443
Loans and leases, net of unearned discount		134,973				134,068				132,355				133,344				132,938
Deposits		167,196				163,274				164,128				162,058				159,075
Borrowings		16,245				13,517				13,854				15,325				14,458
Common shareholders’ equity (c)		25,158				24,946				24,186				23,790				23,366
Tangible common shareholders’ equity (c)		16,595				16,371				15,600				15,192				14,731
Equity per common share		150.90				150.15				145.72				143.41				140.88
Tangible equity per common share		99.54				98.54				93.99				91.58				88.81

(a)

Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects. A reconciliation of net income and net operating income appears in Table 2.

(b)

Excludes impact of merger-related expenses and net securities transactions.

(c)

The difference between total assets and total tangible assets, and common shareholders’ equity and tangible common shareholders’ equity, represents goodwill, core deposit and other intangible assets, net of applicable deferred tax balances. A reconciliation of such balances appears in Table 2.

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M&T BANK CORPORATION AND SUBSIDIARIES

Table 2

RECONCILIATION OF QUARTERLY GAAP TO NON-GAAP MEASURES

		2024				2023 Quarters
(Dollars in millions, except per share)		First Quarter				Fourth				Third				Second				First
Income statement data
Net income
Net income		$	531			$	482			$	690			$	867			$	702
Amortization of core deposit and other intangible assets (a)			12				12				12				12				13
Net operating income		$	543			$	494			$	702			$	879			$	715
Earnings per common share
Diluted earnings per common share		$	3.02			$	2.74			$	3.98			$	5.05			$	4.01
Amortization of core deposit and other intangible assets (a)			.07				.07				.07				.07				.08
Diluted net operating earnings per common share		$	3.09			$	2.81			$	4.05			$	5.12			$	4.09
Other expense
Other expense		$	1,396			$	1,450			$	1,278			$	1,293			$	1,359
Amortization of core deposit and other intangible assets			(15	)			(15	)			(15	)			(15	)			(17	)
Noninterest operating expense		$	1,381			$	1,435			$	1,263			$	1,278			$	1,342
Efficiency ratio
Noninterest operating expense (numerator)		$	1,381			$	1,435			$	1,263			$	1,278			$	1,342
Taxable-equivalent net interest income		$	1,692			$	1,735			$	1,790			$	1,813			$	1,832
Other income			580				578				560				803				587
Less: Gain (loss) on bank investment securities			2				4				—				1				—
Denominator		$	2,270			$	2,309			$	2,350			$	2,615			$	2,419
Efficiency ratio			60.8	%			62.1	%			53.7	%			48.9	%			55.5	%
Balance sheet data
Average assets
Average assets		$	211,478			$	208,752			$	205,791			$	204,376			$	202,599
Goodwill			(8,465	)			(8,465	)			(8,465	)			(8,473	)			(8,490	)
Core deposit and other intangible assets			(140	)			(154	)			(170	)			(185	)			(201	)
Deferred taxes			33				39				43				46				49
Average tangible assets		$	202,906			$	200,172			$	197,199			$	195,764			$	193,957
Average common equity
Average total equity		$	27,019			$	26,500			$	26,020			$	25,685			$	25,377
Preferred stock			(2,011	)			(2,011	)			(2,011	)			(2,011	)			(2,011	)
Average common equity			25,008				24,489				24,009				23,674				23,366
Goodwill			(8,465	)			(8,465	)			(8,465	)			(8,473	)			(8,490	)
Core deposit and other intangible assets			(140	)			(154	)			(170	)			(185	)			(201	)
Deferred taxes			33				39				43				46				49
Average tangible common equity		$	16,436			$	15,909			$	15,417			$	15,062			$	14,724
At end of quarter
Total assets
Total assets		$	215,137			$	208,264			$	209,124			$	207,672			$	202,956
Goodwill			(8,465	)			(8,465	)			(8,465	)			(8,465	)			(8,490	)
Core deposit and other intangible assets			(132	)			(147	)			(162	)			(177	)			(192	)
Deferred taxes			34				37				41				44				47
Total tangible assets		$	206,574			$	199,689			$	200,538			$	199,074			$	194,321
Total common equity
Total equity		$	27,169			$	26,957			$	26,197			$	25,801			$	25,377
Preferred stock			(2,011	)			(2,011	)			(2,011	)			(2,011	)			(2,011	)
Common equity			25,158				24,946				24,186				23,790				23,366
Goodwill			(8,465	)			(8,465	)			(8,465	)			(8,465	)			(8,490	)
Core deposit and other intangible assets			(132	)			(147	)			(162	)			(177	)			(192	)
Deferred taxes			34				37				41				44				47
Total tangible common equity		$	16,595			$	16,371			$	15,600			$	15,192			$	14,731

(a)

After any related tax effect.

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