Item 1. Financial Statements.

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Item 1. Financial Statements.

M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (Unaudited)


(Dollars in millions, except per share)	June 30, 2024		December 31, 2023
Assets
Cash and due from banks	$	1,778	$	1,731
Interest-bearing deposits at banks	24,792		28,069

Trading account	99		106
Investment securities:
Available for sale (cost: $14,131 at June 30, 2024; $10,691 at December 31, 2023)	13,892		10,440
Held to maturity (fair value: $13,509 at June 30, 2024; $14,308 at December 31, 2023)	14,793		15,330
Equity and other securities (cost: $1,201 at June 30, 2024; $1,125 at December 31, 2023)	1,209		1,127
Total investment securities	29,894		26,897


Loans and leases, net of unearned discount of $990 at June 30, 2024 and $868 at December 31, 2023	135,002		134,068
Allowance for credit losses	(2,204)		(2,129)
Loans and leases, net	132,798		131,939
Premises and equipment	1,719		1,739
Goodwill	8,465		8,465
Core deposit and other intangible assets	119		147
Accrued interest and other assets	9,191		9,171
Total assets	$	208,855	$	208,264
Liabilities
Noninterest-bearing deposits	$	47,729	$	49,294
Savings and interest-checking deposits	94,668		93,221
Time deposits	17,513		20,759
Total deposits	159,910		163,274
Short-term borrowings	4,764		5,316
Accrued interest and other liabilities	4,438		4,516
Long-term borrowings	11,319		8,201
Total liabilities	180,431		181,307
Shareholders' equity
Preferred stock, $1.00 par, 20,000,000 shares authorized; Issued and outstanding: Liquidation preference of $1,000 per share: 350,000 shares at June 30, 2024 and December 31, 2023; Liquidation preference of $10,000 per share: 215,000 shares at June 30, 2024 and 140,000 shares at December 31, 2023; Liquidation preference of $25 per share; 10,000,000 shares at June 30, 2024 and December 31, 2023	2,744		2,011
Common stock, $0.50 par, 250,000,000 shares authorized, 179,436,779 shares issued at June 30, 2024 and December 31, 2023	90		90
Common stock issuable, 11,560 shares at June 30, 2024; 12,217 shares at December 31, 2023	1		1
Additional paid-in capital	9,976		10,020
Retained earnings	18,211		17,524
Accumulated other comprehensive income (loss), net	(551)		(459)
Treasury stock — common, at cost — 12,223,276 shares at June 30, 2024; 13,300,298 shares at December 31, 2023	(2,047)		(2,230)
Total shareholders’ equity	28,424		26,957
Total liabilities and shareholders’ equity	$	208,855	$	208,264

See accompanying notes to financial statements.

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M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME (Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions, except per share, shares in thousands)	2024		2023		2024		2023
Interest income
Loans and leases, including fees	$	2,128	$	1,998	$	4,225	$	3,848
Investment securities:
Fully taxable	244		199		456		381
Exempt from federal taxes	16		16		32		33
Deposits at banks	400		302		819		579
Other	1		1		2		2
Total interest income	2,789		2,516		5,534		4,843
Interest expense
Savings and interest-checking deposits	618		369		1,233		646
Time deposits	217		150		442		239
Short-term borrowings	69		96		153		154
Long-term borrowings	167		102		308		187
Total interest expense	1,071		717		2,136		1,226
Net interest income	1,718		1,799		3,398		3,617
Provision for credit losses	150		150		350		270
Net interest income after provision for credit losses	1,568		1,649		3,048		3,347
Other income
Mortgage banking revenues	106		107		210		192
Service charges on deposit accounts	127		119		251		232
Trust income	170		172		330		366
Brokerage services income	30		25		59		49
Trading account and other non-hedging derivative gains	7		17		16		28
Gain (loss) on bank investment securities	(8)		1		(6)		1
Other revenues from operations	152		362		304		522
Total other income	584		803		1,164		1,390
Other expense
Salaries and employee benefits	764		738		1,597		1,546
Equipment and net occupancy	125		129		254		256
Outside data processing and software	124		106		244		212
Professional and other services	91		100		176		225
FDIC assessments	37		28		97		58
Advertising and marketing	27		28		47		59
Amortization of core deposit and other intangible assets	13		15		28		32
Other costs of operations	116		149		250		264
Total other expense	1,297		1,293		2,693		2,652
Income before taxes	855		1,159		1,519		2,085
Income taxes	200		292		333		516
Net income	$	655	$	867	$	1,186	$	1,569
Net income available to common shareholders
Basic	$	626	$	841	$	1,131	$	1,516
Diluted	626		841		1,131		1,516
Net income per common share
Basic	3.75		5.07		6.79		9.09
Diluted	3.73		5.05		6.76		9.06
Average common shares outstanding
Basic	166,951		165,842		166,705		166,782
Diluted	167,659		166,320		167,372		167,359

See accompanying notes to financial statements.

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M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2024		2023		2024		2023
Net income	$	655	$	867	$	1,186	$	1,569
Other comprehensive income (loss), net of tax and reclassification adjustments:
Net unrealized gains (losses) on investment securities	18		(64)		8		1
Cash flow hedges adjustments	22		(156)		(95)		(75)
Defined benefit plans liability adjustments	(2)		(1)		(3)		(3)
Other	—		1		(2)		2
Total other comprehensive income (loss)	38		(220)		(92)		(75)
Total comprehensive income	$	693	$	647	$	1,094	$	1,494

See accompanying notes to financial statements.

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M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)


	Six Months Ended June 30,
(Dollars in millions)	2024		2023
Cash flows from operating activities
Net income	$	1,186	$	1,569
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	350		270
Depreciation and amortization of premises and equipment	159		149
Amortization of capitalized servicing rights	70		57
Amortization of core deposit and other intangible assets	28		32
Provision for deferred income taxes	(14)		(7)
Asset write-downs	6		1
Net (gain) loss on sales of assets	3		(234)
Net change in accrued interest receivable, payable	—		259
Net change in other accrued income and expense	51		(72)
Net change in loans originated for sale	11		(340)
Net change in trading account and other non-hedging derivative assets and liabilities	112		1
Net cash provided by operating activities	1,962		1,685
Cash flows from investing activities
Proceeds from sales of investment securities:
Available for sale	58		—
Equity and other securities	223		614
Proceeds from maturities of investment securities:
Available for sale	3,522		298
Held to maturity	547		571
Purchases of investment securities:
Available for sale	(7,200)		(344)
Held to maturity	—		(2,948)
Equity and other securities	(294)		(873)
Net increase in loans and leases	(1,258)		(1,645)
Net (increase) decrease in interest-bearing deposits at banks	3,277		(2,148)
Capital expenditures, net	(101)		(101)
Net decrease in loan servicing advances	153		286
Other, net	(384)		(360)
Net cash used by investing activities	(1,457)		(6,650)
Cash flows from financing activities
Net decrease in deposits	(3,366)		(1,455)
Net increase (decrease) in short-term borrowings	(552)		4,353
Proceeds from long-term borrowings	3,357		3,486
Payments on long-term borrowings	(162)		—
Proceeds from issuance of Series J preferred stock	733		—
Purchases of treasury stock	—		(594)
Dividends paid — common	(446)		(436)
Dividends paid — preferred	(58)		(50)
Other, net	36		(11)
Net cash provided (used) by financing activities	(458)		5,293
Net increase in cash, cash equivalents and restricted cash	47		328
Cash, cash equivalents and restricted cash at beginning of period	1,731		1,520
Cash, cash equivalents and restricted cash at end of period	$	1,778	$	1,848
Supplemental disclosure of cash flow information
Interest received during the period	$	5,547	$	4,814
Interest paid during the period	2,115		923
Income taxes paid during the period	106		329
Supplemental schedule of noncash investing and financing activities
Real estate acquired in settlement of loans	23		12
Additions to right-of-use assets under operating leases	43		69

See accompanying notes to financial statements.

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M&T BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)


(Dollars in millions, except per share)	Preferred Stock		Common Stock		Common Stock Issuable		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss), Net		Treasury Stock		Total
Three Months Ended June 30, 2024
Balance — April 1, 2024	$	2,011	$	90	$	1	$	9,976	$	17,812	$	(589)	$	(2,132)	$	27,169
Total comprehensive income	—		—		—		—		655		38		—		693
Issuance of Series J preferred stock	733		—		—		—		—		—		—		733
Preferred stock cash dividends (a)	—		—		—		—		(27)		—		—		(27)

Stock-based compensation transactions, net	—		—		—		—		(1)		—		85		84
Common stock cash dividends — $1.35 per share	—		—		—		—		(228)		—		—		(228)
Balance — June 30, 2024	$	2,744	$	90	$	1	$	9,976	$	18,211	$	(551)	$	(2,047)	$	28,424

Six Months Ended June 30, 2024
Balance — January 1, 2024	$	2,011	$	90	$	1	$	10,020	$	17,524	$	(459)	$	(2,230)	$	26,957
Total comprehensive income	—		—		—		—		1,186		(92)		—		1,094
Issuance of Series J preferred stock	733		—		—		—		—		—		—		733
Preferred stock cash dividends (a)	—		—		—		—		(52)		—		—		(52)

Stock-based compensation transactions, net	—		—		—		(44)		(1)		—		183		138
Common stock cash dividends — $2.65 per share	—		—		—		—		(446)		—		—		(446)
Balance — June 30, 2024	$	2,744	$	90	$	1	$	9,976	$	18,211	$	(551)	$	(2,047)	$	28,424

Three Months Ended June 30, 2023
Balance — April 1, 2023	$	2,011	$	90	$	1	$	9,986	$	16,212	$	(645)	$	(2,278)	$	25,377
Total comprehensive income	—		—		—		—		867		(220)		—		647
Preferred stock cash dividends (a)	—		—		—		—		(25)		—		—		(25)

Stock-based compensation transactions, net	—		—		—		14		—		—		5		19
Common stock cash dividends — $1.30 per share	—		—		—		—		(217)		—		—		(217)
Balance — June 30, 2023	$	2,011	$	90	$	1	$	10,000	$	16,837	$	(865)	$	(2,273)	$	25,801

Six Months Ended June 30, 2023
Balance — January 1, 2023	$	2,011	$	90	$	1	$	10,002	$	15,754	$	(790)	$	(1,750)	$	25,318
Total comprehensive income	—		—		—		—		1,569		(75)		—		1,494




Preferred stock cash dividends (a)	—		—		—		—		(50)		—		—		(50)
Purchases of treasury stock	—		—		—		—		—		—		(600)		(600)
Stock-based compensation transactions, net	—		—		—		(2)		(1)		—		77		74
Common stock cash dividends — $2.60 per share	—		—		—		—		(435)		—		—		(435)
Balance — June 30, 2023	$	2,011	$	90	$	1	$	10,000	$	16,837	$	(865)	$	(2,273)	$	25,801

_______________________________________________________________

*(a)*For the three-month and six-month periods ended June 30, 2024, dividends per share for Preferred Series E were $22.95 and $39.075, respectively. For the three-month and six-month periods ended June 30, 2023 dividends per share for Preferred Series E were $16.125 and $32.25, respectively. For the three-month and six-month periods ended June 30, 2024 and 2023, dividends per preferred share were: Preferred Series F - $128.125 and $256.25, respectively; Preferred Series G - $125.00 and $250.00, respectively; Preferred Series H - $0.3516 and $0.7031, respectively; and Preferred Series I - $87.50 and $175.00, respectively.

See accompanying notes to financial statements.

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NOTES TO FINANCIAL STATEMENTS

1. Significant accounting policies

The consolidated interim financial statements of the Company were compiled in accordance with GAAP using the accounting policies set forth in note 1 of Notes to Financial Statements included in M&T's 2023 Annual Report, except as described in the following table. The financial statements contain all adjustments which are, in the opinion of management, necessary for a fair statement of the Company's financial position, results of operations and cash flows for the interim periods presented.

Recent accounting developments


Standard	Description	Required date of adoption	Effect on consolidated financial statements
Standards Adopted in 2024
Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method	The amendments permit an election to account for tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the income tax credits and other income tax benefits received and the net amortization and income tax credits and other income tax benefits are recognized in the income statement as a component of income tax expense (benefit).	January 1, 2024	As described in note 12, the Company adopted the amended guidance effective January 1, 2024 using a modified retrospective transition. The guidance did not have a material impact on the Company's consolidated financial statements.

2. Divestiture

On April 29, 2023, the Company sold its CIT business to a private equity firm. The transaction resulted in a pre-tax gain of $225 million ($157 million after-tax effect) that has been included in "other revenues from operations" in the Consolidated Statement of Income for the three-month and six-month periods ended June 30, 2023. Prior to the sale, the CIT business contributed $15 million and $60 million to trust income in the three-month and six-month periods ended June 30, 2023, respectively. After considering expenses, the results of operations from the CIT business were not material to the Company's consolidated results of operations in those periods.

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NOTES TO FINANCIAL STATEMENTS, CONTINUED

3. Investment securities

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


(Dollars in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2024
Investment securities available for sale:
U.S. Treasury and federal agencies	$	7,819	$	2	$	85	$	7,736
Mortgage-backed securities:
Government issued or guaranteed:
Commercial	2,101		4		16		2,089
Residential	4,108		6		148		3,966
Other debt securities	103		—		2		101
	14,131		12		251		13,892
Investment securities held to maturity:
U.S. Treasury and federal agencies	1,010		—		30		980
Obligations of states and political subdivisions	2,433		—		127		2,306
Mortgage-backed securities:
Government issued or guaranteed:
Commercial	2,037		—		157		1,880
Residential	9,272		—		972		8,300
Privately issued	40		7		5		42
Other debt securities	1		—		—		1
	14,793		7		1,291		13,509
Total debt securities	$	28,924	$	19	$	1,542	$	27,401
Equity and other securities:
Readily marketable equity — at fair value	$	272	$	11	$	3	$	280
Other — at cost	929		—		—		929
Total equity and other securities	$	1,201	$	11	$	3	$	1,209

December 31, 2023
Investment securities available for sale:
U.S. Treasury and federal agencies	$	7,818	$	—	$	113	$	7,705
Mortgage-backed securities:
Government issued or guaranteed:
Commercial	425		—		9		416
Residential	2,272		—		118		2,154
Other debt securities	176		—		11		165
	10,691		—		251		10,440
Investment securities held to maturity:
U.S. Treasury and federal agencies	1,005		—		31		974
Obligations of states and political subdivisions	2,501		—		67		2,434
Mortgage-backed securities:
Government issued or guaranteed:
Commercial	2,033		—		130		1,903
Residential	9,747		4		802		8,949
Privately issued	42		9		5		46
Other debt securities	2		—		—		2
	15,330		13		1,035		14,308
Total debt securities	$	26,021	$	13	$	1,286	$	24,748
Equity and other securities:
Readily marketable equity — at fair value	$	266	$	5	$	3	$	268
Other — at cost	859		—		—		859
Total equity and other securities	$	1,125	$	5	$	3	$	1,127

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NOTES TO FINANCIAL STATEMENTS, CONTINUED

3. Investment securities, continued

Gross realized losses from sales of investment securities totaled $13 million for each of the three-month and six-month periods ended June 30, 2024. There were no significant gross realized gains recognized for those same 2024 periods. There were no significant gross realized gains or losses from sales of investment securities for the three-month and six-month periods ended June 30, 2023. Unrealized losses on equity securities are included in "gain (loss) on bank investment securities" in the Consolidated Statement of Income.

At June 30, 2024, the amortized cost and estimated fair value of debt securities by contractual maturity were as follows:


(Dollars in millions)	Amortized Cost		Estimated Fair Value
Debt securities available for sale:
Due in one year or less	$	3,133	$	3,093
Due after one year through five years	4,789		4,744
Due after five years through ten years	—		—
Due after ten years	—		—
	7,922		7,837
Mortgage-backed securities	6,209		6,055
	$	14,131	$	13,892
Debt securities held to maturity:
Due in one year or less	$	588	$	579
Due after one year through five years	653		628
Due after five years through ten years	1,392		1,332
Due after ten years	811		748
	3,444		3,287
Mortgage-backed securities	11,349		10,222
	$	14,793	$	13,509

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NOTES TO FINANCIAL STATEMENTS, CONTINUED

3. Investment securities, continued

A summary of investment securities that as of June 30, 2024 and December 31, 2023 had been in a continuous unrealized loss position for less than twelve months and those that had been in a continuous unrealized loss position for twelve months or longer follows:


	Less Than 12 Months				12 Months or More
(Dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2024
Investment securities available for sale:
U.S. Treasury and federal agencies	$	2,586	$	15	$	4,400	$	70
Mortgage-backed securities:
Government issued or guaranteed:
Commercial	1,061		10		317		6
Residential	1,129		11		1,874		137
Other debt securities	10		—		64		2
	4,786		36		6,655		215
Investment securities held to maturity:
U.S. Treasury and federal agencies	—		—		980		30
Obligations of states and political subdivisions	45		1		2,214		126
Mortgage-backed securities:
Government issued or guaranteed:
Commercial	—		—		1,880		157
Residential	790		13		7,510		959
Privately issued	—		—		31		5
	835		14		12,615		1,277
Total	$	5,621	$	50	$	19,270	$	1,492

December 31, 2023
Investment securities available for sale:
U.S. Treasury and federal agencies	$	229	$	1	$	7,474	$	112
Mortgage-backed securities:
Government issued or guaranteed:
Commercial	74		1		330		8
Residential	151		2		1,959		116
Other debt securities	6		—		154		11
	460		4		9,917		247
Investment securities held to maturity:
U.S. Treasury and federal agencies	50		—		924		31
Obligations of states and political subdivisions	218		3		2,172		64
Mortgage-backed securities:
Government issued or guaranteed:
Commercial	328		9		1,575		121
Residential	955		11		7,139		791
Privately issued	—		—		34		5
	1,551		23		11,844		1,012
Total	$	2,011	$	27	$	21,761	$	1,259

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NOTES TO FINANCIAL STATEMENTS, CONTINUED

3. Investment securities, continued

The Company owned 3,996 individual debt securities with aggregate gross unrealized losses of $1.5 billion at June 30, 2024. Based on a review of each of the securities in the investment securities portfolio at June 30, 2024, the Company concluded that it expected to recover the amortized cost basis of its investment. As of June 30, 2024, the Company does not intend to sell, nor is it anticipated that it would be required to sell, any of its impaired investment securities at a loss. At June 30, 2024, the Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of the $929 million of cost method equity securities.

The Company estimated no material allowance for credit losses for its investment securities classified as held-to-maturity at June 30, 2024 or December 31, 2023.

At June 30, 2024 and December 31, 2023, investment securities with carrying values of $7.1 billion (including $311 million related to repurchase transactions) and $8.2 billion (including $393 million related to repurchase transactions), respectively, were pledged to secure borrowings, lines of credit and governmental deposits.

4. Loans and leases and the allowance for credit losses

A summary of current, past due and nonaccrual loans as of June 30, 2024 and December 31, 2023 follows:


(Dollars in millions)	Current		30-89 Days Past Due		Accruing Loans Past Due 90 Days or More		Nonaccrual		Total
June 30, 2024
Commercial and industrial	$	58,982	$	234	$	6	$	805	$	60,027
Real estate:
Commercial (a)	21,913		142		4		707		22,766
Residential builder and developer	1,026		2		—		2		1,030
Other commercial construction	5,581		76		2		77		5,736
Residential (b)	21,023		709		214		205		22,151
Residential — limited documentation	762		35		—		55		852
Consumer:
Home equity lines and loans	4,449		33		—		79		4,561
Recreational finance	11,152		83		—		25		11,260
Automobile	4,459		53		—		11		4,523
Other	2,011		20		7		58		2,096
Total	$	131,358	$	1,387	$	233	$	2,024	$	135,002

December 31, 2023
Commercial and industrial	$	56,091	$	238	$	11	$	670	$	57,010
Real estate:
Commercial (a)	24,072		311		25		869		25,277
Residential builder and developer	1,065		5		—		3		1,073
Other commercial construction	6,322		159		1		171		6,653
Residential (b)	21,080		763		295		215		22,353
Residential — limited documentation	825		31		—		55		911
Consumer:
Home equity lines and loans	4,528		40		—		81		4,649
Recreational finance	9,935		87		—		36		10,058
Automobile	3,918		60		—		14		3,992
Other	2,003		30		7		52		2,092
Total	$	129,839	$	1,724	$	339	$	2,166	$	134,068

_______________________________________________________________

*(a)*Commercial real estate loans held for sale were $168 million at June 30, 2024 and $189 million at December 31, 2023.

*(b)*One-to-four family residential mortgage loans held for sale were $209 million at June 30, 2024 and $190 million at December 31, 2023.

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NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

Credit quality indicators

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 and are generally ascribed lower loss factors when determining the allowance for credit losses. Loans with an elevated level of credit risk are designated as “criticized” and are ascribed a higher loss factor when determining the allowance for credit losses. Criticized loans may be designated as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more.

Line of business personnel in different geographic locations with support from and review by the Company’s credit risk personnel review and reassign loan grades based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. Factors considered in assigning loan grades include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information. The Company’s policy is that at least annually, updated financial information be obtained from commercial borrowers associated with pass grade loans and additional analysis performed. On a quarterly basis, the Company’s credit personnel review 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.

- 14 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

The following table summarizes the loan grades applied at June 30, 2024 to the various classes of the Company’s commercial and industrial loans and commercial real estate loans and gross charge-offs for those types of loans for the three-month and six-month periods ended June 30, 2024 by origination year.


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term Loans		Total
(Dollars in millions)	2024		2023		2022		2021		2020		Prior
Commercial and industrial:
Pass	$	4,226	$	7,554	$	7,107	$	4,199	$	1,932	$	6,299	$	24,139	$	73	$	55,529
Criticized accrual	74		334		443		244		129		738		1,690		41		3,693
Criticized nonaccrual	5		45		97		57		62		221		301		17		805
Total commercial and industrial	$	4,305	$	7,933	$	7,647	$	4,500	$	2,123	$	7,258	$	26,130	$	131	$	60,027
Gross charge-offs three months ended June 30, 2024	$	1	$	7	$	10	$	11	$	7	$	9	$	33	$	—	$	78
Gross charge-offs six months ended June 30, 2024	$	1	$	14	$	19	$	15	$	10	$	14	$	83	$	—	$	156
Real estate:
Commercial:
Pass	$	339	$	1,747	$	1,377	$	1,178	$	1,860	$	10,663	$	395	$	—	$	17,559
Criticized accrual	—		294		726		445		695		2,333		7		—		4,500
Criticized nonaccrual	—		—		22		32		37		615		1		—		707
Total commercial real estate	$	339	$	2,041	$	2,125	$	1,655	$	2,592	$	13,611	$	403	$	—	$	22,766
Gross charge-offs three months ended June 30, 2024	$	—	$	4	$	—	$	—	$	5	$	30	$	—	$	—	$	39
Gross charge-offs six months ended June 30, 2024	$	—	$	4	$	—	$	—	$	5	$	43	$	—	$	—	$	52
Residential builder and developer:
Pass	$	234	$	379	$	119	$	24	$	4	$	11	$	113	$	—	$	884
Criticized accrual	6		52		45		10		—		31		—		—		144
Criticized nonaccrual	—		—		—		1		—		1		—		—		2
Total residential builder and developer	$	240	$	431	$	164	$	35	$	4	$	43	$	113	$	—	$	1,030
Gross charge-offs three months ended June 30, 2024	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	—	$	1
Gross charge-offs six months ended June 30, 2024	$	—	$	—	$	—	$	—	$	—	$	2	$	—	$	—	$	2
Other commercial construction:
Pass	$	43	$	1,171	$	1,184	$	517	$	242	$	332	$	44	$	—	$	3,533
Criticized accrual	—		101		693		449		358		517		8		—		2,126
Criticized nonaccrual	—		—		1		9		45		22		—		—		77
Total other commercial construction	$	43	$	1,272	$	1,878	$	975	$	645	$	871	$	52	$	—	$	5,736
Gross charge-offs three months ended June 30, 2024	$	—	$	—	$	—	$	—	$	—	$	3	$	—	$	—	$	3
Gross charge-offs six months ended June 30, 2024	$	—	$	—	$	2	$	—	$	—	$	10	$	2	$	—	$	14

The Company considers repayment performance a significant indicator of credit quality for its residential real estate loan and consumer loan portfolios. A summary of loans in accrual and nonaccrual status at June 30, 2024 for the various classes of the Company’s residential real estate loans and consumer loans and gross charge-offs for those types of loans for the three-month and six-month periods ended June 30, 2024 by origination year follows:

- 15 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term Loans		Total
(Dollars in millions)	2024		2023		2022		2021		2020		Prior
Residential:
Current	$	971	$	1,452	$	4,584	$	3,639	$	2,475	$	7,808	$	94	$	—	$	21,023
30-89 days past due	3		12		112		79		42		460		1		—		709
Accruing loans past due 90 days or more	—		1		21		18		14		160		—		—		214
Nonaccrual	—		1		21		10		2		169		2		—		205
Total residential	$	974	$	1,466	$	4,738	$	3,746	$	2,533	$	8,597	$	97	$	—	$	22,151
Gross charge-offs three months ended June 30, 2024	$	—	$	—	$	—	$	—	$	—	$	2	$	—	$	—	$	2
Gross charge-offs six months ended June 30, 2024	$	—	$	—	$	—	$	—	$	—	$	3	$	—	$	—	$	3
Residential - limited documentation:
Current	$	—	$	—	$	—	$	—	$	—	$	762	$	—	$	—	$	762
30-89 days past due	—		—		—		—		—		35		—		—		35
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		55		—		—		55
Total residential - limited documentation	$	—	$	—	$	—	$	—	$	—	$	852	$	—	$	—	$	852
Gross charge-offs three months ended June 30, 2024	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Gross charge-offs six months ended June 30, 2024	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer:
Home equity lines and loans:
Current	$	—	$	—	$	—	$	2	$	2	$	101	$	2,990	$	1,354	$	4,449
30-89 days past due	—		—		—		—		—		2		—		31		33
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		3		1		75		79
Total home equity lines and loans	$	—	$	—	$	—	$	2	$	2	$	106	$	2,991	$	1,460	$	4,561
Gross charge-offs three months ended June 30, 2024	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1	$	1
Gross charge-offs six months ended June 30, 2024	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	2	$	2
Recreational finance:
Current	$	2,205	$	2,359	$	2,126	$	1,690	$	1,163	$	1,609	$	—	$	—	$	11,152
30-89 days past due	—		14		15		16		14		24		—		—		83
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	—		5		4		5		3		8		—		—		25
Total recreational finance	$	2,205	$	2,378	$	2,145	$	1,711	$	1,180	$	1,641	$	—	$	—	$	11,260
Gross charge-offs three months ended June 30, 2024	$	1	$	4	$	6	$	4	$	3	$	5	$	—	$	—	$	23
Gross charge-offs six months ended June 30, 2024	$	1	$	7	$	11	$	10	$	7	$	12	$	—	$	—	$	48
Automobile:
Current	$	1,287	$	937	$	910	$	832	$	322	$	171	$	—	$	—	$	4,459
30-89 days past due	3		9		14		13		6		8		—		—		53
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	1		2		2		2		1		3		—		—		11
Total automobile	$	1,291	$	948	$	926	$	847	$	329	$	182	$	—	$	—	$	4,523
Gross charge-offs three months ended June 30, 2024	$	—	$	2	$	2	$	2	$	—	$	1	$	—	$	—	$	7
Gross charge-offs six months ended June 30, 2024	$	—	$	4	$	4	$	4	$	1	$	2	$	—	$	—	$	15
Other:
Current	$	145	$	195	$	140	$	95	$	23	$	22	$	1,390	$	1	$	2,011
30-89 days past due	2		2		2		1		—		1		11		1		20
Accruing loans past due 90 days or more	—		—		—		—		—		—		7		—		7
Nonaccrual	1		1		1		—		—		—		55		—		58
Total other	$	148	$	198	$	143	$	96	$	23	$	23	$	1,463	$	2	$	2,096
Gross charge-offs three months ended June 30, 2024	$	4	$	3	$	2	$	2	$	—	$	2	$	13	$	—	$	26
Gross charge-offs six months ended June 30, 2024	$	5	$	6	$	5	$	3	$	1	$	2	$	29	$	—	$	51
Total loans and leases at June 30, 2024	$	9,545	$	16,667	$	19,766	$	13,567	$	9,431	$	33,184	$	31,249	$	1,593	$	135,002
Total gross charge-offs for the three months ended June 30, 2024	$	6	$	20	$	20	$	19	$	15	$	53	$	46	$	1	$	180
Total gross charge-offs for the six months ended June 30, 2024	$	7	$	35	$	41	$	32	$	24	$	88	$	114	$	2	$	343

- 16 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

The following table summarizes the loan grades applied at December 31, 2023 to the various classes of the Company’s commercial and industrial loans and commercial real estate loans by origination year.


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term Loans
(Dollars in millions)	2023		2022		2021		2020		2019		Prior				Total
Commercial and industrial:
Pass	$	8,689	$	8,087	$	4,800	$	2,248	$	2,169	$	4,843	$	22,345	$	70	$	53,251
Criticized accrual	292		279		277		142		127		481		1,460		31		3,089
Criticized nonaccrual	29		68		56		75		36		150		243		13		670
Total commercial and industrial	$	9,010	$	8,434	$	5,133	$	2,465	$	2,332	$	5,474	$	24,048	$	114	$	57,010
Real estate:
Commercial:
Pass	$	2,048	$	1,742	$	1,367	$	2,011	$	3,059	$	8,491	$	440	$	—	$	19,158
Criticized accrual	227		891		465		456		966		2,238		7		—		5,250
Criticized nonaccrual	—		46		3		113		93		611		3		—		869
Total commercial real estate	$	2,275	$	2,679	$	1,835	$	2,580	$	4,118	$	11,340	$	450	$	—	$	25,277
Residential builder and developer:
Pass	$	530	$	252	$	41	$	6	$	2	$	12	$	116	$	—	$	959
Criticized accrual	1		18		30		—		59		—		3		—		111
Criticized nonaccrual	—		—		3		—		—		—		—		—		3
Total residential builder and developer	$	531	$	270	$	74	$	6	$	61	$	12	$	119	$	—	$	1,073
Other commercial construction:
Pass	$	813	$	1,366	$	651	$	373	$	646	$	187	$	30	$	—	$	4,066
Criticized accrual	53		391		390		691		565		326		—		—		2,416
Criticized nonaccrual	—		14		10		46		50		49		2		—		171
Total other commercial construction	$	866	$	1,771	$	1,051	$	1,110	$	1,261	$	562	$	32	$	—	$	6,653

- 17 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

A summary of loans in accrual and nonaccrual status at December 31, 2023 for the various classes of the Company’s residential real estate loans and consumer loans by origination year follows:


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term Loans		Total
(Dollars in millions)	2023		2022		2021		2020		2019		Prior
Residential:
Current	$	1,726	$	4,709	$	3,732	$	2,543	$	1,215	$	7,060	$	95	$	—	$	21,080
30-89 days past due	18		120		88		52		28		457		—		—		763
Accruing loans past due 90 days or more	1		30		28		17		14		205		—		—		295
Nonaccrual	1		17		10		3		4		179		1		—		215
Total residential	$	1,746	$	4,876	$	3,858	$	2,615	$	1,261	$	7,901	$	96	$	—	$	22,353
Residential - limited documentation:
Current	$	—	$	—	$	—	$	—	$	—	$	825	$	—	$	—	$	825
30-89 days past due	—		—		—		—		—		31		—		—		31
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		55		—		—		55
Total residential - limited documentation	$	—	$	—	$	—	$	—	$	—	$	911	$	—	$	—	$	911
Consumer:
Home equity lines and loans:
Current	$	—	$	—	$	2	$	2	$	13	$	98	$	3,022	$	1,391	$	4,528
30-89 days past due	—		—		—		—		—		3		—		37		40
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		5		3		73		81
Total home equity lines and loans	$	—	$	—	$	2	$	2	$	13	$	106	$	3,025	$	1,501	$	4,649
Recreational finance:
Current	$	2,653	$	2,338	$	1,857	$	1,286	$	781	$	1,020	$	—	$	—	$	9,935
30-89 days past due	11		16		19		14		11		16		—		—		87
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	3		5		8		6		5		9		—		—		36
Total recreational finance	$	2,667	$	2,359	$	1,884	$	1,306	$	797	$	1,045	$	—	$	—	$	10,058
Automobile:
Current	$	1,063	$	1,096	$	1,047	$	427	$	198	$	87	$	—	$	—	$	3,918
30-89 days past due	8		15		17		9		6		5		—		—		60
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	2		3		3		2		2		2		—		—		14
Total automobile	$	1,073	$	1,114	$	1,067	$	438	$	206	$	94	$	—	$	—	$	3,992
Other:
Current	$	250	$	176	$	118	$	33	$	13	$	18	$	1,392	$	3	$	2,003
30-89 days past due	3		3		2		—		—		1		20		1		30
Accruing loans past due 90 days or more	—		—		—		—		—		—		7		—		7
Nonaccrual	2		1		1		—		—		—		48		—		52
Total other	$	255	$	180	$	121	$	33	$	13	$	19	$	1,467	$	4	$	2,092
Total loans and leases at December 31, 2023	$	18,423	$	21,683	$	15,025	$	10,555	$	10,062	$	27,464	$	29,237	$	1,619	$	134,068

- 18 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

Allowance for credit losses

For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by type. Changes in the allowance for credit losses for the three months ended June 30, 2024 and 2023 were as follows:


	Commercial and Industrial			Real Estate
(Dollars in millions)			Commercial			Residential			Consumer			Total
Three Months Ended June 30, 2024
Beginning balance	$	684		$	754		$	118		$	635		$	2,191
Provision for credit losses	176			(70)			(8)			52			150
Net charge-offs:
Charge-offs	(78)			(43)			(2)			(57)			(180)
Recoveries	8			17			2			16			43
Net charge-offs	(70)			(26)			—			(41)			(137)
Ending balance	$	790		$	658		$	110		$	646		$	2,204

Three Months Ended June 30, 2023
Beginning balance	$	579		$	669		$	113		$	614		$	1,975
Provision for credit losses	12			122			3			13			150
Net charge-offs:
Charge-offs	(24)			(99)			(1)			(38)			(162)
Recoveries	16			2			3			14			35
Net (charge-offs) recoveries	(8)			(97)			2			(24)			(127)
Ending balance	$	583		$	694		$	118		$	603		$	1,998

Changes in the allowance for credit losses for the six months ended June 30, 2024 and 2023 were as follows:


	Commercial and Industrial			Real Estate
(Dollars in millions)			Commercial			Residential			Consumer			Total
Six Months Ended June 30, 2024
Beginning balance	$	620		$	764		$	116		$	629		$	2,129
Provision for credit losses	313			(61)			(6)			104			350
Net charge-offs:
Charge-offs	(156)			(68)			(3)			(116)			(343)
Recoveries	13			23			3			29			68
Net charge-offs	(143)			(45)			—			(87)			(275)
Ending balance	$	790		$	658		$	110		$	646		$	2,204

Six Months Ended June 30, 2023
Beginning balance	$	568		$	611		$	115		$	631		$	1,925

Provision for credit losses	33			208			2			27			270
Net charge-offs:
Charge-offs	(44)			(128)			(3)			(82)			(257)
Recoveries	26			3			4			27			60
Net (charge-offs) recoveries	(18)			(125)			1			(55)			(197)
Ending balance	$	583		$	694		$	118		$	603		$	1,998

- 19 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

Despite the allocation in the preceding tables, the allowance for credit losses is general in nature and is available to absorb losses from any loan or lease type. In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. The Company utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators, including loan grade and borrower repayment performance, can inform the models, which have been statistically developed based on historical correlations of credit losses with prevailing economic metrics, including unemployment, GDP and real estate prices. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. At each of June 30, 2024 and December 31, 2023, the Company utilized a reasonable and supportable forecast period of two years. Subsequent to this forecast period the Company reverted, ratably over a one-year period, to historical loss experience to inform its estimate of losses for the remaining contractual life of each portfolio.

The Company also estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes. The amounts of specific loss components in the Company’s loan and lease portfolios are determined through a loan-by-loan analysis of larger balance commercial and industrial loans and commercial real estate loans that are in nonaccrual status. Such loss estimates are typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to pay. To the extent that those loans are collateral-dependent, they are evaluated based on the fair value of the loan’s collateral as estimated at or near the financial statement date. As the quality of a loan deteriorates to the point of designating the loan as “criticized,” the process of obtaining updated collateral valuation information is usually initiated, unless it is not considered warranted given factors such as the relative size of the loan, the characteristics of the collateral or the age of the last valuation. In those cases where current appraisals may not yet be available, prior appraisals are utilized with adjustments, as deemed necessary, for estimates of subsequent declines in values as determined by line of business and/or loan workout personnel. Those adjustments are reviewed and assessed for reasonableness by the Company’s credit risk personnel. Accordingly, for real estate collateral securing larger nonaccrual commercial and industrial loans and commercial real estate loans, estimated collateral values are based on current appraisals and estimates of value. For non-real estate loans, collateral is assigned a discounted estimated liquidation value and, depending on the nature of the collateral, is verified through field exams or other procedures. In assessing collateral, real estate and non-real estate values are reduced by an estimate of selling costs.

For residential real estate loans, including home equity loans and lines of credit, the excess of the loan balance over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. That charge-off is based on recent indications of value from external parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that file for bankruptcy are generally charged-off to estimated net collateral value shortly after the Company is notified of such filings. When evaluating individual home equity loans and lines of credit for charge-off and for purposes of estimating losses in determining the allowance for credit losses, the Company gives consideration to the required repayment of any first lien positions related to collateral property. Other consumer loans are generally charged-off when the loans are 91 to 180 days past due, depending on whether the loan is collateralized and the status of repossession activities with respect to such collateral.

Changes in the amount of the allowance for credit losses reflect the outcome of the procedures described herein, including the impact of changes in macroeconomic forecasts as compared with previous forecasts, as well as the impact of portfolio concentrations, imprecision in economic forecasts, geopolitical conditions and other risk factors that might influence the loss estimation process.

The Company’s reserve for off-balance sheet credit exposures was not material at June 30, 2024 and December 31, 2023.

- 20 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

Information with respect to loans and leases that were considered nonaccrual at the beginning and end of the reporting period and the interest income recognized on such loans for the three-month and six-month periods ended June 30, 2024 and 2023 follows:


	Amortized Cost with Allowance		Amortized Cost without Allowance		Total		Amortized Cost				Interest Income Recognized
(Dollars in millions)	June 30, 2024						March 31, 2024		January 1, 2024		Three Months Ended June 30, 2024		Six Months Ended June 30, 2024
Commercial and industrial	$	494	$	311	$	805	$	864	$	670	$	7	$	9
Real estate:
Commercial	315		392		707		855		869		20		26
Residential builder and developer	2		—		2		3		3		—		—
Other commercial construction	13		64		77		141		171		3		3
Residential	95		110		205		202		215		3		6
Residential — limited documentation	20		35		55		53		55		—		1
Consumer:
Home equity lines and loans	37		42		79		87		81		1		2
Recreational finance	15		10		25		30		36		—		—
Automobile	7		4		11		13		14		—		—
Other	58		—		58		54		52		—		—
Total	$	1,056	$	968	$	2,024	$	2,302	$	2,166	$	34	$	47


(Dollars in millions)	June 30, 2023						March 31, 2023		January 1, 2023		Three Months Ended June 30, 2023		Six Months Ended June 30, 2023
Commercial and industrial	$	202	$	405	$	607	$	569	$	504	$	3	$	6
Real estate:
Commercial	376		816		1,192		1,330		1,240		4		9
Residential builder and developer	1		—		1		3		1		—		—
Other commercial construction	44		102		146		143		125		—		2
Residential	91		148		239		254		272		4		9
Residential — limited documentation	28		39		67		69		78		—		—
Consumer:
Home equity lines and loans	49		28		77		81		85		2		4
Recreational finance	23		9		32		34		45		—		—
Automobile	18		4		22		27		40		—		—
Other	51		2		53		47		49		—		—
Total	$	883	$	1,553	$	2,436	$	2,557	$	2,439	$	13	$	30

- 21 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

Loan modifications

During the normal course of business, the Company modifies loans to maximize recovery efforts from borrowers experiencing financial difficulty. Such loan modifications typically include payment deferrals (predominantly extensions of maturity dates) and interest rate reductions but may also include other modified terms. Those modified loans may be considered nonaccrual if the Company does not expect to collect the contractual cash flows owed under the loan agreement. The tables that follow summarize the Company’s loan modification activities to borrowers experiencing financial difficulty for the three-month and six-month periods ended June 30, 2024 and 2023:


	Amortized cost at June 30, 2024
(Dollars in millions)	Payment Deferral (a)		Interest Rate Reduction		Other		Combination of Modification Types (b)		Total (c) (d)		Percent of Total Loan Class
Three Months Ended June 30, 2024
Commercial and industrial	$	51	$	13	$	—	$	—	$	64	.11	%
Real estate:
Commercial	168		—		—		—		168		.74
Residential builder and developer	26		—		—		—		26		2.49
Other commercial construction	125		—		—		—		125		2.18
Residential	55		—		—		1		56		.25
Residential — limited documentation	2		—		—		—		2		.26
Consumer:
Home equity lines and loans	—		—		—		—		—		—
Recreational finance	—		—		—		—		—		—
Automobile	—		—		—		—		—		—
Other	—		—		—		—		—		—
Total	$	427	$	13	$	—	$	1	$	441	.33	%



Six Months Ended June 30, 2024
Commercial and industrial	$	196	$	13	$	—	$	—	$	209	.35	%
Real estate:
Commercial	373		—		—		4		377		1.66
Residential builder and developer	27		—		—		—		27		2.62
Other commercial construction	197		—		—		—		197		3.44
Residential	99		—		—		2		101		.46
Residential — limited documentation	4		—		—		—		4		.45
Consumer:
Home equity lines and loans	—		—		—		1		1		.03
Recreational finance	—		—		—		—		—		—
Automobile	—		—		—		—		—		—
Other	—		—		—		—		—		—
Total	$	896	$	13	$	—	$	7	$	916	.68	%

_______________________________________________________________

*(a)*Predominantly extensions of maturity dates.

*(b)*Predominantly payment deferrals combined with interest rate reductions.

*(c)*Includes approximately $47 million and $88 million of loans guaranteed by government-related entities (predominantly first lien residential mortgage loans) for the three-month and six-month periods ended June 30, 2024, respectively.

*(d)*Excludes unfunded commitments to extend credit totaling $1 million and $27 million for the three-month and six-month periods ended June 30, 2024, respectively.

- 22 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued


	Amortized cost at June 30, 2023
(Dollars in millions)	Payment Deferral (a)		Interest Rate Reduction		Other		Combination of Modification Types (b)		Total (c) (d)		Percent of Total Loan Class at Period End

Three Months Ended June 30, 2023
Commercial and industrial	$	26	$	1	$	—	$	—	$	27	.05	%
Real estate:
Commercial	52		—		—		8		60		.22
Residential builder and developer	85		—		—		—		85		7.49
Other commercial construction	124		—		—		8		132		1.95
Residential	38		—		—		1		39		.17
Residential — limited documentation	3		—		—		1		4		.38
Consumer:
Home equity lines and loans	1		—		—		—		1		.02
Recreational finance	—		—		—		—		—		—
Automobile	—		—		—		—		—		—
Other	—		—		—		—		—		—
Total	$	329	$	1	$	—	$	18	$	348	.26	%



Six Months Ended June 30, 2023
Commercial and industrial	$	93	$	1	$	—	$	1	$	95	.17	%
Real estate:
Commercial	142		—		—		8		150		.56
Residential builder and developer	91		—		—		—		91		7.99
Other commercial construction	215		—		—		8		223		3.29
Residential	69		—		—		3		72		.32
Residential — limited documentation	8		—		—		1		9		.90
Consumer:
Home equity lines and loans	1		—		—		—		1		.02
Recreational finance	—		—		—		—		—		—
Automobile	—		—		—		—		—		.01
Other	—		—		—		—		—		—
Total	$	619	$	1	$	—	$	21	$	641	.48	%

_______________________________________________________________

*(a)*Predominantly extensions of maturity dates.

*(b)*Predominantly payment deferrals combined with interest rate reductions.

*(c)*Includes approximately $25 million and $48 million of loans guaranteed by government-related entities (predominantly first lien residential mortgage loans) for the three-month and six-month periods ended June 30, 2023, respectively.

*(d)*Excludes unfunded commitments to extend credit totaling $78 million and $82 million for the three-month and six-month periods ended June 30, 2023, respectively.

The financial effects of the modifications for the three-month and six-month periods ended June 30, 2024 include an increase in the weighted-average remaining term for commercial and industrial loans of 0.7 years and 0.8 years, respectively, for commercial real estate loans, inclusive of residential builder and development loans and other commercial construction loans, of 0.6 years and 0.8 years, respectively, and for residential real estate loans, of 8.9 years and 10.2 years, respectively.

- 23 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

The financial effects of the modifications for the three-month and six-month periods ended June 30, 2023 include an increase in the weighted-average remaining term for commercial and industrial loans of 1.3 years for each period, for commercial real estate loans, inclusive of residential builder and development loans and other commercial construction loans, of 1.0 years and 1.1 years, respectively, and for residential real estate loans, of 8.6 years and 8.9 years, respectively.

Modified loans to borrowers experiencing financial difficulty are subject to the allowance for credit losses methodology described herein, including the use of models to inform credit loss estimates and, to the extent larger balance commercial and industrial loans and commercial real estate loans are in nonaccrual status, a loan-by-loan analysis of expected credit losses on those individual loans. The following table summarizes the payment status, at June 30, 2024, of loans that were modified during the twelve-month period ended June 30, 2024.


	Payment status at June 30, 2024 (amortized cost)
(Dollars in millions)	Current		30-89 Days Past Due		Past Due 90 Days or More (a)		Total
Twelve Months Ended June 30, 2024
Commercial and industrial	$	294	$	15	$	3	$	312
Real estate:
Commercial	545		42		14		601
Residential builder and developer	28		—		—		28
Other commercial construction	344		2		—		346
Residential (b)	104		54		29		187
Residential — limited documentation	6		—		—		6
Consumer:
Home equity lines and loans	2		—		—		2
Recreational finance	—		—		—		—
Automobile	—		—		—		—
Other	—		—		—		—
Total	$	1,323	$	113	$	46	$	1,482

_______________________________________________________________

(a) Predominantly loan modifications with payment deferrals.

*(b)*Includes loans guaranteed by government-related entities classified as 30 to 89 days past due of $45 million and as past due 90 days or more of $27 million.

- 24 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

4. Loans and leases and the allowance for credit losses, continued

The following table summarizes the payment status, at June 30, 2023, of loans that were modified during the six-month period ended June 30, 2023.


	Payment status at June 30, 2023 (amortized cost)
(Dollars in millions)	Current		30-89 Days Past Due		Past Due 90 Days or More (a)		Total
Six Months Ended June 30, 2023
Commercial and industrial	$	90	$	4	$	1	$	95
Real estate:
Commercial	150		—		—		150
Residential builder and developer	91		—		—		91
Other commercial construction	223		—		—		223
Residential (b)	53		15		4		72
Residential — limited documentation	7		1		1		9
Consumer:
Home equity lines and loans	1		—		—		1
Recreational finance	—		—		—		—
Automobile	—		—		—		—
Other	—		—		—		—
Total	$	615	$	20	$	6	$	641

___________________________________________________________

(a) Predominantly loan modifications with payment deferrals.

*(b)*Includes loans guaranteed by government-related entities classified as 30 to 89 days past due of $11 million and as past due 90 days or more of $4 million.

The amount of foreclosed property held by the Company, predominantly consisting of residential real estate, was $33 million and $39 million at June 30, 2024 and December 31, 2023, respectively. There were $165 million and $170 million at June 30, 2024 and December 31, 2023, respectively, of loans secured by residential real estate that were in the process of foreclosure. Of all loans in the process of foreclosure at June 30, 2024, approximately 39% were government guaranteed.

At June 30, 2024, approximately $19.1 billion of commercial and industrial loans, including leases, $15.8 billion of commercial real estate loans, $18.6 billion of one-to-four family residential real estate loans, $2.6 billion of home equity loans and lines of credit and $10.3 billion of other consumer loans were pledged to secure outstanding borrowings and available lines of credit from the FHLB and the FRB of New York. At December 31, 2023, approximately $13.4 billion of commercial and industrial loans, including leases, $16.4 billion of commercial real estate loans, $18.8 billion of one-to-four family residential real estate loans, $2.6 billion of home equity loans and lines of credit and $11.0 billion of other consumer loans were pledged to secure outstanding borrowings and available lines of credit from the FHLB and the FRB of New York as described in note 5.

- 25 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

5. Borrowings


(Dollars in millions)	June 30, 2024		December 31, 2023
Short-term borrowings
Federal funds purchased and repurchase agreements	$	264	$	316
FHLB advances	4,500		5,000
Total short-term borrowings	$	4,764	$	5,316

Long-term borrowings
Senior notes — M&T	$	3,256	$	2,482
Senior notes — M&T Bank	3,743		3,741
FHLB advances	2,005		5
Subordinated notes — M&T	75		76
Subordinated notes — M&T Bank	867		873
Junior subordinated debentures — M&T	541		540
Asset-backed notes	822		474
Other	10		10
Total long-term borrowings	$	11,319	$	8,201

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 6.082% 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 asset-backed notes secured by automobile loans. A total of $511 million of such notes were purchased by third parties. Those asset-backed notes had a weighted-average estimated life of approximately two years and a weighted-average interest rate of 5.29% at the time of securitization. Further information about this financing transaction is provided in note 12.

M&T Bank had secured borrowing facilities available with the FHLB of New York and the FRB of New York totaling approximately $15.2 billion and $21.5 billion, respectively, at June 30, 2024. M&T Bank is required to pledge loans and investment securities as collateral for these borrowing facilities and could increase the availability under such facilities by pledging additional assets.

6. Shareholders' equity

M&T is authorized to issue 20,000,000 shares of preferred stock with a $1.00 par value per share. Preferred shares outstanding rank senior to common shares both as to dividends and liquidation preference, but have no general voting rights. On May 13, 2024, M&T issued 75,000 shares of Perpetual 7.5% Non-Cumulative Preferred Stock, Series J, with a liquidation preference of $10,000 per share. On July 10, 2024, M&T announced its intention to redeem all outstanding shares of its Perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series E, on August 15, 2024. Issued and outstanding preferred stock of M&T as of June 30, 2024 and December 31, 2023 is presented in the following table.

- 26 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

6. Shareholders' equity, continued


	June 30, 2024			December 31, 2023
(Dollars in millions)	Shares Issued and Outstanding	Carrying Value		Shares Issued and Outstanding	Carrying Value
Series E (a)
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock $1,000 liquidation preference per share	350,000	$	350	350,000	$	350
Series F (b)
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock $10,000 liquidation preference per share	50,000	500		50,000	500
Series G (c)
Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock $10,000 liquidation preference per share	40,000	400		40,000	400
Series H (d)
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock $25 liquidation preference per share	10,000,000	261		10,000,000	261
Series I (e)
Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock $10,000 liquidation preference per share	50,000	500		50,000	500
Series J (f)
Fixed-Rate Non-Cumulative Perpetual Preferred Stock $10,000 liquidation preference per share	75,000	733		—	—

_______________________________________________________________

*(a)*Dividends, if declared, were paid semi-annually at a rate of 6.45% through February 14, 2024 and thereafter are paid quarterly at a rate of the three-month SOFR plus 387 basis points. On July 10, 2024, M&T announced its intention to redeem all outstanding shares of the Series E Preferred Stock on August 15, 2024.

*(b)*Dividends, if declared, are paid semi-annually at a rate of 5.125% through October 31, 2026 and thereafter will be paid quarterly at a rate of the three-month SOFR plus 378 basis points. The shares are redeemable in whole or in part on or after November 1, 2026. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 90 days following that occurrence.

*(c)*Dividends, if declared, are paid semi-annually at a rate of 5.0% through July 31, 2024. On August 1, 2024 the dividend rate reset at 7.246% and will reset at each subsequent five year anniversary date therefrom at a rate of the five-year U.S. Treasury rate plus 3.174%. The shares are redeemable in whole or in part on or after August 1, 2024. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 90 days following that occurrence.

*(d)*Dividends, if declared, are paid quarterly at a rate of 5.625% through December 14, 2026 and thereafter will be paid quarterly at a rate of the three-month SOFR rate plus 428 basis points. The shares are redeemable in whole or in part on or after April 1, 2027. Notwithstanding M&T's option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 90 days following that occurrence.

*(e)*Dividends, if declared, are paid semi-annually at a rate of 3.5% through August 31, 2026. On September 1, 2026 and at each subsequent five year anniversary date therefrom the dividend rate will reset at a rate of the five-year U.S. Treasury rate plus 2.679%. The shares are redeemable in whole or in part on or after September 1, 2026. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 90 days following that occurrence.

*(f)*Dividends, if declared, are paid quarterly at a rate of 7.5%. The shares are redeemable in whole or in part on or after June 15, 2029. Notwithstanding M&T’s option to redeem the shares, if an event occurs such that the shares no longer qualify as Tier 1 capital, M&T may redeem all of the shares within 90 days following that occurrence.

7. Revenue from contracts with customers

The Company generally charges customer accounts or otherwise bills customers upon completion of its services. Typically, the Company’s contracts with customers have a duration of one year or less and payment for services is received at least annually, but oftentimes more frequently as services are provided. At June 30, 2024 and December 31, 2023, the Company had $67 million and $68 million, respectively, of amounts receivable related to recognized revenue from the sources in the accompanying tables. Such amounts are classified in "accrued interest and other assets" in the Company’s Consolidated Balance Sheet. In certain situations, the Company is paid in advance of providing services and defers the recognition of revenue until its service obligation is satisfied. At June 30, 2024 and December 31, 2023, the Company had deferred revenue of $51 million and $54 million, respectively, related to the sources in the accompanying tables recorded in "accrued interest and other liabilities" in the Consolidated Balance Sheet.

- 27 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

7. Revenue from contracts with customers, continued

The following tables summarize sources of the Company’s noninterest income during the three-month and six-month periods ended June 30, 2024 and 2023 that are subject to the revenue recognition accounting guidance.


(Dollars in millions)	Commercial Bank		Retail Bank		Institutional Services and Wealth Management		Total
Three Months Ended June 30, 2024
Classification in Consolidated Statement of Income
Service charges on deposit accounts	$	40	$	87	$	—	$	127
Trust income	1		—		169		170
Brokerage services income	1		—		29		30
Other revenues from operations:
Merchant discount and credit card interchange fees	19		24		—		43
Other	7		8		3		18
	$	68	$	119	$	201	$	388

Three Months Ended June 30, 2023
Classification in Consolidated Statement of Income
Service charges on deposit accounts	$	36	$	83	$	—	$	119
Trust income	1		—		171		172
Brokerage services income	1		—		24		25
Other revenues from operations:
Merchant discount and credit card interchange fees	19		23		—		42
Other	7		8		3		18
	$	64	$	114	$	198	$	376


(Dollars in millions)	Commercial Bank		Retail Bank		Institutional Services and Wealth Management		Total
Six Months Ended June 30, 2024
Classification in Consolidated Statement of Income
Service charges on deposit accounts	$	80	$	171	$	—	$	251
Trust income	2		—		328		330
Brokerage services income	3		—		56		59
Other revenues from operations:
Merchant discount and credit card interchange fees	36		44		—		80
Other	15		15		5		35
	$	136	$	230	$	389	$	755

Six Months Ended June 30, 2023
Classification in Consolidated Statement of Income
Service charges on deposit accounts	$	70	$	162	$	—	$	232
Trust income	1		—		365		366
Brokerage services income	3		—		46		49
Other revenues from operations:
Merchant discount and credit card interchange fees	36		43		—		79
Other	13		16		4		33
	$	123	$	221	$	415	$	759

- 28 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

8. Pension plans and other postretirement benefits

The Company provides defined pension and other postretirement benefits (including health care and life insurance benefits) to qualified retired employees. Net periodic benefit for defined benefit plans consisted of the following:


	Pension Benefits				Other Postretirement Benefits
	Three Months Ended June 30,
(Dollars in millions)	2024		2023		2024		2023
Service cost	$	3	$	3	$	1	$	1
Interest cost on projected benefit obligation	29		29		—		—
Expected return on plan assets	(50)		(50)		—		—
Amortization of prior service credit	—		—		(1)		(1)
Amortization of net actuarial gain	(1)		—		—		—
Net periodic benefit	$	(19)	$	(18)	$	—	$	—


	Pension Benefits				Other Postretirement Benefits
	Six Months Ended June 30,
(Dollars in millions)	2024		2023		2024		2023
Service cost	$	5	$	6	$	1	$	1
Interest cost on projected benefit obligation	58		58		1		1
Expected return on plan assets	(101)		(101)		—		—
Amortization of prior service credit	—		—		(1)		(1)
Amortization of net actuarial gain	(1)		(1)		(1)		(1)
Net periodic benefit	$	(39)	$	(38)	$	—	$	—

Service cost is reflected in "salaries and employee benefits" and the other components of net periodic benefit cost are reflected in "other costs of operations" in the Consolidated Statement of Income. Expenses incurred in connection with the Company's defined contribution pension and retirement savings plans totaled $40 million and $36 million for the three months ended June 30, 2024 and 2023, respectively, and $85 million and $80 million for the six months ended June 30, 2024 and 2023, respectively.

- 29 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

9. Earnings per common share

The computations of basic earnings per common share follow:


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions, except per share, shares in thousands)	2024		2023		2024		2023
Income available to common shareholders:
Net income	$	655	$	867	$	1,186	$	1,569
Less: Preferred stock dividends	(27)		(25)		(52)		(50)
Net income available to common equity	628		842		1,134		1,519
Less: Income attributable to unvested stock-based compensation awards	(2)		(1)		(3)		(3)
Net income available to common shareholders	$	626	$	841	$	1,131	$	1,516
Weighted-average shares outstanding:
Common shares outstanding (including common stock issuable) and unvested stock-based compensation awards	167,282		166,152		167,010		167,076
Less: Unvested stock-based compensation awards	(331)		(310)		(305)		(294)
Weighted-average shares outstanding	166,951		165,842		166,705		166,782

Basic earnings per common share	$	3.75	$	5.07	$	6.79	$	9.09

The computations of diluted earnings per common share follow:


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions, except per share, shares in thousands)	2024		2023		2024		2023
Net income available to common equity	$	628	$	842	$	1,134	$	1,519
Less: Income attributable to unvested stock-based compensation awards	(2)		(1)		(3)		(3)
Net income available to common shareholders	$	626	$	841	$	1,131	$	1,516
Adjusted weighted-average shares outstanding:
Common shares outstanding (including common stock issuable) and unvested stock-based compensation awards	167,282		166,152		167,010		167,076
Less: Unvested stock-based compensation awards	(331)		(310)		(305)		(294)
Plus: Incremental shares from assumed conversion of stock-based compensation awards	708		478		667		577
Adjusted weighted-average shares outstanding	167,659		166,320		167,372		167,359

Diluted earnings per common share	$	3.73	$	5.05	$	6.76	$	9.06

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

Stock-based compensation awards to purchase common stock of M&T representing 1,213,284 common shares and 1,270,737 common shares during the three-month and six-month periods ended June 30, 2024, respectively, and 2,284,597 and 1,828,360 common shares during the three-month and six-month periods ended June 30, 2023, respectively, were not included in the computations of diluted earnings per common share because the effect on those periods would have been antidilutive.

- 30 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

10. Comprehensive income

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


(Dollars in millions)	Investment Securities		Cash Flow Hedges		Defined Benefit Plans		Other		Total Amount Before Tax			Income Tax		Net
Balance — January 1, 2024	$	(251)	$	(203)	$	(155)	$	(7)	$	(616)		$	157	$	(459)
Other comprehensive income (loss) before reclassifications:
Unrealized holding losses, net	(1)		—		—		—		(1)			—		(1)
Unrealized losses on cash flow hedges	—		(313)		—		—		(313)			78		(235)
Other	—		—		—		(2)		(2)			—		(2)

Total other comprehensive income (loss) before reclassifications	(1)		(313)		—		(2)		(316)			78		(238)
Amounts reclassified from accumulated other comprehensive income (loss) that (increase) decrease net income:
Net losses realized in net income	13		—		—		—		13			(4)		9
Net yield adjustment from cash flow hedges currently in effect	—		186		—		—		186		(a)	(46)		140
Amortization of prior service credit	—		—		(1)		—		(1)		(b)	—		(1)
Amortization of actuarial gains	—		—		(2)		—		(2)		(b)	—		(2)
Total other comprehensive income (loss)	12		(127)		(3)		(2)		(120)			28		(92)
Balance — June 30, 2024	$	(239)	$	(330)	$	(158)	$	(9)	$	(736)		$	185	$	(551)

Balance — January 1, 2023	$	(444)	$	(336)	$	(273)	$	(13)	$	(1,066)		$	276	$	(790)
Other comprehensive income (loss) before reclassifications:
Unrealized holding gains, net	3		—		—		—		3			(2)		1
Unrealized losses on cash flow hedges	—		(208)		—		—		(208)			51		(157)
Other	—		—		—		4		4			(1)		3

Total other comprehensive income (loss) before reclassifications	3		(208)		—		4		(201)			48		(153)
Amounts reclassified from accumulated other comprehensive income (loss) that (increase) decrease net income:


Net yield adjustment from cash flow hedges currently in effect	—		108		—		—		108		(a)	(27)		81
Amortization of prior service credit	—		—		(1)		—		(1)		(b)	—		(1)
Amortization of actuarial gains	—		—		(2)		—		(2)		(b)	—		(2)
Total other comprehensive income (loss)	3		(100)		(3)		4		(96)			21		(75)
Balance — June 30, 2023	$	(441)	$	(436)	$	(276)	$	(9)	$	(1,162)		$	297	$	(865)

_______________________________________________________________

*(a)*Included in "interest income" in the Consolidated Statement of Income.

*(b)*Included in "other costs of operations" in the Consolidated Statement of Income.

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


(Dollars in millions)	Investment Securities		Cash Flow Hedges		Defined Benefit Plans		Other		Total
Balance — December 31, 2023	$	(187)	$	(151)	$	(115)	$	(6)	$	(459)
Net gain (loss) during period	8		(95)		(3)		(2)		(92)
Balance — June 30, 2024	$	(179)	$	(246)	$	(118)	$	(8)	$	(551)

- 31 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

11. Derivative financial instruments

As part of managing interest rate risk, the Company enters into interest rate swap agreements to modify the repricing characteristics of certain portions of the Company’s portfolios of earning assets and interest-bearing liabilities. The Company designates interest rate swap agreements utilized in the management of interest rate risk as either fair value hedges or cash flow hedges. Interest rate swap agreements are generally entered into with counterparties that meet established credit standards and most contain master netting, collateral and/or settlement provisions protecting the at-risk party. Based on adherence to the Company’s credit standards and the presence of the netting, collateral or settlement provisions, the Company believes that the credit risk inherent in these contracts was not material as of June 30, 2024. Information about interest rate swap agreements entered into for interest rate risk management purposes summarized by type of financial instrument the swap agreements were intended to hedge follows:


	Notional Amount		Weighted-Average Maturity (In years)	Weighted- Average Rate				Estimated Fair Value Gain (Loss) (a)
(Dollars in millions)			Fixed	Variable
June 30, 2024
Fair value hedges:
Fixed rate long-term borrowings (b) (c)	$	3,850	5.6	3.48	%	5.53	%	$	(9)
Cash flow hedges:
Interest payments on variable rate commercial real estate and commercial and industrial loans (b) (d)	25,905		1.7	3.41		5.33		(1)
Total	$	29,755	2.2					$	(10)
December 31, 2023
Fair value hedges:
Fixed rate long-term borrowings (b) (e)	$	3,000	5.8	3.45	%	5.62	%	$	(1)
Cash flow hedges:
Interest payments on variable rate commercial real estate loans (b) (f)	23,977		1.7	3.45		5.36		11
Total	$	26,977	2.2					$	10

_______________________________________________________________

*(a)*Certain clearinghouse exchanges consider payments by counterparties for variation margin on derivative instruments to be settlements of those positions. The impact of such payments for interest rate swap agreements designated as fair value hedges was a net settlement of losses of $113 million at June 30, 2024 and $43 million at December 31, 2023. The impact of such payments on interest rate swap agreements designated as cash flow hedges was a net settlement of losses of $329 million at June 30, 2024 and $214 million at December 31, 2023.

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

*(c)*Includes notional amount and terms of $1.9 billion of forward-starting interest rate swap agreements that become effective in 2025.

*(d)*Includes notional amount and terms of $7.5 billion of forward-starting interest rate swap agreements that become effective in 2024 and 2025.

*(e)*Includes notional amount and terms of $1.0 billion of forward-starting interest rate swap agreements that become effective in 2025.

*(f)*Includes notional amount and terms of $9.0 billion of forward-starting interest rate swap agreements that become effective in 2024.

The Company utilizes commitments to sell residential and commercial real estate loans to hedge the exposure to changes in the fair value of real estate loans held for sale. Such commitments have generally been designated as fair value hedges. The Company also utilizes commitments to sell real estate loans to offset the exposure to changes in the fair value of certain commitments to originate real estate loans for sale. Changes in unrealized gains and losses as a result of those activities were not material in each of the three and six months ended June 30, 2024 and 2023. Such changes are included in mortgage banking revenues and, in general are realized in subsequent periods as the related loans are sold and commitments satisfied.

Other derivative financial instruments not designated as hedging instruments included interest rate contracts, foreign exchange and other option and futures contracts. Interest rate contracts not designated as hedging instruments had notional values of $43.2 billion and $44.4 billion at June 30, 2024 and December 31, 2023, respectively. The notional amounts of foreign exchange and other option and futures contracts not designated as hedging instruments aggregated $1.5 billion at each of June 30, 2024 and December 31, 2023.

- 32 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

11. Derivative financial instruments, continued

Information about the fair values of derivative instruments in the Company’s Consolidated Balance Sheet and Consolidated Statement of Income follows:


	Asset Derivatives				Liability Derivatives
	Fair Value				Fair Value
(Dollars in millions)	June 30, 2024		December 31, 2023		June 30, 2024		December 31, 2023
Derivatives designated and qualifying as hedging instruments (a)
Interest rate swap agreements	$	2	$	12	$	12	$	2
Commitments to sell real estate loans	1		6		2		8
	3		18		14		10
Derivatives not designated and qualifying as hedging instruments (a)
Mortgage banking:
Mortgage-related commitments to originate real estate loans for sale	15		15		29		32
Commitments to sell real estate loans	32		35		6		3
	47		50		35		35
Other:
Interest rate contracts (b)	232		237		982		879
Foreign exchange and other option and futures contracts	13		19		10		19
	245		256		992		898
Total derivatives	$	295	$	324	$	1,041	$	943

_______________________________________________________________

*(a)*Asset derivatives are reported in "accrued interest and other assets" and liability derivatives are reported in "accrued interest and other liabilities" in the Consolidated Balance Sheet.

*(b)*The impact of variation margin payments at June 30, 2024 and December 31, 2023 was a reduction of the estimated fair value of interest rate contracts not designated as hedging instruments in an asset position of $861 million and $783 million, respectively, as of each period end, and in a liability position of $16 million and $32 million, respectively.


	Amount of Gain (Loss) Recognized
	Three Months Ended June 30,
	2024				2023
(Dollars in millions)	Derivative		Hedged Item		Derivative		Hedged Item
Derivatives in fair value hedging relationships
Interest rate swap agreements:
Fixed rate long-term borrowings (a)	$	(18)	$	18	$	(46)	$	47
Derivatives not designated as hedging instruments
Interest rate contracts (b)	$	3			$	11
Foreign exchange and other option and futures contracts (b)	4				3
Total	$	7			$	14


	Amount of Gain (Loss) Recognized
	Six Months Ended June 30,
	2024				2023
(Dollars in millions)	Derivative		Hedged Item		Derivative		Hedged Item
Derivatives in fair value hedging relationships
Interest rate swap agreements:
Fixed rate long-term borrowings (a)	$	(78)	$	78	$	(34)	$	35
Derivatives not designated as hedging instruments
Interest rate contracts (b)	$	6			$	19
Foreign exchange and other option and futures contracts (b)	8				7
Total	$	14			$	26

_______________________________________________________________

*(a)*Reported as an adjustment to "interest expense" in the Consolidated Statement of Income.

*(b)*Reported as "trading account and other non-hedging derivative gains" in the Consolidated Statement of Income.

- 33 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

11. Derivative financial instruments, continued


	Carrying Amount of the Hedged Item				Cumulative Amount of Fair Value Hedging Adjustment Increasing (Decreasing) the Carrying Amount of the Hedged Item
(Dollars in millions)	June 30, 2024		December 31, 2023		June 30, 2024		December 31, 2023
Location in the Consolidated Balance Sheet of the Hedged Items in Fair Value Hedges
Long-term borrowings	$	3,723	$	2,954	$	(122)	$	(44)

The net effect of interest rate swap agreements was to decrease net interest income by $113 million and $213 million during the three-month and six-month periods ended June 30, 2024, respectively, and to decrease net interest income by $63 million and $132 million during the three-month and six-month periods ended June 30, 2023, respectively. The amount of interest income recognized in the Consolidated Statement of Income associated with derivatives designated as cash flow hedges was a decrease of $99 million and $49 million for the three months ended June 30, 2024 and 2023, respectively, and a decrease of $186 million and $108 million for the six-month period ended June 30, 2024 and 2023, respectively. As of June 30, 2024 the unrealized net loss recognized in other comprehensive income related to cash flow hedges was $330 million, of which losses of $189 million, $148 million and gains of $7 million relate to interest rate swap agreements maturing in 2025, 2026 and 2027, respectively.

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

The aggregate fair value of derivative financial instruments in a liability position, which are subject to enforceable master netting arrangements and the related collateral posted, was not material at each of June 30, 2024 and December 31, 2023. Certain of the Company’s derivative financial instruments contain provisions that require the Company to maintain specific credit ratings from credit rating agencies to avoid higher collateral posting requirements. If the Company’s debt ratings were to fall below specified ratings, the counterparties of the derivative financial instruments could demand immediate incremental collateralization on those instruments in a net liability position. The aggregate fair value of all derivative financial instruments with such credit risk-related contingent features in a net liability position on June 30, 2024 was not material.

The aggregate fair value of derivative financial instruments in an asset position with counterparties, which are subject to enforceable master netting arrangements, was $208 million at June 30, 2024 and $179 million at December 31, 2023. Counterparties posted collateral relating to those positions of $205 million at June 30, 2024 and $179 million at December 31, 2023, respectively. Interest rate swap agreements entered into with customers are subject to the Company’s credit risk standards and often contain collateral provisions.

In addition to the derivative contracts noted above, the Company clears certain derivative transactions through a clearinghouse, rather than directly with counterparties. Those transactions cleared through a clearinghouse require initial margin collateral and variation margin payments depending on the contracts being in a net asset or liability position. The amount of initial margin collateral posted by the Company was $178 million and $129 million at June 30, 2024 and December 31, 2023, respectively. The fair value asset and liability amounts of derivative contracts have been reduced by variation margin payments treated as settlements as described herein. Variation margin on derivative contracts not treated as settlements continues to represent collateral posted or received by the Company.

12. Variable interest entities and asset securitizations

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

- 34 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

12. Variable interest entities and asset securitizations, continued

In March 2024, M&T Bank issued asset-backed notes secured by automobile loans. Approximately $526 million of such loans were sold into a special purpose trust which in turn issued asset-backed notes to investors. The loans continue to be serviced by the Company. A total of $511 million of such notes, representing the senior-most notes in the securitization, were purchased by third parties. Those asset-backed notes had a weighted-average estimated life of approximately two years and a weighted-average interest rate of 5.29% at the time of securitization. Additionally, $15 million of certificates representing the residual interests of the trust were retained by the Company. As a result of the retention of the residual interests and its continued role as servicer of the loans, the Company is considered to be the primary beneficiary of the securitization trust and, accordingly, the trust has been included in the Company's consolidated financial statements. At June 30, 2024, the remaining balance of the loans and leases in trust was $457 million and the outstanding asset-backed notes issued to third party investors was $446 million.

M&T has issued junior subordinated debentures payable to various trusts that have issued preferred capital securities. M&T owns the common securities of those trust entities. The Company is not considered to be the primary beneficiary of those entities and, accordingly, the trusts are not included in the Company’s consolidated financial statements. At each of June 30, 2024 and December 31, 2023, the Company included the junior subordinated debentures as “long-term borrowings” in its Consolidated Balance Sheet and recognized $22 million in other assets for its “investment” in the common securities of the trusts that will be concomitantly repaid to M&T by the respective trust from the proceeds of M&T’s repayment of the junior subordinated debentures associated with preferred capital securities.

The Company has invested as a limited partner in various partnerships that collectively had total assets of approximately $9.5 billion and $9.8 billion at June 30, 2024 and December 31, 2023, respectively. Those partnerships generally construct or acquire properties, including properties and facilities that produce renewable energy, for which the investing partners are eligible to receive certain federal income tax credits in accordance with government guidelines. Such investments may also provide tax deductible losses to the partners. The partnership investments also assist the Company in achieving its community reinvestment initiatives. The Company, in its position as limited partner, does not direct the activities that most significantly impact the economic performance of the partnerships and, therefore, the partnership entities are not included in the Company's consolidated financial statements. The Company’s investments in qualified affordable housing projects are accounted for using the proportional amortization method whereby those investments are amortized to "income taxes" in the Consolidated Statement of Income as tax credits and other tax benefits resulting from deductible losses associated with the projects are received. Effective January 1, 2024, the Company adopted amended guidance which permits an election to account for other tax equity investments using the proportional amortization method if certain conditions are met. The Company has elected to apply the proportional amortization method to eligible renewable energy and certain other tax credit investments in addition to the low income housing tax credit investments for which the proportional amortization method had previously been applied. Information on the Company's carrying amount of its investments in tax equity partnerships and its related future funding commitments are presented in the following table:


(Dollars in millions)	June 30, 2024		December 31, 2023
Affordable housing projects:
Carrying amount (a)	$	1,332	$	1,340
Amount of future funding commitments included in carrying amount (b)	390		410
Contingent commitments	58		55
Renewable energy:
Carrying amount (a)	70		80
Amount of future funding commitments included in carrying amount (b)	6		31
Other:
Carrying amount (a)	39		41
Amount of future funding commitments included in carrying amount (b)	—		—

_______________________________________________________________

*(a)*Included in "accrued interest and other assets" in the Consolidated Balance Sheet.

*(b)*Included in "accrued interest and other liabilities" in the Consolidated Balance Sheet.

- 35 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

12. Variable interest entities and asset securitizations, continued

The reduction to income tax expense recognized from the Company's investments in partnerships accounted for using the proportional amortization method was $8 million (net of $45 million of investment amortization) and $10 million (net of $41 million of investment amortization) for the three months ended June 30, 2024 and 2023, respectively and $15 million (net of $88 million of investment amortization) and $16 million (net of $82 million of investment amortization) for the six months ended June 30, 2024 and 2023, respectively. The net reduction to income tax expense has been reported in "net change in other accrued income and expense" in the Consolidated Statement of Cash Flows. While the Company has elected to apply the proportional amortization method for renewable energy credit investments, at June 30, 2024 no such investments met the eligibility criteria for application of that method. The reduction to income tax expense recognized from renewable energy credit investments was $9 million and $20 million for the three-month and six-month periods ended June 30, 2024, respectively, and $4 million and $12 million for the three-month and six-month periods ended June 30, 2023, respectively. As a limited partner, there is no recourse to the Company by creditors of the partnerships. However, the tax credits that result from the Company’s investments in such partnerships are generally subject to recapture should a partnership fail to comply with the respective government regulations. The Company has not provided financial or other support to the partnerships that was not contractually required. Although the Company currently estimates that no material losses are probable, its maximum exposure to loss from its investments in such partnerships as of June 30, 2024 was $2.2 billion, including possible recapture of certain tax credits.

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

13. Fair value measurements

GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has not made any fair value elections at June 30, 2024.

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

Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2 — Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.
Level 3 — Valuation is derived from model-based and other techniques in which at least one significant input is unobservable and which may be based on the Company's own estimates about the assumptions that market participants would use to value the asset or liability.

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

- 36 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

13. Fair value measurements, continued

Trading account

Mutual funds held in connection with deferred compensation and other arrangements have been classified as Level 1 valuations. Valuations of investments in debt securities can generally be obtained through reference to quoted prices in less active markets for the same or similar securities or through model-based techniques in which all significant inputs are observable and, therefore, such valuations have been classified as Level 2.

Available-for-sale investment securities and equity securities

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

Real estate loans held for sale

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

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

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

Interest rate swap agreements used for interest rate risk management

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

Other non-hedging derivatives

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

- 37 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

13. Fair value measurements, continued

The following tables present assets and liabilities at June 30, 2024 and December 31, 2023 measured at estimated fair value on a recurring basis:


(Dollars in millions)	Fair Value Measurements		Level 1		Level 2		Level 3 (a)
June 30, 2024
Trading account	$	99	$	99	$	—	$	—
Investment securities available for sale:
U.S. Treasury and federal agencies	7,736		—		7,736		—
Mortgage-backed securities:
Government issued or guaranteed:
Commercial	2,089		—		2,089		—
Residential	3,966		—		3,966		—
Other debt securities	101		—		101		—
	13,892		—		13,892		—
Equity securities	280		265		15		—
Real estate loans held for sale	377		—		377		—
Other assets (b)	295		—		280		15
Total assets	$	14,943	$	364	$	14,564	$	15
Other liabilities (b)	$	1,041	$	—	$	1,012	$	29
Total liabilities	$	1,041	$	—	$	1,012	$	29

December 31, 2023
Trading account	$	106	$	101	$	5	$	—
Investment securities available for sale:
U.S. Treasury and federal agencies	7,705		—		7,705		—
Mortgage-backed securities:
Government issued or guaranteed:
Commercial	416		—		416		—
Residential	2,154		—		2,154		—
Other debt securities	165		—		165		—
	10,440		—		10,440		—
Equity securities	268		258		10		—
Real estate loans held for sale	379		—		379		—
Other assets (b)	324		—		309		15
Total assets	$	11,517	$	359	$	11,143	$	15
Other liabilities (b)	$	943	$	—	$	911	$	32
Total liabilities	$	943	$	—	$	911	$	32

_______________________________________________________________

*(a)*Significant unobservable inputs used in the fair value measurement of commitments to originate real estate loans held for sale included weighted-average commitment expirations of 6% at June 30, 2024 and 5% at December 31, 2023. An increase (decrease) in the estimate of expirations for commitments to originate real estate loans would generally result in a lower (higher) fair value measurement. Estimated commitment expirations are derived considering loan type, changes in interest rates and remaining length of time until closing.

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

- 38 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

13. Fair value measurements, continued

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

Loans

Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectable portions of those loans. Nonrecurring adjustments also include certain impairment amounts for collateral-dependent loans when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace and the related nonrecurring fair value measurement adjustments have been classified as Level 2, unless significant adjustments have been made to the valuation that are not readily observable by market participants. Non-real estate collateral supporting commercial and industrial loans generally consists of business assets such as receivables, inventory and equipment. Fair value estimations are typically determined by discounting recorded values of those assets to reflect estimated net realizable value considering specific borrower facts and circumstances and the experience of credit personnel in their dealings with similar borrower collateral liquidations. Such discounts were in the range of 10% to 90% with a weighted-average of 42% at June 30, 2024. As these discounts are not readily observable and are considered significant, the valuations have been classified as Level 3. Automobile collateral is typically valued by reference to independent pricing sources based on recent sales transactions of similar vehicles and, accordingly, the related nonrecurring fair value measurement adjustments have been classified as Level 2. Collateral values for other consumer installment loans are generally estimated based on historical recovery rates for similar types of loans which at June 30, 2024 was 44%. As these recovery rates are not readily observable by market participants, such valuation adjustments have been classified as Level 3. Loans subject to nonrecurring fair value measurement were $1.0 billion at June 30, 2024 ($248 million and $783 million of which were classified as Level 2 and Level 3, respectively), $923 million at December 31, 2023 ($234 million and $689 million of which were classified as Level 2 and Level 3, respectively) and $652 million at June 30, 2023 ($297 million and $355 million of which were classified as Level 2 and Level 3, respectively). Changes in the fair value recognized for partial charge-offs of loans and loan impairment reserves on loans held by the Company on June 30, 2024 were decreases of $93 million and $221 million for the three-month and six-month periods ended June 30, 2024, respectively. Changes in the fair value recognized for partial charge-offs of loans and loan impairment reserves on loans held by the Company on June 30, 2023 were decreases of $101 million and $177 million for the three-month and six-month periods ended June 30, 2023, respectively.

Assets taken in foreclosure of defaulted loans

Assets taken in foreclosure of defaulted loans are primarily comprised of commercial and residential real property and are generally measured at the lower of cost or fair value less costs to sell. The fair value of the real property is generally determined using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace and the related nonrecurring fair value measurement adjustments have generally been classified as Level 2. Assets taken into foreclosure of defaulted loans subject to nonrecurring fair value measurement were not material at each of June 30, 2024 and 2023. Changes in fair value recognized for those foreclosed assets held by the Company were not material during the three-month and six-month periods ended June 30, 2024 and 2023.

- 39 -

NOTES TO FINANCIAL STATEMENTS, CONTINUED

13. Fair value measurements, continued

Capitalized servicing rights

Capitalized servicing rights are initially measured at fair value in the Company’s Consolidated Balance Sheet. The Company utilizes the amortization method to subsequently measure its capitalized servicing assets. In accordance with GAAP, the Company must record impairment charges, on a nonrecurring basis, when the carrying value of certain strata exceed their estimated fair value. To estimate the fair value of servicing rights, the Company considers market prices for similar assets, if available, and the present value of expected future cash flows associated with the servicing rights calculated using assumptions that market participants would use in estimating future servicing income and expense. Such assumptions include estimates of the cost of servicing loans, loan default rates, an appropriate discount rate and prepayment speeds. For purposes of evaluating and measuring impairment of capitalized servicing rights, the Company stratifies such assets based on the predominant risk characteristics of the underlying financial instruments that are expected to have the most impact on projected prepayments, cost of servicing and other factors affecting future cash flows associated with the servicing rights. Such factors may include financial asset or loan type, note rate and term. The amount of impairment recognized is the amount by which the carrying value of the capitalized servicing rights for a stratum exceed estimated fair value. Impairment is recognized through a valuation allowance. The determination of fair value of capitalized servicing rights is considered a Level 3 valuation. Capitalized servicing rights related to residential mortgage loans required no valuation allowance at each of June 30, 2024, December 31, 2023 and June 30, 2023.

Disclosures of fair value of financial instruments

The carrying amounts and estimated fair value for certain financial instruments that are not recorded at fair value in the Consolidated Balance Sheet are presented in the following table:


(Dollars in millions)	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
June 30, 2024
Financial assets:
Cash and cash equivalents	$	1,778	$	1,778	$	1,607	$	171	$	—
Interest-bearing deposits at banks	24,792		24,792		—		24,792		—
Investment securities held to maturity	14,793		13,509		—		13,467		42
Loans and leases, net	132,798		129,866		—		6,865		123,001
Financial liabilities:
Time deposits	17,513		17,463		—		17,463		—
Short-term borrowings	4,764		4,764		—		4,764		—
Long-term borrowings	11,319		11,282		—		11,282		—

December 31, 2023
Financial assets:
Cash and cash equivalents	1,731		1,731		1,668		63		—
Interest-bearing deposits at banks	28,069		28,069		—		28,069		—
Investment securities held to maturity	15,330		14,308		—		14,262		46
Loans and leases, net	131,939		129,138		—		7,240		121,898
Financial liabilities:
Time deposits	20,759		20,715		—		20,715		—
Short-term borrowings	5,316		5,316		—		5,316		—
Long-term borrowings	8,201		8,107		—		8,107		—

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NOTES TO FINANCIAL STATEMENTS, CONTINUED

13. Fair value measurements, continued

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

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

14. Commitments and contingencies

In the normal course of business, various commitments and contingent liabilities are outstanding. The following table presents the Company's significant commitments. Certain of these commitments are not included in the Company's Consolidated Balance Sheet.


(Dollars in millions)	June 30, 2024		December 31, 2023
Commitments to extend credit:
Commercial and industrial	$	29,201	$	28,566
Commercial real estate loans to be sold	682		916
Other commercial real estate	3,764		5,019
Residential real estate loans to be sold	281		163
Other residential real estate	541		331
Home equity lines of credit	8,005		8,109
Credit cards	5,789		5,578
Other	283		413
Standby letters of credit	2,265		2,289
Commercial letters of credit	74		62
Financial guarantees and indemnification contracts	4,133		4,036
Commitments to sell real estate loans	1,269		1,400

Commitments to extend credit are agreements to lend to customers, generally having fixed expiration dates or other termination clauses that may require payment of a fee. In addition to the amounts in the preceding table, the Company had discretionary funding commitments to commercial customers of $12.4 billion and $12.3 billion at June 30, 2024 and December 31, 2023, respectively, that the Company had the unconditional right to cancel prior to funding. Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party, whereas commercial letters of credit are issued to facilitate commerce and typically result in the commitment being funded when the underlying transaction is consummated between the customer and a third party. The credit risk associated with commitments to extend credit and standby and commercial letters of credit is essentially the same as that involved with extending loans to customers and is subject to normal credit policies. Collateral may be obtained based on management's assessment of the customer's creditworthiness.

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NOTES TO FINANCIAL STATEMENTS, CONTINUED

14. Commitments and contingencies, continued

Financial guarantees and indemnification contracts are predominantly comprised of recourse obligations associated with sold loans and other guarantees and commitments. Included in financial guarantees and indemnification contracts are loan principal amounts sold with recourse in conjunction with the Company's involvement in the Fannie Mae DUS program. The Company's maximum credit risk for recourse associated with loans sold under this program totaled approximately $4.0 billion and $3.9 billion at June 30, 2024 and December 31, 2023, respectively. At June 30, 2024, the Company estimated that the recourse obligations described above were not material to the Company's consolidated financial position. There have been no material losses incurred as a result of those credit recourse arrangements.

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

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

The Company is contractually obligated to repurchase previously sold residential real estate loans that do not ultimately meet investor sale criteria related to underwriting procedures or loan documentation. When required to do so, the Company may reimburse loan purchasers for losses incurred or may repurchase certain loans. The Company reduces residential mortgage banking revenues by an estimate for losses related to its obligations to loan purchasers. The amount of those charges is based on the volume of loans sold, the level of reimbursement requests received from loan purchasers and estimates of losses that may be associated with previously sold loans. At June 30, 2024, the Company's estimated obligation to loan purchasers was not material to the Company’s consolidated financial position.

M&T and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings and other matters in which claims for monetary damages are asserted. On an on-going basis management, after consultation with legal counsel, assesses the Company’s liabilities and contingencies in connection with such proceedings. For those matters where it is probable that the Company will incur losses and the amounts of the losses can be reasonably estimated, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent pending or threatened litigation could result in exposure in excess of that liability, the amount of such excess is not currently estimable. Although not considered probable, the range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability, was between $0 and $25 million as of June 30, 2024. Although the Company does not believe that the outcome of pending legal matters will be material to the Company’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future.

In 2024, the FDIC notified member banks that the loss estimate attributable to certain failed banks had increased. The Company recorded FDIC special assessment expense of $5 million and $34 million in the Consolidated Statement of Income for the three and six months ended June 30, 2024, respectively, in addition to the $197 million recorded in the fourth quarter of 2023. The FDIC has indicated that the amount of the special assessment will be adjusted as its loss estimates change.

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NOTES TO FINANCIAL STATEMENTS, CONTINUED

15. Segment information

Reportable segments have been determined based upon the Company's organizational structure and its internal profitability reporting system, which is organized by strategic business unit. The reportable segments are Commercial Bank, Retail Bank and Institutional Services and Wealth Management.

The financial information of the Company's segments was compiled utilizing the accounting policies described in note 23 of Notes to Financial Statements in the Company's 2023 Annual Report. The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, the financial information of the reported segments is not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

Information about the Company's segments follows:


	Three Months Ended June 30,
	2024								2023
(Dollars in millions)	Total Revenues(a)		Inter- segment Revenues		Net Income (Loss)		Total Average Assets		Total Revenues(a)		Inter- segment Revenues		Net Income (Loss)		Total Average Assets
Commercial Bank	$	717	$	2	$	205	$	81,198	$	759	$	1	$	235	$	80,985
Retail Bank	1,294		—		472		52,950		1,296		—		475		51,058
Institutional Services and Wealth Management	401		3		144		3,668		591		3		285		3,720
All Other	(110)		(5)		(166)		74,165		(44)		(4)		(128)		68,613
Total	$	2,302	$	—	$	655	$	211,981	$	2,602	$	—	$	867	$	204,376


	Six Months Ended June 30,
	2024								2023
(Dollars in millions)	Total Revenues(a)		Inter- segment Revenues		Net Income (Loss)		Total Average Assets		Total Revenues(a)		Inter- segment Revenues		Net Income (Loss)		Total Average Assets
Commercial Bank	$	1,416	$	4	$	406	$	81,140	$	1,570	$	3	$	568	$	80,014
Retail Bank	2,562		—		918		52,591		2,530		—		927		51,175
Institutional Services and Wealth Management	778		6		272		3,652		981		6		395		3,688
All Other	(194)		(10)		(410)		74,346		(74)		(9)		(321)		68,615
Total	$	4,562	$	—	$	1,186	$	211,729	$	5,007	$	—	$	1,569	$	203,492

_______________________________________________________________

*(a)*Total revenues are comprised of net interest income and other income. Net interest income is the difference between taxable-equivalent interest earned on assets and interest paid on liabilities owed by a segment and a funding charge (credit) based on the Company's internal funds transfer and allocation methodology. Segments are charged a cost to fund any assets (e.g. loans) and are paid a funding credit for any funds provided (e.g. deposits). The taxable-equivalent adjustment aggregated $13 million and $14 million for the three-month periods ended June 30, 2024 and 2023, respectively, and $25 million and $28 million for the six-month periods ended June 30, 2024 and 2023, respectively, and is eliminated in "All Other" total revenues.

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NOTES TO FINANCIAL STATEMENTS, CONTINUED

16. Relationship with BLG and Bayview Financial

M&T holds a 20% minority interest in BLG, a privately-held commercial mortgage company. That investment had no remaining carrying value at June 30, 2024 as a result of cumulative losses recognized and cash distributions received in prior years. Cash distributions now received from BLG are recognized as income by M&T and included in "other revenues from operations" in the Consolidated Statement of Income. That income totaled $25 million and $20 million for the six-month periods ended June 30, 2024 and 2023, respectively. There were no cash distributions during the three-month periods ended June 30, 2024 and 2023.

Bayview Financial, a privately-held specialty finance company, is BLG's majority investor. In addition to their common investment in BLG, the Company and Bayview Financial conduct other business activities with each other. The Company has obtained loan servicing rights for mortgage loans from BLG and Bayview Financial having outstanding principal balances of $1.1 billion and $1.2 billion at June 30, 2024 and December 31, 2023, respectively. Revenues from those servicing rights were $1 million and $2 million in the three-month periods ended June 30, 2024 and 2023, respectively, and $3 million in each of the six-month periods ended June 30, 2024 and 2023, respectively. The Company sub-services residential mortgage loans for Bayview Financial having outstanding principal balances of $112.5 billion and $115.3 billion at June 30, 2024 and December 31, 2023, respectively. Revenues earned for sub-servicing loans for Bayview Financial were $31 million and $32 million for the three-month periods ended June 30, 2024 and 2023, respectively, and $63 million and $64 million in the six-month periods ended June 30, 2024 and 2023, respectively. In addition, the Company held $40 million and $42 million of mortgage-backed securities in its held-to-maturity portfolio at June 30, 2024 and December 31, 2023, respectively, that were securitized by Bayview Financial. At June 30, 2024, the Company held $701 million of Bayview Financial's $3.6 billion syndicated loan facility.

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